House of Lords
Death of a Member: Lord Stunell
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Stunell, on Monday 29 April. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
House of Lords: Reform
(7 months, 2 weeks ago)
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Lord Campbell-Savours
To ask His Majesty’s Government what proposals they are considering to reform the House of Lords, in particular with regard to the size of the House.
The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)
My Lords, I start by sharing the sadness at the sudden death of Lord Stunell.
The House of Lords plays a crucial role by scrutinising, debating and holding the Government to account. However, reform, including in relation to the size and membership of this House, is not a priority in this Parliament.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.
Lord Campbell-Savours (Lab) [V]
My Lords, I will ask a very simple question. Due to the ageing nature of Labour’s membership of the House, we are now down to as few as 100 Labour Peers regularly attending proceedings. Meanwhile, the Government are openly challenging the excellent and well thought-through Fowler-McFall reforms with a stream of their own introductions, bringing the Conservative membership to nearly 300. If a Labour Government are elected, how can we possibly secure the public business against a background of such overwhelming odds? Is the Government’s strategy to fill the House to capacity and make it difficult for Labour to appoint without further breaching the reforms?
Baroness Neville-Rolfe (Con)
I thank the noble Lord for his Question. On the numbers, we now have 787 Members. The Conservatives have 277 Members, 35% of the House. As the noble Lord points out, the Labour Members are fewer: 172 Members, 22%. But the appointments that have been made, which he referred to, have not changed the dial. It is still hard for the Government to get their business through the Lords, and the numbers fall a long way away from the make-up of the House of Commons, where 53% are still Conservatives. Our priority is to ensure that this House continues to play its important role in scrutinising and revising legislation, which is what the country wants the House of Lords to do.
Lord Beith (LD)
I thank the Minister for paying tribute to our dear colleague, Andrew Stunell, whom we have lost.
Given that the Government have no time left in this Parliament for fundamental reform—I agree on that—why have they continued to appoint Peers at a rate that clearly prejudices any claim the House has to be generally representative? There have been 74 new Peers. Is the Government’s intention to maintain a situation in which they can always dismiss the views represented by the House of Lords when it is arguing with the Commons, on the grounds that we are not sufficiently democratically representative?
Baroness Neville-Rolfe (Con)
I did not give the Liberal Democrat numbers, but there are 80 Liberal Democrat Members—10% of the House—which is a lot more than in the House of Commons. It is important that we continue to refresh the Benches in this House. There has been a good process of parties encouraging retirements at the right stage. Sadly, we lose people; we have just lost Lord Stunell, and we lost Lord Field last week. It is necessary to continue to make appointments, and it is the Prime Minister’s prerogative to advise the sovereign as to who should join this House. There have been some recent appointments to the Labour Benches, which I very much welcomed.
Lord Forsyth of Drumlean (Con)
My Lords, further to that last question, is it not the case, as my noble friend pointed out, that the one party overrepresented in this House is the Liberals? Is it not also the case that the Government lost at least two votes this week because of people voting remotely?
Baroness Neville-Rolfe (Con)
The noble Lord is right that it has been an extraordinary week in that we have had such close votes. I agree with the general sentiment of what he is trying to say. What is really important about this House—people who admire this House say the same—is that we have a different, unique mix of expertise, age, where people come from and the jobs that they have done; some are part-time while others, such as the Front Benches, turn up regularly. That makes for better legislation and better policy-making.
Baroness Chapman of Darlington (Lab)
My Lords, I express from these Benches our sadness at the loss of Lord Stunell, a dedicated public servant; our thoughts are with his family and friends, and especially his friends and colleagues on the Liberal Democrat Benches.
Is the Minister comfortable with the fact that when Labour left office in 2010, there were 24 more Labour Peers than Conservative Peers serving in your Lordships’ House, while today, after 14 years of Conservative government, there are over 100 more Peers on the Government Benches than on the Labour Benches? Does she think this disparity is in the interests of the House?
Baroness Neville-Rolfe (Con)
It is important that the House is refreshed, and I have already explained that the current Prime Minister recently encouraged Labour to put forward candidates for peerages—I am particularly pleased to see the noble Lord, Lord Hannett, with whom I used to work when we were in retail together. The numbers change over time. There are large numbers on the Cross Benches as well as on the party Benches. We have to make sure that we scrutinise the legislation, do our job and refresh the House from time to time. I am grateful for the work that all the parties have done in encouraging retirement and supporting new people to join this House with new perspectives.
Lord Trees (CB)
My Lords, in considering changes to the House of Lords, many advocate an elected Chamber. But I suggest that it is usually good practice, before determining the composition of any group, to first consider its function—function before form. I think many would agree that the function of this House, as articulated by the Minister, is as a scrutinising, revising Chamber to make legislation better. In considering that, does the Minister agree that an appointed Chamber, as now, is better placed to deliver that function than an elected Chamber?
Baroness Neville-Rolfe (Con)
I agree that an elected Chamber has problems, because there would inevitably be a clash with the Commons and indeed the devolved legislatures. An appointed Chamber allows the Commons to prevail constitutionally and serve constituents across the country. Reform is not ruled out in the longer term but we have been very clear, certainly ever since I joined the Front Bench, that we should not have piecemeal reform and that any reform should be very careful, considered and comprehensive.
Lord Sherbourne of Didsbury (Con)
My Lords, I remind the House of one of the greatest reforms of the House of Lords, which I am sure the vast majority of noble Lords agree with, brought in by a Conservative Government—the Life Peerages Act in the 1950s.
Baroness Neville-Rolfe (Con)
I agree with my noble friend, who always has good historical angles, that the Act was a great move forward. Many of us who are lucky enough to serve in this House benefit from that excellent constitutional change.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, surely our objective is the reduction of the number in the House, which is continually criticised outside this place. Can we not revisit the excellent report submitted some years ago by the noble Lord, Lord Burns, who is in his place? Can we not persuade Governments at least to abide by that report or stop complaining about the size of the House?
Baroness Neville-Rolfe (Con)
I pay tribute to the work that the noble Lord, Lord Burns, and his committee did, but a number of Administrations have not signed up to those recommendations and have not wanted to move in the direction of a cap. I think I understand why. You want to focus on the number of Peers who attend, not simply the overall figure. As I have tried to explain, we have a mixture of full-time Peers and some who contribute only occasionally but bring unique insights to what they do. It is a little unclear, when people are made Peers, whether they will not come very often—which is certainly what I intended when I became a Peer—or end up contributing in a very substantial way, particularly at different parts of their career.
Baroness Hayman (CB)
My Lords, the Minister talked eloquently about the important role of this House, but why will the Government Front Bench not recognise that public opinion on the role of this House and the quality of its work is diminished badly by the criticisms of its size and the appointments process by which people get here? Will she not reconsider her view about piecemeal reform, which is the only way we ever get anywhere in this House, and look at having a statutory appointments commission with proper scrutiny powers over appointments?
Baroness Neville-Rolfe (Con)
There were a lot of points there. There are many ideas for reform, some of which have a lot of merit, but to take the final point about making HOLAC statutory, I do not favour that. It is the prerogative of the Prime Minister and the sovereign to appoint. We really value the work done by HOLAC and its new chair, the noble Baroness, Lady Deech, in ensuring the propriety of proposals that come forward, but we do not believe we should move the composition of the House away from nomination by a democratically elected person to a more corporate model. That would be a mistake. On the popularity of the House of Lords, when you talk to people about the work we do, they are much more understanding. We need to get about and explain the work we do in revising legislation and in helping the country to come to better conclusions on matters of policy.
Water Companies: Licence Conditions
(7 months, 2 weeks ago)
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Lord Sikka
To ask His Majesty’s Government what estimates have been made of the distributable reserves of each water company now that OFWAT has taken powers under the Environment Act 2021 to change their licence conditions, including whether they can pay dividends.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
My Lords, I declare my interests as set out in the register. The best proxy for distributable reserves is retained profits. This is the profit and loss reserve on a company’s balance sheet. Company boards are responsible for determining how much of their profit and loss reserves is distributed. The Government have not carried out an exercise to calculate each company’s distributable reserves. Where a company in cash lock-up breaches its licence by paying a dividend, Ofwat will take enforcement action.
Lord Sikka (Lab)
My Lords, as I have previously pointed out in this House, water company accounts are not only massaged but cooked and roasted with abusive accounting practices. Ofwat and the Government have said that under certain circumstances they will block the payment of dividends, which presupposes that they know what the legally defined distributable profits of each company are. The Minister has just said that the Government have not got a clue; therefore, there is no way of knowing whether any of those dividend payments is actually lawful. Can the Minister explain why the Government announce policies when they do not have the basic data to implement them?
Lord Douglas-Miller (Con)
The Government have a very clear idea about the information that they are reviewing because every single water company, like every other public company, has its accounts audited. That information is publicly available, and I refer the noble Lord to the public audited accounts of all those water companies.
Baroness Uddin (Non-Afl)
My Lords, I support everything said by my friend the noble Lord, Lord Sikka. I wonder what regular representation, if any, the Government make about the quality of the water provided to us via various water authorities. I do not know if the Minister is aware that there is an exponential rise of allergies and eczema in east London. The water quality there is poor; I have raised these issues privately and on previous occasions. Can he assure me and this House that the water quality is as important as the profits that the water companies are making?
Lord Douglas-Miller (Con)
I absolutely assure the noble Baroness and the House that that is the case. I was not aware of the issue that she outlined around the outbreak of eczema. I am not sure if that is related to the water, but I can certainly look into that matter for her. The Environment Agency spends a great deal of time on this, and it is one of the issues that we can be really proud of. We get an unbelievably good service provided in terms of clean water that goes into every household across this country for a very modest price.
Lord Watts (Lab)
Why do the Government allow these water companies to retain profits when there is so much need for investment and given their poor performance and the way that they are polluting our rivers and seas?
Lord Douglas-Miller (Con)
The noble Lord perhaps needs to refresh his memory on exactly what a private company is and how that works. When you make an investment into a public company, like a water company, you expect to get some return on that investment, and it is only right and proper that everybody does. We are talking about pension funds as well as individuals.
Earl Russell (LD)
My Lords, does the Minister agree that the continuing secrecy and uncertainty surrounding the future of Thames Water is unhelpful and damaging to the water sector and the whole UK economy? When does the Minister expect to fully update the House and provide some certainty on Project Timber, the Government’s contingency plan for Thames Water?
Lord Douglas-Miller (Con)
The noble Earl knows that it would be improper of me to comment on the details about Thames Water. I assure him and the House that we are taking an extremely close and careful look at this. It is in all our interests that the financial resilience of our water sector, as well as the individual players within it, is maintained and enhanced to ensure the level of investment required to improve water and address the issues related to sewage.
The Earl of Devon (CB)
My Lords, given the increasing regulatory and compliance burdens on water companies due to the Environment Act and such other essential recent legislation, is it not simply becoming unprofitable to invest in the water industry, which surely will make nationalisation at some point inevitable?
Lord Douglas-Miller (Con)
I do not think that I agree with that assessment at all; it certainly is not this Government’s policy to nationalise the water industry or indeed any other industry. Environmental issues around water companies are certainly highlighted more greatly than they ever were in the past. The Government have put a huge effort into monitoring the level of sewage and other pollutants going into the water systems. That, in part, is leading to much greater awareness of issues that have probably been going on for a very long time, and we are committed to fixing those issues.
Baroness Hayman of Ullock (Lab)
My Lords, I want to come back to the Minister’s response on dividends, investments and payments. Earlier this month, the Financial Times revealed that the 16 water companies paid out a total of £78 billion in dividends in the three decades since privatisation to March 2023, building up £64 billion in borrowing over the same period. It is worth remembering that the utilities were debt free when they were privatised. Frankly, I find these figures incredible. Is the Minister justifying his response to my noble friend as to how much money is acceptable to be paid in dividends?
Lord Douglas-Miller (Con)
The noble Baroness raises a lot of very detailed numbers in her question, but the principle of dividends for public companies is well established and every other public company produces dividends for its investors. Perhaps I might take away those thoughts and come back to her.
Lord Bellingham (Con)
My Lords, may I assist the Minister? It is one thing a company paying a dividend if it makes a reasonable profit, but does he not agree that it is completely different if a company is borrowing heavily to pay a dividend? I ask him also to comment on this, because he has not done so yet: we are all for the leaders of these industries being properly rewarded, but they should not be given bonuses when their environmental duties fall short.
Lord Douglas-Miller (Con)
I entirely agree with my noble friend on that issue. Ofwat will also take forward a consultation to consider a ban on water bosses receiving bonuses when their company has committed a serious criminal breach. As part of that consultation, Ofwat will consider the criteria for a ban on bonuses. This would likely include successful prosecution for a category 1 or 2 pollution incident, such as causing significant pollution at a bathing site or conservation area.
Lord Wigley (PC)
My Lords, given the uncertainty of Thames Water’s finances, what are the prospects of it being able to go ahead with its scheme for water transfer from the Severn to the Thames to meet the needs of south-east England? Does that not put the capital requirement for that scheme very much in doubt?
Lord Douglas-Miller (Con)
The capital requirement will be considered at the next spending review, which is due this year, so we will hear more about that in due course.
Lord Browne of Ladyton (Lab)
My Lords, once again, your Lordships’ House is indebted to the forensic skills of my noble friend Lord Sikka. He is the one person in this House who needs no instruction about where to look for what is going on in businesses and in companies, and how important accounts are. With some assistance from him, I had a look at Thames Water’s accounts. Its accounts, directors’ reports and cash-flow statements say that it paid dividends to its parent company as follows: £37 million in 2022, £45 million in 2023, and another £37.5 million in September 2023. However, its own PR spin says that these are not dividends and that this is the way it is paying interest on its debt. That is not what the accounts are for, and the accounts are not right if that is correct. In December, a spokesperson for Ofwat said:
“Following notification that Thames Water has paid a dividend to shareholders, Ofwat is investigating whether this payment meets its licence requirements”.
The Minister is a knowledgeable man in this area, as he tells us, so he should be able to explain what is to be investigated. More importantly, does he know why Ofwat has not reported since December?
Lord Douglas-Miller (Con)
I also pay tribute to the accountancy skills of the noble Lord, Lord Sikka; they are very thorough. Indeed, the noble Lord, Lord Browne, has himself made an extremely good attempt at interpreting the accounts on that front. The issues around Thames Water and the dividend that it paid last year are subject to an investigation at the moment. Therefore, it would not be appropriate for me to comment on them.
Higher Education: Arts and Humanities
(7 months, 2 weeks ago)
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The Earl of Clancarty
To ask His Majesty’s Government, following recent announcements of proposed university staff cuts, what steps they are taking to support the study of the arts and humanities in higher education.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, we recognise the importance of the creative and performing arts to our economy. While some higher education providers have seen decreases in arts and humanities staff, academic staff numbers across England rose by 1.9% between 2019-20 and 2022-23 to 21,640.
The Earl of Clancarty (CB)
My Lords, Gillian Keegan’s freezing of further funding for creative arts courses at universities, which has occurred since I tabled this Question, is surely pouring oil on already extremely troubled waters. We have a Government who seem wilfully blind to both the current threat to the arts at universities and the strategic importance of that pipeline. Will they reconsider that funding decision and take steps to protect the jobs and departments at Goldsmiths, Middlesex, Kent and elsewhere that are so necessary for the creative and economic future of this country?
Baroness Barran (Con)
We absolutely agree with the noble Earl that high-quality provision across a range of subjects in the arts and humanities is critical both for our cultural enrichment as a society and for our workforce. That is why we require the Office for Students to at least maintain funding for those high-cost subjects at the current level of £16.7 million. As the noble Earl is also aware, we have dedicated funding for both our world-leading cultural institutions and other performing arts institutions.
Baroness Warwick of Undercliffe (Lab)
My Lords, the cap on student fees has meant that funding for students is at its lowest level in over 25 years. There is a £1 billion hole in domestic teaching funding, which will inevitably mean some very difficult decisions, as my noble friend indicated. Does the Minister agree that arts and humanities graduates have the creative and critical thinking essential for problem solving, which will be crucial to support businesses to get the most out of AI tools?
Baroness Barran (Con)
As the noble Baroness knows, the Government strive to create a sustainable student finance system that both remains responsive to the needs of the wider economy and of the labour market, which she referred to, and is fair to students and taxpayers. As she remarked, those with creative and critical-thinking skills in relation to AI are of course important, but so are students with STEM skills.
Lord Johnson of Marylebone (Con)
My Lords, ahead of the local and mayoral elections tomorrow, would my noble friend the Minister say what the impact of slashing the graduate route will be on arts and humanities provision, as well as on the levelling- up agenda? I am thinking specifically about towns such as Middlesbrough and Darlington, where every intake of international students at Teesside University brings £240 million of benefits each year to the local economy.
Baroness Barran (Con)
My noble friend is aware that we remain absolutely committed to our international education strategy, which has been extremely successful in terms of both the number of students who study in this country and their contribution to the economy. I cannot comment on the specifics of individual towns, but we absolutely recognise the value that those students bring.
Lord Storey (LD)
My Lords, the Minister quite rightly pointed out the importance of the arts to our cultural and creative industries, but they are also important to soft power. We are seeing 15 universities making job cuts in their arts and humanities departments and 35 others considering it. I do not need to go through the individual universities, but drama, film, music, dance and entire theatre departments are at risk. Two problems need to be addressed. The first is funding, if we want to keep these creative and humanities subjects at such a high level. The second is the pipeflow. We have talked about the EBacc before, but would the Minister now care to consider what damage it is doing and the danger it poses to the pipeflow to our university and FE sector?
Baroness Barran (Con)
With the greatest respect to the noble Lord, I really do not follow the logic of how the EBacc is damaging the flow to our universities. Humanities and modern foreign languages are absolutely central and at the heart of the EBacc, but we are building on that with our higher technical qualifications and T-levels in areas such art and design, which will be introduced this year. I remind the House that bursaries and scholarships for, say, modern foreign language teachers are at the same level as for physics teachers.
Lord Blunkett (Lab)
My Lords, does the Minister agree that it would be crazy to restrict entry from overseas students to particular universities or particular faculties or courses within those universities, not least because it would say that all the rest were perfectly okay for our daughters and sons but were not good enough for overseas students?
Baroness Barran (Con)
I am not aware that that plan has currently been proposed. Where we have concerns about quality, they are about courses rather than subject areas at individual institutions, where the outcomes for those students, whether they are international or domestic, are significantly poorer than for the same course at another institution.
The Lord Bishop of Sheffield
My Lords, almost every armed conflict in the world at present has a religious dimension, making informed and respectful dialogue increasingly critical for international peace and security. In that context, the steady decline in the numbers of those studying religion, theology and ethics in our higher education institutions is a cause for real concern. Given the dearth of graduates in these subjects at present, can the Minister tell us how the Government will nurture the necessary religious literacy of our public life in the coming years?
Baroness Barran (Con)
This is a very important subject and, I may say, goes wider in terms of critical thinking and understanding the information that we receive both in reality and online. I do not have the specific figures for religious studies on their own, but historical, philosophical and religious studies have declined over the last three years, as the right reverend Prelate said, but only by 5%. Multiple issues impact on that, but I think we also see young people seeking debate, and the moves that we have made as a Government on free speech within our universities are critical to underpinning that.
Baroness Wilcox of Newport (Lab)
My Lords, the Government indicated that they would publish a cultural education plan by the end of last year, but they have given no commitment on a date for publishing. If they are keen, as we are, to put creativity at the heart of education, can they now give us a timeline for the publication of the plan?
Baroness Barran (Con)
I am unable to give the noble Baroness a precise timeline, but the Government have already acted on cultural and creative education, for example through our investment in the institutes of technology: all 21 of these will be open by this autumn and seven are already working directly with creative, film and entertainment industries, addressing just the sort of cultural and creative jobs that I know the noble Baroness aspires to.
Lord Aberdare (CB)
My Lords, I declare my interest as a graduate in classics, or literae humaniores as they were called at Oxford. Studying classics can open doors to a vast range of knowledge and experience, including language learning; grammar and vocabulary; literature and history; scientific, botanical and medical terminology; arts, architecture and sculpture, so much of which is based on classical themes and models, as is classical music; and logical thinking, which is so important to digital technologies and coding and to other fields of activity. So what steps are the Government taking to promote and enhance continued teaching of classical subjects at university?
Baroness Barran (Con)
The noble Lord will be aware that the Government do not impose in any way on universities what subjects they should teach. The noble Lord has done a most marvellous marketing pitch for classics; I expect to see applications rise in response this autumn. But it is up to individual universities to decide. In schools, we have been encouraging the greater teaching of Latin, and certainly that is much appreciated by those students who benefit.
Ukraine: Small Boats
(7 months, 2 weeks ago)
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Lord Moore of Etchingham
To ask His Majesty’s Government how many small boats impounded from illegal migrants they have in their possession, and whether they plan to grant requests from the Ukrainian authorities to contribute these to the Ukrainian war effort.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, no such request by the Ukrainian authorities has been received by the Home Office. These boats, which are not manufactured to commercial standards, are completely unsuitable for anything other than endangering those who use them. Border Force has seized and disposed of hundreds since 2018.
Lord Moore of Etchingham (Non-Afl)
I thank the Minister for his reply, but I think it is ridiculous to tell the Ukrainians what is safe for them to use in the situation they are in. They want these boats because they are the only way they can get across the Dnipro to their bridgeheads on the other side, and ferry men and munitions in and the wounded out. The Ukrainian authorities have asked for them; I am afraid it is a mistake to say that they have not. The Ukrainian embassy asked for them twice in February, and I have heard today that the Ukrainian ministry of defence is about to ask for them again now. I find it very puzzling. I would be grateful if the Minister could explain why there is such reluctance to help—particularly as, at last, the American aid has come through—Ukraine get on the front foot, doing something incredibly brave, with these tiny boats, to get across the Dnipro and progress. They know more about what craft are seaworthy; they will repair these craft, because they need to—because they use them in matters of life and death.
Lord Sharpe of Epsom (Con)
My Lords, there are a number of questions there. First, just to repeat, the UK’s total committed military, humanitarian and economic support for Ukraine now amounts to almost £12.5 billion. As recently as 23 April, the Prime Minister announced that the UK will send our largest ever package of equipment from the UK, which is designed to help push back the Russian invasion on land, sea and air.
I go back to my initial Answer: these craft are unseaworthy. It is for us to determine their seaworthiness. They are built to extremely poor standards; they do not really even make it across the channel. They are not worth sending to Ukraine. As far as we are aware, the Ukrainian authorities have yet to ask for these boats. If they do, they should approach the Home Office and we will certainly come up with some other solutions.
Baroness Smith of Newnham (LD)
My Lords, perhaps I could help the Minister, because the Times last Monday had the answer to some of the questions about how many boats the Home Office has impounded. There are
“20 rigid inflatables … 62 folded-up inflatables and 131 engines”.
The fact that they have made it over the channel and been impounded suggests that they were seaworthy at a certain point. If the Ukrainians want them, why on earth does the Home Office not allow them to have them? Why do we need to keep them? Surely it is a win-win situation simply to hand them over to the Ukrainians to enable them to use them on the Dnipro.
Lord Sharpe of Epsom (Con)
Far from being rigid inflatables, these boats more resemble oversized rubber tires—inner tubes. The engines on these things tend to be very underpowered; they are less than 30 horsepower. They are bolted to a plywood transom and riveted to the back of the boat. They are unsafe.
Lord Hodgson of Astley Abbotts (Con)
My Lords, assuming that the seized boats are not going to Ukraine, could my noble friend tell the House how quickly they are destroyed?
Lord Sharpe of Epsom (Con)
Some are kept for evidential and investigation reasons, but they are destroyed as quickly as possible. They are actually recycled; they are not put into landfill.
Lord Berkeley (Lab)
My Lords, a year ago I asked this same Question and I got the same Answer from the Minister. Does saying that the boats are not safe indicate that the Maritime and Coastguard Agency has a role to play, in making sure that we can give boats to the poor people of Ukraine only if the MCA has approved it? It is nothing like crossing the channel to cross the river; it is a big river, but it is nothing like the channel. I know that the Swindon Humanitarian Aid Partnership is sending aid out all the time; it is taking buses and could take boats. It has said it can do it with no problem with security, but still the Minister rejects it. Could he think again?
Lord Sharpe of Epsom (Con)
No. I am rejecting it because these boats are unsafe. What I will do, however, is share a good news story from last week. The seventh convoy run by the National Fire Chiefs Council delivered to the border of Ukraine a large amount of the sort of aid that the noble Lord is describing, including 33 fire and rescue vehicles, two mechanics’ vehicles, an HGV carrying more than 2,800 items of surplus equipment, and 30 fire and rescue vehicles, including 20 fire engines, eight command units, an aerial ladder platform and a 4x4 LPP vehicle. That is practical help. I commend the 100 volunteers from all over the country who drove the fire services aid to the Ukrainian border. That is worth having. These boats are not.
Lord West of Spithead (Lab)
My Lords, speaking as a simple sailor, none of those things float so they will not help the Ukrainians much on the Dnipro, will they? It seems extraordinary. Perhaps these things are unsafe, but can we not leave it to the Ukrainians to decide? If you are fighting for your survival, my goodness me, it is amazing what you can do. I would like to think that we could do the same if we were in that position, so why not let them do it? Is it because we are frightened of litigation against us? What is the reason, really?
Lord Sharpe of Epsom (Con)
I am very disappointed that the noble Lord the admiral does not support the Government’s position on this. An unsafe boat is an unsafe boat. He knows more about them—and ships, of course—than I do. The fact is that the Ukrainians, as far as we are aware, have not even asked for these things, so that judgment does not need to be made.
Baroness Butler-Sloss (CB)
If these boats are unsafe, why can the Government not let them have other boats?
Lord Sharpe of Epsom (Con)
As I have just said and will continue to say: because the Ukrainians have not asked for them.
