House of Lords

Friday 10th May 2024

(2 months, 1 week ago)

Lords Chamber
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Friday 10 May 2024
Prayers—read by the Lord Bishop of St Albans.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Third Reading
Moved by
Lord Woodley Portrait Lord Woodley
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That the Bill do now pass.

Lord Woodley Portrait Lord Woodley (Lab)
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With your Lordships’ indulgence, I will say a few words. Fire and rehire, as I have said here many times, is a despicable tactic used by unscrupulous employers to rip off workers, cut costs and boost profits—notwithstanding the very rare occasions when it may be necessary, as a last resort, to ensure a company’s survival. That is why it gives me so much pleasure to see this Bill make such progress in the House, and I warmly welcome the cross-party support that it has secured. I pay tribute to my noble friends across the House who have spoken up for this important legislation.

There is also some noteworthy history behind the Bill, and I pay tribute to the people and organisations who have made this progress possible today. I thank my union, Unite, for blowing the whistle on this abusive practice back in 2020, as hugely profitable corporations used the Covid pandemic as cover to undermine workers’ pay and terms and conditions. I thank Unite for raising awareness so successfully both among the public and here in Parliament.

I pay tribute also to my honourable friend in the other place Barry Gardiner, who chose fire and rehire as his Private Member’s Bill the following year. I thank him for the fantastic campaign that he ran with this Bill and for agreeing to carry it forwards in the other place—with your Lordships’ approval, of course.

I pay tribute to my noble friend Lord Hendy and Professor Keith Ewing from the Institute of Employment Rights for drafting this powerful and elegant piece of legislation, and for helping me to navigate through the legal quagmire associated with this scandalous practice.

I also thank the other trade unions that backed this Bill—over 20 unions representing working people across the UK economy, from bakers to bartenders, scientists to civil servants, prison officers to professional footballers—in fact, the whole of the British TUC.

I also thank my own party, the Labour Party, for making the fight against fire and rehire, and against current exploitative employment practices, at the forefront of its offer to the British public at the next election.

I am confident that, whatever future befalls the Bill, there will soon be no place for fire and rehire abuses in our economy and nowhere for bad bosses to hide in the statute book. It is an honour to play, I hope, a small part in bringing such desperately needed change a step closer. I beg to move.

Bill passed and sent to the Commons.

Alternative Investment Fund Designation Bill [HL]

Third Reading
Moved by
Baroness Altmann Portrait Baroness Altmann
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That the Bill do now pass.

Baroness Altmann Portrait Baroness Altmann (Con)
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My Lords, I beg your Lordships’ indulgence to make a few remarks on the importance of this Bill. I declare an interest as a shareholder in investment companies, and I pay tribute and thanks to my noble friend and her officials for their work. I thank the Public Bill Office, the noble Baroness, Lady Bowles, the noble Lord, Lord Livermore, and all noble lords who supported this Bill at Second Reading. I also thank Nigel Farr of Herbert Smith Freehills and many journalists and industry experts, as well as a group of investment company executives who have been highlighting a problem that affects all of us in this country.

This week, the Treasury Select Committee received evidence from the FCA, the regulator, which clearly demonstrated why this legislation is so urgently required. The UK’s own regulator seems not to understand how this sector works from an investor perspective. A quarter of a trillion pounds from companies that are responsible for and investing in growth companies of the future, in alternative energy and so on, is being mishandled by our regulator. I therefore urge my noble friend the Minister to take back to her department the urgency of speeding this legislation through the other place or, preferably, encouraging the FCA to recognise its errors and immediately change industry guidance on charges disclosures.

It is truly frightening that the FCA told the Treasury Select Committee this week that investment company management fees are directly deducted from the value of an investor’s holding this year. Indeed, we were given a helpful example; the FCA said that

“if you put £100 into an equity investment trust”

and share prices do not change, the investment will be lower in one year’s time

“because of the management fee”.

That is simply not correct. Our regulator has also obliged investment companies to put this incorrect information into their key investor documents, even though it is wrong. This error has now usefully been exposed this week—we did not know this when we were debating the Bill at Second Reading. It lies at the heart of the problem that the Bill seeks to remedy; the value of a listed investment company’s shares is the share price, not the asset value.

Of course, all charges must be disclosed, and indeed they are, but the regulator and government officials seem not to realise that the way investors are given information is misleading them, and creating selling pressure and starving of capital. This is an important part of the UK financial markets, which have always been a success story for the UK. It is undermining and creating existential damage to the very sector that the regulator is responsible for looking after. The investor needs to know what costs are, as any share investor needs to know what costs the company it is investing in incurs, but they also need to know the premium or discount, not just whether their management fee is cheaper or more expensive than an open-ended company, which directly deducts those management fees from the investor holding.

It is globally recognised—apart from here, it seems—that, as an uncontroversial foundational principle of public market valuations, the investor’s value is the share price. The current regulatory interpretation of EU-derived legislation, as transposed into UK law by the FCA, directly contradicts this. The FCA also incorrectly claimed to the Treasury Select Committee that other countries disclose management expenses as we do, entering values for so-called “ongoing charges figures” in the industry-standard data fees, presented for investors to rely on when seeking to inform themselves or when retail platforms inform them of relevant information they need to know. The FCA seems not to know how the EMT actually works.

This is why such legislation is important, and perhaps explains why, so far, the situation has been allowed to continue. The other countries entering so-called consumer costs for their investment companies are not entering the figures as we are; it is simply not the case. I urge my noble friend to urge the FCA to inform itself properly before further damage occurs.

Yes, we need a level playing field, but we need a level playing field with international and other companies, rather than worrying about comparing apples and pears. MiFID has not been applied; the same legislation has not been applied to any other member state’s domestic listed equities, and no listed companies outside the UK report MiFID costs and charges. This Bill seeks to remedy that error, which is causing such havoc in markets.
Again, the FCA chief did say that discounts have narrowed significantly, so the problem seems to be going away. I am afraid that too is misinformed. The discounts of all investment companies—except for 3i, which has never considered itself an investment company, but has been included in these figures—are now at a 40% premium. But all other investment company discounts have remained around the record levels that they were before, so it seems to me that any complacency is misplaced. I urge my noble friend to meet with us if she wishes to, or to urge others to meet with us, to discuss this really serious problem for the UK economy, our investors and our financial markets.
Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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My Lords, I declare my interest as a non-executive director of the London Stock Exchange, and as a shareholder in investment trusts. I thank everyone who has involved themselves in this Bill and on this topic; we had a remarkable and united Second Reading debate.

The Bill is a catalogue of where listed investment companies have been squeezed into fund legislation without any tailoring to their listed company structure, from which a single solution could be selected to solve current market disruption ahead of replacement EU legislation. Reporting formats for management charges were designed for the huge open-ended fund industry and the price formation structure of equity listing and trading never got considered, yet the UK uses that same format for listed investment companies. Therefore, investors are wrongly told at the point of sale that expenses already baked into the share price will be deducted annually from their investment holding—producing severe economic effects, and decimating share prices, IPOs and follow-on funding.

The EU does not consider this format of cost disclosure applicable to listed investment companies, and Swiss regulators now explicitly state that it does not apply, in an open invitation to list there instead of London. Correction does not mean that expense ratios cannot be presented at point of sale; they just need a true explanation. Suggestions on how to do that already exist, and they are better explained, for example, in Australia.

However, Treasury officials and the FCA say that we can wait a year or so for adjustments, claiming it is chiefly macroeconomic circumstances. But if it is all macroeconomic, why have investment trust NAVs been performing well? Unfortunately, NAV is not what the shareholder owns, even if the FCA and its CEO do not understand that, as exhibited at the Treasury Select Committee this week.

Really, it just will not do, and it will not do because the people being hurt are retail consumers owning shares. Mainstream ex 3i discount to NAV is now at minus 15% compared to minus 4% in January 2022. That is way out of line with anything that has happened through crises, or when there have been comparable interest rates to now. Retails consumers owning half of listed investment company shares have suffered a value decline against NAV of £22 billion since the misleading disclosure format started. Another year or more of this retail consumer harm could be avoided, even just by selectively advancing the MiFID proposal contained in the Bill—recognising the truth that, with listed shares, value owned is share value. Let expense ratios be disclosed in their true light, not deceptively described as a deduction from holdings.

Lord Livermore Portrait Lord Livermore (Lab)
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My Lords, I congratulate the noble Baroness, Lady Altmann, on the success of her Bill. I pay tribute to her for raising this issue to the prominence it deserves, and for the hard work that I know she has put in to get her Bill to this stage.

Throughout the passage of the Bill, the noble Baroness has made an extremely compelling case for action. It is a timely piece of legislation, exposing a significant problem that has been left unsolved for too long, at considerable cost to both the sector and the wider economy. The Bill unarguably makes the case that urgent action is required. I wish it well in the other place. I hope it will help to expose the issues involved, and that it might compel the Government and regulators to move further and faster than has so far been the case.

Bill passed and sent to the Commons.

Artificial Intelligence (Regulation) Bill [HL]

Third Reading
Moved by
Lord Holmes of Richmond Portrait Lord Holmes of Richmond
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That the Bill be now read a third time.

A privilege amendment was made.
Moved by
Lord Holmes of Richmond Portrait Lord Holmes of Richmond
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That the Bill do now pass.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, I declare my technology interests as adviser to Boston Ltd. I thank all the organisations and individuals that took the trouble to meet with me ahead of the Second Reading of my Bill, shared their expertise and insight, and added to the positive, almost unified, voice that we had at Second Reading in March. I thank colleagues around the House and in the other place for their support, and particularly thank the Labour and Liberal Democrat Front Benches for their support on all the principles set out in the Bill. I also thank my noble friend the Minister for the time he took to meet with me at all stages of the Bill.

It is clear that, when it comes to artificial intelligence, it is time to legislate—it is time to lead. We know what we need to do, and we know what we need to know, to legislate. We know the impact that AI is already having on our creatives, on our IP, on our copyright, across all that important part of our economy. We know the impact that having no labelling on IP products is having. Crucially, we know the areas where there is no competent legislation or regulator when it comes to AI decisions. Thus, there is no right of redress for consumers, individuals and citizens.

Similarly, it is also time to legislate to end the illogicality that grew out of the Bletchley summit—successful of itself, but strange to put only a voluntary code, rather than something statutory, in place as a result of that summit. It was strange also to have stood up such a successful summit and then not sought to legislate for all the other areas of artificial intelligence already impacting people’s lives—oftentimes without them even knowing that AI is involved.

It is time to bring forward good legislation and the positive powers of right-size regulation. What this always brings is clarity, certainty, consistency, security and safety. When it comes to artificial intelligence, we do not currently have that in the United Kingdom. Clarity and certainty, craved by consumers and businesses, is a driver of innovation, inward investment, pro-consumer protection and pro-citizen rights. If we do not legislate, the most likely, and certainly unintended, consequence is that businesses and organisations looking for a life raft will understandably, but unfortunately, align to the EU AI Act. That is not the optimal outcome that we can secure.