Baroness Altmann (Con)
My Lords, I commend the Government’s efforts to support the people of Ukraine. Does my noble friend agree that we must do everything we can to try to protect the brave people of Ukraine when in many ways they are fighting on the front line for our own democracy? If there were a request from the Ukrainians for these boats, would his reply be different?
Lord Sharpe of Epsom (Con)
My reply would be that we should look into the appropriate sorts of boats that we should send as part of our aid. Again, to remind noble Lords about the type of aid, since the start of the conflict the UK has sent almost 400 different types of capabilities to Ukraine. If the Ukrainians asked for boats, we would certainly look at providing them, but not these.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I visited Western Jet Foil just over a year ago, and I agree with Minister. I saw oversized rubber tyres which looked extremely dangerous, so I support the Minister in what he just said. I want to ask the Minister about the seizure of Russian assets. We have had the same answer from the Government on this question for a long time now. Will the Minister outline what concrete steps the Government are taking to access those assets for the benefit of the Ukrainian people?
Lord Sharpe of Epsom (Con)
I thank the noble Lord for his support for the Government’s position regarding the boats. On the seizure of Russian assets, I am afraid I am not more aware of the discussions than he will be from having read in the papers about what is going on at a very high level among the international community. I am sure that as soon as there is more to say on the subject, we will be back at the Dispatch Box.
Lord Lancaster of Kimbolton (Con)
Having listened to the conversation, I think the enthusiasm in your Lordships’ House to support Ukraine in any way that we can is highly commendable. After two and a half years of conflict, there is a now a highly mature system of gifting in kind from the UK to Ukraine based not on—dare I say?—bright ideas of what we think we have that they want but on what they need and what they request. If we simply start gifting everything that we think they want, rather than what they actually ask for, we are in danger of overburdening them with all sorts of kit they know not what to do with.
Lord Sharpe of Epsom (Con)
My noble friend makes an extremely good point. If there is a genuine request from the Ukrainian authorities to provide them with boats, we will absolutely look at it, and we will find the appropriate vehicles.
Lord Naseby (Con)
Can my noble friend clarify this? I understand that he is saying that there has been no request through the embassy here in the UK. Equally, the noble Lord, Lord Moore, said that there was a formal request in February. Could my noble friend, for the benefit of all of us here who feel quite strongly about this, double-check whether there was or was not such a request?
Lord Sharpe of Epsom (Con)
I say to my noble friend what I said earlier: no request has come to the Home Office, and, as far as I am aware, the same goes for the FCDO and the MoD. As far as I am concerned, there has been no meaningful request to the authorities which could provide the boats that are under discussion.
Lord Sentamu (CB)
My Lords, the noble Lord, Lord Ponsonby, asked about seizing Russian assets to use them to support the war effort by Ukraine. That idea came from the Foreign Secretary. He said it on a BBC programme and everyone else there said it was the most brilliant idea that had come from the United Kingdom, so I am surprised that there has been no further conversation. I happen to agree with the Foreign Secretary; he has his finger on the pulse. Is it not time that these assets were seized and used to help Ukraine to fight its war?
Lord Sharpe of Epsom (Con)
As I think I made clear, I do not disagree or otherwise with the noble and right reverend Lord. He makes a perfectly reasonable point, but the Foreign Secretary is having those discussions and I am not.
Renters (Reform) Bill
Wednesday 1st May 2024
(7 months, 2 weeks ago)
Lords ChamberRead Full debate Renters (Reform) Bill 2022-23 View all Renters (Reform) Bill 2022-23 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
Alternative Investment Fund Designation Bill [HL]
Wednesday 1st May 2024
(7 months, 2 weeks ago)
Lords ChamberRead Full debate Alternative Investment Fund Designation Bill [HL] 2023-24 View all Alternative Investment Fund Designation Bill [HL] 2023-24 Debates Read Hansard Text Watch Debate
Baroness Altmann (Con)
My Lords, I understand that no amendments have been set down to the 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 the order of commitment be discharged.
UK Armed Forces in Middle East
(7 months, 2 weeks ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I remind the House of my entry in the register of interests, specifically my association with the Royal Navy.
Our service personnel are currently deployed in multiple theatres across the Middle East, reinforcing regional stability, protecting freedom of navigation in the Red Sea, fulfilling our ongoing commitments under Op Shader and of course assisting vital humanitarian efforts in Gaza. As ever, we are grateful for their service, their dedication and the sacrifices that they make daily to protect British national interests.
I ask the Minister to update your Lordships’ House on the new role of the RFA “Cardigan Bay” in helping to build the temporary pier on the Gaza Strip. How long is this deployment and what specific role will the UK play in the pier’s construction? As always, the Royal Fleet Auxiliary is on the front line supporting UK operations. My right honourable friend John Healey asked in the other place about the RFA, but the Minister there was seemingly unable to assist, so can the noble Earl confirm that the RFA is protected from his new Civil Service cuts? Can he provide an update on the current state of the industrial dispute with the RFA, given its important role?
The Minister of State, Ministry of Defence (The Earl of Minto) (Con)
My Lords, there were about six different questions there. First, I confirm that the UK Armed Forces operate under a number of international coalitions in the Middle East and have done so for some time. They include the Jordanian-led international effort for humanitarian aid into Gaza, the RAF drops, the support that we are giving in building the pier, the global coalition against Daesh, Operation Shader and Operation Prosperity Guardian. We do all that to protect life, uphold the rules-based international order and secure UK interests against malign forces in the region. “Cardigan Bay” is providing living support for the American soldiers and sailors who are building the bridge. It lies off Gaza now in international waters, and will be there for as long as it takes.
Baroness Smith of Newnham (LD)
My Lords, can the noble Earl tell the House, first, whether the Government would give a parliamentary vote if there were to be boots on the ground? Secondly, what conversations have His Majesty’s Government had with the Israeli Government about looking for appropriate ways of getting aid into Gaza and ensuring that those delivering that aid are protected, be they UNRWA or other charitable organisations?
The Earl of Minto (Con)
My Lords, I cannot remember the first question, but on the question of talking with the Israeli Government, we continue to press them on international aid to open up as many opportunities as we can to get a considerable amount of aid in. That includes via Ashdod, Erez and this new floating pontoon. It is extremely important to get as much aid in as we possibly can.
Lord Robathan (Con)
My Lords, can my noble friend update us on the situation regarding the malign influence of Iran, which has of course recently attacked Israel? It has certainly armed Hamas in the past, whatever its situation now, and is almost certainly controlling Hezbollah. Can he please update us on that?
The Earl of Minto (Con)
My Lords, the diplomatic situation with Iran is that we are using every possible effort to quieten down what could have become an extremely dangerous situation. So far, that diplomacy does seem to be working.
Lord Hannay of Chiswick (CB)
My Lords, would the Minister and the Opposition Front Bench recognise that neither of them referred, in their replies, to the role of the sovereign base areas in Cyprus? Does he not agree that the bases we have there have played an extremely positive role in recent times, and indeed in more previous times than that? Would he offer some thanks to those who are manning those bases?
The Earl of Minto (Con)
My Lords, I certainly will and would. We are part of international coalitions and there is a certain level of sensitivity around precisely which states are involved in what. But I can assure the House, in all respects, that the level of support from various areas could not be higher.
Lord Lancaster of Kimbolton (Con)
My Lords, away from the valuable operations of the Royal Navy and Royal Air Force in the region, it is easy to overlook the regular tempo of land exercises with our allies there, which not only build strategic capabilities over time but act as a deterrent to our foes in the region. Despite the large increase in pending announced last week, there remain in-year saving challenges. These exercises, being uncommitted spend, are the first things to be cut. I simply ask my noble friend to look carefully at ensuring that, away from operations, these exercises continue.
The Earl of Minto (Con)
My noble friend makes an extremely good point. The prioritisation of all the activities that we are engaged in through the UK Armed Forces is extremely important. To be ready to war-fight and win is absolutely paramount; to train to achieve that is critical.
Lord West of Spithead (Lab)
My Lords, the “Cardigan Bay” is of course one of our crucial Royal Fleet Auxiliaries. I refer to my noble friend’s question about the work that is going on about conditions of service. There is a very real risk of an impact on our Royal Fleet Auxiliaries because of this debate—and fight—going on about pay, conditions of service and the like. Can the Minister possibly tell us where we have got to in these negotiations? Is this going to impact not only there but on our amphibious group out in the Pacific and so on? These ships are so important.
The Earl of Minto (Con)
My Lords, I entirely agree about the importance of these ships—what better example than “Cardigan Bay”, which is providing an absolutely vital role in supporting our allies to build this bridge? I will write to the noble Lord with specific detail; I think that is the best thing to do.
Baroness Stuart of Edgbaston (CB)
My Lords, I refer to my registered interests in the Royal Navy. I encourage the Minister to take this opportunity to pay tribute to the work of HMS “Diamond”, particularly its recent contribution to continued freedom of the high seas in the Red Sea.
The Earl of Minto (Con)
My Lords, I could not pay greater tribute to our forces out there, whether on “Diamond”, “Lancaster” or “Cardigan Bay”. They are all providing absolutely critical support to an extremely important initiative.
Baroness Goldie (Con)
My Lords, we should applaud the role of the RAF, with the recent contribution it made in the interception of Iranian drones launched against Israel. I ask my noble friend the Minister: was that under Operation Shader? If so, is the role of Shader now being expanded?
The Earl of Minto (Con)
I thank my noble friend for that question. It was indeed under Operation Shader, which has been in place since 2014. In fact, I answered a question about this the other day. The RAF has flown nearly 9,000 missions under Operation Shader and released more than 4,000 precision weapons, which gives noble Lords an idea of the scale and importance of ensuring that Daesh in Iraq and Syria is ultimately destroyed. There is no intention to increase the scope of that operation, but back in April it was the appropriate asset to use for that particular sortie.
Baroness Foster of Oxton (Con)
My Lords, I would like to take up the point in the question asked by the noble Baroness opposite and hopefully have further information. I had concerns about some of the news that came out at the weekend that, in the project taking place in Gaza, we could end up looking at deploying British troops to be involved in the delivery of lorries on to the land. I would have great concerns about British troops being put into that position. We would not want to look as though we are condoning any of the Hamas actions that took place on 7 October; humanitarian aid is another issue. Could my noble friend give us reassurance that British troops will not be deployed inappropriately in this matter?
The Earl of Minto (Con)
My Lords, I can give an absolute assurance that that report was pure speculation. That is exactly where the situation remains.
Leasehold and Freehold Reform Bill
Wednesday 1st May 2024
(7 months, 2 weeks 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-IV Fourth marshalled list for Committee - (30 Apr 2024)
Lord Khan of Burnley
“Requirement to establish and operate a management company under leaseholder control(1) The Secretary of State may by regulations make provision—(a) requiring any long lease of a dwelling to include a residents management company (“RMC”) as a party to that lease, and(b) for that company to discharge under the long lease such management functions as may be prescribed by the regulations.(2) Regulations under subsection (1) must provide—(a) for the RMC to be a company limited by share (with each share to have a value not to exceed £1), and(b) for such shares to be allocated (for no consideration) to the leaseholder of the dwelling for the time being.(3) Regulations under subsection (1) must prescribe the content and form of the articles of association of an RMC.(4) The content and form of articles prescribed in accordance with subsection (3) have effect in relation to an RMC whether or not such articles are adopted by the company.(5) A provision of the articles of an RMC has no effect to the extent that it is inconsistent with the content or form of articles prescribed in accordance with subsection (3).(6) Section 20 of the Companies Act 2006 (default application of model articles) does not apply to an RMC.(7) The Secretary of State may by regulations make such provision as the Secretary of State sees fit for the enforcement of regulations made under subsection (1), and such provision may (among other things) include provision—(a) conferring power on the First-Tier Tribunal to order that leases be varied to give effect to this section;(b) providing for terms to be implied into leases without the need for any order of any court or tribunal.(8) The Secretary of State may by regulations prescribe descriptions of buildings in respect of which regulations may be made under subsection (1).(9) 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;“long lease” has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;“management function” has the meaning given by section 96(5) of the Commonhold and Leasehold Reform Act 2002.(10) The Secretary of State may by regulations amend the definition of “management function” for the purposes of this section.”Member's explanatory statement
This new Clause would ensure that leases on new flats include a requirement to establish and operate a residents’ management company responsible for all service charge matters, with each leaseholder given a share.
Lord Khan of Burnley (Lab)
My Lords, I will speak to Amendment 92 on behalf of my noble friend Lady Taylor of Stevenage. This new clause would ensure that leases on new flats included a requirement to establish and operate a residents’ management company responsible for all service charge matters, with each leaseholder given a share. The amendment has dual purposes. It would remedy two significant current flaws in the leasehold system that the Bill does not address, and it would provide a step forward to commonhold, without doing so in a piecemeal way.
I turn to the current flaws. First, unless leaseholders in blocks of flats acquire the right to manage, collectively enfranchise and then establish a residents’ management company, or buy a property in a development where a residents’ management company has already been set up, they have no control whatever over how their money is spent. This is despite having to pay all the costs to maintain and manage their buildings. Secondly, the rights that leaseholders do have to exercise control over how their buildings are managed—whether through a tribunal, the appointment of a manager or the right to manage—are locked behind difficult and often costly legal processes to which many will not have access.
Our amendment would address both these problems by requiring that when a new residential block of flats was constructed and its units sold the development should be a three-way lease between the freeholder, the leaseholder and the new residents’ management company. Each leaseholder in the block would then own a share of the residents’ management company, and it would be under their exclusive control, giving them full responsibility for services, repairs, maintenance, improvements, insurance and the cost of managing their building. This would give them control over how their money was spent. This ability to influence the management of their building would come at no additional cost.
The Minister will no doubt say that our amendment leaves no space either for limited cases in which a mandatory residents’ management company is not appropriate or where leaseholders simply do not want this responsibility. The Government have said many times that they are keen to give more home owners control over the management of their buildings, and we welcome that the Bill is moving in the right direction. Would it not make sense to have leaseholder management of their buildings to be the default?
Where mandatory residents’ management companies are not appropriate, could the Government not put forward such cases to be incorporated as exceptions? In the case of leaseholders not wanting to be compelled to manage their buildings, could there not be a provision for leaseholders to use the power of the management company to appoint a manager or simply return management to the freeholder? I would be keen to hear the Minister’s thoughts on these alternative options.
The real importance of this clause, however, comes from it being a key way of laying the groundwork for a future where commonhold is the default and leasehold becomes obsolete. It would help to create a cohort of leaseholders who have experience in running their buildings, as they would under a commonhold arrangement, even if that experience is limited both in time and the extent to which they have carried it out.
This is certainly not a perfect solution. It would do little for leaseholders who have already purchased their flats and do not currently have a residents’ management company. We need other solutions, building on measures already in the Bill to address the challenges they will continue to face. I look forward to the Minister’s response and beg to move Amendment 92.
Baroness Thornhill (LD)
My Lords, I support Amendment 92 in the name of the noble Baroness, Lady Taylor of Stevenage, and explained so well by the noble Lord, Lord Khan of Burnley. The right to manage was first introduced in the leasehold reform Act of 2002. From the start, it was, as the noble Lord said, intended as a simple and cost-effective alternative to collective enfranchisement, but, despite the happy intentions of that Act, the reality was quite different. Take-up has not been what we would all have hoped for or expected, because the right to manage has proved incredibly problematic in practice.
These problems culminated in the Law Commission’s final report in 2020—time has marched on—on exercising the right to manage. It summarises the difficulties as follows:
“The ‘simple’ RTM process envisaged in the original consultation which led to the 2002 Act has not come to pass. The requirement for strict compliance with the statutory procedures, such as the service of certain notices on particular parties, can be unforgiving to leaseholders. In many cases, small mistakes made by the RTM company have afforded landlords opportunities to frustrate or delay otherwise valid claims. The Court of Appeal has noted that while the procedures ‘should be as simple as possible to reduce the potential for challenges by an obstructive landlord’, in fact they ‘contain traps for the unwary’”.
This is not a good advert for anyone seeking to exercise the right to manage, which we believe is fundamental to the change we need. The Law Commission subsequently made 101 recommendations, of which the then Government adopted two.
Whole swathes of actions could be happening to make this process simpler and to encourage residents to take this up. We have no doubt that the process is not an easy one and that the provisions in the Bill as it stands are actually quite limited. The uplift from 25% to 50% is welcome, as are the beneficial changes in cost provision, and minor changes to courts and tribunals. They are all positive but underwhelming—a far cry from the 101 recommendations.
In debates throughout the course of the Bill we have heard numerous instances of excessive charges and unfair practices, from both Houses. The Law Commission summed it up best when it said that
“the landlord and leaseholder have opposing financial interests—generally speaking, any financial gain for the landlord will be at the expense of the leaseholder, and vice versa …Their interests are diametrically opposed, and consensus will be impossible to achieve”.
This amendment is quite realistic: it is starting only with new build, but what it does is symbolic, in that it draws a line under the past and clearly points the way forward. Noble Lords will notice that I am not wearing rose-coloured spectacles, and we are not saying that the residents’ right to manage will be any easier—but it will be fairer. Those paying the bills control the bills and can remove any poorly performing providers. We believe that a leaseholder-controlled resident management company with an elected board, accountable to all leaseholders, is a far more democratic arrangement than one middleman freeholder controlling block management, spending leaseholders’ money freely and not involving them in the decision-making processes. It is fundamentally a better way to go, and there seems to be widespread support for it.
We support this amendment because we believe that it is a step in the right direction and could reinvigorate right to manage with the right support. It seems that the Government are finding reasons not to do something instead of working to enable something better to happen.
Lord Gascoigne (Con)
My Lords, I thank the noble Lord, Lord Khan of Burnley, for speaking to Amendment 92 in the name of the noble Baroness, Lady Taylor of Stevenage, and I am grateful for both contributions in this brief discussion.
The amendment seeks to require the establishment of leaseholder-owned management companies for all leasehold flats. I understand the intention to ensure that, by default, all leaseholders of new flats would be responsible for the management of their buildings. The Government support the desire to give more home owners control over the management of their buildings. This Bill is intended to do just that, and will make it cheaper and easier for more leaseholders to own and manage their homes should they wish to.
In some cases, developers have voluntarily set up residents’ management companies to transfer management responsibility to leaseholders. We welcome this, and encourage the industry to adopt this model where appropriate. However, we believe that the best way in which to achieve resident-led management for new buildings is not for government to mandate change to leasehold but to reinvigorate and improve the uptake of commonhold. Commonhold does not require involvement from a third party.
We will reinvigorate commonhold so that it is a genuine alternative to leasehold for new flats. However, there are limitations in the current legal design of commonhold which can limit its use in some settings. We must get any changes right, and preparing the market for the widespread uptake of commonhold will take time. Existing leaseholders can already use the right to manage to take over management responsibility for their building. This is an established, no-fault right that allows leaseholders to take over management responsibility when a majority of leaseholders wish to do so.
There are some situations where the right to manage is not available because leaseholder-led management is not considered appropriate—for example, in largely commercial buildings or where there are social tenants. We believe that it would not be appropriate to apply a blanket provision requiring residents’ management companies for all new buildings without considering where equivalent protections should apply.
Further practical challenges include determining at what point during development and the sale of units management responsibility would be transferred; what position the freeholder would have in the management company if they retained non-residential units or those on short leases; and what protections would be required should leaseholders not wish to take up management responsibilities. Answering these questions would require significant additional consideration—consideration that is ultimately unnecessary because a reinvigorated commonhold is the answer for new buildings, and the right to manage for existing leaseholders makes sure that home owners can already control the management of their building.
Lord Khan of Burnley (Lab)
My Lords, I thank the Minister for his response, although it does not satisfy exactly the issues that we have raised. I thank the noble Baroness, Lady Thornhill, for saying that this
“draws a line under the past”
and is a
“step in the right direction”.
It is a fairer process when those who are paying the bills have control of the bills.
We would not need this amendment if the Government had followed the Law Commission recommendations to move to a commonhold system now. This is a missed opportunity. That is why we have argued that this is a limited Bill. I wish that the noble and Lancastrian Lord had gone for the Lancastrian approach and been absolutely candid and answered the questions. In the meantime, I accept his reasoning and beg leave to withdraw the amendment.
The Earl of Lytton
“SCHEDULEBUILDING SAFETY REMEDIATION SCHEMEDuty to establish the scheme
1 (1) The Secretary of State must establish, or make arrangements for the establishment of, a Building Safety Remediation Scheme (“the BSRS”).(2) The purpose of the BSRS must be to ensure that residential blocks of flats with building safety risks are made safe, mortgageable and insurable at no cost to leaseholders or landlords. (3) For the purposes of this Schedule “building safety remediation principle” is the principle that—(a) so far as reasonably practicable, remediation costs for relevant buildings with building safety risks arising from defective construction or additional building work should be met by the developer, the principal contractor or both, and(b) where that is not reasonably practicable, or where building safety risks do not arise from defective construction or additional building work, costs should be met by the building industry.Scope of the scheme
2 The BSRS must be framed so as to apply to relevant buildings which—(a) were constructed, or subject to additional building work, on or after 1 June 1992, and(b) present building safety risks.Operation of the scheme
3 (1) The BSRS must provide for persons (including freeholders and leaseholders) to apply—(a) for a building to be recognised as a relevant building, and(b) for a relevant building to be recognised as eligible for grants in respect of the cost of remediation works.(2) The BSRS must provide—(a) for the appointment of persons (“BSRS adjudicators”) with appropriate expertise to determine, on behalf of the Secretary of State, applications under sub-paragraph (1)(a) and (b), and(b) for BSRS adjudicators to be required to exercise operational independence in making determinations under the scheme.(3) For the purposes of sub-paragraph (2), the BSRS may provide for appointments to be made by the Secretary of State or by one or more persons designated for that purpose by the Secretary of State under the scheme.(4) The BSRS must provide that determinations of BSRS adjudicators in respect of building eligibility for the scheme under paragraph 4 are final (but nothing in this sub-paragraph prevents the exercise by the High Court of its judicial review jurisdiction).Scheme supplementary regulations
4 (1) The Secretary of State must make regulations (“scheme supplementary regulations”) in respect of the BSRS.(2) Scheme supplementary regulations, in particular—(a) may make provision for determining what is to be, or not to be, treated as a relevant building for the purposes of the scheme;(b) may make provision for determining the date on which buildings were constructed or subject to additional building work;(c) may make provision for determining who is entitled to make an application under the scheme in respect of a relevant building;(d) may specify criteria to be applied by BSRS adjudicators in determining whether a relevant building presents building safety risks as a result of defective construction (and the criteria may, in particular, make provision wholly or partly by reference to building regulations or other enactments in force at the time of construction or by reference to specified classes of document);(e) may make provision permitting or requiring BSRS adjudicators to conduct tests, and requiring owners and occupiers of relevant buildings to cooperate with BSRS adjudicators in conducting tests; (f) may make provision permitting BSRS adjudicators to require local authorities or other specified classes of person to provide information or documents, and requiring persons to comply with any requirements imposed;(g) may make provision about the timing of applications and determinations;(h) may make provision about evidence to be adduced in support of an application;(i) may require or permit BSRS adjudicators to operate a rebuttable presumption of defective construction where specified classes of fact have been proved (for which purpose the regulations may make provision similar to, or applying with or without modification, any enactment);(j) may make provision about the making, processing and determination of applications under the scheme;(k) may make provision about the giving of notice to developers and others;(l) may make provision about the payment of awards;(m) may make provision about monitoring expenditure on remediation works;(n) may set a threshold for the estimated or quoted cost of remediation works below which an application for recognition cannot be made;(o) may make provision for determining, having regard in particular to the need for proportionality, the nature and extent of remediation costs which may be funded by the scheme (for which purpose “remediation costs” means any class of expenditure related to building safety risks, including, in particular, repair costs, the costs of interim mitigation or safety measures and reimbursement of or compensation for increases in insurance premiums);(p) may make provision for account to be taken of grants provided in respect of remediation works by any other scheme established by enactment or by a public authority;(q) may make provision for financial assistance provided by any other scheme established by enactment or by a public authority to be repaid out of grants under the remediation scheme;(r) may permit or require the amalgamation of multiple applications in respect of one relevant building, or of applications on behalf of the residents of one or more relevant buildings;(s) may permit or require representative applications on behalf of the residents of one or more relevant buildings;(t) may make provision about the qualifications, appointment, remuneration and conduct of BSRS adjudicators, and the regulations may, in particular—(i) provide for adjudicators to be remunerated from BSRS funds;(ii) provide for indemnities in respect of decisions taken by adjudicators (for which purpose the regulations may apply an enactment (with or without modification));(u) must include provision requiring the maintenance and publication of records of applications and determinations under the BSRS;(v) must confer a right to appeal to the First-tier Tribunal in respect of determinations as to whether a building safety risk arose from defective construction or additional building work.Scheme funding regulations
5 (1) The Secretary of State must make regulations about the funding of the BSRS and of grants made under it (“scheme funding regulations”).and of grants made under it (“scheme funding regulations”). (2) Scheme funding regulations must aim to apply the building safety remediation principle so far as practicable.(3) For that purpose, scheme funding regulations must aim to ensure that a grant awarded under the BSRS is funded—(a) so far as possible where building safety risks arise from defective construction or additional building work, by the developer or principal contractor of the building in respect of which the grant is awarded, and(b) failing that (whether by reason of the dissolution of a developer or principal contractor, insolvency or otherwise), or where building safety risks do not arise from defective construction or additional building work, by money paid into a fund maintained through a levy on the building industry in general, or specified parts of the building industry.(4) For the purposes of achieving the objective in sub-paragraph (3)(a)—(a) the reference to the developer of a building includes a reference to any person who arranged for its construction or additional building work and for the sale of units in the building;(b) the reference to the principal contractor is a reference to the person who was responsible to the developer for the construction of a building or undertaking additional building work;(c) scheme funding regulations must permit a BSRS adjudicator to provide for an award under the scheme to be paid by one or more persons specified by the adjudicator (and awards may, in particular, provide for joint and several liability);(d) scheme funding regulations must confer a right to appeal to the First-tier Tribunal;(e) scheme funding regulations may include provision permitting a BSRS adjudicator to permit or require an award for payment by a specified person to be satisfied wholly or partly by a person connected to that person (within the meaning of the regulations, for which purpose the regulations may apply, with or without modification, section 121 of the Building Safety Act 2022 and any enactment relating to joint ventures);(f) scheme funding regulations may include provision about enforcement of liability to satisfy awards, which may, in particular—(i) provide for collection of awards as a statutory debt,(ii) include provision for interest or penalties,(iii) provide for liability to make payments pending appeal or review, and(iv) create criminal offences in connection with evasion.(5) For the purposes of achieving the objective in sub-paragraph (3)(b), scheme funding regulations—(a) must establish one or more levies to be paid by specified businesses or classes of business;(b) must make provision for determining liability to pay the levy;(c) may confer functions on BSRS adjudicators or other specified persons (which may include the Secretary of State) in respect of determination of liability to pay the levy;(d) must confer on a person determined to be liable to pay the levy the right to appeal to the First-tier Tribunal;(e) may provide for different amounts of levy to be paid by different classes of person;(f) may provide for the levy to be paid by way of one-off payments, periodic payments or both; (g) may include provision about enforcement of liability to pay the levy (which may, in particular, provide for collection of the levy as a statutory debt, include provision for interest or penalties and create criminal offences in connection with evasion);(h) must include provision about the administration of the levy by the Secretary of State, including provision as to the maintenance and publication of estimates, accounts and other records;(i) may include supplemental provision about the levy.(6) In making regulations under sub-paragraph (5), and in particular in assessing the proportionality and other fairness of any levy imposed by regulations under sub-paragraph (5), the Secretary of State must—(a) have regard to any other levy or similar imposition that appears to have a similar purpose as a levy under the scheme funding regulations, and(b) must consult persons appearing to him or her to represent the interests of persons affected by other relevant levies and impositions.(7) Scheme funding regulations may include provision about—(a) application of awards, levies and grants, including provision for holding (or return) of surplus funds;(b) the nature and extent of obligations imposed by awards (which may, in particular, provide for payments in money or services or money’s worth);(c) processes and procedures to be applied in determining applications for grants and questions of liability to awards (which may, in particular, include provision for determination wholly, partly, absolutely or contingently by arbitration, mediation or any other kind of process or procedure the Secretary of State thinks appropriate);(d) terms and conditions of awards, levies and grants;(e) appraisals, appeals and enforcement.Apportionment
6 (1) Scheme funding regulations may make provision about apportionment of liability for defective construction.(2) In particular, scheme funding regulations may provide that where a person is required to pay an award under the BSRS, that person may bring proceedings to recover a contribution from one or more persons who share responsibility for the defects in respect of which the award is made.(3) Provision made by virtue of this paragraph may—(a) confer jurisdiction on the First-tier Tribunal or on any other specified court or tribunal;(b) apply (with or without modifications) any enactment about third- party liability.Interim payments
7 (1) The Secretary of State may make interim grants to persons whom the Secretary of State believes are likely to be entitled to benefit from the remediation scheme.(2) Interim grants may be made on such terms and conditions (including as to repayment) as the Secretary of State may specify.(3) Scheme supplementary regulations—(a) may include provision for account to be taken of interim grants under this paragraph, and(b) may include other provision about interim grants under this paragraph (including provision about applications for grants, eligibility for grants and determination of applications for grants). Interpretation
8 For the purposes of this Schedule— “building safety risk” has the meaning given in section 120(5) of the Building Safety Act 2022;“building industry” has the meaning given in section 127(7) of the Building Safety Act 2022;“construction” includes any kind of building work (whether part of the original construction of a building or not) including works of improvement, repair and extension;“class” includes description;“defective construction or other building work” means construction or additional building work that—(a) contravened building regulations or other enactments in force at the time of the construction or additional building work, or(b) satisfies any other criteria specified in the BSRS or in scheme supplementary regulations;“BSRS funding regulations” has the meaning given by paragraph 5;“BSRS scheme” has the meaning given by paragraph 1;“BSRS adjudicator” has the meaning given by paragraph 3;“grant” includes loans and any other form of financial assistance (for which purpose a reference to payment includes a reference to the provision of assistance);“building safety remediation principle” has the meaning given by paragraph 1;“landlord” means means the landlord under the lease or any superior landlord.“remediation costs” has the meaning given by paragraph 4;“relevant building” means a self-contained building, or self-contained part of a building that contains at least two dwellings;“scheme supplementary regulations” has the meaning given by paragraph 4.Consultation
9 Before making the scheme, the scheme supplementary regulations and the scheme funding regulations, the Secretary of State must consult—(a) persons appearing to represent the interests of freeholders, leaseholders or occupiers of blocks of flats with building safety risks;(b) persons appearing to represent the interests of the construction industry and related industries, and(c) such other persons as the Secretary of State thinks appropriate.Regulations
10 (1) Scheme supplementary regulations and scheme funding regulations—(a) may make provision that applies generally or only for specified purposes,(b) may make different provision for different purposes,(c) may confer functions (including discretionary functions) on specified persons or classes of person, and may provide for the Secretary of State to appoint persons to exercise functions under the regulations or the remediation scheme (whether or not on behalf of the Secretary of State), and(d) may include supplemental, consequential or transitional provision.(2) Scheme funding regulations may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.(3) Scheme supplementary regulations are subject to annulment in pursuance of a resolution of either House of Parliament.” Member's explanatory statement
This new Schedule would implement a building safety remediation scheme to ensure that buildings with building safety risks are put right without costs to leaseholders.
The Earl of Lytton (CB)
My Lords, in moving Amendment 93B I will also speak to linked Amendment 107 and Amendments 105C to 105G standing in my name. These amendments offer a range of proposals to enhance the protection of leaseholders from the costs of remedying fire protection or other structural defects.
I make no apology for returning, once again, to this matter of basic consumer protection for leaseholders and for going over some old ground. My mailbox tells me that the issues are far from resolved. Too many leaseholders remain seriously encumbered by the defects in the original construction of flats that they occupy or own. The plain truth is that the Building Safety Act—I shall refer to it as the BSA—is not delivering the protection that leaseholders ought to expect as a basic right, and this Bill serves to undermine it further in certain material respects.
There is cross-party consensus that the BSA needs amendment. I pay tribute to colleagues who, with me, continue to press the Government to make changes. I support the other amendments in this group for reasons that will become apparent. The BSA is convoluted. It complicates, excludes, creates uncertainty and risk, and delays remediation. It leaves some leaseholders—and their lenders—with permanently impaired assets. Where before there was one market, the BSA creates three tiers of flat ownership, with such complex rules that conveyancers frequently decline instructions and, increasingly, insurers are unwilling to offer professional indemnity cover to practitioners.
The Government have placed substantial remediation obligations on landlords. The courts should be the last resort, yet the BSA and the Bill force landlords to take legal action as a first resort on initial unfunded remediation and, thereafter, to recover the costs of defects that they did not cause from the developers. Where the developer no longer exists, they must fund it themselves. There is no automatic developer liability to meet any of the costs in the 85% of buildings not covered by the developer contract. There is no legal obligation on any contracting developer to cover non-life-critical fire defects and structural defects. Landlords are the backstop if public funding for cladding costs happens to prove insufficient. Construction inflation, moreover, has risen by a quarter since the announcement of the building safety fund in March 2020, so my first question is: what assurance exists that all eligible claims on the building safety fund and the cladding safety scheme will be met even if they exceed those historic cost budgets?
More broadly, this model seems to be based on little more than political bias and destined to fail, and fail in a way that will ultimately harm leaseholders and the leasehold market. I have questioned previously whether the major landlord groups can afford to fulfil their remediation obligations as demanded. I was therefore surprised to learn that under the Bill, and despite relying on landlords to fund non-cladding remediation works or related legal action, the Government proposed to eliminate or reduce the ground rent income. I was further surprised to learn from the noble Baroness, Lady Swinburne, in a letter last week, that the Government have no estimates of the risk of freeholder insolvency.
The main asset of many landlord groups is ground rent income, as we have heard before in discussions on the Bill. It is used to repay the long-term bonds or loans over many decades. If the income is removed, some will likely declare insolvency: the Government acknowledge this risk in their own impact assessment. I mention this again because it is critical to the remediation obligation. So that leaseholders are not left completely exposed if their landlords are insolvent, I trust that the Minister will regard as an essential lifeline my amendments, which are the only ones providing for alternative remediation funding sources. I would like to know what contingency plans the Government have in place apart from this, should buildings with remediation obligations escheat to the Crown, an eventuality the Minister alluded to on Monday.
Valuers are already marking down portfolio valuations because of material uncertainty. Permanent impairment of leaseholder and lender assets is also risked under the Government’s model. Basel III pillar 1 standards come into force next year. Lenders will have to revalue a loan if an
“event occurs resulting in a permanent reduction of the property value”.
Leaseholders will also be hit by these provisions; specifically the unprotected and partially protected—that is, the capped liability leaseholders—and those leaseholds covered by the developer contract. The contract allows combustible materials, now banned, to remain on buildings so long as they do not cause that “life-critical fire safety risk”. I put that in quotes: it is a non-statutory definition and my Question for Written Answer on this still awaits a response. But leaving these in place gives rise to a B1 category of building risk rather than the fully remediated A1 classification. At the same time, these flaws are evident to the market, which values an asset not according to life safety but according to the risk of material loss. The result is permanently higher insurance premiums. Ministers may wag the finger at the FCA in relation to its insurer members but, in truth, the market has spoken on the BSA and on building and professional indemnity cover risks, and no amount of political manipulation is going to alter that.
There is one group that faces a very bleak outcome, unless the Government change course, and that is in enfranchised leaseholders. Theirs are, in the terms of the BSA, “not relevant buildings”, a point that the noble Lord, Lord Young, makes in his amendments. The limit of any new protection afforded to resident management companies is the cost of obtaining a remediation contribution order, so can the Minister explain how enfranchised leaseholders will deal with non-cladding defects or effectively force the original developer to make a contribution, especially if it happens not to exist any longer?
Better policy is clearly needed. Simply, the BSA should be amended to protect all leaseholders, regardless of circumstances, in buildings of all heights. A separate, dedicated funding stream is needed so that leaseholders are not left in limbo, particularly when their landlord becomes insolvent.
The Committee will be familiar with Amendments 93B and 107 from the debates on the levelling-up Bill and the then Building Safety Bill, so I will try not to labour the point too much. Amendment 107 requires the Government to establish a building safety remediation scheme and Amendment 93B proposes a new schedule setting out the scheme’s key features. The scheme would serve to protect all leaseholders, without exclusion, from building safety remediation and interim safety costs. As drafted, it is fully funded.
Joint and several liability for remediating building safety defects is placed on the developer and principal contractor where a building did not comply with regulations at the time of construction. If neither can pay, or if the regulations have moved on and a building is retrospectively deemed unsafe, remediation funding comes from a levy across the wider building and materials industry. That approach has been extensively scrutinised by a range of legal and other professionals. In particular, I thank David Sawtell KC, of 39 Essex Chambers, for making himself available when I recently met with the Minister, whom I thank for facilitating the meeting.
I have added a second option for good measure. Amendments 105C to 105G amend certain arrangements already in the BSA. The developer contract limits developer responsibility to undefined “life-critical fire safety defects”. That means that all other defects are excluded. Amendment 105C closes that loophole by requiring developers to remedy all defects defined in the BSA. That brings all fire and structural defects within the scope of the developer contract—and, therefore, the responsible actors scheme—and puts that in line with primary legislation. It ends the arrangement whereby Parliament set in legislation one definition of defects requiring remediation while the Secretary of State entered into some side agreement with the industry for something rather different. At present, the government scheme requires developers only to remediate their own buildings. The Secretary of State has not given effect to Section 126(4)(b) of the BSA on the costs of remediating other buildings. Amendment 105D would put that right by amending the responsible actors scheme regulations.
Amendments 105E and 105F set out to end the three- tier system of leaseholder exclusions from remediation cost protection. Amendment 105E removes the exclusions according to building height and type of lease set out in the BSA. Amendment 105F removes the conditions and exclusions around remediation cost protection in Schedule 8 to the BSA.
The risk of major landlord insolvency is real. Amendment 105G reinstates and expands the original BSA provisions on insolvent landlords. It obliges insolvency practitioners and Law of Property Act receivers to commence or continue remediation work. Remediation costs are to be considered part of their expenses and therefore paid ahead of other creditors. It also reinstates their power to apply for a remediation contribution order, which the Government seek to remove through the Bill. But—this is a very big “but”—insolvency practitioners need secure funding if that is to work.
In closing, I draw attention to the great gulf between the Government’s self-praise about what they are doing—although, to a great degree, there is a lot of good in the Bill—and the reality. That reality is measured in the anguish and distress of hundreds of thousands of leaseholders who bought properties in good faith and now cannot sell them, get mortgages or move on with their lives. It is measured in the 15,000 people evacuated from their homes, as reported three days ago in the Sunday Times and referred to by the noble Baroness, Lady Thornhill, on Monday. It is measured in the 37% defect rate found in developer-contract buildings; in the glacial progress of remediation revealed in the Government’s most recent progress statistics; and in the FCA’s frank warning that insurers price risk not according to the loss of life, as the Government may wish, but according to the stronger test of total loss of asset. It is measured by the fact that this debate continues to play out seven years after the Grenfell fire.
This inequitable scattering of liability across innocent parties begs the question: why do the Government not make the wider construction industry, which designed, built, sold and banked the profits from these defective properties, the primary backstop for the damage done? We do not have an answer to that.
I have provided in these amendments two possible routes to effective protection of leaseholders, the most vulnerable group in this sorry tale of shame. I ask the Minister and noble Lords: if not by these proposals, how? When will the Government act to protect all innocent, home-owning consumers from market failure, and are they content to risk their reputation and legacy on simply making this a problem for the next Government? I beg to move.
Lord Young of Cookham (Con)
My Lords, it is a pleasure to follow the noble Earl, Lord Lytton, who has been at the forefront of the campaign to extend protection to leaseholders since the Building Safety Act was passed. I say at the beginning that I will miss the contributions to our debates from the noble Lord, Lord Stunell, who was a regular contributor to housing debates and spoke with great authority.
This group of amendments is for many leaseholders the most important, and it differs from the rest of the Bill. The rest of the Bill gives rights to leaseholders that they did not have when they bought their lease. This group restores rights that leaseholders thought they had when they bought the lease but have now discovered that they did not. That right was to live in a building that complied with the safety regulations at the time. These leaseholders took all the necessary precautions, employing professional people before buying, but now find that they are faced with unaffordable bills, unsaleable properties and, quite often, repossession. As the noble Earl referred to, the Sunday Times revealed that more than 15,000 residents have been forced to leave homes due to fire or fire safety defects. These decants are on the rise, with residents decanted from 21 buildings last year. Until these injustices are addressed, the Bill, with its new rights, is meaningless to those leaseholders.
I welcome the steps the Government have taken through the Building Safety Act, and I am grateful to my noble friend the Minister for patiently listening to me during our many meetings. But despite the steps forward in recent years, there is still a gap between what the Government promised at the outset and where we are now. I will not repeat the quotes I gave at Second Reading but here is one I did not use, from Michael Gove:
“Most importantly, leaseholders are shouldering a desperately unfair burden. They are blameless, and it is morally wrong that they should be the ones asked to pay the price”.—[Official Report, Commons, 10/1/22; col. 283.]
I will come back in a moment to those who fall outside the protection.
Amendment 102 asks for a progress report. It covers the same ground as my Amendment 101, which was down for Monday but which I was unable to speak to owing to an aggressive Covid jab over the weekend. I am grateful to Giles Grover and the team at End Our Cladding Scandal for their briefing.
According to the department’s own figures on overall remediation, of the 4,329 buildings identified with unsafe cladding, over half had not started remediation at the end of March this year—seven years after Grenfell. Only 23%, 976 buildings, have completed remediation works. Within that overall figure there are 1,501 buildings 11 metres and over in height that have life-critical fire safety defects and where developers have committed to remediate or pay to remediate, but over half have not started remediation. Some 1,001 of the developers’ buildings have not even been assessed.
Looking at the cladding safety scheme, there are now 1,105 buildings within the scheme after the pilot was launched in November 2022. Work has been completed on not one. Work has started on two and the rest are in various stages, the largest number being in “pre-application”. Nor am I reassured by the statement by the department:
“All residential buildings above 11 metres in England have a pathway to fix unsafe cladding, either through a taxpayer-funded scheme or through a developer-funded scheme, protecting leaseholders from these costs”.
Having a pathway is like a traveller having a map. It does not follow that he has begun his journey. Where there is grant funding, the money is not being disbursed at pace. Because of these delays, the department had to surrender nearly a quarter of a billion pounds to the Treasury last year. We need a firm grip and oversight of remediation through the available schemes—which have no visible oversight or co-ordination—and that is what Amendment 102 provides.
The rest of my amendments have broadly the same objective as those tabled by the noble Earl, Lord Lytton, while getting there by a slightly different route. They would ensure that the Building Safety Act operates as intended, as was the Government’s stated objective in the King’s Speech last year. On Amendment 96, on buildings under 11 metres, the department’s view was set out by the Minister, Lee Rowley, on 22 April:
“Of those, we can count on one hand where there has been a problem. We are working with each of those three buildings to make the progress we need to make”.—[Official Report, Commons, 22/4/24; col. 636.]
Those three require full remediation but leaseholders are now reliant on the good will of their developer, without any mechanism in place to compel work to take place to the necessary standard. In Inside Housing on 26 April, it was reported that there are 586 homes under 11 metres in Barnet with defective cladding. One 25% shared owner has a bill of £23,000, and this falls outside the Building Safety Act. The other 75% is owned by a housing association, Notting Hill Genesis, which has said that under the terms of the lease the shared owner is responsible for all remediation costs. Mortgage lending on buildings under 11 metres is still inconsistent. Based on data from four or five mortgage lenders, an EWS1 certificate was deemed to be required for mortgage valuations on approximately 2,000 low-rise flats last year, although the Government have said that it is not necessary.
Insurance in low-rise buildings is another quagmire, with several insurers mandating work as a requirement of providing cover. There are many cases of difficulties with insurance; I cite only one. Aviva was the only insurer that would give cover on one low-rise block, but on the condition that HPL cladding would be removed within an urgent timeframe of four months. The judge at the First-tier Tribunal hearings was satisfied that this was the case, having seen the correspondence. There was no means of funding other than leaseholders. Cladding was removed in 2022 as instructed. It has taken two years to raise funds to replace the cladding, with the replacement due to begin in February 2024. The total cost will be £45,000 per leaseholder.
I remain concerned over resident-owned—or enfranchised —buildings, which were referred to by the noble Earl, Lord Lytton, and are covered by Amendment 99. Last November the department issued a press release confirming that this Bill would
“include measures to amend the Building Safety Act 2022 to make it easier to ensure that those who caused building-safety defects in enfranchised buildings are made to pay”.
Five months later, it remains unclear what measures these will be. Those who were encouraged by the Government to take ownership and control of their buildings remain beset with uncertainty on how and when their homes will be made safe. They do not have the protection afforded to those who did not enfranchise. The same press release also said that the Government would ensure that
“the leaseholder protections are not unfairly weighted against those who own properties jointly”.
This is addressed in Amendment 100. This is known as the marriage penalty, whereby a couple owning four properties together do not have this part-ownership accounted for in the leaseholder protection, despite tax law recognising this pro rata weighting. A call for evidence on this was opened in early April. However, time seems to be running out for the Government’s commitments to be kept in respect of joint-owner leaseholders—unless my noble friend can tell me otherwise.
The Secretary of State has repeatedly expressed his desire to ensure that
“those with the broadest shoulders must pay”,
so Amendment 100 would also help those who invested in buy to let but whose shoulders are not broad. It would ensure that all received protection for the first three flats that they owned, rather than the current cliff edge, and introduce a leaseholder wealth criterion, which is the same basis on which freeholders and developers are tested to assess whether they have the means to pay. The department is well aware of the case of Malcolm in Salford, a leaseholder of a number of properties with a total value below £1 million, who asked the department for help two years ago but has now been forced to enter into bankruptcy. Who will now pay his share of the remediation costs?
Finally, that amendment would end
“the distinction between qualifying and non-qualifying leases once prescribed conditions are met”—
once remediation is complete. This would ensure that the value of flats owned by leaseholders who are still deemed to be non-qualifying would be returned to somewhere near their market value without the severe impairment that non-qualifying leases currently suffer, even where no work is required.
Without this set of amendments, ordinary people across the country will still shoulder a desperately unfair burden, still face financial ruin and still be no closer to moving on with their lives, all at odds with the assurances that Ministers have given. I know my noble friend is sympathetic and I look forward to her reply.
The Lord Bishop of Lincoln
My Lords, I stand to support the amendments in the name of the noble Lord, Lord Young of Cookham. My right reverend friend the Bishop of Manchester has put his name to the amendments and regrets that he cannot be in his place today. As we have heard, the Building Safety Act 2022 contained welcome measures to address historic building safety defects, but the fact remains, as other noble Lords have noted, that it does not go nearly far enough. Seven years on from the Grenfell fire, only 21% of high-rise blocks have been fully remediated—and they are the ones that are eligible; there remain gaps in provision where leaseholders are disqualified for such arbitrary reasons as their block being 10.9 metres tall rather than, say, 11.1. The Act disqualifies huge numbers of people who are now trapped in potentially unsafe flats which they will struggle to sell. They might face very high bills through service charges and insurance premiums.
My right reverend friend’s diocese of Manchester has been identified, as mentioned by the noble Lord, Lord Young, as one of the areas most at risk from inadequate cladding. More than 20 buildings have been identified with ACM cladding in both Manchester and Salford, and in Salford between six and 10 of those are yet to be remediated. The measures are not being implemented fast enough, which is why I also support the amendment from the noble Baroness, Lady Pinnock, which would require a statement to Parliament on progress, because, clearly, more scrutiny is needed. But for those buildings which are ineligible for support entirely, a statement to Parliament does not go far enough. Does the Minister believe that living on the top floor of a block of 11.5 metres is significantly safer than living on the top floor of a block of 11 metres, where both have flammable cladding? Beyond this obvious safety issue, my right reverend friend has received correspondence evidencing the difficulties that some leaseholders face in selling ineligible properties due to the difficulties in obtaining a mortgage on those flats. Will the Minister commit to ending this injustice once and for all?
Lord Rooker (Lab)
My Lords, I support the thrust of the amendments in general. I also much regret the news we had today about the noble Lord, Lord Stunell. The points I am going to raise relate to a previous debate we had on the levelling-up Bill where he followed me and also raised some very practical issues on safety.
I want briefly to follow up the points I raised on 18 September last year during the passage of the levelling-up Bill, at Hansard cols. 1252 to 1255, regarding the issue of electrical safety and what are known as NCDs—neutral current diversions. I have no interest to declare, other than my 60-year membership of the Institution of Engineering and Technology and that I came across this issue via an article in the April 2023 issue of the IET magazine.
Since I raised the issue in September last year, I have been contacted by several electrical engineers. Indeed, I visited one factory involved in preventing neutral current diversions. I will keep the techy bit brief. A neutral current diversion can occur on the network when the combined protective earthing and neutral—PEN—conductor fails. The current is then diverted, making a circuit via exposed metalwork on buildings, including gas, water and oil pipes. This can lead to a significant build-up of heat, because those pipes are not designed to carry electricity, which can lead to fires and gas explosions. These conductors are susceptible to damage, corrosion, and general wear and tear across what is an ageing network. We probably have the second-oldest electrical network in the world—and it will vastly expand due to our net-zero obligations.
Baroness Thornhill (LD)
My Lords, before I get into the detail of these amendments, I will comment on some significant absences from our Benches. First, my noble friend Lady Pinnock is up for re-election tomorrow. She has been a passionate and doughty fighter from the beginning and throughout this tragic journey.
The second absence, as has already been mentioned, is due to the recent shocking death of Lord Stunell. His expertise and attention to detail, often peppered with a gentle sense of humour, were a perfect foil to my noble friend Lady Pinnock: they worked well together. We have missed him significantly during the passage of this Bill; I am truly a poor sub from the bench.
In truth, the significant contributions from the noble Earl, Lord Lytton, and the noble Lord, Lord Young of Cookham, are grounded in solid evidence and reality. We support and endorse them and I have no intention of going anywhere near the detail that they described. I admit openly that I have learned a lot.
All the amendments in this group relate to building safety and to the fallout of the Building Safety Bill and the gaps that were created as a result of it. Noble Lords have outlined them very well and I am certain that the noble Baroness, Lady Taylor, will too.
After the tragic events at Grenfell Tower in 2017, in which 72 people lost their lives, it became clear that millions of leaseholders would need to make their buildings safe and habitable. The campaign group End Our Cladding Scandal—some of its members are here today—estimates that as many as 3 million leaseholders are caught up in the scandal. That is a huge number of families and people and, if you think of the people who they know, care for and love, you will be talking about considerably more.
The Building Safety Act sought to protect leaseholders from the cost of remediating these safety defects but, as has been amplified, the scheme has a glaring issue: a huge number of affected leaseholders are not included. We support the amendments that are clearly designed to widen that pool—if we do not just say “Let’s do the whole caboodle”.
Estimates included in a briefing from the National Residential Landlords Association suggest that there are approximately 1.3 million leaseholders of buildings less than 11 metres in height who are not able to qualify for support. This is in addition to the 400,000 leaseholders in high-rise buildings who are non-qualifying due to other eligibility criteria, such as, as has been mentioned, the enfranchised leaseholders and leaseholders owning more than three flats. On learning about that a little bit more, it seems to me that this is a travesty. As has been stated by others, these leaseholders are facing eye-watering sums and many are living in unsafe buildings that are unmortgageable, uninsurable and unsellable. That they have been abandoned is unconscionable.