It is clear that when it comes to AI legislation and regulation things are moving internationally, across our Parliament and—dare I say—in No. 10. With sincere thanks again to all those who have helped so much to get the Bill to this stage, I say again that it is time to legislate—it is time to lead #OurAIFutures.

Lord Leong Portrait Lord Leong (Lab)
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My Lords, I regret that I was unable to speak at Second Reading of the Bill. I am grateful to the government Benches for allowing my noble friend Lady Twycross to speak on my behalf on that occasion. However, I am pleased to be able to return to your Lordships’ House with a clean bill of health, to speak at Third Reading of this important Bill. I congratulate the noble Lord, Lord Holmes of Richmond, on the progress of his Private Member’s Bill.

Having read the whole debate in Hansard, I think it is clear that there is consensus about the need for some kind of AI regulation. The purpose, form and extent of this regulation will, of course, require further debate. AI has the potential to transform the world and deliver life-changing benefits for working people: whether delivering relief through earlier cancer diagnosis or relieving traffic congestion for more efficient deliveries, AI can be a force for good. However, the most powerful AI models could, if left unchecked, spread misinformation, undermine elections and help terrorists to build weapons.

A Labour Government would urgently introduce binding regulation and establish a new regulatory innovation office for AI. This would make Britain the best place in the world to innovate, by speeding up decisions and providing clear direction based on our modern industrial strategy. We believe this will enable us to harness the enormous power of AI, while limiting potential damage and malicious use, so that it can contribute to our plans to get the economy growing and give Britain its future back.

The Bill sends an important message about the Government’s responsibility to acknowledge and address how AI affects people’s jobs, lives, data and privacy, in the rapidly changing technological environment in which we live. Once again, I thank the noble Lord, Lord Holmes of Richmond, for bringing it forward, and I urge His Majesty’s Government to give proper consideration to the issues raised. As ever, I am grateful to noble Lords across the House for their contributions. We support and welcome the principles behind the Bill, and we wish it well as it goes to the other place.

Viscount Camrose Portrait The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
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My Lords, I too sincerely thank my noble friend Lord Holmes for bringing forward the Bill. Indeed, I thank all noble Lords who have participated in what has been, in my opinion, a brilliant debate.

I want to reassure noble Lords that, since Second Reading of the Bill in March, the Government have continued to make progress in their regulatory approach to artificial intelligence. I will take this opportunity to provide an update on just a few developments in this space, some of which speak to the measures proposed by the Bill.

First, the Government want to build public visibility of what regulators are doing to implement our pro-innovation approach to AI. Noble Lords may recall that we wrote to key regulators in February asking them for an update on this. Regulators have now published their updates, which include an analysis of AI-related opportunities and risks in the areas that they regulate, and the actions that they are taking to address these. On 1 May, we published a GOV.UK page where people can access each regulator’s update.

We have taken steps to establish a multidisciplinary risk-monitoring function within the Department for Science, Innovation and Technology, bringing together expertise in risk, regulation and AI. This expertise will provide continuous examination of cross-cutting AI risks, including evaluating the effectiveness of interventions by government and regulators.

We have also set out plans to establish a new steering committee, with regulator and government representatives, to guide the work of our central co-ordination function, supporting effective co-ordination across the AI governance landscape and facilitating regulator join-up. We have been working at pace to design the steering committee and we will provide a further update on this in the summer.
We have delivered on our White Paper commitment to pilot new regulatory tools to support AI innovators with the launch of the Digital Regulation Cooperation Forum’s AI and digital hub pilot on 22 April. The Government have made up to £2 million of funding available to support this new multiagency advisory service, which will support AI and digital innovators with complex compliance queries that span regulatory remits. It will increase innovators’ confidence in bringing new products more quickly and safely to market by helping them to understand and navigate regulatory requirements. It will also provide regulators with a collaborative space in which to develop and clarify their guidance about the application of the AI regulatory principles outlined in the White Paper.
I reassure noble Lords that the Government are committed to addressing the serious misuse of AI, which can cause significant harm and distress. Last month, the Government announced a new criminal offence to tackle the creation of deepfake sexual images of adults without their consent. Under the new offence, people who create these horrific images face a criminal record and an unlimited fine. If the image is then shared more widely, offenders can be sent to jail.
The UK continues to play a leading role in international AI developments. In April, the Government signed a memorandum of understanding with the US to work together to develop robust methods for evaluating the safety of AI tools and systems that underpin them, following through on commitments made at the AI Safety Summit in Bletchley last November. Building on the success of the Bletchley declaration last year, we are proud to be co-hosting the AI Seoul Summit alongside the Republic of Korea on 21 and 22 May. This summit will address the capabilities of the most advanced AI models. I look forward to updating noble Lords on the summit following its conclusion.
On the Bill before us as a whole, I understand Members’ concerns regarding the rapid development of artificial intelligence and the desire to put in place effective guard-rails. I hope that what I have said gives reassurance that the Government are progressing work on the most pressing areas. On legislation specifically, the Government are not ruling out new law in the future, but we believe our non-statutory approach is still the right one for now while we continue to build the understanding needed to inform any future legislation based on a more comprehensive assessment of the benefits and risks of this fast-evolving technology.
Although the Government do not support the Bill, I hope noble Lords will continue to contribute their valuable expertise in this area as our regulatory approach evolves. In that light, I look forward to speaking with my noble friend Lord Holmes on this issue again very soon.
Lord Empey Portrait Lord Empey (UUP)
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Before the noble Viscount sits down, he listed a whole series of activities that are very welcome, but I said at Second Reading that I felt the Government were losing momentum, because the Prime Minister had set an international lead: the United Kingdom was going to lead the world and would be an example to everybody. It seems, with the Minister’s statement, that we have slipped back now. The European Union has set out its stall. If we are not going to have a legislative framework, we need to know that. I just hope the Government will reflect that the position the Prime Minister adopted at the beginning of this process was innovative, positive and good for the United Kingdom as a whole, but I fear that the loss of momentum means we will be slipping back down at a very rapid rate.

Viscount Camrose Portrait Viscount Camrose (Con)
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I thank the noble Lord for his comments. I am not sure I accept the characterisation of a loss of momentum. We are, after all, co-hosting the AI safety summit along with our Korean friends in a couple of weeks. On moving very quickly to legislation, it has always been the Government’s position that it is better to have a deeper understanding of the specific risks of AI across each sector and all sectors before legislating too narrowly, and that there is a real advantage to waiting for the right moment to have judicious legislation that addresses specific risks, rather than blanket legislation that goes to all of them.

Bill passed and sent to the Commons.
Second Reading
Northern Ireland Legislative Consent sought.
Moved by
Lord Black of Brentwood Portrait Lord Black of Brentwood
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That the Bill be now read a second time.

Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
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My Lords, noble Lords will know of my long-standing commitment to animal welfare. Soon after I joined your Lordships’ House, I secured the first ever debate here on the welfare of domestic animals. In campaigning on issues such as microchipping, electric shock collars, pet theft, pets in care homes and many others, I raised so many questions—principally about cats, I admit—that, in time, when I started going through the Division Lobby my noble friend Lady Anelay, then the Chief Whip, began to say “miaow” as she clicked me through. So it is a privilege, and a great honour, to introduce the Pet Abduction Bill today.

I am grateful to all noble Lords who are taking part in this debate. I look forward to their contributions, especially that of my noble friend the Minister. He and his officials have been incredibly helpful and supportive throughout the passage of this legislation. I am very grateful to them for their time and expertise. This piece of legislation will, I hope, soon take its place alongside many others placed on the statute book since 2010. The Government, with the support of the opposition parties, have a record of which to be proud. We are not just the people’s Parliament but the animals’ Parliament too.

I owe an enormous debt of gratitude to Anna Firth MP, who introduced this Bill in the other place. She is passionate about animals—something which shone through as she piloted the Bill through with steely determination, eloquence and great emotion. She is a true champion of those who have no voice.

We are a nation of animal lovers. I am one of them, and I declare my interest as a cat owner. I must say that dogs have an equal place in my affection—looking to my noble friend Lord Holmes—but at the moment our flat is ruled over by adorable Destino, a fluffy ginger rescue cat. I also declare an interest as a patron of International Cat Care.

This Bill has government and cross-party support, for which I am most grateful. It enjoys the strong support of the admirable charities in the sector: Cats Protection, the Dogs Trust, Battersea Dogs & Cats Home, Refuge, the RSPCA and many others that have campaigned long and hard to get to this point. I believe it also has strong public backing, as we saw from the excellent speeches in the other place during Second Reading, as many MPs set out the horrendous experiences of their constituents whose pets had fallen victim to this callous crime.

Tragically, it is a wicked crime that is increasing. There are no centrally recorded figures—something the Bill will rectify—but we do have some information from the charitable and insurance sector. Direct Line estimates that there is an average of 2,400 dog thefts a year—that is seven dogs stolen every day—and a Pet Theft Awareness report found in 2022 that cat theft had increased 40% year on year, and more than quadrupled since 2015.

Thankfully, some stolen pets find their way back to their owners, but not many. The recovery rate is only 12%, so the vast majority of the thousands of cats and dogs abducted every year are never seen again, something which a recent leader in the Times described as

“an ocean of human misery”.

The stories of the impact of pets being stolen are agonising and heartbreaking to read, even when there is a happy ending. Cats Protection has kindly sent me numerous examples, such as Betty, a much-loved Bengal who was stolen from her family when they moved home. Betty’s loving owners were frantic, setting up Facebook groups to find her, putting up posters and posting leaflets. Two weeks after she went missing, they found her being advertised on Gumtree. Thanks to clever detective work by her owners, Betty was eventually retrieved but in an extremely stressed state, with stomach problems and a twisted leg. She had clearly had a terrible time. So too had her family. For them, it was the worst three weeks of their lives, which they found absolutely horrifying.

However, more often than not, cats are not retrieved. Clooney was a young male seal-point Siamese, chipped and neutered, who disappeared from his garden in Norfolk more than 10 years ago. In the weeks that followed his disappearance, his owner described the emotional and tortuous days and nights spent searching for him, door-knocking with flyers, putting up posters and recruiting the help of a tracker dog in case he had been injured or worse. After finding no trace, the owner reported Clooney’s suspected theft to the police, twice, but, frustratingly, they dismissed her claims of theft. To this day, Clooney’s owner misses him dreadfully.

I have seen similar reports from my own county of Essex, such as the theft of Twiglet, a dachshund, who was snatched after a thief smashed a patio door to abduct her. Video footage showed the poor animal struggling to get away from her attacker. Her owner described the incident as her worst nightmare and said that it was like a member of your family being snatched out of your home. It was horrible.