Amendments 93B, 96, 97, 99, 100, 105 and 107 seek, in different ways, to expand the number of leaseholders eligible for remediation support. This is the right thing to do. It is also obvious that some small adjustments can be made to make things better for more: for example, simply looking at the wealth—what is known as the affordability test—or the issues of joint ownership.
Amendment 93B, tabled the noble Earl, Lord Lytton, is very clear that only a building remediation scheme will ensure that all buildings with safety defects undergo remediation, irrespective of ownership or building height. We agree with that. Too many people are falling through the gaps that have emerged post the Building Safety Act. Insurance has already been mentioned, so I will not make any more comments on that.
It seems to us that the pragmatic Amendments 96, 97, 99 and 100 from the noble Lord, Lord Young of Cookham, are arguably the neatest way of achieving this aim. They simply amend the Building Safety Act so that these non-qualifying leaseholders are included in the support available to other leaseholders.
Amendment 102, in the name of my noble friend Lady Pinnock, would require the Government to report on progress relating to the building safety remediation. I am sure that she would probably agree with the comments made by the right reverend Prelate. This amendment was drafted in response to concerns raised by End Our Cladding Scandal, namely the speed at which remediation is occurring, alongside the progress in ensuring that leaseholders have access to a robust and independent dispute resolution process, and the fact that not all affected leaseholders are able to access protection.
I note that the Government publish monthly figures relating to the remediation of building safety defects, but there is no clear target for when these works should be completed. It would be appreciated if the Minister could perhaps clarify this. I am reminded of the saying that you do not fatten a pig by simply weighing it. To us, the lack of speed or a plan or any sense of urgency is clearly the impetus behind the amendments from the noble Earl, Lord Lytton. It seems that no one is holding anyone’s feet to the fire.
The Government also promised a robust and independent resolution process that would allow leaseholders to challenge building assessments or remediation. This has arguably not come to pass, with the process being more ad hoc and without sufficient leaseholder representation. It is vital that leaseholders are able to hold developers to account and ensure that remediation is completed safely, in a timely manner and at good value, but they need more government clout.
There was something mentioned only briefly that I would like to expand on a little. It seems to me that developers are getting all the flak. We all agree that lease- holders are blameless, but developers are not the only party to blame. Many of us still need to be brought to the table, preferably with cash, to provide the funding that will fix the problem. I am talking about product manufacturers, architects and designers, contractors, building control, testing houses and insurers. They all have a part to play and they should all play their part.
I suspect that, when the Grenfell Tower Inquiry reports later this year, the role that successive Governments, to be fair, have played will also be unavoidable. We feel that it is time that the Government really stepped up and gripped this problem comprehensively. They are the ringmaster, after all.
Lord Empey (UUP)
I am most grateful to the noble Baroness for giving way. She mentioned a list of people who had a degree of responsibility. One of them, of course, is building control. My experience of building control in local authorities is that they can be extremely pernickety and difficult, and can enforce very high standards. All of us, in our different cities, will have seen examples of absolutely grotesque omissions and failures. But is it not the case that a local authority has a statutory liability, through building control, and that that, in and of itself, could and should be a source of remedy for a person who finds themselves in this position? On top of that, is there not an incentive for a developer, having built a structure and sold on the units, to wind up and move on to a different company to build the next one? We end up with people slipping out of the net entirely.
Baroness Thornhill (LD)
The noble Lord has hit on a point; in some estates, you build one building that might just meet the requirements, and then more and more are built, and it expands the problem. I agree with a lot of what he said. I was trying to point out that we tend to say it is all on the developers, but I think this is a systemic failure of a series of accountable people. That is what I am trying to say.
Ultimately, I am saying that, sadly for democracy, this is yet another state failure—like WASPI, blood contamination and Windrush, to name but a few. The harsh reality is that the impact of this is felt every day by some people, and is growing: when a leaseholder decides that they want to reinsure or somebody decides that they want to sell, suddenly they are faced with, “Wow, I didn’t realise that there was all of this”. Therefore, the number of people affected is actually growing.
I will end on what my noble friend Lady Pinnock always says: leaseholders have done nothing wrong and everything right. Excellent campaigning from groups such as End Our Cladding Scandal and the non-qualifying leaseholders group has helped us achieve the progress we have made on remediation support. We owe it to them to keep pressing the Government on making sure that all leaseholders are protected from the costs of a situation they did absolutely nothing to cause.
Baroness Taylor of Stevenage (Lab)
My Lords, I add my tribute on the sad and sudden passing of Lord Stunell. We worked very closely with him on the levelling-up Bill, and he was such a great asset during the passage of that Bill. Looking at his record over the years, his was a life dedicated to public service, to both national and local government. I hope the noble Baroness will take our condolences back to the Liberal Democrat group, and we will pass them on to his family as well.
The noble Earl, Lord Lytton, is right to call this issue a sorry tale of shame. It is clear from the number of building safety amendments in this group and this Bill, and previously in the levelling-up Bill, that there appears from our debates to be a cross-party consensus from most of us, except the Government Front Bench, of such deep dissatisfaction with building safety in general and the glacial progress on remediation in particular. It was carefully calculated in the recent Times article by Martina Lees, referred to earlier, to show that only 8% of buildings in need have been remedied, not the 21% that the Government claim, and which was mentioned by the right reverend Prelate the Bishop of Lincoln.
As important is the huge number of non-qualifying leaseholders whose dreams of property ownership have turned to nightmares, as the horror of their uncertain financial position, the escalating costs of remediation and the impossibility of selling homes—I have seen evidence of this, as valuers are currently placing values at zero or negative—snatch away their aspirations and leave behind only extreme anxiety. Numbers vary, but the Times estimates the number of affected homes to be up to 1.5 million and, as other noble Lords have said, upwards of 4 million people are affected.
An excellent briefing from the National Residential Landlords Association points out that data remains lacking and estimates that there are approximately 1.3 million leaseholders in buildings less than 11 metres in height and 400,000 leaseholders, referred to by the noble Baroness, Lady Thornhill, in high-rise buildings who are non-qualifying because of other eligibility criteria. Many leaseholders are unaware of their non-qualifying status or are alerted to it only when they receive an invoice for remediation works or attempt to sell their property. It is important to remember that many leaseholders are understandably reluctant to speak out on this issue for fear of further devaluing what they thought was going to be a very valuable property asset.
The scale of this problem is eye-watering. I agree with comments made previously by Members of your Lordships’ House that, unless this is addressed urgently, as more and more leaseholders discover their liability, another enormous injustice scandal will unravel, which will scar whole generations of home owners. The noble Earl, Lord Lytton, referred to the fact that this will escalate over time to the detriment of freeholders and leaseholders, but with the balance of personal financial risk sitting with leaseholders.
The system the Government put in place, which was subject to an update in your Lordships’ House at the end of March, may have made some progress, but as a spokesperson for Grenfell United said:
“Government’s shockingly slow progress towards remediation shows a complete lack of political will to keep people safe in their own homes”.
Giles Grover, of the excellent group End Our Cladding Scandal said:
“The majority of unsafe buildings across the country still don’t have plans in place to fix all issues”.
The 7,283 mid-rise buildings that the Government have estimated to be unsafe are missing from any plan for remediation as they are deemed non-qualifying, and the unbearable pressure of remediation is falling on the ordinary people who make these flats their homes. While the Government have brought forward legislation and statutory instruments to deal with this situation, progress has been slow because issues are being dealt with piecemeal as they arise. Even when legislation has been considered, such as the Building Safety Act 2022, which should have been a comprehensive solution, too often amendments were rejected with serious impacts and consequences for leaseholders only now becoming more apparent.
The noble Earl, Lord Lytton, proposes a comprehensive and detailed framework to encompass the whole situation around building safety remediation that would give more structure to the current piecemeal approach. While I understand that the level of detail that he proposes in this scheme will almost certainly not be greeted by the Minister with the wholehearted approval that it probably deserves, I hope the principle of having such a framework in place and the thorough approach set out by the noble Earl will at least be a matter for reflection and future consideration as the Bill progresses.
Amendments 96 and 97, tabled by the noble Lord, Lord Young of Cookham, his Amendments 99 and 100, to which I have added my name, and Amendments 105E and 105F, tabled by the noble Earl, Lord Lytton, are aimed at ending the iniquitous distinction between qualifying and non-qualifying leaseholders. We cannot simply allow the nightmare that many non-qualifying leaseholders are enduring to continue.
We totally support the aim of Amendment 102, in the name of the noble Baroness, Lady Pinnock, in terms of holding the Government to account for the building safety remediation programme. The reporting mechanisms so far do not appear to have accelerated progress on remediation, although it has to be said that the bringing to justice of some of the worst developer offenders, such as those involved with Vista Tower in Stevenage, is welcome. I hope the Government will accept this amendment and bring regular updates before your Lordships’ House, but it would be even better if there could be target dates for outstanding work to be completed. The fact that remediation has dragged on for so many years is a cause of great frustration, anxiety and financial hardship to those affected. Do the Government have a view about a projected end date for these works to be completed? A deadline, even if it is not met by everyone involved, is great for concentrating the minds of those involved in remediation.
In response to the points made by the noble Baroness, Lady Thornhill, and the noble Lord, Lord Empey, I agree with the noble Baroness that it is not just developers who are responsible for this issue. But a big problem here has been the deregulation of the building control function, taking it away from local authorities and allowing developers to pick and choose who their building control inspectors will be. That has been greatly responsible for some of these issues.
Our Amendment 105 is simple and straightforward in its aim. It would bring the beleaguered non-qualified leaseholders, who are in desperate need of remedies for their building defects, within the remit of the Building Safety Act 2022. Surely, if we are concerned about ensuring that people feel safe and are safe in their homes, we can all support that. It remains our position that it should not be the responsibility of leaseholders to suffer the financial consequences of defective building. Amendment 105C in the name of the noble Earl, Lord Lytton, has a similar aim.
I support my noble friend Lord Rooker in his campaign to highlight the danger of—I was going to call them electricity surges, but I had better not now because I will get into trouble with him—neutral current diversion. I want to come back to the case that Martina Lees quoted of Viv Sharma and his Ukrainian wife Julia, who had to leave their nine-storey block when the fire service deemed it unsafe. It had more than 17 defects, caused by the original developers, which should never have been approved by building control. They have been offered less for their property than they bought it for 15 years ago, and they have had to pay for temporary accommodation. Julia has said:
“I’m now 50. How am I supposed to rebuild my life?”
That situation—which is morally wrong, as the noble Lord, Lord Young, said—remains in place. Such situations should have been remedied by the Building Safety Act but were not. We now have another opportunity to put things right, so I hope the Government will do so by accepting the amendments before us today.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I first add my tribute to Andrew, Lord Stunell. I have sat opposite him for many hours in this Chamber and in Committee, being challenged by him in a detailed but always good-humoured way. I am going to miss him. I did not know where he was this week to begin with, and I asked questions. He will be sorely missed, particularly on the issues that we talk about as a group of Peers. I send his family, friends and colleagues our best wishes. May he rest in peace.
I thank noble Lords for the amendments on building safety and for this thoughtful debate. It is an important issue. I will take all the amendments in turn and put the Government’s view. I thank the noble Earl, Lord Lytton, for Amendments 93B and 107. Their aims were debated extensively during the passage of the Building Safety Act 2022 and the Levelling Up and Regeneration Act 2023. I thank the noble Earl for his years of important campaigning on building safety, and for tabling these amendments again and speaking to them in such a detailed way. We continue to consider his arguments and are always willing to listen carefully to the ways in which we could improve the current regime. That is why the Government tabled several clauses in the other place to clarify and extend the protections in some particular areas of this Act.
However, I reiterate that implementing a new building safety remediation scheme would reverse what has been achieved by the regulatory regime set out in the Building Safety Act. Creating a system which mirrored the existing regime would delay essential remediation already being carried out. It would also create uncertainty for leaseholders across the country. The responsible actors scheme, the developer remediation contract, remediation orders and remediation contribution orders are already delivering many of the noble Earl’s objectives, requiring developers to fix problems that they have caused.
Lord Empey (UUP)
On that matter, if a company was responsible for defective property and the company became insolvent, am I to understand that the directors of that company would be capable of recommencing building another property? Or is the Minister saying that the individuals could be followed through the courts for remediation, rather than being able to sidestep their responsibilities?
Baroness Scott of Bybrook (Con)
My Lords, that is an interesting and very legal point. Rather than speaking off the top of my head, I would like to get it right and write to the noble Lord.
I move to Amendments 96, 97, 99 and 100. I thank my noble friend Lord Young of Cookham for these amendments. Amendments 96 and 99 would extend the leaseholder protections to buildings under 11 metres and to collectively owned leaseholder buildings. It is generally accepted that the risk to life from historic fire safety defects is proportionate to the height of buildings. As this risk is lower in buildings under 11 metres, such buildings will require remediation only in very exceptional circumstances. Given the small number of buildings that have required this—it is three across the country; the developers have remediated two of them and we are in negotiations on the third to get that remediation done—our assessment remains that extending the leaseholder protections to these buildings is neither necessary nor proportionate.
Where leaseholders in buildings under 11 metres face remediation costs, it is important, as I have said so many times at the Dispatch Box, that they contact the department immediately and we will look into that individual building on a case-by-case basis. If necessary, we will write to the building owner to seek assurances that any proposed works are necessary and proportionate, and that the rights to redress are being fully utilised.
The Government understand that some leaseholders in these buildings are still facing higher insurance premiums, with insurers citing building safety as the reason for the increase. The Association of British Insurers and its members have stated that premiums should reduce where buildings comply with building regulations. We expect insurers to honour their commitments and make sure that premiums are priced fairly and appropriate to the level of risk.
Regarding collectively owned leaseholder buildings, the Government made the decision that the leaseholder protections in the Building Safety Act would not apply to these buildings. As a result, people would still have to pay to remedy the safety defects in their building as owners. Residents who own the freehold would have to pay not only their portion of remediation costs but for any residents who did not participate in the purchase of the freehold.
Since the Building Safety Act, the Government have continued to examine the situation faced by collectively owned leasehold buildings. For instance, the Building Safety (Leaseholder Protections) (England) Regulations 2022 provide owners in these leaseholder-owned buildings with access to remediation contribution costs. We have listened and we have acted.
I turn to Amendment 97. The existing leaseholder protection package is designed to maintain a fine balance between leaseholders’ and freeholders’ rights. The amendment distorts the balance disproportionately in favour of leaseholders and risks unfairly benefiting one group of investors, leaseholders, to the detriment of another—the freeholders.
Regarding Amendment 100, our intention has always been to protect individuals living in their own homes, rather than those who have purchased property for financial or commercial reasons. Changing the leaseholder protection regime so that it is linked to a share of ownership, rather than individual properties, would also introduce an unnecessary level of uncertainty and complexity into the protections.
Regarding cessation certificates, it is not clear what effect such a certificate would have or how a landlord would know when to serve one. The responsibility for the costs of fixing historical building safety defects should rest with those responsible for creating them. The Building Safety Act was clear that, when this is not possible, responsibility for remediation should be shared between stakeholders in the property. Concentrating responsibility on a single group would risk a number of unintended consequences, including freeholders becoming insolvent. Taken together, the changes made by this amendment would therefore complicate the regime unnecessarily and slow the progress made towards the remediation of buildings.
I thank the noble Baroness, Lady Thornhill, who spoke on behalf of the noble Baroness, Lady Pinnock, to Amendment 102 about the reporting requirement for building safety remediation. The Government are committed to accelerating remediation and protecting affected residents. The total number of buildings reported to have started or completed remediation works in England has more than doubled since the end of March 2023. Along with monthly updates, Ministers have also committed to providing the other place and those interested with regular updates on progress, the latest of which was provided on 26 March.
My noble friend Lord Young of Cookham asked about ACM cladding. Another noble Lord mentioned pathways. I realise that pathways do not mean delivery, but, importantly, all residential buildings in England taller than 11 metres have a pathway to fixing unsafe cladding, either through taxpayer-funded schemes, developer-funded schemes or social housing provider-led remediation. This protects leaseholders from these costs. In addition, 99% of high-rise buildings with unsafe Grenfell-style ACM cladding identified before 2023 have been made safe or have work under way to make them safe. The proportion of buildings remediated continues to shift as more buildings are being identified and 90% of all high-rise buildings with ACM cladding have been made safe or have work under way on them.
My noble friend Lord Young also brought up the issue of decanting. The Government amended the Bill in the other place to make it explicit that the costs of alternative accommodation for residents, when they are decanted from their homes to avoid imminent threat to life or of personal injury, or because remediation works cannot take place while residents are in occupation, can be recovered. They can recover those costs through a remediation contribution order, which is an important change to the Bill.
The department continues to take steps to support applicants to start on site more quickly. Local authorities, fire and rescue authorities and the Health and Safety Executive can take enforcement action against those not progressing remedial works. Where building owners are failing to make acceptable progress, those responsible should expect further action to be taken.
Some 55 of the largest developers signed legally binding contracts committing to remediate, or to pay to remediate, life-critical fire safety defects in 1,500 buildings over 11 metres that they had a role in developing in England over the 30 years to April 2022. Together with the building safety levy, this will see industry contribute an estimated £6 billion. The department publishes information on developer progress based on quarterly returns submitted by developers, and this is available. I make it clear that the introduction of new reporting requirements involves time and cost, which need to be balanced against the need to continue our progress in building remediation. So I ask the noble Baroness not to press the amendment.
I thank the noble Baroness, Lady Taylor of Stevenage, for her Amendment 105. Similarly to Amendment 97, it would open the door to changes which distort that balance disproportionately in favour of one group, to the detriment of another. It is important that legislation provides clarity for leaseholders, freeholders and the courts. The Government believe that having definitions of qualifying and non-qualifying leases in primary legislation provides greater certainty to all interested parties—an important consideration given that this is a pivotal part of the legislation for so many people across the country.
I thank the noble Earl, Lord Lytton, for Amendments 105C to 105G, which seek to make several changes to the building safety regime and, in the case of Amendment 105G, the insolvency regime. Amendment 105C would rewrite the developer remediation contract by statute. This would unfortunately serve to create operational legal confusion about what developers’ obligations are, which buildings need to be identified and remediated, and what standards this should be done to, resulting in delay and litigation. I hope the Committee agrees that the Government should instead focus on holding developers to account for remediating unsafe buildings as quickly as possible.
On Amendment 105D, it is right that the Government have worked with major developers that have built defective buildings to secure binding commitments to remediate, worth an estimated £3 billion. However, I do not believe it would be fair also to target these specific developers to pay a disproportionate share of other remediation costs for buildings that they have no connection with. That is why we are focused on setting up the building safety levy to contribute funds to our programmes to remediate buildings over 11 metres. The levy is estimated to raise a further £3 billion over 10 years, or more.
We have had much debate on the merits of Amendment 105E, and I gave my views on Amendments 96, 97 and 99. As I mentioned, relatively small numbers of residential buildings under 11 metres or five storeys require remediation. These buildings are considered to be at low risk of historical fire defects, and I maintain that this change would disproportionately and unfairly place the obligation for remediation of non-life-threatening defects on freeholders. Meanwhile, extending protection to leaseholders who have not purchased the freehold would place the financial burden of remediation entirely on leaseholders who own a share of the freehold, making it less likely that these buildings will be remediated.
As for providing leaseholder protections to leaseholders who own more than three dwellings, I reiterate the points raised earlier. Landlords owning a number of properties are likely to have these as investments, and a fair balance needs to be met. The Building Safety Act was not designed to benefit investors; it is to help individuals living in their own homes.
On Amendment 105F, removing qualifications for passing on costs for defects in service charges would widen the scope of the leaseholder protections considerably. This would risk the burden of remediation costs falling disproportionately on landlords, whether or not those landlords are also some or all of the leaseholders in the building. The amendment also provides for members of a building industry scheme to cover remediation costs. I have already mentioned my concerns with the similar approach in Amendment 105D.
The Earl of Lytton (CB)
My Lords, I thank all noble Lords who have spoken in this debate. Needless to say, too many further questions arise out of all this, and there are too many points for me to be able to address anything other than the odd one—other than by making a very long speech and incurring the wrath of the Government Whip for the second time in the week.
I preface my further remarks by saying a word about Lord Stunell. His death is a great loss to all of us. He was forensically well-informed and always delivered his contributions with care, tact and supreme authority. I had the great honour of serving with him on the Built Environment Committee and, of course, I was with him throughout the Fire Safety Bill and the Building Safety Bill, as well as the levelling up Bill. He will leave a very great hole in our deliberations.
There is a fundamental common purpose between what the noble Lord, Lord Young, and I are trying to achieve. I simply say that I look forward to working with him to see whether we can find a common way forward—and indeed with other noble Lords, such as the noble Baronesses, Lady Thornhill and Lady Taylor, and the Minister, because there is a consensus that something needs to be done.
The right reverend Prelate and all the Bishops have been fantastic in their support on this—right the way through the passage of the now Building Safety Act and Levelling-up and Regeneration Act, and again on this Bill—in order to get justice for innocent leaseholders.
The noble Baroness, Lady Thornhill, referred to the wider liability and systemic failures. I get that, which is why I keep referring to the wider construction industry. There are lots of people involved there and they all have some responsibility.
The noble Lord, Lord Empey, referred to building control. This takes us back to the Building Act 1984 measures, which allowed for approved inspectors—as privatised entities—effectively to take over the role of local authority building control. The local authority then lost control of the process at that stage. The construction sector gamed the system. Indeed, I know at least one large body that had its own wholly owned subsidiary as its approved inspector. Where is the objectivity there?
The noble Lord, Lord Rooker, was absolutely right on the question of electrical safety, which is a subset of the fire safety issue.
The noble Baroness, Lady Taylor of Stevenage, has always been a fantastic supporter of what I am trying to do; I say to her and to all noble Lords that I am not set on the particular solution that I have put forward, but I am dead set on wanting something that protects consumers and protects leaseholders in their own home—this is the recurring theme. The chickens are going to come home to roost: the bottom line is that this will always end up with leaseholders by default picking up the pieces; they are the most vulnerable. The problems do not go away; whether you kick the political can down the road or whether you do not, it just leads to more grief.
I will not go through the comments of the Minister, but I thank her for them and will look at them with very great care. I am sorry that the argument still seems to be that, because this matter was raised in the passage of the then Building Safety Bill and levelling up Bill, it somehow should not be discussed any more. The point is that the problem has not gone away. The Minister may not want to listen to me—certainly not for much longer this afternoon—but she needs to listen carefully to what leaseholders are saying about their experiences. We in Parliament may start turning a tin ear to what is happening out there, but it is evident in the media and in emails to me and other noble Lords, and it cannot be ignored or avoided any longer. The mercury in this respect is going up the tube quite fast, and this will become more and more of an issue.
If my proposals are destined to slow down the process, all I can say is that, politically, I suspect that this is going to start speeding up very rapidly. The Government may say that they will take further action if the players do not perform, but this is another bit of finger-wagging. We know that something needs to be done and that it needs to be done now.
I end by saying that I will consult with other noble Lords about how we can take this forward. I certainly may return to this matter on Report. None of us wants to delay this Bill but, unamended, the agony for lease- holders will go on and on. On that note, I beg leave to withdraw Amendment 93B.
Lord Best
“The Regulator of Property Agents(1) The Secretary of State shall establish a body corporate known as the Regulator of Property Agents (“the Regulator”) to regulate property agents in respect of—(a) estate management of leasehold properties,(b) sale of leasehold properties, and(c) sale of freehold properties subject to estate management or service charges.(2) Regulations under this section—(a) must be laid within 24 months of the date of Royal Assent to this Act,(b) must be made by statutory instrument, and(c) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.(3) If, at the end of the period of 12 months beginning with the day on which this Act is passed, the power in subsection (1) is yet to be exercised, the Secretary of State must publish a report setting out the progress that has been made towards doing so.(4) The objectives of the Regulator are—(a) to protect the consumers of services provided by property agents, in respect of—(i) estate management of leasehold properties,(ii) sale of leasehold properties, and(iii) sale of freehold properties subject to estate management or service charges. (b) to set and uphold standards of competence and conduct for property agents in relation to the sale of leasehold properties and freehold properties subject to estate management or service charges.(5) “Property agent” means an individual or body of persons (whether incorporated or not) which carries out the roles of an estate agent as defined in Section 1 of the Estate Agents Act 1979 or of a property manager as defined in Sections 54 and 55 of the Housing and Planning Act 2016.(6) The Secretary of State may provide financial assistance (by way of grant, loan or guarantee, or in any other form) and make other payments for the establishment and maintenance of the Regulator.(7) The Regulator must establish a panel of persons called “the Advisory Panel”.(8) The Panel may provide information and advice to the Regulator about, and on matters connected with, the Regulator’s functions (whether or not it is requested to do so by the Regulator).(9) The Regulator must appoint the following persons to the Panel—(a) persons appearing to the Regulator to represent the interests of—(i) leaseholders of properties managed by property agents,(ii) freeholders of properties subject to estate management or service charges, and(iii) professional bodies and associations representing property agents who manage leasehold properties.(b) the Secretary of State.(10) The Regulator has powers as follows—(a) to monitor, assess, report, and intervene (as appropriate) in relation to the performance of property agents who manage leasehold properties;(b) to determine mandatory qualifications to ensure that those undertaking the activities of a property agent in England have, or are working towards, qualifications that demonstrate competency in respect of the sale or management of leasehold and freehold properties;(c) to enforce compliance with a mandatory and legally-enforceable Code of Practice for property agents selling or managing leasehold properties;(d) to provide guidance to property agents on the regulatory framework for the sale and management of leasehold and freehold properties;(e) to register all property agents complying with the requirements of the Regulator and to revoke the registration of property agents who persistently breach the regulatory framework;(f) to raise a registration fee and an annual fee to pay for the ongoing costs of the Regulator of Property Agents;(g) to review and make recommendations to the Secretary of State for the updating of the statutory guidance that sits alongside the regulatory framework for the sale and management of leasehold and freehold properties;(h) to delegate to designated bodies administrative and regulatory functions in respect of the sale and management of leasehold and freehold properties, as it deems appropriate.(11) The Property Ombudsman and other redress schemes, if any, covering property agents shall provide the Regulator with such information as the Regulator shall request.”Member’s explanatory statement
This amendment seeks to create a Regulator of Property Agents to regulate property agents in respect of estate management of leasehold properties, sale of leasehold properties, and sale of freehold properties subject to estate management or service charges.