There are countless other stories, but all with the same theme. A thread runs through them all, and it is this: our pets are very special to us; they are part of our family. They bring us joy and console us when we are down. We love them, and if they are stolen, the cruel person who has committed the crime is not just harming the animal and subjecting it to unbelievable stress and anger, they are destroying a family at the same time. The cats my husband and I have always had have lived indoors, so we thankfully never suffered from this horrible crime, but I know that if anyone ever abducted Destino or one of his predecessors, it would not just be heartbreaking and we would not have just got over it—there could never be closure. A part of us would have died at the same time. That is why this Bill is necessary.

Let me explain why. At the moment, the taking, abducting or detaining of someone else’s beloved pet is classified alongside the theft of mere objects, such as a garden tool, a pair of cufflinks or a smart phone. It is treated in law under the Theft Act 1968 and the Theft Act (Northern Ireland) 1969 in exactly the same way and is punished in the same way. Yet the abduction of a pet is absolutely not the same because pets are not mere property. We do not have an emotional bond with a power tool that someone steals from the garage. A watch being stolen may be annoying, but it does not destroy a family’s life. If a thief takes your laptop, it is upsetting, but you do not lie awake at night in pain and anguish or look out your window every day, possibly for the rest of your life, wondering where it is and how it is being treated. In short, there is a stark gap between how the law views and values domestic animals and how the public does. The devastating impact that animal abduction has on pets and people needs properly to be reflected in criminal law, and that is what the Pet Abduction Bill does. For the first time, the law will recognise the profound difference between pets as sentient beings and inanimate objects.

I shall say a little about how the Bill will work. It creates two new criminal offences of the taking or detaining of a dog and the taking of a cat from someone’s lawful control. The two provisions, the dog clause and the cat clause, are quite rightly different, in that the dog clause expressly applies the provision where a person either detains a dog or takes it, whereas the cat clause refers only to taking. This recognises the fact that, unlike dogs, cats roam without their owners. They enjoy mixing with other households, and probably getting fed at every house in the street. One of the first cats that we ever met was a sweet little tabby—we used to call him Gregory—who sat outside the flat where we lived and often came in for a stroke and some water, and then would be on his way. This Bill is not intended to punish behaviour such as that, where there has been no malice or ill intent in looking after a cat that voluntarily visits you.

The Bill includes defences of lawful authority and reasonable excuse. It also introduces tough penalties of a fine and/or up to five years in prison, a term which is comparable with provisions for animal welfare offences under the Animal Welfare Act 2006 and the Welfare of Animals (Northern Ireland) Act 2011. The sanctions will lay down a vital marker that the abduction of beloved pets will be punished appropriately. At the moment, the Bill covers only cats and dogs, but there are enabling powers in it so that it can be amended to cover other species of animals if the need arises. The Bill applies to England and Northern Ireland only, as these issues are quite rightly matters for the devolved Governments. I hope they will implement similar legislation, so that this crucial animal welfare measure covers the whole of our country.

One other important aspect of this Bill is that it will help the police to collect accurate data on pet theft, which does not currently exist. I have in the past asked Parliamentary Questions on this subject, but I have never been able to receive a proper Answer because pet theft is recorded by the police simply under the category of property. As a result of this legislation, pet abduction will have a unique identifier in crime datasets that will allow us to uncover the scale of the problem.

This Bill is long overdue. The status of pets as mere property and inert objects rather than intimate members of a family and treasured companions was put on the statute book when I was four years old. I turn 60 in the summer, and this Bill becoming law would be the best birthday present I could have. It is a short, simple Bill, but its implications will be far-reaching in protecting animals and their owners. It shows that society will not tolerate the abduction of cats and dogs, and the value we place on them, by enshrining their special position in our society in law. It shows that Parliament understands the needs of animals, giving a voice to the voiceless in the most powerful way possible, by changing the law to protect them. I hope this Bill will enjoy support across the House and make speedy process to the statute book. I beg to move.

Lord Blencathra Portrait Lord Blencathra (Con)
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My Lords, I am pleased to give my full support to my noble friend’s excellent Bill, and I look forward to getting it on the statute book. I like that the word used is “abduction” and not “theft”, since theft is of an inanimate object; “abduction” is the right word here to describe other intelligent living things.

However, I have a number of concerns. In the other place, my honourable friend Sir Christopher Chope made the fairly valid point that there were 130,000 motor vehicle thefts and 2,000 dog thefts in 2022, and the police were not very good at catching the criminals involved in the organised theft of motor vehicles and therefore might not be very good at catching those abducting pets either. I would like to hear from my noble friend and from the Minister what steps will be taken to emphasise to the police that, while a cat may cost a fraction of the cost of a Range Rover, the devastation to the owners of a lost, stolen or abducted pet is infinitely greater than the cost of 20 Range Rovers.

While I support the Bill, I will want to move some amendments in Committee. Take the penalties. Theoretically, they are quite good,

“not exceeding the general limit in a magistrates’ court”,

which could be up to 12 months and an unlimited fine or, if tried on indictment, up to five years in prison. But that will never happen, because once the rather wet, woke, liberal Sentencing Council produces its sentencing guidelines, no one will get the maximum; the average sentence will be watered down to a few hundred pounds, and the fine will not be paid, just as happens with lots of other sentences we pass in this Parliament. I plan to move an amendment stating that abducting a pet will be a summary offence in the magistrates’ court and the fine will be £5,000 irrespective of ability to pay. Where it is organised gangs, or two or more people acting in concert, then it should be tried on indictment with a set fine of £20,000 and 12 months’ imprisonment—and nothing less. If there is cruelty involved, it should be five years’ imprisonment and nothing less.

Some other amendments are also necessary. I want to make exceptions to some of the abduction offences. I have been privileged to serve as deputy chairman, under the brilliant Tony Juniper, the chair of Natural England, as he has delivered on the superb policies in the Environment Act—the brainchild of Michael Gove, assuredly the finest Secretary of State for the Environment we ever had. The Addison rules forbid me speaking about Natural England, but I can refer to Tony’s article last month that said that we are on track for the greatest recovery of nature on a landscape scale that we have ever had. However, in relation to this Bill, I want to praise what he said on the BBC last week: that cats allowed outside should have a collar with a bell to reduce the massive killing of wildlife that they do. All independent studies suggest that cats that are allowed to wander at will kill about 260 million mammals per annum in the UK and 60 million garden birds. Of course, there are other predators killing animals and birds, as letters in the Telegraph this week have pointed out, but the contribution from roaming cats is massive and unnecessary. Studies by three UK scientists, published in the Applied Animal Behaviour Science journal, show that in the UK cats with bells killed 34% fewer mammals and 41% fewer birds. We need every measure we can have to preserve our declining garden birds, so I would seek to make collars with bells compulsory for cats allowed outside.

I would go further and ban cat flaps completely. The organisations the Mammal Society and Garden Bird point out that it is natural behaviour for cats to hunt and kill mammals and birds, but the prime time is sunset and dusk, when birds are feeding. They suggest that, if you want to let your cat outdoors, you should let them out only after the sun has risen and before it sets. There is no justification whatever for cat owners taking a laissez-faire attitude and letting their cat go in and out when it pleases. Do not call yourself a cat lover if you have no idea where your cat goes at night, where it can be attacked or run over, catch fleas and diseases and kill precious wildlife. Over the last 30 years, the Americans have completely changed their behaviour over letting cats outside. Some 70% of UK cat owners let their cats roam outside, but only 10% of United States cat owners do this, because they consider it risky and neglectful to do so—and I agree.

My amendment will make it not an offence for anyone to abduct a cat which is in a public place outside its home. The abductor would have to take it to an animal refuge, charity or shelter, or he would then be committing an offence. Do not tell me that that is interfering with the natural behaviour of cats. How natural is it for people to give them processed cat food or put down litter trays, groom them and give them veterinary care? I passionately support those interventions and, as a devoted cat lover, I say: keep your cats in at night, feed them properly and do not let them kill birds in your garden, or anyone else’s garden—especially my garden.

I also want to make a major exception to Clause 3 on other animals commonly kept as pets. The trouble is that this definition is very vague. I turn to the Defra guide to the Zoo Licensing Act 1981. Annexe A on page 29 attempts to define “normally domestic” and “normally non-domestic” animals. Unfortunately, it begins:

“The Secretary of State is not in a position to give an authoritative statement on which animals fall into the ‘normally non-domestic’ and ‘normally domestic’ categories ... However, an informal view on the more common cases that have caused uncertainty is set out below”.

It lists five categories and, leaving aside farm animals in the normally non-domestic category, these are: dogs, cats, rabbits, ferrets, guinea pigs, hamsters, gerbils, and other species most of us would say are commonly known as pets. Columns three and four list animals which are wild but may be farmed, such as bison, ostriches, buffalo and wild boar. We would not normally consider them to be pets. However, it is column five that concerns me. It lists every other wild animal, including dangerous invasive species, which some misguided and foolish people keep as pets.

In February, the Born Free organisation published a big study conducted in 2023. It says:

“The staggering fact that there are nearly three thousand wild creatures classified as ‘dangerous’ under UK law, being kept as ‘pets’ across Britain, is of great concern to Born Free. The keeping of such animals threatens the safety of people and other animals, and results in considerable animal suffering. Unlike domesticated animals, which have been bred over generations to live alongside humans, these wild animals have complex physical, psychological, nutritional, social, and environmental needs which cannot be met by a life in captivity. As a result, these, often threatened, creatures can suffer poor health and psychological damage. Increased demand for exotic ‘pets’ also puts pressure on wild populations of many already threatened species”.

That includes 400 venomous snakes, which is far more than we have in our zoos.

Do we want a repeat of dangerous and invasive species being released into the wild when the owners get fed up with them or cannot cope? Have we not learned from the disaster of grey squirrels and African bullfrogs? Some morons are now even importing racoon dogs from the United States. Just look at all the species in the Schedule to the Dangerous Wild Animals Act 1976; there is not a single one that any individual should be permitted to keep at home. Attitudes on how we keep wild animals have changed in the last 48 years. If my noble friend cannot withdraw the licences and ban these species in ordinary houses in the UK, I shall try an amendment permitting anyone to abduct these species and take them to a proper licensed zoo.

I regret—in the few seconds I have left—that we did not go far enough with the regulations on keeping primates. The noble Baroness, Lady Hayman of Ullock, was right. We should not license private individuals to keep primates. Sometimes, I think that even some of our best zoos are borderline on giving them the sort of habitats they need. If we have difficulty finding the right habitat for lynx in Kielder Forest, how in the name of God can some people keep lynx at home?

So, with these few simple additions that I would like to make to my noble friend’s Bill, I repeat that I fully support it. It is an excellent Bill and I commend it to the House.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, it is a pleasure to take part in this Second Reading. I congratulate my noble friend Lord Black for his excellent introduction and my noble friend Lord Blencathra for his fine words. Unlike cats, in all of his contributions, you will never find him sitting on the fence.