Lord Best (CB)
My Lords, Amendment 94 is in my name and those of the noble Lord, Lord Young of Cookham, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Taylor of Stevenage, and I am very grateful for their support. Before I speak to the amendment, I want to add my appreciation of the life and shock at the loss of Lord Stunell. Andrew Stunell was a terrific advocate for better housing, as a notable Construction Minister in the coalition Government and an eloquent speaker on a range of Bills, not least the Bill we are debating today, which he analysed brilliantly just a month ago in this Chamber. He will be very greatly missed indeed.
Amendment 94 represents the grand finale in our Committee debates on the Bill. It would empower the Secretary of State to establish an independent statutory regulator of property agents who sell and manage leasehold property. It would introduce into law the recommendations from the Government’s own Regulation of Property Agents working group, which I had the honour to chair and which reported in July 2019. The twin objectives of the regulator would be to protect consumers and to raise standards. Although the working group recommended a regulator for all property agents covering estate agents, sales agents and letting agents as well as property agents handling leasehold property, the amendment relates only to the leasehold managing agents, to keep within the scope of the Bill. However, many property agents involved in leasehold sales and management also engage in sales of freehold properties and in the management of rented sector lettings, so would be covered. Moreover, a twin amendment in the Renters (Reform) Bill, due in this House shortly, could extend the regulators’ role to cover agents managing rented properties as well.
The need for regulation was spelled out graphically at Second Reading, and many of your Lordships have shared details of agents’ misconduct brought to their attention. The unsuitability of badly behaved agents ranges from simply not communicating with leaseholders to misleading them and taking advantage of their leaseholder status with exorbitant commissions, charges and fees, not least in retirement housing developments. Although there are some excellent agents providing a good service and value for money, there are also inept, incompetent and exploitative agents whose reprehensible behaviour cries out for proper regulation. The urgency for regulating the sector has now increased, following the passage of the Building Safety Act 2023. This legislation has meant managing agents of blocks of flats taking responsibility for spending substantial sums of leaseholders’ money and of taxpayers’ subsidies to cover remedial building works in blocks of flats. It is now more essential than ever that such responsibilities are exercised only by reputable and qualified professional agents.
There is rock-solid support for a regulator of property agents from the professional bodies and trade associations representing the sector: the RICS; Propertymark; and the Property Institute, which comprises the Institute of Residential Property Management and the Association of Residential Managing Agents. Those property agents who are acting honourably are undermined by the unprofessional conduct of too many. Of course, the organisations representing consumers, such as Citizens Advice and the Leasehold Knowledge Partnership, are extremely supportive of the proposals encapsulated in this amendment.
A regulator would establish requirements for relevant qualifications and continuous professional development and would require adherence to an overarching code of conduct and to subsidiary-specific codes covering the different components of property agency. The regulator would have a full range of enforcement powers, from requiring specific changes to levying fines or removing the licence for a firm or individual to operate. That would provide the same consumer protections as for social housing, with its social housing regulator and Housing Ombudsman, and as for the financial sector, with its Financial Conduct Authority and Financial Ombudsman Service.
As with accountants, lawyers or surveyors, property agents deserve to be respected as professionals with expertise and with the proper attributes that go with professional status. Why would the Government resist a measure that is likely to be extremely popular with millions of leaseholders, which is earnestly requested by those who would themselves be the subject of regulation, and which has been given so much support from this House, particularly following the strong encouragement from the cross-party scrutiny of your Lordships’ own Industry and Regulators Committee last month?
Baroness Hayter of Kentish Town (Lab)
My Lords, I declare a non-financial interest in having worked with the Property Institute and other groups that have supported this area for many years. Also, as the noble Lord, Lord Best, alluded to, I chaired a committee working on one aspect of this matter, which I will come to shortly.
As the noble Lord said, it is quite unusual for this call for regulation to come not only from the consumers who would benefit but from the professionals already working in the field. It is virtually unanimous; in fact, among the organised groups, it is unanimous that this is the regulation under which they would like to work. The agencies and their representative bodies are waiting for this to happen.
As has just been described, in a way the reasons are obvious, not only outside but within this House. We know that, as was mentioned, the Best report was welcomed, I think universally; the Select Committee on Industry and Regulators has called for it to happen; and in the world outside there is still an expectation—a hope—that this might happen. A number of us want an election soon but we could even put it off—if that would be the only thing needed to get this through, we will put up with more of this Government.
It is fairly obvious that housing is not just bricks and mortar. Homes are fundamental to people’s financial and emotional well-being. Get this right, and their own quality of life improves dramatically. Get it wrong, and it is debilitating, stressful and expensive. It starts, of course, with the purchase, or indeed the sale, of a leasehold property, which is a more complicated transaction than simply buying a freehold house. So even at that stage, transparency, clarity, openness and proper explanation by estate agents are essential, and so, therefore, is the need for their expertise in these specialist areas of purchase and sale.
However, even once it has happened and you are living in the leasehold property, that can be a particularly fraught arrangement. With leasehold management there is a three-way relationship between the landlord, the resident—that is, the leaseholder or the owner—and the managing agent. Marriages with three in are always a bit complicated, but in this case, of course, you have the managing agent, who is appointed by the landlord but who has duties and, even more importantly, a close working relationship with the leaseholder. That adds an element of necessary expertise in how to handle it.
As important is the complexity of the law involved in this. It covers particular rights that are different from those associated with a freehold house. There are the safety issues, which have been well rehearsed in Committee. There are consumer issues and fiduciary duties, as well as myriad external bodies and requirements that have to be met. Frankly, managing agency is no task for an amateur. Agents need to be trained in ethics as well as the law and building regulations, and they need to be checked to ensure that they are fit and proper to handle both people’s money and their safety, and to prepare all the legal and other paperwork essential for running a complex operation. That is why we require regulation and oversight of this important profession.
As was mentioned, a code of conduct is needed across the industry, not simply to provide the requirements on agents but, importantly, to enable consumers to understand and thus to be able to enforce their rights. As the noble Lord, Lord Best, said, a cross-industry group that I had the privilege to chair and whose outcome was welcomed by the department has prepared the code and it is ready and waiting, so the work in setting up this regulatory body would be less than otherwise. It is there, ready and waiting for the legislation to make adherence to that code a legal requirement. That is the key to professionalising the industry and enhancing the experience of all who deal with managing agents—landlords and leaseholders alike.
It is not sufficient, welcome though it might be, to have an ombudsman to adjudicate and put things right when things have gone wrong. We need to prevent problems arising, which means raising standards, ensuring compliance, requiring training and qualification, and continuing professional development in a world of statutory requirements that seem to be changing, not just year by year but month by month, as is the technology involved in building, which we know about.
The Best way is the only way. Let us give the noble Lord what he has been asking for for so long and just get this report into law—let us get on with it. I am delighted to support Amendment 94.
Lord Young of Cookham (Con)
My Lords, I will add a very brief footnote to the excellent speeches made by the noble Lord, Lord Best, and the noble Baroness, Lady Hayter.
The point I want to make is that the market is changing. We are moving away from a position where the freehold of blocks of flats was owned by the Grosvenor estates, Cadogan Estates, the Portman Estate —professional freeholders—and they were well able to choose responsible managing agents and keep an eye on them. We are moving away from that to a position where more and more of the blocks of flats are owned by the leaseholders. It is a trend that I that I welcome—indeed, the Bill accentuates that trend—and eventually we will end up with commonhold. Against that background, it becomes even more important that the managing agents should be professional. The background is changing and the need for this is now much more urgent than it was a few years ago.
I very much hope that the Government will be able to respond to the eloquence of the noble Lord, Lord Best, and introduce regulation of managing agents. However, if they cannot, he hinted at two intermediate steps, which I think the Government might be able to take. One is requiring mandatory qualifications. As the noble Lord said, these have already been introduced for the social housing sector and could be expanded to protect leaseholders and private tenants. The second thing the Government could do, which the noble Lord also mentioned, is to introduce the mandatory code of practice, drawing on his working group on the regulation of property agents—this case was well made by the noble Baroness, Lady Hayter.
The Government could do one final thing which has not been mentioned so far. There is a government document called the How to Lease guide, and they could make that a mandatory document to be shared with consumers who purchase a leasehold property, in exactly the same way in which landlords and agents must provide the How to Rent guide to tenants. Therefore, if my noble friend cannot go the whole hog, I very much hope that she can smile warmly on intermediate steps, which might then pave the way to the final introduction of regulation of managing agents in the very near future.
Lord Truscott (Non-Afl)
My Lords, I am pleased to follow the noble Lord, Lord Young of Cookham, and I agree with the comments that he just made. I remind the Committee that I have been a leaseholder for around 30 years, and over that time I have dealt with several property management companies.
I wholeheartedly support Amendment 94 in the names of the noble Lords, Lord Best and Lord Young of Cookham, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Taylor of Stevenage. I pay tribute to the dogged determination of the noble Lord, Lord Best, in pursuing the reform and regulation of property agents over a number of years, and, of course, to the sterling work of the noble Baroness, Lady Hayter of Kentish Town.
I fail to see why His Majesty’s Government should not support this amendment in full. I also fail to see why the Government have failed to bring forward their own measures to regulate property agents, which, as we have heard, are long overdue. I know that the Minister will say that this is all very complicated and requires detailed and thoughtful legislation, that she will describe how property managing agents are making voluntary strides to improve their standards and operation, and how there are redress schemes in place. However, I do not really buy that argument. This amendment gives His Majesty’s Government two years to lay down regulations to regulate property agents. That is enough time even for this Government, and if not them, then certainly for the next one.
No other sector I know of handles potentially millions of pounds of other people’s money but is unregulated by statute. The City of London looks at property management companies aghast given the lack of oversight. I will give some practical examples of why property management companies should be effectively regulated, following the comments of the noble Lord, Lord Best.
Baroness Hayter of Kentish Town (Lab)
My Lords, I apologise to the Committee. From what the noble Lord has said, I realise that I probably should have said that I was a leaseholder when I spoke.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to offer Green support for this clear, obvious and essential amendment, which already has strong support across the Committee.
I want to pick up a point made by the noble Baroness, Lady Hayter, about how both buyers and sellers desperately need confidence and how that confidence is utterly lacking at the moment. A lot of our discussion has focused on the problem of estate management, where there are clear and obviously pressing problems, but to focus a little on sales of properties and the need for some oversight there, I note that, last year, trading standards warned that many agents were not passing on the best offers that they had received from purchasers, as they are legally required to do, because they were getting commission fees from mortgage brokers, solicitors, surveyors and other third parties. They were choosing to go with what would produce a better result for them but a lower price for the seller. The only way that this is generally uncovered is if the would-be buyer who did not succeed in purchasing the property happens to look at the Land Registry sales price, says “but that’s less than I was offered” and creates a fuss. That is a sign of just how utterly cowboy the current situation is without regulation.
A report out yesterday noted that for 34% of the “for sale” stock on some major websites there had been an asking price reduction. People often need to sell for all kinds of reasons—including divorce, bereavement or perhaps because they need more bedrooms for extra children. These are all stressful, difficult situations where delays can cause damage and create uncertainty. We have a cowboy situation out there, and as the noble Baroness, Lady Hayter, said, the people in the industry who want to do the right thing know that there are cowboys out there who are a threat to them. Therefore, the amendment is clearly essential to making our housing sector less of a cowboy environment than it is now.
Baroness Thornhill (LD)
My Lords, I too support Amendment 94 in the name of the noble Lord, Lord Best, which was so well outlined by him with his usual clarity and reason. It is an amendment that I was determined to put my name to, but its popularity was such that I was too late. However, I listened intently to the informed contributions from the noble Baroness, Lady Hayter, and the noble Lord, Lord Young of Cookham, and look forward to the contribution of the noble Baroness, Lady Taylor. This will therefore be possibly my shortest and easiest contribution to the Bill, simply saying that, between them, the proposers have nailed this issue with an amendment that should be workable and which we hope that they will take forward on Report.
The noble Lord, Lord Best, listed the broad coalition of support for a regulator and indeed it appears that it is ready to go. This is something which the noble Lord has campaigned on for years. His report was widely accepted and praised for its thoroughness and its remarkably workable plan for the way forward, which he has stated in detail. Interestingly, the recommendations of his working group went much further than this amendment, so the movers of the amendment are being pragmatic and measured because they want to see change now—we support that.
I found the contribution of the noble Lord, Lord Truscott, on redress, particularly interesting. It reminded us that, currently, regulation in the property sector is voluntary and sanctions are limited. This Bill will not change that enough. Do your Lordships not think it is shocking that anyone can set up a firm from their bedroom and very soon be handling hundreds of thousands of pounds of leaseholders’ and taxpayers’ money while being largely unaccountable to the leaseholders who, on the whole, do not choose them to manage their block or control their service charges? This cannot be right. An individual can set up in business as a property manager without any formal qualifications, experience or even insurance.
It seems shocking that there has been so much good legislation to protect much smaller sums, such as deposits for renters, but nothing to protect leaseholders’ funds. We have regulations and regulators for individuals and companies handling much smaller amounts of people’s money. Leaseholders are usually required by the terms of their lease to make advance payments towards the service charge and to contribute to a sinking fund or reserve fund. These sums can be substantial, especially if major works are planned, which is why we supported the amendment tabled by the noble Baroness, Lady Fox, earlier in the Bill on consultation on major works. The Federation of Private Residents’ Associations has asserted that there is no other area in the UK in which money is held by a third party that is not regulated—unless somebody can tell me otherwise. The federation suggests that moneys held by unregulated and unprotected third parties may well exceed £1 billion.
If we want to change the behaviour of such property agents, there needs to be a much more professional approach to training and development, as the noble Baroness, Lady Hayter, exemplified well. Mandatory professional standards should be set, along with the oven-ready code of practice.
Even within the sector, the good guys—and there are good ones—do not want the rogues giving them a bad name and tarring everyone with the same brush. It is clear that the Government are procrastinating on this issue, so much so that several years after the report from the noble Lord, Lord Best, very little has happened. The fact that the Government have not taken the opportunity with this Bill to introduce relevant property agent regulations proves that they have probably yielded to the anti-regulation voices among their ranks, despite their acceptance in principle of the case for regulating property agents, which has also been accepted by the majority of interested and affected parties. We are all seeking a solution, and Amendment 94 is certainly worthy of consideration, and we urge the Government to give it that consideration. I look forward to the Minister’s reply and to Report, definitely.
Lord Thurlow (CB)
My Lords, I have not heard a voice in the Chamber this afternoon against the amendment from the noble Lord, Lord Best. It is such a refreshing amendment, it is long awaited, and we have heard, and we all knew, that his report was kicked into the long grass many years ago by the Government, and that is something of a disgrace. Even in the Levelling- up and Regeneration Bill debates last year, this subject was much discussed. We must not overlook that large cohort of hugely responsible and professional property managers—and there are many—but our focus must be on those who fail to adopt high standards, those who knowingly overcharge, those who take discreet commissions, and those in the pockets of clients with dubious standards.
This subject of rogue managing agents has come up again and again in this Bill; the time has come to act. The amendment clearly has strong cross-party support, and we have heard that the Government want to do it in principle. If the Government really want to do something for leasehold occupiers, this is it: simple regulation of property managing agents and other related property advisers; no one to practise without registration; a no-nonsense, strictly monitored and enforced system of effective supervision; and a simple, advertised complaints procedure for the lessees and rigorous monitoring of those complaints. This amendment has my wholehearted support. I hope the Government will adopt it; if not, I hope it is pressed on Report.
Lord Hacking (Lab)
My Lords, I do not want to jump in front of my Front Bench, but this is not a Bill that I have followed in detail. I did not take part in the Second Reading, and I have not taken part so far in Committee, but I was in the House this afternoon, and that is why I am standing up to very briefly address your Lordships on Amendment 94, which should be fully supported. I declare a personal interest, and your Lordships will see how I can link that to supporting this amendment. My wife and I are both freeholders and leaseholders of five flats, which are in an adjacent house to our own house. We personally manage them and know all the tenants well, and we try to deal with all their needs and circumstances, but the time will come when we have to sell. It is that stage that I am worried about, to ensure that these leaseholds are properly managed under the auspices of the regulator.
Baroness Taylor of Stevenage (Lab)
My Lords, it is a great pleasure to take part in this debate and to hear from such eminent experience across the Committee on this issue. On one of the points made by the noble Baroness, Lady Thornhill, about how far back this goes: one of my very first jobs in the early 1970s was at an estate agent. It was a family business run by somebody who had trained as a journalist and had a career in journalism, but he did, at least in that case, have the grace to train as a chartered surveyor as he carried on his business as an estate agent. You would have thought that things would have changed a bit over the subsequent years—it is quite a long time ago now—and it is ridiculous that it can still happen that people with little experience or qualification can be in charge of huge sums of other people’s money and property, and I hope that we can move matters on, at least in that respect.
Baroness Scott of Bybrook (Con)
I thank the noble Lord, Lord Best, for his Amendment 94, and for his and other noble Lords’ persistence in pushing for the creation of a new regulatory body to oversee property agents. I put on record my sincere thanks to him for his valuable work on regulation over very many years. I note that he is also a member of the Industry and Regulators Committee, which recently concluded that the case for regulation of the property agent sector still remains. Ministers will respond to the committee in due course.
However, as the noble Lord is acutely aware, the Secretary of State indicated in the other place that he did not consider that this was the right time or the right Bill to set up a new regulator for property agents. I know that he and other noble Lords will be disappointed, but perhaps not surprised, by this. However, the Government remain committed to driving up professionalism and standards among property agents. Leaseholders deserve a good service for the money they pay, whether from their landlord or their managing agent, where one is in place.
The noble Lord once again brought up, as he has many times with me, mandating professional qualifications. This was one of the areas that the Government asked the noble Lord’s working group to look into as part of its review. I assure him that that remains on the table.
At this point, I will respond to the interesting idea from my noble friend Lord Young of Cookham about the How to Lease guide. Interestingly, I spoke to officials about this idea not too many hours ago, building on the guide to renting. That is something that could be put in place. I will work further on it and talk to my noble friend more.
Industry plays an important role in driving up standards, and we welcome the ongoing work being undertaken by the industry and others to support this. This includes the efforts of the noble Baroness, Lady Hayter of Kentish Town, and her independent steering group in preparing an overarching code of conduct. I thank her for that. I know that the Government are very interested and looking at it in much more detail. This is an important development to ensure that all consumers are treated fairly and agents work to the same high standards. I echo what many noble Lords have said. We have some excellent agents in this country who do a fantastic job. The agents we are talking about are the rogue agents, who I know noble Lords are trying to ensure come up to the same high standards. I thank the noble Baroness for her work on this.
I should also stress that measures in this Bill, alongside existing protections and work being undertaken by the industry, seek to make managing agents more accountable to those who pay for their services. That includes making it easier for leaseholders to take on the management of their buildings themselves, where they can directly appoint or replace agents.
However, I recognise the strength of feeling expressed on this issue at Second Reading and today by a number of noble Lords, and the ambition of all noble Lords who spoke to drive up the standards of property agents. The noble Lord, Lord Truscott, the noble Baroness, Lady Bennett of Manor Castle, and others spoke about individual cases where managing agents have been either good, as we heard from the noble Lord, Lord Truscott, or extremely unacceptable.
I will continue to engage with the noble Lord, Lord Best, my noble friend Lord Young of Cookham and any others who would like me to on this issue during the remainder of the Bill’s passage. I know I already have a meeting in my diary with the noble Lord, Lord Best, in a week or so. With the assurance that we will keep working on this, and following what I have said, I hope the noble Lord will withdraw the amendment.
Lord Best (CB)
My Lords, I am very grateful to all noble Lords who have spoken—all of them in favour of the concept of a regulator of property agents. I think the case is now unavoidable. My especial thanks to the noble Baronesses, Lady Hayter and Lady Taylor, and the noble Lord, Lord Young of Cookham, for supporting this amendment, and to the noble Baroness, Lady Thornhill, who, if we were allowed one more name on the list, would have been there as well. It was great to hear illustrations from real life from the noble Lord, Lord Truscott, bringing a consumer perspective to the story. The noble Baroness, Lady Bennett, shared stories of cowboy agents. I am afraid they do exist, and we should be doing something about it.
The Minister offered me some consolation. We are going to meet again soon, and she recognises the strength of feeling that everybody has been expressing. I thank her for continuing to engage on the subject and I hope there is something we can salvage, before the Bill finally passes, that will at least make a start on this really important mission of creating a regulator to the benefit of the 5 million leaseholders out there. I beg leave to withdraw my amendment.
Port Talbot Steelworks
(7 months, 2 weeks ago)
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Lord Harlech (Con)
My Lords, with kind agreement from the usual channels and with the leave of the House, I will read in the form of a Statement the Answer given in the Commons by my right honourable friend the Secretary of State for Wales. In doing so, I declare my farming and heritage interests in Wales, as set out in the register. The Statement is as follows:
“On 25 April Tata announced its strategic direction to proceed with its Port Talbot transformation, following the launch of the formal national consultation with the unions on 6 February. Technically, the consultation has not concluded at national or local level. The statutory consultation remains under way, and I understand that the company intends to move to local consultation with staff who may be affected.
This is a deeply concerning time for the Tata workforce and the wider community. I hold regular conversations and meetings with the unions and management, and will continue to do so as we develop interventions to build a brighter future for Port Talbot. On 15 September we announced an unprecedented £500 million government grant as part of the £1.25 billion investment by Tata Steel to build a new electric arc furnace. Tata Steel employs more than 8,000 people, including at Port Talbot. All those jobs—along with many thousands more in the supply chain—would be under great threat were it not for the agreement that we struck. The transformation will be difficult, but the funding has saved 5,000 jobs in the company. It is not the case that we have paid money to put people out of work; we have paid money to save 5,000 jobs. We are also looking to modernise production and ensure that steel-making in south Wales can continue for generations to come.
Going beyond that, to support those affected by Tata’s decision we have put £100 million towards the creation of the transition board, which I chair, and which includes representatives of the UK and Welsh Governments, local authorities and industry. The funding includes £80 million from the UK Government and £20 million from Tata—unfortunately nothing as yet from the Welsh Government, but we hope that there will be some in the near future. These funds will be used to achieve the transition board’s priorities, the first of which is to support those affected employees to find new, well-paid jobs. The board’s priorities also include supporting businesses in the supply chain and the longer-term regeneration of the region.
In its most recent meeting last week, the transition board endorsed a local economic action plan, which will act as a road map for how best to use the funding to support those affected. While the ongoing consultation is a matter between the trade unions and the company, we will continue discussions with all parties. We hope a resolution is found that avoids industrial action. The UK Government will continue to work closely with industry to secure a sustainable and competitive future for the Welsh steel sector.
I am confident of a good future for Port Talbot and the region, with the UK Government progressing the bid by Associated British Ports to the next stage for up to £160 million of funding to support our nascent floating offshore wind industry, and our progress towards establishing the Celtic freeport, backed by £26 million of government funding”.
Baroness Wilcox of Newport (Lab)
We are proud of our steel sector in Wales: it is an asset for the whole of the UK, so this closure is devastating news. Yesterday, in the other place, the Minister said that the Government would encourage Tata to come to an agreement so that there are no compulsory redundancies. What steps are the Government taking to protect workers whose jobs are at risk? There are also those in the supply chain: what commitments have the Government secured from Tata for the workers at downstream facilities about the security of their jobs after the electric arc furnace is built, and what are they doing to secure more?
Lord Harlech (Con)
My Lords, the deal struck by the UK Government with Tata will safeguard around 5,000 jobs in the UK steel industry, as well as 12,000 jobs in the wider supply chains. However, we all recognise that this is a devastating blow for the community of Port Talbot, and we are committed to doing everything that we possibly can to save jobs and support anyone who loses their job. This is why the UK Government have set up the Port Talbot transition board, backed by £80 million from the UK Government and £20 million from Tata.
Baroness Humphreys (LD)
My Lords, the people of Wales well understand the suffering that can be the consequence of industrial decline and the loss of a major industry. What we see happening in Port Talbot will blight the current generation and those to come, unless the Government invest in the national skills strategy that we need to prepare for the “new, well-paid jobs” that the Secretary of State talked about and for the future workplace. We need to develop skills for the remainder of the 21st century, so will the Government commit to a national skills strategy?
Lord Harlech (Con)
My Lords, I thank the noble Baroness for her question. In addition to the £100 million funding for the Port Talbot transition board, £15 million is being put towards the regeneration of Port Talbot town centre, with improvements to the civic square, the refurbishment of the Princess Royal Theatre and improvements to green space. Seed funding of £26 million for the Celtic freeport will support regeneration of local communities by attracting new businesses, jobs and investments, and we are investing £790 million in city and growth deals across Wales, including the Swansea Bay city deal, which is building on the region’s strengths in the areas of life sciences, energy and manufacturing.
Baroness Gale (Lab)
My Lords, as others have said, this will have a devastating impact on the south Wales community. It reminds me of the 1980s when the pits were closed; south Wales valleys were devastated and never recovered. I hope that that is not going to happen in Port Talbot. As the UK will now become the only country in the G20 to leave itself without the capacity to make virgin steel, how does the Minister feel about the legacy of this Government in making the UK reliant on foreign imports? What discussions has he had with the Welsh Government? Could he give us a report on them and are they ongoing?
Lord Harlech (Con)
My Lords, the noble Baroness asked a range of questions. What came through was her passion, which I think everyone involved in this Question shares, that these jobs and the steelworks are part of the community—it is an identity, not simply a job, and we feel that deeply. I am afraid to say that the Welsh Government have not offered financial support towards this transition. However, we are doing everything we can to create new jobs for the ones that have been lost. Without our investments, there was a threat that all jobs within TATA, not just those in south Wales, could have left the UK.
The noble Baroness also asked me about virgin steel. We have heard these arguments. We are ensuring that the UK, by moving to green steel, will be less dependent on international supply chains. By moving to green steel—electric arc furnace steel—we are securing the future of UK steel capability and our economic and national security.
Baroness Bennett of Manor Castle (GP)
My Lords, the events in south Wales are a real demonstration of the Government’s absolute failure to deliver a just transition for the workers of the region and indeed beyond, and nor are we seeing the growth in renewable energy we should be seeing in uses of steel. I have questions for the Minister about the supply of steel for recycling. The EU is looking to secure the supply of scrap steel by 2027. It is going to bring in rules to ensure that scrap steel is exported only to places with very high environmental standards. That contrasts with the situation here in the UK. More than 50% of our scrap steel is now exported to three countries: Turkey, Egypt and India. Pakistan is the next country on that list, and none of those places is known for the environmental standards of its steel industry. Will the Government bring in a plan for the long-term future of a steel industry using electric arc furnaces?
Lord Harlech (Con)
My Lords, that is exactly what we are doing. I find it quite staggering that the Green Party fails to recognise that moving to electric arc furnaces will reduce carbon emissions by around 5.5 million tonnes per year—the noble Baroness shakes her head, but that is a fact. The UK produces 11 million tonnes of domestic scrap per year. Currently, demand is lower than supply, so 8 million tonnes of that scrap is exported. This gives plentiful and reliable future supply in the UK for electric arc furnace production from domestic scrap.
Health and Disability Reform
(7 months, 2 weeks ago)
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Baroness Sherlock (Lab)
My Lords, I am grateful to have the opportunity at last to ask some questions about this Statement, because the route here has not been pretty or swift. The Prime Minister made a speech on 19 April about the need to reform sickness and disability benefits. Cue lots of headlines about sick note culture and the need for a crackdown. Then, there was silence: 10 days of expecting a Statement which did not come; 10 days of asking for detail; 10 days during which, if noble Lords are anything like me, they will have had a succession of messages from sick and disabled people who were very anxious about what was going to happen to their benefits.
When the Secretary of State finally talked, it was not to Parliament but to the media, of course, so we began to find details there. The Telegraph ran the headline, “Disability benefits could be vouchers, not cash”. The Sunday Times said, “Depressed and anxious face losing … benefits”, with the sub-headline, “Tories plan welfare reform as election divide”. I sorry to say it, but there we have it. The Secretary of State was quoted in the Sunday Times as saying that
“it was ‘extraordinary’ that Labour was refusing to say whether it supported his benefit changes”.
At this point, there was no document, there had been no Statement in Parliament, and no details were available. In fact, when the Statement was made in Parliament, the Secretary of State did not even observe the usual courtesies of giving an advance copy to the Speaker and the shadow Secretary of State. I do not know why the Government would sit on the Statement and document for 10 days and then publish them in the week of the crucial local elections—it is a mystery.
Now we have the details, although it is not very detailed. I read the Green Paper from cover to cover, and if you exclude questions and the padding in the annexes, there are 14 pages of content. The Green Paper could hardly be any lighter green.
How did we get here? In 2013, the Government abolished disability living allowance and created PIP. According to the Green Paper:
“PIP was intended to differ from DLA by being fairer (by paying greater regard to needs arising from mental health, sensory and cognitive conditions)”.
It was also to be
“more consistent … objective … transparent … sustainable … modern and dynamic”.
The Government committed to undertake an independent review of PIP after two years and again two years later. There have been two consultations covering PIP since then.
Then, in July 2021, the Government published Shaping future support: the health and disability green paper, which launched a consultation on PIP and ESA. Nearly two years later, in March 2023, the Government published a health and disability White Paper which set out the Government’s vision
“to help more disabled people and people with health conditions to start, stay and succeed in work”.
That paper announced the plan to remove the existing universal credit limited capability for work and work-related activity element and replace it with a new universal credit health element. It was also going to abolish the work capability assessment, which was people’s gateway to those benefits, so there would be only one health and disability functional test in future: the PIP assessment.
Now, a year after that White Paper, we are back to a Green Paper, which proposes abolishing the PIP assessment. What is going on? How will anyone be assessed for anything? Will the Minister tell us what happens to people who are clearly too sick to work at the moment but are not disabled? How will they have their support assessed when there is neither a work capability assessment nor a PIP assessment? Is the plan still to have a new universal credit health element, or is that under consideration again as well? The Government suggest that some health conditions can be taken out of PIP assessments. Can the Minister tell us which conditions they have in mind? PIP is also passport to the carer’s allowance. How will that work if there is no PIP assessment? Do people risk losing their benefits and their personal care from family or friends at the same time?
The Government said that DLA was the problem and PIP was the answer; now it seems that PIP is the problem. The fact is that we have a problem in this country: we have a record 2.8 million people locked out of work due to long-term sickness. But what or who is to blame? How much of that is down to the Government's record on the NHS? When the Statement was debated in the Commons, the chair of the Work and Pensions Select Committee pointed out that:
“PIP assessment providers confirm that worsening delays in NHS treatment are a big factor in the increase in the number of people applying for PIP”.—[Official Report, Commons, 29/4/24; col. 52.]
We have also been hearing strong hints that the real problem is people with mental health problems. I do not doubt the Minister on this, but politicians in general need to be very careful about how we speak about mental health, for risk of stigmatising people or making them afraid to speak out or seek help. Can the Minister say whether the Government’s plans involve treating people’s mental and physical health differently? If so, can he explain the legal basis for making such a distinction? Can he also say what the Government will do about the near impossibility, for many people, of getting any timely mental health support at the moment?
A Labour Government would take a different approach. Among those who need the help of the state, there are some people who are temporarily or, in some cases, permanently unable to work and who need support to have a decent life. There are many others who need extra help to get, keep and advance in a job, and it is the state’s job to give that to them. For those people, health and work are two sides of the same coin.
Rather than blaming people for being sick, a Labour Government will support our NHS. The last Labour Government delivered the highest patient satisfaction level on record, and that is the record on which we want to build. We will drive down NHS waiting lists by getting patients treated on time, with 2 million more weekend and evening appointments, and we will ensure more support for those with mental health problems through an extra 8,500 mental health staff.
We will focus constructively on work, the other side of that coin, because the costs of failure in this area are a disaster for individuals and the country. Where it is possible, work is good for us—for our mental and physical health. Labour will have a new deal for working people, improving rights for the first time in a generation. We will drive up employment in every region, devolve employment support and end the tick-box culture in jobcentres. We will tear down the barriers to work for disabled people and provide help for young people.
Labour will carefully review the issues raised by this latest Green Paper. Clearly, sick and disabled people need appropriate help and support, but we also want to be a country where disabled people have the same right to a good job and the help to get it as anyone else. We will judge any measure that the Government bring forward on its merits and against that principle. I look forward hearing more from the Minister.
Baroness Tyler of Enfield (LD)
My Lords, I will not repeat what the noble Baroness, Lady Sherlock, has just said about the lead-up to the publication of this Green Paper, but it can hardly be described as ideal. When announcing the Green Paper and the reforms to PIP on Monday, the Prime Minister said that something had gone wrong since the pandemic, leading to more people not working because of long-term ill health; he singled out the rise in people unable to work because of mental health conditions. Of course, I agree with helping people to get back into work, where that is possible, and I agree that for some people with mental health problems, it can improve their well-being. What I worry about greatly is putting the spotlight on people with mental health problems in such an unhelpfully divisive and—I agree—stigmatising way.
We need to go back to the root causes here. Can it be any surprise that so many people are claiming sickness and disability benefits when millions are still waiting for NHS treatment, and mental health wait times are through the roof, due to an acute shortage of mental health professionals, including doctors, nurses and counsellors? Does the Minister agree that if the Government are serious about getting people back to work, they need first to reduce waiting times for NHS treatment and tackle the crisis in our mental health services which makes accessing mental health treatment so difficult and protracted?
The Prime Minister also claimed that these changes are about “compassion”, but does this not rather miss the point that most young people claiming PIP are doing so because they have ADHD or autism, rather than anxiety and depression? Last year, 190,000 young people claimed PIP due to autism, ADHD or other learning disabilities, compared to just 129,000 claiming for all other disabilities. Could the Minister explain why, in the announcement of these proposals, there has been such a strong focus on anxiety and depression and how far this is based on the evidence?
I am concerned that potentially stopping cash payments will be seen as an affront to the dignity of benefit recipients. The BBC News website yesterday quoted one 71 year-old recipient, who said that for her PIP is about
“maintaining independence, not being a burden on my family and keeping my dignity”.
It could hardly be said that the reaction from the sector has been favourable. The charity Scope has said that these plans do not fix the underlying issues faced by disabled people. The chief executive of the charity SANE has pointed out that
“mental health problems are often invisible and fluctuate from month to month or day to day, and … assessments for benefits are all too often based on ‘snapshot’ judgments that do not take account of how hidden and disabling mental illness can be”.
Can the Minister say what consultation took place with the mental health sector and those who work closely with people directly affected by these issues prior to the Green Paper being published?
Finally, I turn to a wider issue. The Statement talks about a
“new conversation about how the benefits system can best support people to live full and independent lives”.
I am sure we can all agree with that, but we need to look at these issues in the round. Being able to live independently in the community can often rely on the help and support of unpaid family carers. Does the Minister agree that it is simply unacceptable for over 150,000 unpaid carers to be facing severe financial penalties—pushing many into debt or financial hardship —for often quite unknowingly breaching the earnings limit while caring for a loved one? What urgent steps are the Government taking to stop this outrage, and will they agree to an amnesty while it is being sorted out? If the Minister cannot answer that now—I accept it is not within the immediate focus of this Statement—would he please write to me?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I start by thanking the noble Baronesses, Lady Sherlock and Lady Tyler, for their questions; I will do my best to answer them.
Indeed, the Prime Minister did make a speech on 19 April, and I was there in person. He covered a whole range of announcements in the world of welfare. I found it to be a very caring and compassionate speech; that is a really important point to make, because it did not come across in some quarters in the media. On how the Statement was communicated, I will not dwell on that other than to say that both noble Baronesses will know that apologies were given. That is on the record, and I do not think it is right that I should say anything more about that now.
The noble Baroness, Lady Sherlock—and it was alluded to by the noble Baroness, Lady Tyler—spoke strongly about mental health and the link with physical health. I want to make a few remarks about this, because we should see it as a sign of progress that people can talk about mental health more openly. The Government will never dismiss or downplay the conditions that people have; it is precisely because we take mental health so seriously that we need to reform the system. There is no one-size-fits-all approach, but the current system does not reflect that. It is simply wrong to write people off when there is a growing body of evidence that good work can improve mental health.
In terms of the evidence raised by the noble Baroness, Lady Tyler, I visited a jobcentre only this morning and asked various questions of the job coaches. I reassure her, or alert her to the fact, that the evidence is certainly there. I am sure she will know from her own experience there is an increased level of mental ill-health, some of a severe nature. Action must be taken.
But it is more than that; it has been over 10 years since the introduction of PIP. We need to ensure that our system is fair and accurately targeted at those who need our support most. Although we have made significant progress, the disability benefits system for adults of working age is not consistently providing support in the way it was intended. In terms of a point raised by the noble Baroness, Lady Sherlock, I reassure her and the House that we will and intend to continue to support those who need it. That includes those who genuinely are not able to work—that is what we are doing at the moment. In terms of what may come out of the Green Paper, and indeed this conversation or consultation, that is a most important point that I want to emphasise—which, by the way, the Prime Minister also emphasised.
The noble Baroness, Lady Tyler, asked about the importance of investing in mental health services. She is right; we want to ensure we are providing the right support to those who need it most, targeting our resources most effectively, and supporting disabled people and people with long-term health conditions to live independently and reach their full potential, irrespective of whether this is a physical or mental health condition—which alludes to the point that the noble Baroness, Lady Sherlock, made. Mental health remains a key government priority; that is why we are investing £2.3 billion a year into NHS mental health services, and why we brought in the long-term workforce plan, which will deliver the fastest expansion of mental health services in the NHS’s history. Just this morning, as I said, I visited a jobcentre and found out more about that.
The noble Baroness, Lady Sherlock, asked about PIP and mental health. I will give a few more statistics to back up the views I have given so far. In 2019, there were an average of 2,200 new PIP awards a month in England and Wales, where the main disabling condition was mixed anxiety and depressive disorders. That figure more than doubled to 5,300 a month in 2023. As I said earlier, we will and must continue to support everyone with mental health conditions, recognising that the severity and individual circumstances will vary and that there is no one-size-fits-all approach. Those with the most debilitating conditions should be entitled to the support they need, as I said earlier. That is exactly what PIP is intended to do, and that core aim will not change.
However, we need to have an honest conversation, which we have just started, about whether individuals with some conditions are better served by treatment and tailored support than by cash payments—which I think was a point raised by one of the noble Baronesses. To increase support, we have expanded mental health provision. Altogether, between 2018-19 and 2023-24, spending on mental health services has increased by £4.7 billion in cash terms, increasing access to mental health services. This has put 400,000 extra people through the NHS talking therapies programme, which the House will be aware of.
On the question raised by the noble Baroness about the amount going on, I say that there is a huge amount. We fully intend to go ahead with the reforms that we announced in Transforming Support: The Health and Disability White Paper, because the Government are committed to doing everything that we can to help disabled people and people with long-term health conditions. These changes are separate from this PIP consultation but, as we develop our proposals, we will consider how some interactions with the current welfare system will be reflected in a reformed system. This will be carefully worked through and reported on before we consider introducing any changes. I say again that this is the start of a conversation. We are asking as many people as possible to input into the Green Paper. Already, we have received a good number of responses in the past few days since it was announced.
The noble Baroness, Lady Tyler—it might have been the noble Baroness, Lady Sherlock, as well—spoke about too many piecemeal publications and not enough action. Since 2010, we have delivered significant welfare reforms, including introducing universal credit, a modern benefit that ensures that people are better off in work than on benefit. There are nearly 4 million more people in work than in 2010 and 1.1 million fewer people in absolute low income. However, we are now seeing a new challenge—they come up in government sometimes —that emerged in recent years and accelerated post pandemic. As the Prime Minister said, the current system is unsustainable, unfair for taxpayers and no longer targeted at those who need it most. That is why it is essential that we take action.
On the point raised by the noble Baroness, Lady Tyler, about carers, there probably is not enough time to go into everything I want to say, but perhaps I can give her some reassurance on the issues circling at the moment. We must carefully balance our duty to the taxpayer to recover overpayments with safeguards to manage repayments fairly. Claimants have a responsibility to ensure that they are entitled to benefits and to inform my department, the DWP, of any changes in their circumstances that could impact their award. To be helpful, we have improved, rather urgently, customer communications to remind them of the importance of telling us about any earnings, including in the annual uprating letter that all claimants receive. We are looking to make the best possible use of earnings information collected by HMRC—so-called real-time information—to help to prevent some overpayments occurring in the first place. I reassure the noble Baroness that we are taking this extremely seriously.
Baroness Browning (Con)
My Lords, I declare an interest as I have for decades been the person who has supported two near relatives in receipt of PIP. In fact, I spent two hours on Sunday night helping to fill in a PIP review form—26 pages—for a PIP application that was refused in the first place and given at an enhanced rate on appeal. My noble friend will recognise from this that there is a lot already wrong with PIP and the way questions are asked and formulated.
I am particularly concerned about autism-related anxiety. It is not the same as people who just have the slings and arrows of outrageous fortune to cope with, which we all do. The brains of people with autism are wired differently. The things that make them anxious can very easily lead to a downward spiral that can result in suicide. I say to my noble friend—I know we are limited on time—that when it comes to the worried well, I put my hand up, because every day of my life now I wonder who on earth is going to help with those forms and applications when I am no longer here. It is a nightmare.
Viscount Younger of Leckie (Con)
I take very seriously what my noble friend has said. On the PIP process, she is right. Work needs to be and is being done to modernise the health and disability benefit services to create a more efficient service, reduce processing times and improve trust in our services and the decisions that we make. As part of this, from July 2023, a limited number of claimants have been able to begin their claim for PIP entirely online, which we aim to roll out across England and Wales.
My noble friend’s substantive question was on the important subject of autism. She will be aware of the Buckland review. It is important to say that we will link whatever comes out of this conversation, which may include matters to do with autism, with the progress we are making on the Buckland review. I am aware of the huge challenges linked to assessing those who have autism. On a brighter note, we know most autistic people want a job, and evidence shows that they may bring positive benefits to their employers. Now is the time to raise our ambition. On 2 April 2023, World Autism Acceptance Day, the DWP announced the launch of this new review. My noble friend will know that a task group has been set up that will include people with direct lived experience of autism, and be chaired by a respected independent person who is separate from government and clearly represents autistic people and their needs. The members of the task group will cover a broad range of interest groups to ensure that their views are represented. It is important to link this to what we may do out of the review on PIP. I say “may do” because this is a consultation, and we want to hear from people.
The Lord Bishop of Lincoln
My Lords, I declare an interest as a bishop relating to L’Arche UK and worldwide, which cares for people with intellectual and physical disabilities. The aspiration outlined in the Ministerial Statement to create a Britain in which disabled people can be supported to thrive is one that we all share. At a time of economic challenge, any responsible Government must pursue priorities and make difficult choices, but I have been in your Lordships’ House for 10 years and this kind of Statement reminds me of the circularity of this debate about welfare provision within that 10 years, where we do not seem to have made huge progress. We heard a lot from previous speakers about the varied needs of people with disabilities, some people with temporary health issues and those with severe and enduring mental health conditions. The Joseph Rowntree Foundation has noted that almost two-thirds of people living in destitution or direct homelessness have a chronic health condition or disability. These people may be unable to meet their most basic needs to stay warm, fed, dry and clean. Does the Minister agree that energy for further reform of disability benefits might be best applied to meeting the needs of this cohort rather than seeking to make eligibility even tighter?
Viscount Younger of Leckie (Con)
I gently correct the right reverend Prelate, or give my view, which is that the current PIP system has served a purpose; that is a fair comment to make. However, as I said earlier, after 10 years—it was our Government who brought in PIP—now is the time to review it. To put this in perspective and explain why we are doing it now, I say that since 2015 the proportion of the caseload receiving the highest rate of PIP has increased from 25% to 36%, and 7% of working-age people in England and Wales now claim PIP or DLA, which is forecast to rise to 10% by 2028-29. Going back to 2022-23, the Government spent £15.7 billion on extra costs for disability benefits for people of working age in England and Wales, and the OBR has forecast that the cost will rise to £29.8 billion in nominal terms by 2028-29. On the right reverend Prelate’s question, we believe that now is the right time to do something. In fact, not doing something would be highly negligent. It covers everybody at all levels. I know he referred particularly to those who are the most vulnerable, and he was quite right.
Lord Addington (LD)
My Lords, this Statement should fill us with joy, but anyone familiar with the history of this issue will actually be worried. The assessment has just got a hell of a lot more complicated. In the past, people have been told that they cannot get their benefits, whatever they are called, because they can walk 10 yards—except they could do it one day but not the next, and it was a nightmare. The Government have just made a quantum leap in the complexity of conditions that they are dealing with. That is good, but unless they back it up with better support to make the assessment then they are guaranteeing failure. There is no real argument about that; the noble Baroness, Lady Browning, hinted at it, and others will back me up,
I suggest that something the Minister could do to make the Government’s life easier is to start passporting the identification of problems such as education in earlier life. For instance, there are education, health and care plans, and the disabled students’ allowance. If we cannot passport those into the Department for Work and Pensions, we are going to waste a huge amount of time and effort. Most of these things will have been tested in the courts, or with an assessment. What are we doing there? When we are making new assessments, are we investing in proper identification? That has been a chronic problem in this area. I hope that by now the Government have realised that and put some sort of plan in place.
Viscount Younger of Leckie (Con)
I encourage the noble Lord, with his knowledge and experience, to input into the consultation, as I suspect he probably will. He will know that the consultation is limited in scope to PIP, which is open only to claimants aged 16 and over. That is quite broad, but it is payable regardless of whether you are in work, education or, as he spoke about, training. We are keen to hear from people from all walks of life and backgrounds, and encourage everyone, including students, to respond to the consultation.
I take note of the noble Lord’s point about passporting. I know about EHC plans from my previous brief. It is important that the student diaspora and those who represent it also input to the conversation.
As I said, we believe there may be better ways of supporting people in living independent and fulfilling lives. This could mean financial support being better targeted at people, including students, who have specific extra costs, but it could involve improved support of other kinds, such as for physical as well as mental health, leading to better outcomes.
Baroness Bottomley of Nettlestone (Con)
My Lords, I commend the Statement and the Green Paper. I regard the Secretary of State as someone with a warm and sincere heart, and a clear head. I think he is an impressive Secretary of State in a complex area. I also commend his Permanent Secretary, who is a quite excellent man.
Obviously, the understanding of disability and ill health changes all the time. This benefit has been around since 2013, and it is time for a strategic review. Earlier this week, we were talking about the late Frank Field. When I worked on benefit agencies with him, it was quite different. With these vast sums of money, we should focus and make sure that the money is spent wisely and well. There is only a certain amount of public money, as another party may discover in a few months’ time, although I can say nothing about that. Money cannot go both on doctors and nurses and on welfare payments, so we have to look strategically.
There are partners. Charities have a big part to play, and the Church is important in dealing with mental health. I remember the effect of Pentecostal choirs on West Indian boys with schizophrenia. They went to the Pentecostal choir, and said that they felt like new men, and I am not surprised.
I want to talk particularly about employers. Good employers have transformed the support that they offer to people with mental illness problems. Prevention is much better than cure, if you can reach out and help someone in the workplace to talk about their mental health problems. I agree about stigma. If you have schizophrenia then you say you have depression, and if you have depression then you say you have the flu. There are a number of employers that have impressed me, which I would point out to the Secretary of State, where there are ally groups supporting people’s mental health, and where facilities and services are provided. Yes, the Government have a part to play, but so does the wider community. Work, for most of us, is a lifesaver. I have never been more miserable than when I was stuck at home during Covid, and I do not think I am alone.
Viscount Younger of Leckie (Con)
I thank my noble friend for her kind comments about the Secretary of State and the Permanent Secretary, with whom I am working closely, as she will know.
My noble friend made an important point about the variations among individuals who have conditions. As she alluded to, some claimants will have considerable extra costs related to their disability, while others will have fewer or minimal costs. This is why we have brought forward the Green Paper, looking at whether there are ways in which we can improve how we support people, where that is better suited to their needs and to the way they want to run their lives. I should also say that it is right that it is fairer to the taxpayer than the current system.
My noble friend is right that my department has been undertaking a huge amount of work with employers and that, with the rise in mental health conditions, sometimes people in work feel that they cannot stay in that job because of their condition. A lot of work has been going on to persuade or help them to stay in work, while holding their hands and giving them detailed, experienced, skilled advice on how to cope with their lives. That is working, and I could go into more detail on it, but it just shows that we are alert to the increase in mental ill health that has come about for a variety of reasons, not just because of Covid.
Baroness Newlove (Con)
I want to ask the Minister about applying for PIP. Similar to my noble friend Lady Browning’s case, my son-in-law has applied. He has MS and has been advised by his consultant. He has waited six years for a diagnosis and is 32 years of age. His application for PIP was turned down. He works 50 hours a week—he is not lazy at all, or anything like that—and he provides. When he reapplied, it was out of date, and he has just been told that, because he applied online once, he has to use the paper form. That form is 44 pages long. He cannot write or hold a pencil because of his illness—he has his daughter write Christmas and birthday cards. Unfortunately, the person on the other end of the phone does not seem to be sympathetic about that.
It is diabolical that someone with a medical illness like that has been sent a 44-page document to complete in two working weeks when he already feels that he is holding out a begging bowl. But he has been advised to apply by his consultant because working the many hours that he does is having an impact on his health. I ask the Minister to look at that. If we are going to digital, surely the message should not be that you get one chance only to apply online and then any other applications must be on paper.
Viscount Younger of Leckie (Con)
I have every sympathy with what I have heard from my noble friend. I will not repeat what I said about the huge changes that we are making to the PIP process, but I am aware of the example that she has given of the 44-page form, which falls into that category.
Perhaps I can go a bit further—this is linked to the waiting times that we know have been apparent for applying for PIP—and say that we have seen a decrease in PIP clearances since August 2021. The latest statistics show that the average end-to-end journey for those applying for PIP had reduced from 26 weeks in August 2021 to 15 weeks at the end of January this year. So we are clearing claims faster than we were prior to the pandemic, which is going in the right direction, and we are committed to ensuring that people can access financial support through PIP in a more timely manner. Managing the customer journey times for PIP claimants is a priority for the department, and we are working constantly to make improvements to the service.
My noble friend mentioned the issue of online. Online is a way forward but it is not necessarily for everyone. We have increased the availability of case managers and assessments, and provided health professional resources, and we have been triaging and prioritising new claims in a better way.
Baroness Bennett of Manor Castle (GP)
My Lords, the justification for this Statement and the Government’s plan, repeated by the Minister, is that the level of claims has risen significantly since 2009, specifically mental health claims. Since 2009, we have had a global pandemic and the acuteness of the climate emergency has become obvious to everybody. We have had a cost of living crisis; we have a huge crisis in housing. Surely it is not a surprise that we have very poor levels of mental health across our society. That is a measure of government failure rather than individual responsibility.
Does the Minister acknowledge that there are social determinants of health and that what we have to do is create a healthy society? This Statement makes no reference to that. Also, do the Government accept the social model of disability, acknowledging that the way in which society is arranged and organised is what truly disables people? Why is there nothing in this Statement—not a single reference—to what can be done to push employers to provide appropriate arrangements for disabled people, to allow them to continue to work, rather than focusing on the behaviour of disabled people?