I thank all the organisations who sent such excellent briefings ahead of this Second Reading. It would be invidious to single out any, but I will, for the work that Battersea Dogs and Cats Home continues to do year in and year out—not least all through those difficult Covid years. We should give all our thanks to every individual who works at and is involved with Battersea.

I fully support this Bill and I am pleased that we are bringing it forward at this time. As both noble Lords have said, it is right that we move from theft as a concept to abduction, which is the correct concept. It follows a legislative logic that we have had over a number of Bills, not least the Animal Welfare (Service Animals) Act we passed a number of years ago, which is also known as Finn’s law. Up until that point, police dogs and animals were seen as just property and subject to criminal legislation in that sense. That Act, like this Bill, sought to put the animals in their sentient centre, and in the right place in our human and animal-loving society.

To that end, I ask my noble friend and the Minister, given that it is quite correct that it is far more traumatic for anybody to have a pet abducted than to lose a car or a tool from a garden shed—irritating though that certainly is—would it not make sense to have a higher tariff than that set out in the Theft Act 1968 of seven years? I would be interested to see the logic of aligning all these acts around the five-year mark. Why should that not be increased? As my noble friend Lord Blencathra set out, it is highly unlikely that anyone will be given the maximum. So in a sense, the only way to address that from Parliament is to set a maximum that is higher, to enable a right sentence to be set. I would argue that the maximum sentence should be at least seven years, not the five years set out in the Bill.

Since Covid, and indeed during Covid, so much changed in terms of pets and service animals. It became nothing short of a Wild West out there. There were untrained dogs, abducted dogs and cats, and an atmosphere that seemed to change overnight. From a personal perspective, pre Covid I may have experienced a dog incident perhaps once per month or once a quarter. Since Covid, it can be daily. That is the experience for people with service animals and people with pets. It has to change; we have to get back to a situation where humans, pets and animals can all coexist in a far more harmonious manner. To that end, I will be looking at some potential specific amendments to bring through in Committee.

This is an excellent and a timely Bill. I support it fully. I will certainly be very interested in the amendments my noble friend Lord Blencathra is seeking to bring. In conclusion, this is probably a unique example of where it is positive to pass “paw” legislation.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, I congratulate the noble Lord, Lord Black of Brentwood, on his introduction to the Bill, which gave many examples of the poor treatment of abducted animals. He has a strong reputation on animal welfare issues and especially the well-being of dogs and cats. I am grateful to the Battersea Dogs & Cats Home, Blue Cross and the House of Lords Library for their briefings. I declare my interest as a dog owner.

During Covid, there was an increase in the number of dogs stolen. Many were extremely valuable, and this is coupled with the rise in the price of puppies and kittens. The Government, following the work of the pet theft task force, are supportive of this Private Member’s Bill. Your Lordships would expect me to refer to the abandoned kept animals Bill, which would have seen legislation on this subject on the statute book before now if it had not been abandoned. The pet theft task force was set up in 2021, but we are now, in 2024, at last debating this issue of pet theft and abduction.

The Bill generated a lot of discussion in the other place, which I have read. The pet theft task force felt that the offence of pet abduction would shift the emphasis from the theft of goods, which has been referred to—this is the effect of the definition in previous legislation on stolen animals—to the welfare of the animal. Since the passage of the animal sentience Act, there has been much more emphasis on the plight of the animal and less on the owner. The noble Lord, Lord Holmes of Richmond, has referred to this and to the need for a more stringent sentence for miscreants.

It is right that the impact of being abducted on a cat or dog is considered. Many will be distraught at the separation from their owners, but it is equally true that the owners will be distraught at the loss of their treasured companions. For numerous elderly men and women who find themselves living on their own, a pet dog or cat is a lifeline. This is the companion that greets them when they get up in the morning and is behind the door when they come in from visiting the day centre or doing their shopping. This is the companion with which they will share their joys and woes. They do not get a verbal response in the way they would from a partner, but they do get affection and are dependable. To have this much-loved companion abducted can be devastating, causing anxiety and depression.

The Bill is a pragmatic way forward. The penalties for abduction are reasonably sufficient for those who are caught, but I am not sure that they will function as a deterrent for the determined criminal. The noble Lord, Lord Blencathra, indicated that he is not content with the penalties for those convicted of abduction and intends to table amendments for Committee.

Microchipping is an essential tool in reuniting a dog or cat with its owner, and perhaps it should be mandatory instead of just encouraged. It is the only fail-safe method of ensuring that the right pet is reunited with the right owner. Many of the abducted pets will be extremely valuable and will have cost their owners thousands of pounds. Others may have been acquired from animal rescue centres. Whatever the case, the loss to the owner is first and foremost emotional and, secondly, about the cost of the pet.

The noble Lord, Lord Blencathra, raised the issue of exotic pets. As someone who at one time kept what could be classed as exotic pets, I look forward to how the noble Lord will include these species in the Bill.

The Bill quite rightly does not get into the muddy waters of who gets custody of a pet after a relationship breakdown. I support the view that this is a matter for adults to negotiate for themselves. Nor will I be drawn into whether the emotional value of a dog is more than that of a cat—the owner will love their pet for what it is, whether a dog or a cat.

I have a couple of queries. First, I am slightly concerned about cross-border issues. This legislation refers to England and Wales, but it would be easy for abducted pets to be taken over the border to Scotland. Is there likely to be an arrangement with Scotland on the repatriation of pets?

Secondly, the penalties for abduction are severe and include prison sentences. Is it likely that the severity of the sentence would be linked to the value of the cat or dog? If the purpose of altering legislation is so that the pet is treated as a sentient animal and not an inanimate piece of property, as in the Theft Act 1968, it would seem that the sentence of convicted abductors should be linked not to the monetary value of the pet but to the distress caused to both the pet and its owner. Does the Minister agree?

I fully support this Private Member’s Bill and look forward to it passing on to the statute book quickly.

Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, I thank the noble Lord, Lord Black of Brentwood, for sponsoring the Bill and introducing it so eloquently. I also thank Anna Firth MP for bringing it forward in the other place. We very much welcome the Bill. We support it and want it to reach the statute book swiftly, so we are pleased that it has the support of the Government.

We have heard today that dog and cat abduction can happen for a number of reasons, which, sadly, can include resale, extortion, breeding and sometimes even dogfighting. We have heard how devastating this can be for the owners and how much distress and sometimes cruelty it can bring to the animals.

I am sure that the noble Lord would be surprised if I did not ask about the Animal Welfare (Kept Animals) Bill, mentioned by the noble Baroness, Lady Bakewell of Hardington Mandeville. It was such a shame that it was stopped when it had cross-party support. The proposals that we see today would have been brought into law much quicker if the Government had kept that Bill.

Having said that, we have heard that the Bill will create two new offences, of dog abduction and cat abduction, carrying a maximum penalty of five years’ imprisonment, a fine or both. The noble Lord, Lord Blencathra, talked about proposing an amendment regarding penalties. As he and the noble Lord, Lord Holmes, said, it is really important that, if penalties are brought in, they are used and are a proper deterrent.

The Bill provides powers for Ministers to extend the legislation to other animal species kept as pets. I am very pleased to see that in the Bill; it is a shame that a similar extension to other breeds, brought forward in an amendment to the livestock exports Bill by the noble Lord, Lord de Clifford, was not supported by the Government. Could that be revisited at some point?

As other noble Lords have said, there have been briefings on the Bill from different organisations, to which we are grateful. They include Battersea Cats & Dogs Home, Cats Protection, Blue Cross, the RSPCA and others—and the Library did an excellent briefing on this.

A number of points have been raised during the debate. As we have heard, dog and cat abduction is currently treated in law akin to stealing an inanimate object, with sentencing depending in great part on the monetary value of the stolen dog or cat. This completely fails to consider any aspect of animal welfare or the impact on the owners of this crime, which can be completely devastating, as we heard. Blue Cross has always argued that the status of pets is fundamentally different from property. They are not inanimate objects but sentient creatures and, as we have heard, irreplaceable family members. They should therefore be treated as such, and it is welcome that the Bill will finally bring this into law, because the law as it stands is too lenient.

We are aware of data from Scotland that reveals that nearly a third of dog abduction cases were related to domestic issues and ownership disputes, instead of being motivated by profit—so it is important that the sentencing and any fines are done in a proper and sensible manner. It is important that the emotional impact of losing an animal in this way is properly recognised, so we are pleased to see this in the Bill.

We have heard that comprehensive and reliable data on the true scale of pet abduction is difficult to collate due to the lack of a central database and different methods of recording. I hope we can start to make steps in the right direction and know more about what we are dealing with in order to tackle it better.

Dog and cat abduction are currently classed as theft, so some police forces find it more difficult to isolate the data on instances of cat and dog abduction compared to other types of theft. It is important that we get a clear and complete picture right across the country, as the noble Lord, Lord Black, said in his introduction.

Other noble Lords talked about the fact that instances of dog theft have been going up year on year, until I think last year, when they started to come down. But it has been a real problem since Covid-19—the noble Lord, Lord Holmes of Richmond, talked about how that completely changed the situation. In some ways, we are only just starting to get a more level playing field, given that abduction went up so much during that time.

Some police forces have higher average rates of dogs per theft. That could be significant: we need to understand the data and the thefts better, because we need to understand where thefts are actually being co-ordinated and gangs are involved. We know that cat theft is not on the same scale as dog abduction, but it is becoming an increasing problem. Pet Theft Awareness has done a certain amount of research on this and has come up with information and figures that will be very useful in taking this forward. It considered that the rise in cat theft could be attributed to the very strong market in cats and kittens, particularly pedigrees. The noble Lord, Lord Black, talked about the particular case of Betty. That means that cats, as well as dogs, are more likely to be targeted by opportunistic criminals who want to resell them—or, of course, if the cats are unneutered, use them for breeding.

While we are on cats, I was very interested to hear the noble Lord, Lord Blencathra, suggest amendments that he might bring forward on cats, pointing out that they can be quite aggressive killers when outdoors. I would just like to stand up for my own cat, Sid, in this matter. Sid, sadly, is not a very prolific killer—I do not know whether it is because he is a little fat and not very good at catching birds and small mammals—but he seems to bring in mice quite regularly, which end up living in the sofa or the kitchen cupboards, which is not incredibly helpful. Since his encounter with one of our hens, he is rather frightened of birds.

I thank the noble Lord for his supportive words regarding my position on the licensing of primates kept privately.

I confirm that we very much welcome the Bill. We are very pleased to see that it has finally arrived and strongly support the maximum sentence of five years’ imprisonment. This clearly reflects the gravity of the offence and the devastating emotional impact on both the owner and the abducted pet. It also aligns with the maximum sentence provided for by the Animal Welfare (Sentencing) Act 2021. I look forward to the Minister’s speech, but I strongly support the Bill.