Viscount Younger of Leckie (Con)
I know that we— the noble Baroness, Lady Bennett, and I—have had several sessions across the Chamber, and I say gently that, for her to say that all the instances of mental health that have cropped up are purely to do with decisions that the Government have taken wholly misrepresents the situation. She will know, as I think most of the House will, that it is much more complex than that. It is linked to all kinds of issues: for example, the rise in social media and the fact that more young people are on their phones is talked about a lot. So I might chide her that she might have mentioned that, for example.
This allows me also to give one reason why now is the time to look at PIP, given the very sobering figures that I gave out slightly earlier. I now want to go a little further. If we did nothing, over the coming four years PIP spending alone is forecast to rise by 63%, from £21.6 billion to £35.3 billion. That would be for the period 2023-24 right up to 2028-29. But it is not just about the cost. As I said earlier, I hope fairly, it is important that we review PIP to be sure that it is directed in the right way, targeted at those who need it most, delivering the right sort of support for people with disabilities and health conditions and, as I said earlier, providing better value for the taxpayer.
Lord Young of Cookham (Con)
My Lords, I agree with what my noble friend has just said and the point made by my noble friend Lady Bottomley that, whoever is in power, the present regime is financially unsustainable. However, I also agree with what the noble Baroness, Lady Sherlock, said at the beginning: the tone and language that one uses when discussing reform is crucial. My noble friend gets that right, but can I ask him about the proposals for the so-called sick note?
At the moment, yes, GPs are under pressure, but they at least know the patient and have access to a wide range of information before they come to their decision. Under the proposals, this will be done by a DWP assessor, who will not know the claimant and will have a limited amount of background information—and relatively limited interaction with the claimant. How confident is my noble friend that that process will be fair and robust?
Viscount Younger of Leckie (Con)
Absolutely. This allows me to talk a bit about the so-called fit notes. I start by saying that we know that work positively impacts people’s physical and mental health and well-being. The current fit-note system, which is the gateway to accessing sick pay and ill-health unemployment benefit assessments, is writing off too many people as “not fit for work”. By the way, it is quite a sobering figure that it is 94% of all fit notes. We need to fundamentally overhaul the system, so that it changes the default assumption by focusing on what people can do with the right support. We know that 10 million not-fit-for-work fit notes are issued every year, so there is a real missed opportunity here.
On my noble friend’s question, we are working on a new process and there is a call for evidence out. This was published on 19 April and we are gathering evidence to assess the impact of the current fit-note process in supporting work and health conversations. It asks stakeholders how they would like to see the fit-note process change to better support people to start, stay at and succeed in work. To that extent, it very much chimes with and links into my department. That is why we are working ever more closely with the Department of Health and Social Care to take forward this important area.
Telegraph Media Group Ltd: Acquisition
(7 months, 2 weeks ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bassam of Brighton (Lab)
My Lords, we on the Labour Benches are grateful today to the Government for this short Statement, setting out where they are on the future acquisition of the Telegraph Media Group. As the House knows, we have been steadfast in our support for a free and independent press across the political spectrum. We will always champion the right of a free press to hold power to account, speak hard truths and expose corruption and wrongdoing.
We oppose foreign powers owning our free press, which has been consistently raised by parliamentarians across all Benches both here and in another place. We also welcome investment into the UK, in particular in news media businesses. For that reason this Statement is important, as it sets out how the Secretary of State intends to use her powers. It is our expectation that the Secretary of State will use these powers wisely to protect the diversity of our media landscape and encourage inward investment. The Government can be assured that we will follow the auction process closely.
I have a few questions today for the Minister. First, can he say a little more about the timescale for the auction? Can he assure the House that the Telegraph Media Group will at all times keep its workforce and unions informed? I noted from the Secretary of State’s Statement that the order governing this process not only prevents actions that might prejudice a phase 2 reference to the CMA; it also effectively freezes organisational and staff changes. To us, it would seem that union consultation is a small move on from that step, so have Ministers had any discussions with the relevant trade unions representing Telegraph Media Group staff? Can the Minister also tell the House what principles will underpin the approach to the auction and what steps the Secretary of State will take to guarantee that there is a free and open sale of the media group?
This is a year of multiple elections: we have local elections tomorrow and a general election, we hope, as soon as possible afterwards. It is essential to our working democracy that we have a free, honest and independent press. For our part, although we may not always agree with the editorial line of the Telegraph, we will champion its right—and the right of all publications—to hold us all to account.
Lord McNally (LD)
My Lords, I had always imagined that the noble Lord, Lord Bassam, was a Telegraph reader.
Lord McNally (LD)
Yes, the cricket.
We welcome this Statement. Sometimes I am teased by my colleagues about my membership of the Puttnam committee on the Communications Act 2003, but actually the Puttnam amendment to that Act is the origin of the powers that the Secretary of State has used here. The Puttnam amendment widened the reasons for Secretary of State interventions and has been used very usefully at key times in the last 20 years. In terms of these bids for purchase of our media, it means that we are able to take in the wider public interest and we support the Secretary of State in so doing.
I am not naturally a supporter of RedBird IMI, but I have some sympathy for the question of whether it is fair to either would-be bidders or the wider public interest to be so behind the curve and reactive when such bids arise. Media ownership is becoming more interlocking and intertwined between print, broadcasting and online. In many ways, although they might not like it, print journalists are becoming almost like the hand-loom weavers in the world of fast-moving technological change—and that is before we feel the full impact of artificial intelligence on the sector.
I would like to probe the Minister. Yesterday, Sir John Whittingdale in the other place pointed out that
“it is six years since Ofcom said that there needs to be fundamental review of our media merger regime”.—[Official Report, Commons, 30/4/24; col. 165.]
I agree with him, and I ask the Minister whether the Government are actively considering such a review.
With the Media Bill now before this House, will the Government seek cross-party agreement on clarifying and strengthening our media ownership rules for the future? I see the noble Baroness, Lady Stowell, is in her place. She has already put down an amendment to the Media Bill which could take this forward, but I think it could be done much more comprehensively at this time. If we do not do it comprehensively at this time, we will find that we have another 20 years of drift and that we are behind the game. It is essential that we have in place protection from foreign influences and state players, while, as the noble Lord, Lord Bassam, emphasised, seeing sustained plurality in both ownership and opinion in a free press—as all sides of the House want.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, I should reassure the noble Lord, Lord Bassam of Brighton, that the Government do not always agree with the editorial line of the Telegraph either, but that is the point. The independence of the press, holding Governments of all colours to account, is why the Secretary of State has always taken this so seriously and used the powers available to her under the Enterprise Act in the way that she has. It is why, as I outlined in debates on the digital markets Bill, we have acted to put beyond doubt and make explicit the ability for her to act in this scenario following the concerns raised, not least by my noble friend Lady Stowell of Beeston, about the potential influence of foreign Governments over our newspapers.
I am grateful to both noble Lords, Lord Bassam and Lord McNally, for their comments and their welcome of the Statement. I am grateful to the noble Lord, Lord McNally, for recalling rightly the role that Lord Puttnam played in the legislative landscape, which the Secretary of State and her predecessors have been able to use in this important area.
The noble Lord, Lord Bassam, referred to the balance between taking action to preserve the freedom of press, which we hold dear as a cornerstone of our democracy, and attracting investment into the UK. We have always been clear, as have my noble friend Lady Stowell and others, that our actions in relation to the potential influence of foreign Governments are not prejudicial to our welcoming of foreign investment more generally in media businesses, and I am glad to have the opportunity to say that again.
The noble Lord, Lord Bassam, asked about consultation with trade unions. The Government will not be engaging with potential buyers or be involved in the sale process from this stage on. We have obviously been careful in the stages so far. From now on, it will be run by RedBird IMI alone. The Secretary of State made her decision based on the evidence provided by Ofcom and the Competition and Markets Authority, which issued a call for evidence and spoke to relevant parties. The unions could have made representations to both those bodies—whether they did or not, I do not know, but that is the appropriate way for views to be fed in. The noble Lord is right to refer to the people whose jobs and livelihoods depend on this. Some of them, who have jobs that allow them to write freely, have made those points, but there are many more people whose jobs in these important sectors are affected by it, which I am happy to acknowledge.
On timelines, RedBird IMI will now proceed with a sale of the call option. The details of that are not finalised, and it would not be appropriate for me to comment further on the next steps as they are a commercial matter. I will say, as the Secretary of State has, that she will monitor the outcome with a view to deciding in due course if she should take any further regulatory action under the Enterprise Act.
The noble Lord, Lord McNally, asked about our consideration of the media mergers regime more broadly. That work was already under way before this issue came to a head. We have taken the action that we have in the digital markets Bill. That action continues, and we will have more to say on that, not least during our debates on the Media Bill. I know that he and others will rightly use this as an opportunity to return to these matters.
Baroness Stowell of Beeston (Con)
My Lords, I will pick up on the theme of timescales. I am grateful to my noble friend for the answers he has given to the noble Lords, Lord Bassam and Lord McNally, because they cover some of the issues I wanted to ask about. Could my noble friend also tell us what the expectation is for the Government to bring forward the secondary legislation that covers the carve-out for legitimate indirect foreign state investors, such as sovereign wealth funds? That is important in providing clarity for prospective buyers. This has already been said, but it is worth saying again: in raising this, I am very conscious that, in meeting our essential objective of a sustainable future for our free press, we should ensure that there is a proper channel for inward investment into the media industry. If my noble friend could give an update, that would be helpful.
Lord Parkinson of Whitley Bay (Con)
Many of the provisions we have made in the digital markets Bill require the Bill to receive Royal Assent, which I hope it will very soon, and they will come into force then. Once that has happened, we will be able to bring forward the measures we have committed to via secondary legislation. I will be writing in the coming days with a bit more information about that and about the consultation process on some of the points my noble friend raised, and we discussed in debates during the passage of the Bill. I will write to all noble Lords with further information about that very soon.
Lord Stevenson of Balmacara (Lab)
My Lords, the questions so far have focused on the intersection between this and the previous regime, which was established, as noble Lords have already said, by Lord Puttnam and his Enterprise Act—it was not exactly his; it was the House’s Enterprise Act, and it was published by a Government we were proud to be part of. That has stood the test of time, but I am afraid time is accelerating. We are now in a situation with a rather hard edge.
I am grateful to the noble Baroness, Lady Stowell, whom I worked with on the amendment we eventually put through, which will also be referred to within the forthcoming digital media Bill. However, that provides an absolute block against further foreign ownership; it is not just ownership, but interests in the freedom of the press and the plurality of it. Of course, there are other issues, which under the old regime would be considered, including those looked at in detail by Ofcom and the CMA.
I want to pick up on the exchange the noble Lord, Lord McNally, quoted, between the Secretary of State and John Whittingdale. In response to his question about whether these things need to be brought forward and accelerated, she said that she was
“looking at whether online news should be included in the scope of Ofcom’s powers ”.—[Official Report, Commons, 30/4/24; col. 165.]
I rather had the view that Ofcom had those powers. Could the noble Lord explain a little bit where he sees a gap and, if so, given what he said about timescales, whether we can look forward to the gaps being filled in? That seems to be a very important part of it, in the context of us needing to look more widely at what we want out of a free press, without reflecting government intervention and recognising that plurality is one of the main concerns. There are other bidders for the current holdings in the Daily Telegraph, one of which is a media interest. I wonder if the Minister would like to opine on that.
Lord Parkinson of Whitley Bay (Con)
The noble Lord’s question gets to the heart of an important distinction: there are newspapers that have websites, there are websites that are news providers, and there are online services that are not principally news providers but from which people increasingly derive their news. It is right that we look at all those things. He is right that the Communications Act 2003 has served us well for the last 20 years but, as we said in our debates on the Online Safety Act, it was written at a time when the internet was in its infancy and did not look at it. Of course, we touched on that in the debates on that Act and will return to some of the points in the Media Bill. We will shortly consult on expanding the existing media mergers regime and the foreign state ownership provisions to include online news websites, and we will touch on other matters when we discuss the Media Bill.
Baroness Bottomley of Nettlestone (Con)
My Lords, it has been a long time since 1855 and the start of the Telegraph at the time of the Crimean War and when David Livingstone found the Victoria Falls. Can the Minister tell us how many owners the Telegraph has had in that time? He may wish to write to me. It was started by Arthur Sleigh as a way of airing personal grievances against the future commander-in-chief of the British Army, Prince George, Duke of Cambridge. We should have a sense of proportion. I thought Rupert Murdoch, Roy Thomson and Conrad Black—the noble Lord, Lord Black of Crossharbour—did not have British passports, and there was Max Beaverbrook and many others, so this is not something new.
However, I respect the way the Government have acted fast to block a loophole. I pay particular tribute to my noble friends Lady Stowell and Lord Forsyth. In my day as Secretary of State, it was my noble friend Lord Inglewood who handled all the impossibly complex issues around media ownership. The Lords questions were always so much more difficult than those in the Commons, so I could simply sail through. I believe that it is extraordinarily important for there to be transparency about media ownership—so can the Minister inform us who the real owners of the Jewish Chronicle are?
Lord Parkinson of Whitley Bay (Con)
I will have to write to my noble friend on that and to give a precise number of owners of the Daily Telegraph since 1855, and of the Spectator, which is linked to this and older still. She is right to refer to a number of the foreign owners that there have been. We have made the distinction throughout between foreign Governments and foreign investment; it is important to underline that again. We have no problem with foreign investment in our media businesses, just as in so many other areas of our economy. The problem raised by my noble friend Lady Stowell of Beeston and a number of others was foreign government interference. They made it clear that they would have as much of a problem with the Government of the United Kingdom having influence over newspapers in this country. However, it remains true that the Daily Telegraph is the only newspaper that has produced an editor who also sat in Cabinet: Bill Deedes. It has a long history of representation in your Lordships’ House and the fine line between politics and the media, but it is important that we maintain its independence so that it can continue to hold Governments to account.
Baroness Bottomley of Nettlestone (Con)
My Lords, I apologise—I have received a text from the Father of the House of Commons, who says that I never declare my interests. For the past 10 years, I have been an unremunerated trustee of the Economist newspaper, where we went through a change of media ownership, which we took extremely seriously. I am delighted to tell the House that the Economist is as flourishing today as ever it was.
Statement of Changes in Immigration Rules
(7 months, 2 weeks ago)
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Lord Oates
That this House regrets the Statement of Changes in Immigration Rules (HC 556), published on 19 February, in particular the provisions preventing overseas care workers from bringing family to the United Kingdom, as this will (1) deprive migrant care workers of the basic right of caring for their own children, (2) increase workers’ dependency on their sponsors by removing the safety net of a partner’s income, and (3) make it harder for workers to report and change sponsors, increasing the risk of exploitation.
Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Lord Oates (LD)
My Lords, I thank the Work Rights Centre for its briefing and support, and for all its efforts to protect working people from exploitation. I am also grateful to the Kenyan Nurses and Midwives Association UK, the Refugee, Asylum and Migration Policy project, the Cavendish Coalition, and the Recruitment and Employment Confederation for their briefing.
Noble Lords will not be surprised to learn that my remarks tonight will be heavily critical of the Government so, before I embark on them—and as I may not have another chance before change comes at the next election —I put on record my personal respect for the noble Lord, Lord Sharpe of Epsom, and my thanks to him for his rapid and humane responses to the immigration issues I have frequently raised with him.
This regret Motion concerns the Government’s Statement of Changes in Immigration Rules on 19 February, which came into effect on 11 March. The Statement implements part of the announcements made by the Home Secretary on 4 December 2023. This includes preventing overseas care workers from bringing their dependants to the UK, and a requirement that care providers in England that wish to sponsor migrant workers are registered with the Care Quality Commission. Regrettably, these changes will do little to combat exploitation in the care sector. Arguably, they will encourage and entrench it.
Before I go into further detail on this point, I express particular regret at the notion that carers arriving in the UK will no longer be able to bring their children with them. This troubles me deeply. We are asking care workers to care for our loved ones, but we are denying them the right to do the same in respect of their own children and partners. The Government have stated that they do not expect a significant reduction in the demand for care roles because of this change. Given the Government’s failure to provide an impact assessment to accompany these changes, a fact highlighted by the Secondary Legislation Scrutiny Committee, neither we nor the Government can know this. Only time will tell, but I will certainly be surprised if the changes do not lead to a fall in the experience and quality of care workers who wish to come to the United Kingdom.
This concern appears validated by the work of two organisations, the Women’s Coalition of Zimbabwe and the Southern Africa Human Rights Defenders Network, which support over 100 women healthcare workers who received their work permits before the changes took place and therefore have a right to have their children join them. However, they are repeatedly being refused visas for their children. The distress and anxiety of leaving a child behind are overwhelming, and many of these women choose to return home rather than continue to be parted from their children. One of these women describes the pain of separation from her teenage son as follows:
“The separation has strained the emotional bond between us. I am not in his life during this critical teenage stage. It’s devastating not to be in the daily life of your child. It is having a negative impact on his future. In truth I am now a depressed caregiver. This in turn affects my work as well. A happy carer makes happy clients”.
These women are exceptional people. Some are graduates and university lecturers, and many have medical qualifications —they are nurses, midwives and senior nurses. They have skills and experience that our country will not benefit from if we enforce the separation of care workers from their children and partners.
However, regardless of whether the number of care workers or the level of their experience falls or stays the same, we should ask ourselves whether this change is morally right. What sort of country are we if we exploit the contribution that care workers make to the well-being of our communities but implement rules that separate them from their communities and their children, across continents and against their will? We need to think carefully about this issue and how we ourselves would feel were such a situation to affect us and our families.
Separating parents from their children is terrible in itself, but there are other consequences that the ban on dependants is likely to have. The Work Rights Centre points out that the ban, which includes a ban on partners, is likely to do two things: first, to force carers into acquiescent exploitative working conditions and, secondly, to make it more likely that carers will be forced into destitution. This is because the income of partners is one of the only lifelines that migrant care workers have to support themselves when exiting an exploitative workplace. It is also often a vital source of income, given the cost of living pressures in the UK.
Turning to the first issue, migrant care workers are vulnerable because their visas rely on employer sponsorship. The latest intelligence report from the Gangmasters and Labour Abuse Authority, the government agency tasked with tackling exploitation, noted that the most common vulnerability among potential victims of forced and compulsory labour in the UK was the potential victim being tied into a visa sponsorship arrangement with an employer. The report states:
“This on occasions led to workers being forced to work for the employer even if the conditions were unacceptable and the employer using the threat of cancelling the sponsorship if the worker complained”.
If sponsorship is revoked, workers have only 60 days to find another registered sponsor before becoming undocumented. Two months’ time is simply not enough time; not only do workers have to find a new employer who has a sponsor licence in that period but they also have to secure confirmation of a job offer and they need to submit new visa applications for themselves and any family members. To make matters more difficult, there is no central job search portal to match migrant workers in this situation with legitimate employers who have a sponsor licence.
With regard to the second issue, migrant care workers and their partners arriving in the UK depend on the money that they are able to earn while working in the sector; they do not have recourse to public funds and, in social care, they are paid at notoriously low rates. Many migrant workers opt for the additional 20 hours a week that is permitted under the health and care work visa in order to supplement their income, and many often need their partner’s income to meet the cost of living. A central concern here is that, without addressing the vulnerability that underlies work sponsorship or tackling the issues of low pay in the sector, banning migrant care workers from bringing their partners to the UK will do little but increase cost of living pressures and financially disincentivise people from reporting exploitation. That is before we consider whether it is right that those emigrating to the UK to work in our social care sector and make a valuable contribution to our society should be denied the ability to do so with their loved ones by their side.
I come now to the new CQC registration requirement, designed to combat the increasing and disturbing evidence of exploitation of sponsored workers in the care sector. Regrettably, the evidence suggests that these changes are unlikely to achieve this important objective. There have been recent media reports concerning sponsor licences being issued by the Home Office to companies purporting to provide care but with a very limited corporate history or track record of actually doing so. Some of these companies were successfully registered with the CQC before being given sponsor licences, although they had never been subject to CQC inspection. This has resulted in sponsored workers arriving in the UK to find that there is no work and being forced into precarious situations by rogue actors to whom they are often indebted.
These revelations suggest that merely being registered with the CQC is not a sufficient measure to prevent exploitation. Stakeholders have identified a number of loopholes—for example, that care providers can register with the CQC but then make this registration dormant. The provider is not then subject to inspection or other regulation by the CQC, and its dormant status is not listed on the CQC’s website. Stakeholders have expressed concerns that these dormant providers are obtaining sponsor licences.
These loopholes give rise to a number of questions, which I hope the Minister can answer this evening. First, why do the Government not impose a requirement that care providers wishing to sponsor migrant workers should either have been subject to inspection in the recent past or must be inspected before a licence to sponsor is issued? Secondly, have the Government considered imposing a minimum inspection rating as a requirement before care providers are eligible to sponsor? Thirdly, what measures do the Government intend to put in place to assess the impact of these changes so that the Home Office can properly assess whether they are delivering on the objective of ending care worker exploitation?
The truth is that this measure, while it has the veneer of action against exploitation, is without any real teeth to ensure that that exploitation is actually stamped out. The CQC has not been provided with new powers to investigate labour exploitation within the care workforce. Indeed, that is not its responsibility. The CQC is clear that its focus is on the quality of care that is delivered, not on labour exploitation. The CQC obviously has a vital role to play in regulating the social care sector in England, but the Home Office cannot abdicate its responsibility to properly audit employers before and after sponsor licences are given out.
On this note, the report of the former Independent Chief Inspector of Borders and Immigration into the immigration system and its role in the care sector is deeply concerning. It highlighted, among other things, the inappropriateness of the sponsor licensing regime for the sector and the mismatch between the Home Office’s meagre complement of compliance officers and the ever-expanding register of licensed sponsors. Senior Home Office staff and managers told the inspector’s team that Home Office guidance is not sufficiently stringent to enable refusals of sponsor licence applications, even where significant concerns exist.
In light of these findings, will the Minister outline what improvements have been made to empower sponsor compliance case workers to refuse the licence applications of abusive employers at the earliest possible stage? If the department cannot instigate a greater number of sponsor inspections, how will it change guidance so that it does not remain flexible and enabling for exploitative sponsors? How is the Home Office protecting migrant workers who, as a result of enforcement action against sponsors, are left destitute and indebted? These are key questions, the answers to which are extremely unclear.
I close by paying heartfelt tribute to all those who come to this country to work in our health and care sectors in difficult circumstances and often on low pay. They make an immeasurable contribution to our country and the well-being of our communities. I hope, therefore, that the Government will reconsider their approach so that we can ensure that they are all protected from exploitation, are able to have a decent standard of living and are afforded the rights to family life that we would expect for ourselves. I beg to move.
Lord Allan of Hallam (LD)
My Lords, my noble friend Lord Oates has done us all a favour by ensuring that we are able to have this debate today—a debate which, as he has pointed out to us, involves some of the most vulnerable people coming to this country in order to fill a need that we have. It is that need that has brought me here to make a contribution today.
The debate is particularly timely, given that we had the Government earlier today making a Statement in which they seemed incredibly pleased with themselves because there had been a reduction of over 20% in the number of health and social care visas that were issued during the first three months of the year. That reduction with which the Government are so inordinately pleased is an area of significant concern for those of us who worry about the provision of health and social care services.
There are three possible hypotheses for why we saw that reduction. The first is that the need for health and social care workers was only temporary—that we have now filled all the jobs and therefore no longer need those migrant workers. That seems quite a stretch to me. The second is that the reduction represents the fact that some of the fraud and abuse in the system has been squeezed out—those visas were not actually necessary, so now the new processes have squeezed them out. I am sure that that is what the Government hope is happening. The third is that there continue actually to be significant shortages but somehow we have managed to contrive through these changes to change the system such that we are putting people off, for the very good reasons that my noble friend described —for example, there are people who simply will not come now, even though we desperately need them, because they cannot bring their family members with them.
If that latter scenario is true then we are storing up trouble. We can imagine that we will be back here in six months’ time, having to make changes again because our health and social care system is crying out for those workers. That kind of yo-yo effect does a disservice both to the health and social care system and to our reputation. We are perhaps a little imperial in thinking that people out there think of the UK as the only option; they have a lot of options. As long as the UK presents a good option, people from countries will come here. However, if we are yo-yoing—saying that we want them today but not tomorrow, and making it easy today but difficult tomorrow—then people will explore other options. When we issue the call for help because we need it, fewer people will answer. From a health and social care point of view, this is extremely concerning.
I would be interested to hear from the Minister what mix of those scenarios he thinks is correct: that we have put people off who we actually need; that we do not need them any more; or that there was just a lot of fraud in the system, and we have now squeezed that out and therefore everything is fine and at a steady state.
Baroness Hamwee (LD)
My Lords, I hope that the House will forgive me for taking the Front-Bench slot from this Bench instead, where I can lean on the back of the Bench in front of me.
The inscription on the sculpture at Waterloo Station commemorating the Windrush generation reads:
“You called … and we came”.
It is the first and repeated line of a poem by Professor Laura Serrant, a very senior nurse, celebrating the call between 1948 and 1971 to people to care for this nation. One stanza is as follows:
“Our big hearts, skilful hands and quick minds
encased in our skins – of a darker hue.
Which had shimmered and glowed
in our sunnier climes.
But now signified our difference
– our un-belonging.
Matrons became assistants
Nurses became like chambermaids.
All the while striving to fulfil our promise
– to succour, to serve, to care”.
This is not the first time that I have used poetry in this Chamber to make a point which I cannot make quite so clearly myself.
I share both my noble friends’ regret regarding these rule changes as they apply to care workers—though “regret” is rather a mild term when we still look beyond the UK to other countries for people to care for us but do not treat them as we should. We fail to respect them as we should. We subject or expose them to experiences that do not show respect or, sometimes, humanity. We may not display overt racism in the same way that the Windrush generation encountered, but failing to recognise that caring is part of the culture of some other nations in a way that it is not in ours is, I think, an aspect of othering.
The paradox—or contradiction, if you like—of “We want you and we need you but there is a limit to how far we will reflect that in our rules and our ways of working” remains. It is reflected in the rules regarding dependants and in the risks of exploitation. My noble friends have covered that very fully, as did the Secondary Legislation Scrutiny Committee—although, as usual, it couched its criticisms in very careful language. Its report on the lack of an impact assessment and an equality impact assessment is very clear and, in my view, uncontestable, as is the absence of consultation. On the latter, the Government explained that
“an external consultation would carry an unacceptably high risk of a prolonged spike in applications pre-empting the rule changes”.
In other words, they have made the decision and do not want to have anything fed back to them that disrupts that decision.
To say, as the Home Office did, that a formal public consultation
“would be disproportionate given the nature of the changes”
overlooks how our care system operates, which is of enormous public interest and concern. It is something that people think of in terms of their own lives and the lives of the people they are close to. The Home Office explained that consultation would be disproportionate because of the
“marginal benefits of consulting on these particular changes – which would be unlikely to … inform the policy in any meaningful way”.
I leave that to speak for itself, but to me it is an interesting approach to consultation.
I am a member of the Select Committee reviewing the Modern Slavery Act, and we have identified the care sector as one to be concerned about. I do not want to say too much about that, not least because we have yet to take oral evidence from the CQC, but the CQC’s expertise, or the limits of its expertise, and its capacity have already been identified as areas to investigate: just what is to be inspected; what about enforcement; how best practice is to be encouraged and maintained; and all this in the context of a route designed, as the Independent Chief Inspector of Borders and Immigration put it, as applying to a largely compliant sector but applied to a high-risk area. It is a fragmented sector too, and it is easy to let people fall through the gaps. And it is a sector where exploitative practices are seen in providers who are actually now registered with the CQC.
How “the party of the family” can introduce rules about dependants, most of whom must be children and all of whom are subject to the “no recourse to public funds” rules is beyond me. How does this help in filling care roles? Is it a deterrent that care workers cannot bring their dependants with them? Deterrence must be a term which the Government wish had never been coined. It seems that, yet again, immigration numbers trump every other consideration.
Professor Serrant’s poem ends:
“Recognising the richness of our kaleidoscope nation.
Where compassion, courage and diversity are reflected
in our presence and our contribution:
Not only the hopes and dreams of our ancestors.
Human values needed to truly lead change … and add value.
Remember… you called.
Remember… you called.
You called.
Remember, it was us, who came”.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the noble Lord, Lord Oates, for moving his regret Motion and for the way he did it so fully and so movingly, if I may say so. I also thank the two other Liberal Democrat Peers who have spoken. I thought the noble Lord, Lord Allan, had an interesting perspective, with the various questions he asked the Minister and the way he delved a little more into the fraud that is strongly suspected to be currently within the system. Of course, the noble Baroness, Lady Hamwee, has taken a long-standing interest in these matters.
Anyone who works in our adult social care system deserves to be treated with dignity and respect, and our thanks should go to anyone who comes to our country to join our adult social workforce and our NHS workforce. The changes the Government have made regarding access to and cost of visas, including family visas, have had a huge impact on many families across the country, and there are serious concerns about how lack of transparency in the Government’s decision-making only makes the situation worse.
Net immigration levels soared to 745,000 in 2022, despite the Government repeatedly saying their priority is to bring them down. This compares to a net immigration level of 245,000 in 2019. We in the Labour Party are clear that this level of immigration is unsustainable. We must ensure a level of controlled immigration that balances the needs of the country. Our efforts to create a sustainable system must be evidence-based and transparent. The Government have not been clear, in the large number of major changes they have made in the past year, about why decisions are being made and what impact they will have on our workforce and our economy. The Migratory Advisory Committee must be asked to investigate the impact of preventing workers bringing dependants to the UK, as well as the setting of salary thresholds, and decision-makers must consider those findings and reach a sensible, balanced conclusion.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I also thank all noble Lords who have spoken, particularly the noble Lord, Lord Oates, who tabled this Motion and has therefore given us the opportunity to discuss these important issues. Before I address the points raised, I will start by summarising the changes that have come into effect.
On 4 December, the Home Secretary announced a package of changes aimed at reducing the overall level of net migration and tackling abuse in the social care sector. From 11 March, those being sponsored to work as care workers or senior care workers have been unable to apply with dependants. As we have seen with the latest statistics that were published yesterday, since May 2023 there have been, on average, 20,000 dependant applications per month under the health and care visa. That is unsustainable, so we had to act. We also now require any care service seeking to sponsor care workers in England to be providing regulated services and be registered with the Care Quality Commission.
However, the Government of course continue to be immensely grateful for the vital contribution that health and social care workers from across the world make, and we recognise their commitment in keeping vital services running and, obviously, in saving lives. As the noble Lord, Lord Oates, noted, they are of course exceptional people.
The Government have provided substantial support for health and care professionals, over and above what other sectors get. We launched the health and care visa in August 2020, making it easier, cheaper and quicker for health workers to come to the UK to work, compared to other immigration routes. As we have seen in the immigration statistics, the sector makes very good use of the immigration system to ensure it has the workers it needs. Building on that, we added care workers to the shortage occupation list and health and care visas on 15 February 2022. Since this time, the Home Office have issued over 100,000 visas to care workers and senior care workers, before even considering dependants accompanying and joining them. These roles remain on the immigration salary list, maintaining access to these workers for the sector.
While we have a generous visa offering in place for the sector, the Government also have commitments in reducing overall numbers coming to the UK, and we have taken action to address that. Let me be clear that the provisions that came into force on 11 March apply to new applications and will not affect those already sponsored to work as a care worker or senior care worker through the health and care visa before that date. That includes those who were sponsored before the rules had changed but who have not brought dependants to the UK yet. In addition, there is a provision allowing children born in the UK to regularise their stay.
The Government recognise that the measure to prevent care workers and senior care workers from applying with dependants will dissuade some people from applying. However, given the large volume of applications, we believe that there will still be people willing to apply for care worker and senior care worker roles, and our offer to those carers is still very competitive.
There is no evidence yet on the quality issue that the noble Lord, Lord Oates, raised, but we will keep that under review. I also note that medically qualified individuals possibly have other routes available to them that may allow for dependants to accompany them.
I turn to the points raised in the Motion. We have clearly set out the position that individuals will need to determine whether they wish to make an application with the full knowledge that those working in care worker and senior care worker roles will not be able to apply with dependants. As I have said, we believe that we still have a very generous offer for those who wish to work in social care.
All noble Lords have raised concerns about individuals having an increased reliance on sponsors as a result of not having family in the UK. I accept that this may be a possibility, but it is also arguable that a person having to consider the impact of leaving a job, which might affect an entire family, has greater reason to stay than an individual without a family to support. I also caution that only 25% of dependants are estimated to be in work, meaning that many would not be able to rely on additional income to support the family in any event. I also do not believe that these changes make it harder to report or change an employer. I must say that we will not tolerate any instances of abuse by employers and, where we see evidence of it, we will take action.
Officials from the Home Office and the DHSC are working closely with the sector to improve their interactions with the immigration system and to help target non-compliance and exploitation. We strongly condemn offering employment to health and care worker visa holders under false pretences. Those found operating unlawfully may face prosecution and/or removal from the sponsorship register.
During UKVI compliance work, we have encountered a significant number of non-genuine employers and, in very high numbers, employers not being able to evidence hours of work available to migrants. That has led to two strands of action. First, considerable scrutiny is applied to employers who are asking to bring over a migrant worker, to ensure that they have enough work guaranteed to occupy that worker in addition to their current workforce. Secondly, compliance activity is being taken against employers currently sponsoring migrant workers when they are either unfit to do so or do not have sufficient work levels available for that migrant. Given the level of displaced workers and abuse in the sector—and the need to operate a fair immigration system that treats all workers, employers and sectors equally—it would not be appropriate to relax those requirements for the care sector.
The Home Office has also dedicated resource to policing the sponsorship system to ensure that sponsors adhere to their duties and wider UK law. A person who is sponsored to work in the UK is linked to that employer, but they are free to seek alternative sponsorship and to make a new application if they do not believe that they are being treated fairly. If a person were here with a family and decided to leave their job, they would still need to find alternative sponsored employment before their leave was curtailed. As I mentioned earlier, the additional income from a working partner would help only if they were one of the 25% of dependants estimated to be in employment. Those individuals whose sponsor’s licence has been revoked can seek alternative employment, providing they have a job offer from a Home Office-approved sponsor and make a new application. Work is under way, across government, with the sector to address unethical recruitment practices and to signpost migrants to help with their rights.
I am grateful to the noble Lord, Lord Ponsonby, for bringing up the subject of the domestic workforce, because a lot of work is being done on that and I welcome the opportunity to run through it quickly. We remain committed to developing the domestic workforce by investing in retention through better workforce training, recognition and career progression. We are launching a new career structure for care workers, so that all staff can build their careers and more experienced care workers are recognised for their skills. We are creating a new qualification and digital skills record to reduce the need for retraining costs and additional training time for care workers every time they might move employer. Reduced retraining also means that care workers can spend more time caring for people. We are increasing funding for learning and development, creating thousands of new training places, so that care workers can improve their skills and gain qualifications.
The Government have made available up to £8.6 billion in additional funding over the financial years 2023-24 and 2024-25 to support adult social care and discharge. That includes the £500 million announced this January, which has been made available specifically to support local authorities with the cost of social care in 2024-25. We provided £15 million for the 2023-24 financial year to help local areas to establish support arrangements for ethical international recruitment in adult social care and bolster the workforce. We are also working with the DWP to promote adult social care careers to jobseekers, and funding sector partners to provide support to employers and commissioners to improve recruitment and retention.
The noble Lord, Lord Allan, asked a number of questions about immigration non-compliance and migrant exploitation. As I have said, we are working very closely with the Department of Health and Social Care on that. UKVI also works closely with law enforcement counterparts on areas that it identifies go beyond immigration non-compliance. He invited me to speculate on the type of offences that may be committed, but I obviously cannot do that because I do not know. Some of those may well represent fraud, but it would not be for me to say. As I also mentioned, we have a large number of compliance officers who ensure that the system is properly policed.
The noble Baroness, Lady Hamwee, asked a perfectly good question about the impact assessment. A full impact assessment has not been published, and I have been before the Secondary Legislation Scrutiny Committee to discuss the matter. We published a Statement on the estimated impact on immigration in December 2023. The Government are still working through assumptions on the impact assessment, but we intend to publish it as soon as that work has been completed. The estimated impact on visa in-flows was published in December 2023, which estimated a 22% reduction based on the number of workers who could be matched to the register of CQC-regulated businesses—equivalent to around 20,000, if the rule had been in place in the year to September 2023.
Noble Lords will be aware that the Government are committed to bringing down the overall level of net migration. We believe that the package of measures announced on 4 December strikes the right balance between cutting the numbers of people who come to the UK and attracting those with the required skills and experience. Once again, I thank the noble Lord, Lord Oates, for the opportunity to discuss this important issue—and for his very kind words—and all noble Lords who have taken part in the debate. I will read the report of it carefully and, if I have not answered any questions, I will do so by letter.
Lord Oates (LD)
My Lords, I thank the Minister for his response and all noble Lords who have participated in the debate. A number of important points have been made, but I fear that he may be a little complacent about the ability of care workers who feel that they are being exploited to leave their employment and find other employment. It is an incredibly difficult situation for them, and things certainly do not seem to operate in that way.
There are very important issues around the enforcement of and resources for compliance. The Minister seemed to suggest that the Home Office had the necessary resources for that job but, as I pointed out, that was certainly not the view of the Independent Chief Inspector of Borders and Immigration. The noble Lord, Lord Ponsonby, also made an important point about the idea of a single enforcement authority, because we need absolute clarity about who is enforcing things.
I am particularly grateful to my noble friends Lord Allan and Lady Hamwee for taking part in this debate and for, as always, bringing important thoughts to it. I also thank her for the passion that she has always shown on these issues.
I would have wished to divide the Chamber on this matter in different circumstances, but that might not be the wisest idea tonight. I am sure that we will return to the issue in due course. In the meantime, I beg leave to withdraw my Motion to Regret.
Immigration Update
(7 months, 2 weeks ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made in the other place by my honourable friend the Minister of State for Immigration, Tom Pursglove, on immigration. The Statement is as follows:
“This Government are committed to reducing immigration—both legal and illegal—into the UK. Legal immigration has risen in recent years in part because we have extended the hand of friendship to people fleeing conflict and persecution in Ukraine, Hong Kong and Afghanistan. That was the right thing to do. But another factor has been rising numbers of overseas students and workers and their dependants, which have risen to unsustainable levels. The steps that my right honourable friend the Home Secretary announced last year to cut net migration will mean that around 300,000 people who would have been eligible to come to the UK will now not be.
We have restricted most students from bringing dependent family members, increased the salary that most skilled worker migrants need to earn to get a visa by almost 50% to £38,700, stopped overseas care workers bringing dependent family members with them, raised the minimum income for family visas to ensure that people are supported financially, and scrapped the 20% going rate salary discount for shortage occupations and replaced the shortage occupation list with a new immigration salary discount list. The latest estimates from the Office for National Statistics show that net migration in the year to June 2023 was 672,000, 73,000 lower than six months earlier. These are provisional figures and we need to go further, but these are encouraging signs.
The latest statistics show that the numbers applying for skilled worker, health and care and study visas in the first three months of 2024 were down by 24% on the same period last year. We removed the right to bring dependants on the student visa route for those starting courses from 1 January other than those on postgraduate research programmes and government-funded scholarships. Applications for student dependant visas have fallen by 80% since our changes came into force. From 11 March 2024, we have stopped overseas care workers bringing family dependants, and have required social care firms in England to be Care Quality Commission-registered in order to sponsor visas. In the year ending September 2023, an estimated 120,000 dependants came via that route. In the first three months of 2024, applications for health and care visas were down by 28%. This is just the start; most of our changes have only just come into force.
Meanwhile, we remain committed to stopping the boats. Following Royal Assent to the Safety of Rwanda Act 2024 and the ratification of our treaty with Rwanda, we can operationalise our plan to relocate illegal migrants to Rwanda. Rwanda is a safe country that has repeatedly shown its ability to offer asylum seekers a chance to build new and prosperous lives. It has a strong and successful track record in resettling people, hosting more than 135,000 refugees, and it stands ready to accept thousands more who want to rebuild their lives and who cannot stay in the UK. Once flights begin, we will have added another vital deterrent to crack down on the people-smuggling gangs who treat human beings as cargo. The first illegal migrants set to be removed to Rwanda have now been detained, following a series of nationwide operations this week. Operational teams within the Home Office have been working at pace to safely and swiftly detain individuals in scope for relocation to Rwanda, with more activity due to be carried out in the coming weeks. This action is a key part of the plan to deliver flights to Rwanda in the next few weeks.
We have made solid progress in stopping the boats but we need to finish the job. The number of small boat arrivals fell by more than a third in 2023, and our work with international partners prevented more than 26,000 crossings last year, as well as helping to dismantle 82 organised crime groups since July 2020. Our new agreement with Albania has cut Albanian small boat arrivals by more than 90%, and we recently signed a ground-breaking deal with FRONTEX—the European border and coastguard agency—which marks another crucial step in securing our borders. An initial cohort in the thousands of suitable cases for removal to Rwanda has been identified and placed on immigration bail, with strict reporting conditions. We have a range of measures in place to ensure that we remain in contact with individuals, including both face-to-face and digital reporting, and Immigration Enforcement has a range of powers to trace and locate any individuals who abscond, as well as a dedicated team of tracing officers who work with the police, other government agencies and commercial companies to help trace individuals and bring them back into contact. It would be inappropriate to comment further on operational activity.
Immigration has enriched this country beyond measure, but it needs to be sustainable and it needs to be fair. Legal immigration should be focused on helping those in genuine need, and on ensuring that our economy has the skills it needs to flourish. It is simply not right for those who can afford to pay gangsters to jump ahead of those who would play by the rules and whose need is greater. No one needs to flee to the UK from a safe country such as France. Illegal immigration and unsustainable legal migration both place intolerable burdens on communities, and over time they will undermine support for immigration in general, which would be a tragedy. That is why the Government have a plan, which we are putting into action. There is further to go but we are seeing the positive impact of it already. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the Minister for repeating that Statement; I have a number of questions for him.
What is the Government’s plan for the 99% of people who will not be sent to Rwanda? How will the Government fulfil the Prime Minister’s promise to detain everyone crossing the channel, given that there is fewer than one detention space for every 10 migrants who make that journey? Of the 5,700 migrants who have been identified for removal, only 2,145 can be located. Where are these people and what is the department doing about tracking them down? Can the Minister explain what will happen to the more than 150,000 people whom the Refugee Council estimates cannot be removed to Rwanda or returned to their home country since the introduction of the Illegal Migration Act 2023? Does he accept that these people are stuck in limbo and are likely to be reliant on Home Office support or to go underground?
Do the Government have an updated figure for how much money has been sent to Rwanda? Will they publish the advice that they have received on their new visa rules and what impact they believe these changes will have on key industries such as hospitality and social care? What action are the Government taking to ensure domestic social care training and recruitment so that elderly and vulnerable populations are cared for? How are they working cross-department to address this issue? I remember that the Minister largely answered that question in the previous business. Will the Government commit to publishing their analysis on the workforce and economic impact of their immigration policies, and are they considering stronger measures to crack down on rogue care sponsors?
There has been a huge amount of publicity in the last couple of days about the one volunteer who was flown to Rwanda with £3,000. I understand from reading the papers that he was from Africa in any event. In addition to that £3,000, is there any support? On other schemes, people being sent to Rwanda are likely to get a five-year support package as they make their new lives in Rwanda. Will the individual who voluntarily flew out also be entitled to this package of support? I look forward to the Minister’s answers.
Baroness Hamwee (LD)
My Lords, I thank the Minister for repeating the Statement and I am sorry that he has been given the task of defending what reads more like a press statement on the eve of an election than an update on overall policy, but perhaps I am prejudiced. I am sorry that the Statement does not extend to putting our policy into an international context and telling the House anything about work being done with international partners.
Like the noble Lord, Lord Ponsonby, I am interested in this well-covered story of the individual who has received £3,000 under the old scheme to go to Rwanda. What support will he receive to help him settle in? Will he have to pay for it out of the £3,000? Can the Minister give a breakdown of the number of asylum seekers who are not missing but who cannot be found? How many are due to report within the next week, the next month and so on? What is the “range of measures” to remain in contact with those people and how does the Home Office know where they are when they are reporting digitally? Will the Government keep the House updated on this?
The Statement refers to the minimum income requirement for family visas, which we will be debating the week after next. We have just debated overseas care workers bringing dependants, so I will ask some questions about students—most, but not all, of whom similarly cannot bring dependent family members—and about young people.
On students, where has there been a reduction in student visa applications? Is there data to show which courses have a reduction in international student numbers? Have the Government consulted universities recently about the impact of international student numbers on their university funding? Is the reduction in numbers reflected more in certain nationalities than others? What would be the long-term impact on university funding? Has an assessment been made of the impact of the policy to reduce international student numbers on the soft power that creates for the UK internationally?
With regard to young people, the youth mobility visa scheme offered by the EU has been rejected by the Government and I understand that Labour takes the same view. Why have the Government rejected this out of hand? Details would need to be negotiated but it is a sensible proposition. It would boost our economy—especially in hospitality and tourism—offer important opportunities for young people to live and work abroad and have an important role in our relationship with the rest of Europe. Why have the Government rejected the proposal?
Lord Sharpe of Epsom (Con)
My Lords, I thank noble Lords for those questions. I will start with the cohort that the noble Lord, Lord Ponsonby, referred to. He asserted that of the 5,700 that have been identified, the Home Office has located only 2,143. This is not accurate. In preparation for flights taking off, we have identified the initial cohort to be removed to Rwanda, as was said in the Statement, and have dedicated caseworkers who are ready to process any claims. An initial cohort of around 2,000 suitable cases has been identified for removal. They have been placed on immigration bail with strict reporting conditions. For those outside this group, there is still a wide range of tools to maintain contact with them, including face-to-face and digital reporting, while many individuals are also residing in Home Office accommodation. We are confident of their whereabouts. Once the decision to detain is made, this is just one of the cohorts of people who may be eligible for removal to Rwanda.
As to those who may or may not get sent to Rwanda, I am not qualified to comment on those particular statistics. I certainly did not recognise the one that the noble Lord quoted from the Refugee Council, so I will refer back to Hansard and, if I may, I will reply in more detail. On money, I do not know how much more has been released to Rwanda. I am basically up to date with what I read in the papers, which is that when the treaty was ratified there was another release—but, again, I may have to come back and correct the record on that.
The noble Lord asked me again, as did the noble Baroness, Lady Hamwee, about the impact assessment. As I said on the previous group, the intention is to publish this as soon as possible. There are a number of assumptions in there that are being reworked, and as soon as those are solved or sorted, it will come around.
The noble Lord did acknowledge that I have already answered a lot of the questions that he posed about the domestic workforce, the plans we have in place and the cross-departmental work with DHSC and DWP—so I will not rehash all that, because it would bore the House to tears. On his final question about the volunteer who flew to Rwanda, as I understand it, he qualifies for the five-year support package, as outlined in the Bill.
The noble Baroness, Lady Hamwee, raised the issue of students. We expect to see a surge of applications in the summer as students tend to apply for their visa in advance of their course start date, most commonly in September. We have asked the Migration Advisory Committee to look at the whole student situation; I am not quite sure when it is due to report back, but it will certainly do so in due course, and I am sure we will discuss its findings.
The noble Baroness also asked me to comment on a large number of operational matters. I am afraid I will not do that, for very obvious reasons, but I will recount some of the work that is being done with our international partners, particularly on the policing and law enforcement side. As noble Lords will be aware, to stop boats launching we signed the biggest ever deal with France; we have doubled the organised immigration crime funding for the National Crime Agency; and, as I mentioned again in the opening Statement, last year the French stopped 26,000 boats launching and we took down 82 gangs. Since the inception of the UK-France Joint Intelligence Cell, 24 organised crime groups have been dismantled, with 12 in 2023; and 280 people smugglers were arrested in 2023, including 94 pilots of small boats. The NCA also conducted the biggest ever international operation targeting networks suspected of using small boats for people smuggling, with 136 boats and 45 outboard engines seized. Over 150 small boats and engines have been seized as a result of the work of law enforcement in the UK.
On working with EU partners, illegal migration, as noble Lords will be aware, at the EU’s external border is growing dramatically. It is the highest it has been since the 2016 migration crisis. There were about 380,000 irregular crossings at the EU’s external border in 2023, showing a 17% increase from 2022 and indicating a consistent upward trend over the past three years. But the UK is committed to working with our European partners on these issues, both bilaterally and multilaterally, including at the EU level. I have mentioned FRONTEX —I could go on. There are an awful lot of interesting EU and broader European initiatives taking place, but I do not want to bore the House and I will not go through all the details now.
Lord Allan of Hallam (LD)
My Lords, I cannot resist a buy one, get one free offer, so I want to come back in on the health and social care workforce, as we have this opportunity, and pick up one of the points that the noble Lord, Lord Ponsonby, made around transparency and the impact of the Government’s policies on the workforce. It may be that this is one of those happy occasions where the Government can eat their cake and have it, by both reducing immigration and filling the gaps in the social care workforce, but it may also be that the two are in tension. It is really important and I hope the Minister will at least commit to transparency around that, because I do think the public are grown-up enough to have a conversation around this. They do not just need to hear from the Government that it is all fine on both counts if it is not. So I hope we will get the data that we need to understand and make a grown-up choice. If there is a trade-off between reducing immigration and filling the social care workforce, we should have a public discussion about that.
Lord Sharpe of Epsom (Con)
I completely agree with the noble Lord; of course we should. We have to monitor those statistics to make sure that the sector has what it needs, but also that the system suits the domestic issues that we have been discussing as well.
Lord Dodds of Duncairn (DUP)
My Lords, the Minister and your Lordships will be aware of the frequent denunciations of the Government’s policy on immigration by Irish politicians. Indeed, members of the Irish Government have denounced the Rwanda policy in very derogatory terms. Yet, having done so, they now seek to return to the UK those who say they are fleeing the UK because of the Rwanda policy. It is one of the many ironies of the situation: a Government who wanted an open border in all circumstances now want to send police to the border to ensure that there are controls there, and so on and so forth.
It is not lost on many people in Northern Ireland that Brit bashing becomes very fashionable as Irish politicians head into an election, but can the Minister assure me that Northern Ireland will not become a dumping ground for people returned from the Irish Republic? Although the Irish Government talk about 80% of people coming in through Northern Ireland, they have not produced any real evidence as to the actual figures. Can we be assured that Northern Ireland will not become a dumping ground and that there will not be any people border between Northern Ireland and the rest of the United Kingdom? Can he also outline what the understanding is, which the Irish Taoiseach has referred to as already being in existence between the United Kingdom and the Irish Republic, about the return of people coming into the Irish Republic from the UK illegally? Can he tell us what that understanding amounts to and whether it has any force of law?
Lord Sharpe of Epsom (Con)
I thank the noble Lord for his comments. I would also reflect on the fact that the noble Baroness, Lady Hamwee, made the point relatively recently that there is no deterrent effect, but clearly that is not being represented in the facts on the ground.
I shall to an extent repeat what my honourable friend said in the other place, which is that
“this Government are resolutely opposed to a hard border on the island of Ireland”.
He said that he understood that
“the Secretary of State for Northern Ireland has requested an urgent meeting with the Irish Government to seek assurances that there will be no adverse implications for the smooth operation of either the common travel area or the Good Friday agreement. That is an important meeting and he is right to seek it. I reiterate that we would welcome a returns agreement with the EU. We think it is right that we explore those opportunities and we will continue to pursue that”.
Beyond that, I am afraid I cannot comment. It would be wrong of me to comment on the stories about the Irish police and the border. Much as I would not comment on operational matters in this country, I certainly will not on those in another. Obviously, higher-level discussions are still ongoing, which would, I think, address the last part of the noble Lord’s question. I am sure there will be much more to be said about that in the coming days.