Lord Douglas-Miller Portrait The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
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I start by putting on record my thanks to my noble friend Lord Black for supporting this important Bill. He is a great champion of animal welfare overall, and I know he has followed the discussions on today’s topic particularly closely. I am delighted that he has chosen to steer this Bill through the House. I know it will be in safe hands, in the animal Parliament that he described.

There are more than 20 million cats and dogs in the country, and over a quarter of households own at least one of these animals. The noble Baronesses, Lady Hayman and Lady Bakewell, both spoke passionately about the companionship and friendship that animals bring. In my own home in Scotland, there are always four happy faces and wagging tails there to greet me when I return from a week here in London.

The Government strongly support this Bill, which represents another important step in our progress on animal welfare. It delivers one of the key recommendations from the Government’s pet theft taskforce. This cross-government group was convened in 2021 in response to an apparent rise in pet theft during the Covid pandemic, at a time when many households decided to buy or adopt a new pet.

We understand the devastating impact that the theft of a pet can have. While stealing an animal is already an offence, the fact that the item stolen is a live animal is not explicitly recognised by existing theft offences. The Pet Abduction Bill changes that by making abduction of a cat or a dog a specific offence in England and Northern Ireland. The intention is that this Bill will allow the courts to place greater focus on the impact on the welfare of the animal as well as the interests of its owner when deciding on the appropriate penalty in an individual case. It also allows pet abduction cases to be recorded and therefore traced, to help inform the scale of the issue, a point raised by a number of noble Lords this morning.

The Bill focuses on cats and dogs, given their status as the most popular pets. However, we recognise the value of other pets. The Bill includes an enabling power that will allow the Secretary of State in respect of England, or the Department for Agriculture, Environment and Rural Affairs in respect of Northern Ireland, to introduce similar bespoke offences for other species commonly kept as pets, if there is evidence of the need for this. The noble Baroness, Lady Bakewell, talked about repatriation across devolved Administrations. I hope that we will not get to that—the devolved Administrations have similar plans to introduce this type of legislation, and we are working closely with them.

As my noble friend Lord Black has already eloquently outlined, the abduction offences differ between cats and dogs, in that the cat abduction offence is limited to the taking, only, of cats. This reflects the lifestyle differences between cats and dogs, with cats often roaming independently and enjoying the odd nap on someone else’s sofa—perhaps not the sofa of the noble Baroness, Lady Hayman, as it will be full of mice, although that might be why they would go there—or a bite to eat from a different feed bowl. Simply feeding someone else’s cat will generally not be an offence. However, one can imagine cases where someone deliberately uses food or other tactics as a means of taking a cat. It is right that the Bill allows flexibility for those cases to be tried as pet abduction. This difference also strikes the right balance in not wanting to discourage people from looking after stray cats that need their help. Animal welfare organisations such as the RSPCA, Cats Protection and Battersea have excellent information available on what people should do if they find a cat that they believe is a stray. There are also clear legal requirements around what people must do when they find a stray dog, both in England and Northern Ireland. In both countries, this includes a requirement to involve the local area’s authorities.

The offences in the Bill will not apply in certain situations where disputes about the ownership of a dog or cat are likely to arise between members of a household when they separate and cannot agree on which member should be allowed to keep the dog or cat. This approach reflects one of the findings of the pet theft taskforce—that reports to the police of pet theft were sometimes linked with divorce cases. By excluding these types of cases, the Bill will rightly prevent attempts to use the new offence to address household disputes about pet ownership.

My noble friends Lord Blencathra and Lord Holmes asked about the police taking seriously the unlawful taking of pets. The public rightly expect police to respond when a crime is reported to them, working with partners across the criminal justice system to see more criminals charged and prosecuted. Police forces across England and Wales have committed to pursuing all lines of inquiry when there is a reasonable chance that it could lead to them catching a perpetrator or solving a crime.

My noble friends also raised a number of points around sentencing. This Bill is designed to deal with the unscrupulous people who abduct a cat or a dog. The maximum sentence attached to this crime will be up to five years in prison, an unlimited fine, or both. This is the same as the maximum term for animal welfare offences under the Animal Welfare Act 2006 and the Welfare of Animals Act (Northern Ireland) 2011. I hear what my noble friends say, but I feel it is right that the maximum penalty aligns with other serious animal welfare offences in this way.

In response to my noble friend Lord Holmes of Richmond’s points about guide dogs, they are very much in the scope of the dog abduction offence. The Bill applies to dogs as a species and does not distinguish between types of dogs. When dealing with an offence, the courts already have a broad range of sentencing powers to deal effectively and appropriately with offenders. In deciding what sentence to impose, the courts take into account the circumstances of the offence and any aggravating and mitigating circumstances.

My noble friend Lord Blencathra rightly pointed out that the popularity of pets is subject to trends. The wording of the enabling power allows it to remain relevant over time, even if the pet-keeping practice changes. The assessment of whether such animals can be considered to be a species commonly kept as a pet for the purposes of this Bill would form part of the consideration to engage the Bill’s enabling power. That power is further restricted by the Government’s duty to consult such persons as they consider appropriate before making legislation. In addition, any such legislation is subject to the affirmative procedure. The House will therefore have the opportunity to scrutinise the rationale for adding to or removing from the Bill any particular species, should that power be used.

My noble friend Lord Blencathra also raised the issue of cats predating on songbirds—but perhaps not the cat of the noble Baroness, Lady Hayman, in this case. My officials met the SongBird Survival charity recently. They heard about research by the University of Exeter, which showed that owners can reduce their cat’s hunting by adjusting their cat’s diet or by spending short periods playing with them. SongBird Survival’s education campaign, run jointly with Cats Protection, aims to spread awareness of how to reduce cat hunting this spring. We look forward to continuing our engagement and hearing the outcome of this campaign.

Before I finish, I want to touch on the issue of microchips, which was raised by the noble Baroness, Lady Bakewell, and my noble friend Lord Black, when he spoke very eloquently about Clooney, the Siamese who disappeared from his owner’s garden in Norfolk. My noble friend referenced Clooney’s microchip and the fact that it had been scanned and checked while Clooney was missing from his home, but that, heartbreakingly, his owner had not been made aware. Microchips are the best way to reunite people with lost and abducted animals. The microchipping of dogs has been compulsory in England since 2016, and for even longer in Northern Ireland. From 10 June this year, cats in England that are older than 20 weeks will need to be microchipped and registered on a compliant database. There is abundant evidence that microchipping works to bring animals home, which is why it is so sad to hear that in Clooney’s case it did not work.

To conclude, the Government are committed to this Bill. We have further strengthened this commitment during the passage of the Bill through the other place by adding the commencement date for these offences in England into the Bill. They will enter into force here three months after Royal Assent. This Bill addresses an issue that campaigners have long been calling for. I am grateful for the support from the many animal welfare organisations and individuals. This Bill also further strengthens our already strong track record on animal welfare, something that I know noble Lords rightly feel strongly about. I thank noble Lords for their considered contributions to this debate; it is clear that this is a subject close to people’s hearts. I too express my hope that we can work together to get this Bill on to the statute book by the summer—and in time for my noble friend’s birthday.

Lord Blencathra Portrait Lord Blencathra (Con)
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In view of my noble friend’s assurances that the Government will not allow willy-nilly any species to be classed as a commonly kept pet, and if he continues his work in Defra discussing how cat owners can make sure that their cats are not killing too many songbirds or others in the garden, I can give the House an assurance that I may be persuaded not to move any amendments.

Lord Douglas-Miller Portrait Lord Douglas-Miller (Con)
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My noble friend is very kind.

Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
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My Lords, I am very grateful to all noble Lords who have spoken and for their strong support. I am particularly grateful to my noble friend the Minister for signalling the Government’s resolute backing for the Bill and to the noble Baronesses, Lady Bakewell and Lady Hayman, for ensuring that it has strong cross-party support. Our House has always spoken with unanimity of voice on this animal welfare issue.

This has been a hugely constructive debate on a subject of great importance to any individual or family who owns a beloved cat or dog. My noble friend Lord Blencathra raised a number of very important issues, which I would be delighted to talk about further. I do not think that I will enter into the collar and bells debate—not least out of deference to Sid and the mice—but I am bound to say that I think I probably agree with him. I hope that my noble friend is reassured by the comments from my noble friend the Minister on the inclusion of other species in the Bill and the scrutiny that would be necessary.

My noble friend Lord Holmes made a very passionate speech, as always. On the issue of sentencing, of course, emotionally, I absolutely agree with him. There are many in this House who, when it comes to issues of animal cruelty or abduction, would, frankly, want to throw away the key. However, I think we have the balance right in ensuring that the maximum term of imprisonment under the Bill aligns with the maximum term for animal welfare offences under the Animal Welfare Act 2006 and Welfare of Animals Act (Northern Ireland) 2011.

I agree very much with the noble Baroness, Lady Hayman of Ullock, that it is very important that these powers are actually used. We do not want this legislation just to sit on the statute book; it is there to make a difference to families and to animals. It is important that the police—an issue that my noble friend Lord Blencathra raised—take it seriously and use the powers contained in this legislation.

As I have said, this Bill is, I believe, long overdue. I hope that we can now get it on to the statute book without delay. I beg to move.

Bill read a second time and committed to a Committee of the Whole House.
Second Reading
Moved by
Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark
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That the Bill be now read a second time.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab)
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My Lords, I am delighted to present this Bill to your Lordships’ House for its Second Reading today. I should declare to the House that I am a director of the London Mutual Credit Union, and while it is not a building society, it is a full member of the Building Societies Association, as it offers mortgages, and the BSA is very much in support of this Bill.

I thank all noble Lords who have signed up to speak in this debate and look forward to each of the contributions that will follow shortly. I am particularly delighted that my good and noble friend Lord Naseby will be speaking. We have worked together many times to support the co-operative and mutual sectors on legislative measures, and I am pleased to have his support again today.

In the last Session, I was able to get the Co-operatives, Mutuals and Friendly Societies Act 2023 on to the statute book following the success of my honourable friend in the other place, the Member for Preston, Sir Mark Hendrick, in steering it through the House of Commons. That Act of Parliament is permissive legislation that enabled mutual organisations to have the ability to opt into a restriction on the use of their assets. The co-operative and mutual sectors enjoy cross-party support, which is one of the strengths of the movement. This Bill has benefited from that cross-party and industry support. I am grateful to my honourable friend in the other place, the Member for Sunderland Central, Julie Elliott MP, for taking this Bill through the House of Commons. She did so with great skill, and we are all grateful to her.

Building societies were originally established to allow people to pool their savings and to buy a home. The world’s first building society was Ketley’s Building Society, founded in 1775 by Richard Ketley, the landlord of the Golden Cross, in Snow Hill, Birmingham. Since then, these important mutuals have played their part in enabling people to own their home. Owning the roof over your head is something that most people in the UK aspire to, and building societies have enabled generations of people to buy their own home.

I am grateful to the Library of the House of Lords and the Building Societies Association for their excellent briefing notes, and to officials at His Majesty’s Treasury for producing the Explanatory Notes explaining the purpose of the Bill in such clear detail. The Bill builds on the Building Societies Act 1986, which is a good piece of legislation that has worked well. The Bill allows for targeted, specific improvements to update and modernise the existing legislation. It comprises four clauses, which I will explain briefly.

Clause 1 amends Section 7 of the Building Societies Act 1986 and enables the Treasury to make secondary legislation, using the affirmative resolution procedure, to allow certain funds to be disapplied from counting towards the 50% retail funding limit. The funds to be exempted from the building societies wholesale funding calculation are set out in the Bill. These are Bank of England liquidity insurance facilities; debt instruments raised to meet minimum requirements for own funds and eligible liabilities; and sums received by the society under a sale and repurchase agreement entered by the society with a view to complying with a specified PRA rule.

Further, Clause 1 would allow the Treasury, through secondary legislation, to specify named funds, descriptions of funds and PRA rules relevant to the sums received under sale and repurchase agreements. Taken together, the clause allows for the exclusion of certain types of funding from the funding calculation, which requires building societies to obtain at least 50% of their funding from member deposits, thereby allowing them to acquire more funds without fear of breaching the funding limit.

Clause 2 allows for building society member meetings to be attended virtually, allows those members to speak and vote, and allows for proportionate measures to confirm the identity of those members attending and participating in the meeting.

Clause 3 extends the powers in Section 104 of the 1986 Act, again using the affirmative resolution procedure, with reference to common seals and the execution of documents, enabling provisions to be updated and processes to be modernised and allowing building societies to take advantage of them.

Clause 4 sets out that the Bill extends to the whole of the United Kingdom and comes into force two months after it becomes law—so it is small in size but not in its proposed effect. It will enable more funds to be made available to members, help more people own their own home, modernise processes and allow for greater participation of members and the more efficient execution of documents. All these changes need primary legislation, which is why we have this Bill today. Other measures will be introduced using secondary legislation outside of this Bill, which will help the sector further.

I was delighted, as I said earlier, when my good friend the honourable Member for Sunderland Central in the other place asked me to take this Bill through this House. In my 14 years of membership of this House, I have sat here as a Labour and Co-op Member of the House of Lords. I have been a member of the Co-operative Party for nearly 40 years. It has had an agreement with the Labour Party since 1918 to seek public office only jointly. The Co-operative Party has always sought to champion the positive role that co-ops, mutuals and friendly societies can play in our economy, in our society and in a variety of different spheres to improve people’s lives and give them the power to have a greater say in the things that matter to them. I am also delighted that Members from all parties support the Bill, and that it has the support of the Government. It is a really important measure which deserves support. I beg to move.

Lord Naseby Portrait Lord Naseby (Con)
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My Lords, it is a particularly exciting morning as far as I am concerned. I got up, the sun was shining; I then heard that, thanks to my Government, we are out of recession; and the icing on the cake is this particular Private Member’s Bill. It is a very exciting Bill because the building society movement is a dynamic element in our society. We see that at every level today and, as we move forward, I reflect a little on the fact that I took through this House one of the few other mutual Private Members’ Bills in my more than 25 years in this part of our Parliament, the Mutuals’ Deferred Shares Act. That was done with the support of the Government of the day, as this one has been, and that is very exciting.

I had the privilege, as noble Lords will know, of doing my national service training as a pilot in Canada. It was the first time, as a young man, that I took out a very small savings account, in the depths of the prairies just outside Moose Jaw, with a credit union. That was my first experience and I was delighted, when I was elected as the Member for Northampton South, to find that there was an active credit union there as well. Of course, the building societies themselves are much more than those relatively smaller areas of the mutual savings market. I had the privilege of being chairman of the Tunbridge Wells Equitable Friendly Society, now the Children’s Mutual, and that element too needs some help in the future.

The important part of this Bill is that the Building Societies Association has been lobbying for changes for some considerable time. I say a huge and sincere thank you to my noble friends on the Front Bench: my noble friend Lady Penn when she was there and now my noble friend today. They have both listened and have now acted, and that is a huge step forward for the whole mutual movement. When we look at the market on the ground, yes, it has been a difficult time for the United Kingdom, but which is the sector of the savings market that is not closing branches and making life very difficult for the citizens of the United Kingdom? The one area that is not closing branches is the building societies.

I happen to bank with the Nationwide, which is the biggest of them, but there are a considerable number of building societies, all of which are really active in the savings market. I say well done to them for coming through this difficult period. If we look at mortgages in recent times that are helping younger couples get on the housing ladder, we see that the vast majority come through the building societies movement. I do not need to go through the Bill in any detail. I will just thank my noble friend on the Front Bench and His Majesty’s Government for picking up what has been quite a long journey to get to this stage, and my noble friend on the Opposition Bench for his skill in taking the Bill through and for paying tribute to the Member of Parliament in the other place for picking it up as well.

All I will say, finally, is that the Bill has my wholehearted support and I will do anything possible at any time, any hour, to make sure that it gets on the statute book.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
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My Lords, it is a pleasure to take part in Second Reading. In doing so I declare my financial services interests as set out in the register as adviser to Ecospend Ltd. I fully support the Bill and congratulate my friend the noble Lord, Lord Kennedy, on bringing it. He, as much as anyone in this House, has backed mutuals, friendly societies, credit unions and all those organisations doing so much for so many people right across our country. It was also a pleasure to have the pilot of the Bill then followed by a pilot speaking on the Bill. I am going to keep my feet firmly on terra firma and stick to the financial facts, because in no sense is this a minority matter: 25.8 million of us avail ourselves of building society accounts and services, and they have assets racing towards £400 billion.

If we are talking about levelling up in this country, we should also talk about levelling the playing field for building societies, which do such good work in all our communities. In saying that, I thank the Library for its excellent briefing and the Building Societies Association for its briefing and for everything it does to represent this important part of our economy and society. This Bill will look not only at the capital requirements and some important corporate governance matters, but in doing that it will increase scale, growth and competition across our financial services sector. Those are three excellent elements at any time but are critical when we look at the current macroeconomics not just of the UK but internationally. I am delighted to support this Bill and its provisions. It also updates things by enabling virtual, real-time participation in AGMs. It aligns very much with what other countries have been able to enjoy for many years.

I have just three questions for my noble friend on the Front Bench. First, when will the secondary legislation be brought into being? The Explanatory Notes say “as soon as possible”—does that mean before the summer? It certainly sounds better than “in due course”. While the Bill itself is critical, it is as critical that we get the secondary legislation through in a speedy fashion to enable the full impact of these changes to be felt by people up and down the country, and indeed the institutions themselves.

Secondly, what is the Government’s current position on mutuals in general? So many elements of our society—so many economic and social issues—can be addressed by an increased focus on and enablement of mutual structures right across society. What is their current work on mutuals across the piece? They were extraordinarily influential when they first came into being and their potential impact could never be more needed than in the time we are currently experiencing.

Allied to our discussions this morning, have the Government considered a potential mutualisation of the Post Office—obviously once we are through all the current issues and the liabilities therein? Does my noble friend not agree that a mutualised structure could work incredibly well for such an organisation—a brand that has been part of our society and high streets for over half a millennium? We need a positive Post Office. We need to support all those excellent sub-postmistresses and sub-postmasters, up and down the country. What sensational new chapters could be written for the Post Office and the communities in which it operates? Mutualisation could be at the heart of that.

So I fully support the Bill. I think it will have a positive impact in short order. Scale, growth and competition will deliver economic, social and psychological benefits, increase financial inclusion and well-being and drive possibilities for individuals and small entities right across the United Kingdom. I wish it swift speed into statute.

Baroness Kramer Portrait Baroness Kramer (LD)
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My Lords, we on these Benches support the Bill. The main, important provision here is to exclude MRELs, minimum requirements for own funds and eligible liabilities, from the wholesale funding limit for building societies. I had rather hoped that the noble Lord, Lord Kennedy, would explain in opening what MREL was; he wisely avoided that task, so I will just explain it in one line for those who do not spend their time in financial services debates. In effect, it is a layer of debt that automatically converts to capital in case of a failure of the institution, with the notion that that would then protect the taxpayer. I hope that is an adequate summary.

This Bill carefully does not challenge the principle of having that layer of protection but stops the double-counting that goes on when the current rules are applied to building societies, in contrast to banks. I and other members of my party have been calling for years for the unique characteristics of building societies to be accommodated when the UK regulator sets the MREL rules. All of that is permitted under the Basel III regime from which MREL emanates—the regime that came into play after the financial crisis of 2008 to try to find ways of protecting global economies from failures within the financial services sector.

I am also very conscious that raising the non-preferred or subordinate debt, which is the typical constituent and primary instrument of the MREL layer, is very difficult for building societies to do at a reasonable price. It is a very limited market, so having double-counting in the building society system was, frankly, reasonably unforgivable. I take the view that the regulator could have sorted this all out without primary legislation; I am told that the Treasury for a while thought the same but has decided that primary legislation is necessary. So be it. If it is necessary, I am glad that we have it in front of us today.

Like others, we on these Benches are convinced that a revitalised building society sector can fill the geographic and demographic gaps in our financial services provision. The sector and mutuals generally play a crucial role in bringing financial services, including mortgages, to a broader section of our population, especially first-time home buyers.

However, in the context of what some would call an argument for weakening a resolution regime, I should say that I am not going soft. I remain deeply concerned at the steps taken by this Government and the financial regulators to water down the protections brought in after 2008 to prevent a repeat of that kind of financial crisis. Elements of Solvency UK, parts of the proposed Edinburgh reforms, the breaching of the ring-fence in HSBC’s purchase of Silicon Valley Bank UK and the lifting of the cap on bankers’ bonuses are all examples of key shifts that have begun to undermine the protections that were put in place. When these issues are raised, the Government typically say—I wonder whether they will do so again today—that we can afford to encourage much more risk in the financial sector because we now have a powerful resolution regime in place, of which MREL is a key part.

This is not the day to go into detail, but I hope that parliamentarians are aware that, in the two instances when we have had bank failures in the global banking sector following the creation of the resolution regimes, Governments have chosen not to use the regimes, because the collateral damage from enforcing the bank failure and the consequent almost wiping out of those who are holding the preferred debt that is part of MREL, as well as the shareholders, has been assessed as being so great that, in effect, the taxpayer has become the means of resolving the problem. The two examples are the failures of Silicon Valley Bank in the UK, including its UK operations, and of Credit Suisse. The US, UK and Swiss Governments all looked in the face of that resolution regime and decided not to exercise it. This stresses the importance of not having a crisis in the first place—which takes us back to making sure that those initial protections remain strong and powerful.

The other features of this Bill make sense to me, so I will not elaborate. I do want to say quickly that I am conscious that some noble Lords—I have had letters about this—wish to use this Bill to challenge some aspects of the Nationwide purchase of Virgin Money. It is important to say that amending this Bill will simply kill it, as it is a Private Member’s Bill, which would achieve nothing for anyone. So I hope others will support the Bill and I wish it swift passage.

Lord Livermore Portrait Lord Livermore (Lab)
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My Lords, I congratulate my noble friend Lord Kennedy of Southwark on his opening speech and pay tribute to him for not only sponsoring this Bill but his lifetime of commitment to building societies, mutual and friendly societies, credit unions and the wider co-operative movement. I note that some of the principles of this sector are democratic member control, autonomy and independence—not, perhaps, principles you might always associate with a Chief Whip.

I also congratulate my honourable friend in the other place, Julie Elliott MP. Drafting a Bill that generates strong cross-party support and, hopefully, becomes law, is the result of tremendous hard work, working painstakingly over many months and engaging constructively with civil servants and Ministers. I know that she has worked closely with Labour’s sister party, the Co-operative Party, and the wider mutual sector, including the Building Societies Association and Nationwide.

We enthusiastically support the Bill. As my noble friend Lord Kennedy set out in his opening speech—and as the noble Lord, Lord Naseby, said—modernising the legislation around building societies is long overdue. The Bill would enable building societies to compete on a level playing field with banks. It would cut red tape by removing outdated corporate governance requirements, which building societies face but banks do not. Crucially, it would also support first-time buyers by enabling building societies to lend more.

Building societies direct a greater proportion of their lending to first-time buyers than any other part of the financial services sector; it accounts for over 55% of their lending. They supported 70,000 first-time buyers in the first three-quarters of 2023 and a total of 360,000 first-time buyers since 2020. That is over £63 billion provided to help people buy their first home.

That is why the Bill is so important: it will empower societies across the UK to raise more funds. It could unlock billions of pounds of additional lending capacity, helping families and boosting the UK’s future prosperity and economic growth. For example, every £10 billion of new lending capacity secured through these changes potentially supports an additional 20,000 first-time buyers.

Building societies have never been more important in the UK’s economy and public life. During the cost of living crisis, many families have needed to use their savings in the face of rising energy costs and food prices. But building societies have continued to support people to save, bucking the trend of the decline in saving balances that we have seen across the wider sector. In the first nine months of last year, they attracted £18.9 billion in cash savings, supporting people to build financial resilience during this difficult period.

That is why Clause 1 is so important: it allows building societies to exclude funds accessed from the Bank of England in stress scenarios, types of loss-absorbing debt instruments, and sale and repurchase agreements from the funding limit. It will level the playing field with banks and provide that extra level of protection for building societies during difficult times, so that they can continue to support their members for many decades to come.

In recent years we have seen many building societies adapt to new challenges and adopt exciting technologies and digital ways of working. During the pandemic, Leeds Building Society, finding that requests for mortgage deferrals had increased to 2,000 a day, increased their use of robotic automation technology to create a fully automated web form for customers. At Nationwide, a team of mortgage, technology and AI specialists trained the society’s virtual assistant to handle common Covid-related mortgage queries. Principality Building Society has delivered an online mortgage payment holiday service, in partnership with the fintech company Podium Solutions. The service allows members to access a mortgage holiday repayment calculator to better understand their mortgage outcomes.

These are examples of why the changes introduced by Clause 2, which would allow real-time virtual participation in annual general meetings, are long overdue. Building societies have proven time and again their ability to innovate and adapt to changing consumer behaviours. There is no reason to subject the sector to outdated restrictions that do not apply to the wider financial services sector. Likewise, Clause 3 paves the way for reducing the administrative burden of executing documents, with similar provisions already in place for banks.

Labour has long called for modernisation of the Building Societies Act to level the playing field with the wider financial services sector. Indeed, it was a key commitment in our financial services review published earlier this year. We believe that more can be done to unleash the full potential of building societies and the wider mutual sector. That is why our financial services review set out Labour’s pledge to double the size of the co-operative and mutual financial services sector in government.

I once again congratulate my noble friend Lord Kennedy on his opening speech and thank him for his sponsorship of the Bill. It is a vital and important step forward, and we gladly give it our full support.

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
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My Lords, I congratulate the noble Lord, Lord Kennedy, on introducing this important Bill to your Lordships’ House. It will help to support the future growth and success of the mutual sector. The Bill has been warmly welcomed by the building societies sector and has cross-party support. It was a veritable highlight in the day of my noble friend Lord Naseby, and he is of course right.

My remarks will be relatively brief, covering two main elements. First, I will look at the detail of the Bill, although many noble Lords have already set it out very clearly. Secondly, I will set out further insight on the Government’s support for the mutual sector. It has been a widespread message from across all Benches in your Lordships’ House today that the mutual sector plays an important role in the UK economy.

Building societies are one of the best-known types of mutual organisations. There are 42 building societies providing mortgage and savings products to around 26 million members. When considering the future of these important institutions, it is right that we reflect on their uniquely British origins.

As the noble Lord, Lord Kennedy, noted, the global building society movement began nearly 250 years ago, in Birmingham, when Richard Ketley established Ketley’s Building Society. It had a very clear purpose: to combine resources from its members, and build a shared fund from those resources that members could draw from to purchase land and construct a home. Like all effective movements, it was much greater than the sum of its parts. As a result of its success, throughout the 19th and 20th centuries more building societies formed across the nations and regions of the United Kingdom. Today, the 42 UK building societies hold total assets of over £500 billion.

The mutual ownership model improves the financial resilience and inclusion of individuals by rooting these businesses in their local communities. The Bill will help to support the prosperity of the building society sector so that it can continue to anchor those roots and to grow.

On the substance of the Bill, the Government support the vision set out by the noble Lord, Lord Kennedy. We agree that the Bill will enable building societies to compete more effectively with retail banks and to better support their members. There are three key measures. First, the Bill will exclude three key sources of funding from counting towards the building society wholesale funding limits; I am grateful to the noble Baroness, Lady Kramer, for providing a little more insight into what exactly the funds are. Under the Building Societies Act 1986, building societies are required to obtain at least 50% of their funding from individual retail deposits, and that will continue. All that is happening is that some of the funds will be excluded from the calculation, meaning that the ownership model will not be diluted. This will enable building societies to raise additional wholesale funds.

The second element, as highlighted particularly well by the noble Lord, Lord Livermore, is that building societies will be able to continue to develop their use of technology. The second part speaks to enabling real-time virtual participation at building societies’ meetings. It will make meetings more accessible to members and might therefore encourage greater support and participation from the membership. It also brings building societies more in line with retail banks.

Thirdly, the Bill will provide building societies with greater flexibilities regarding their funding and corporate governance requirements in relation to common seals and the execution of documents, aligning them with changes made to company law. It will support them in their work serving their members, as well as providing diversity to the UK’s financial services industry.

It is important to note that the changes are supported by industry. As my noble friend Lord Naseby stated, it has been quite a long journey, though not too long as the consultation for the changes occurred from December 2021 to February 2022. There were five responses, with most building societies responding through a single response from the Building Societies Association. All responses welcomed the amendments that will be delivered through the Bill. There are other amendments that were consulted on and are not included in the Bill; the Government are currently progressing these through secondary legislation.

My noble friend Lord Holmes of Richmond asked when the secondary legislation set out in the Bill will be brought before Parliament. I am afraid I can go no further than to say that it will be following the Bill’s Royal Assent and when parliamentary time allows.

To reassure my noble friend Lord Holmes, I will now say a few words on the wider mutuals sector and confirm that the Government are absolutely behind the mutuals sector. There are 9,000 mutuals operating across many sectors in the UK. They are rooted in their local communities and they want to serve their members and work towards a better society. However, despite their social mission, mutuals are not charities. They are thriving businesses with a combined revenue of £88 billion in 2022, employing over 433,000 people. So it is indeed not a minority matter, as my noble friend Lord Holmes noted.

It is due to their economic and social significance that the Government have been and continue to be fully committed to providing an array of support for the whole of the mutuals sector. For example, we are funding the Law Commission to conduct reviews of the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992. These pieces of legislation underpin the co-operative movement and friendly societies sector respectively in the UK. These reviews will set us up for the most comprehensive modernisation of the sector for a generation.

Last year, the Government supported the Co-Operatives, Mutuals and Friendly Societies Act, which achieved Royal Assent in June 2023. This enables the Treasury to provide co-operatives, mutual insurers and friendly societies with greater flexibility in deciding what to do with their surplus capital. The Government will consider the regulatory options to enact this legislation. However, in the first instance we are directing resources to the Law Commission review, to examine existing legislation. Finally, through changes that the Government have made via the Financial Services and Markets Act 2023, credit unions in Great Britain can now offer a greater range of products and services. This includes hire purchase agreements, conditional sale agreements and insurance distribution services.

My noble friend Lord Holmes asked whether the Post Office might be mutualised. I am aware that the trade body Co-operatives UK recently met with postmasters, postmistresses and the Department for Business and Trade to discuss what potential there is for mutualisation of the Post Office. So I welcome the views of my noble friend Lord Holmes and note that discussions are taking place. One does not know where they will end, but it is certainly an option that is on the table. The Government continue to seek opportunities to support the mutuals sector and those who might wish to join the mutuals sector in this country.

In conclusion, I have today outlined both the Government’s support for the mutuals sector and how this Bill will support the future success of UK building societies. I note again the support for the Bill from across your Lordships’ House and reiterate the point made by the noble Baroness, Lady Kramer, that any amendments to the Bill would probably cause the Bill to fail, which is not in the interests of the sector and not I think the will of your Lordships’ House. This is a worthwhile and necessary Bill. It updates the law in relation to building societies’ funding and corporate governance. Again, I thank the noble Lord, Lord Kennedy, for introducing this Bill to your Lordships’ House and hope that Members across the House will recognise its merits.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab Co-op)
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My Lords, I thank all noble Lords who have spoken in this debate. My noble friend Lord Naseby’s support for the Bill, and his support of the mutuals financial sector over many years, have been very welcome. He is highly respected in the sector. It has been a pleasure to work with him on these issues over many years.

The noble Lord, Lord Holmes of Richmond, in his support for the Bill, highlighted the updating that enables virtual meetings to take place. He made an important point about when secondary legislation would be brought into force. He used the words “scale”, “growth” and “competition”. I very much agree with the noble Lord on those points. We are in complete agreement. I am grateful to the noble Baroness, Lady Kramer, for her support of the Bill and for setting out MREL and explaining it much more clearly than I could have done. I thank her very much for that. It is much appreciated.

My noble friend Lord Livermore again gave the support of His Majesty’s Opposition for the Bill. I am grateful to him. He said how important the Bill was to enable additional lending capacity to enter the market, allowing people to borrow funds and buy their own homes. My noble friend referred to me being the Opposition Chief Whip. I view myself as a very friendly, happy and co-operative Chief Whip—particularly when people are agreeing with me.

I thank the Minister and the Government for their support. I agree with the Minister very much about the importance of the mutual sector and those organisations that are rooted in their communities. We clearly must keep pressing the Government to get the regulations sorted out. Maybe there is scope for a few Oral Questions. Maybe it will get me off leasehold. Anyway, we will come back to that at a later date.

Finally, I refer to the points that the noble Baroness, Lady Kramer, made about any well-intentioned amendments. We can always make things better, but can I plead with noble Lords here? However well-intentioned they are, any amendments will ensure that the Bill fails. It is really important that we do not have any well-intentioned amendments turning up. This Bill does what it says on the tin. The industry supports it, the Government support it—we all support it. We now need to get it through the House with the minimum of fuss.

Bill read a second time and committed to a Committee of the Whole House.
Second Reading
Moved by
Lord Randall of Uxbridge Portrait Lord Randall of Uxbridge
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That the Bill be now read a second time.

Lord Randall of Uxbridge Portrait Lord Randall of Uxbridge (Con)
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My Lords, I am delighted to bring forward to your Lordships’ House this simple but very important Bill, which was admirably steered through the other place by my honourable friend Bob Blackman, an exemplary constituency MP and a champion of ZSL. I declare some entries in the register, of conservation charities that I am a trustee of and in particular that I am a vice-president of Fauna and Flora International.

In his speech, my honourable friend Bob Blackman paid fulsome praise to Matthew Gould and Victoria Godwin of ZSL for their briefing and encouragement. I echo that praise and praise all those staff—those working in research, those in the zoological gardens and so on—for all the hard work they do. I pay tribute to Matthew Gould’s predecessor, Dominic Jermey, who was on this a long time ago and would, I am sure, be delighted to see what is happening today.

This Bill is a simple Bill, which is rather apt because I am a rather simple person. It is asking for an equally simple change to the Crown Estate Act 1961: it asks for the Department for Culture, Media and Sport, which grants the lease, to be given the power to offer a lease of up to 150 years, as ZSL is currently limited to 60 years. This would bring the lease arrangement into line with other leases of Crown Estate law governed by the 1961 Act, as well as the Crown Estate leases for equivalent organisations such as the very well renowned and famous Kew Gardens.

So why is this needed? It is because it will give certainty of length of time, so that the Zoological Society of London can create a lot of good things. It can create the world’s first campus for nature. With that certainty, it can do a lot more on research innovations and do lots of stuff in the zoo, including making natural landscapes and giving truly accessible opportunities. I think that we all would welcome that. A longer lease will allow ZSL to modernise London Zoo, increasing visitor numbers and hence income for the charity, which is the income that is then put back into conservation and scientific research.

Noble Lords will be pleased to know that I do not have enough time to talk in detail about the incredible work ZSL has done on conservation, both at home and abroad, ranging in the UK from working on hedgehogs with HogWatch, to TB in badgers. I well remember chairing a debate at ZSL on TB in badgers, which was more difficult to chair than any Brexit debate, to be perfectly honest. However, I got through relatively unscathed. ZSL has also been working on oysters in the UK, and lots of other projects both here and of course around the world. It is recognised as being at the forefront of all that.

My first ambition when I was a very small boy—it seems a long time ago—was to be a zookeeper. I got close to that only when I became government Deputy Chief Whip, keeping control of wild creatures—and sometimes cleaning up after them. I have enjoyed visiting the zoo for I think over 60 years, and it has marked many parts of my life. I remember when I was younger seeing the famous Guy the gorilla and Chi-Chi the giant panda, who rejected the amorous advances of the Russian An-An. Those of a certain age may remember that; we had high hopes, but it was not to be. There was also Josephine the great hornbill, which was a very long-lived bird.

Latterly, I remember as a student playing football in Regent’s Park and hearing the lions roar and the elephants walking in the distance while I was fouling Opposition Members—no, obviously, that would be wrong; I mean opposition players. Then, most memorably, when I was government Deputy Chief Whip, we organised a Whips’ outing to ZSL and my Chief Whip, now the noble Lord, Lord McLoughlin, entered the Komodo dragon enclosure. They gave each other a look of equal awe, both being animals of great distinction.

This has given me over my life a fascination and an admiration for wildlife. I have been lucky enough to travel quite extensively around the world and see a lot of these creatures in their natural habitat, and I have seen the conservation work going on. However, it was that initial visit to the zoo, where I could see the animals at close hand and smell them, which gave me this lifelong passion for wildlife and conservation. I have had some of the happiest moments in my life at both London Zoo and Whipsnade. I therefore hope we will have mutual agreement, and I beg to move.

Baroness Featherstone Portrait Baroness Featherstone (LD)
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My Lords, if I was investing significant amounts of money in improving the structures of the zoo, I would want a very long lease in order to do that. Extending it up to 150 years will make possible the provision of modern facilities for the zoo’s residents. Obviously, there are issues about keeping animals in captivity in the middle of a city, but the benefits far outweigh the detriment, and these days animal care is superb. I suspect that the animals are treated better than many humans in our capital city—but that is for another debate.

Like many Londoners, I have visited London Zoo on countless occasions. I became a member when I first became a parent. When I was being driven mad and was at the end of my tether, I would shove—or rather put—my daughter into her pushchair and go to the zoo. It was an endless source of entertainment and interest but was also educational and magical. Our favourites were the nocturnal house and the small monkeys. I can remember on one occasion taking my daughter up to the glass. This beautiful tiny golden lion tamarin monkey put his or her hand up to my daughter’s hand and they were looking at each other and communicating. It was just such a particularly tender moment; the wonder of that stayed with us for ever.

The noble Lord mentioned Bob Blackman, whose Private Member’s Bill this is. He talked of Guy the gorilla when he introduced the Bill to the House. I remember seeing Guy for the first time when I was young. He was so huge but so human, and I had never really seen that before.

Reading through the debate on the Bill in the other place and the memories and the stories that were told, it is clear how central London Zoo has been to many generations. I did not know that Charles Darwin had conducted many of his studies at the zoo. How many of us have stood and stared at the snakes in the reptile house—since Harry Potter, anyway—half fascinated and half scared, and half expecting them to talk to us in Parseltongue?

We all have London Zoo stories to tell because it is part of our history and our future. I used to worry about the larger animals having enough space and an environment conducive to their well-being, but the larger animals have now gone to Whipsnade. There are so many important issues that London Zoo tackles. Thanks to the breeding programme, animals facing extinction are now safe for the future. Conservation programmes, animal care and breeding programmes all contribute to a vital and living entity—one where all our children can learn about, experience and enjoy seeing animals such as birds, fish and reptiles, whose variety in size and colour is awesome.

The zoo provides valuable educational opportunities for visitors of all ages to learn and experience wildlife, biodiversity and conservation. Through exhibits, educational programmes and interactive experiences the zoo raises awareness of protecting endangered species and their habitats.

The zoo is actively engaged and involved in conservation efforts, including captive breeding programmes, species reintroduction initiatives, and funding research projects. By maintaining genetically diverse populations of endangered species and supporting field conservation projects, the zoo contributes to global biodiversity conservation. The zoo also provides researchers with opportunities to study animal behaviour, physiology and health in controlled environments. These studies yield valuable insights into wildlife biology and inform conservation strategies both in captivity and in the wild.

On species preservation, the zoo houses species that are rare or endangered in the wild, serving as a safety net against extinction. Through captive breeding programmes, the zoo can help bolster populations of threatened species and provide individuals for reintroduction to their native habitats.

On public engagement, London Zoo offers the opportunity for the public to connect with animals in a way that fosters empathy, appreciation and respect for wildlife. By providing close-up encounters and immersive experiences, the zoo can inspire visitors to take action to protect animals and their habitats, and to be aware of such matters throughout their lives.

On animal welfare, London Zoo prioritises the well-being of its animals through enrichment programmes, veterinary care and habitat enhancements.

It is now time to upgrade the facilities and modernise, but it will be expensive. Some structures have historic value and therefore have to be retained but revamped, which is more expensive than simple demolition and reconstruction. Building or renovating part of the zoo also involves long-term planning and investment strategies which are aimed at achieving sustainable growth and financial viability over time. There is the initial investment in building any new part of a zoo, and the costs can be, as I said, substantial, including the expense associated with construction, infrastructure, landscaping and animal habitats. The length of time it takes to recoup initial investment costs will depend on the magnitude of the investment and on the zoo’s ability to generate revenue from new structures.

By lengthening the lease, the Bill makes the project viable for the zoo and for investors and provides the time to recover the outlay. It is important that today, we ensure the future of the zoo and the future well-being of the animals in its care. We on these Benches therefore support the extension of the lease on London Zoo and wish it every success going forward.

Lord Evans of Weardale Portrait Lord Evans of Weardale (CB)
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My Lords, it is a pleasure to follow the noble Baroness, Lady Featherstone, and I will echo a number of her comments and remarks.

The Zoological Society of London is a tremendous national asset. It provides knowledge and research in areas of zoology through its institute, and the Bill is extraordinary timely today. I have been struck by the way in which companies are now increasingly expected to report on their contribution to nature, as well as to climate sustainability, anti-slavery and such other really important factors. How can they do that unless they have proper understanding? That understanding of the scientific background to our wildlife is what the Zoological Society of London can contribute. It is important work, uniquely focused on by this institution, which is also, as has been said, actively involved in conservation. This is not just academic research but an active contribution to conservation in this country and internationally. It is a vital part of our educational infrastructure.

My daughter teaches at a school quite close to London Zoo itself, where many of the children come from a deprived background and have very limited horizons. The access that the zoo provides for those children is vital in exciting them and providing them with a wider aperture to have visibility on the world, helping their education. For inner-city children, that is so important, and something that the zoo does wonderfully.

In the same way, in recent years there has been much greater access. If you go to the zoo as a tourist, it is pretty expensive. If you are a claimant of benefits, you can access it much more cheaply. That is right, and it has greatly extended access to this tremendous location, which is very much to be welcomed. Of course, there is an economic contribution from all this. London Zoo itself and Whipsnade are great tourist attractions, and alongside their contribution to knowledge and education there is an economic benefit.

For all of this, ZSL is not a rich organisation. Unlike many of the museums, ZSL does not receive a grant in aid from the Government. We provide a grant in aid for dead animals but not for live ones, and that is challenging for an organisation that has the sort of infrastructure we see at ZSL. If you visit, it is a marvellous sight. The animals are tremendous, but it is very clear that there needs to be better investment to bring it up to date and to get the full benefit from its location and the knowledge that is there. You cannot do that unless you have a long-term horizon; this is not something that will be done quickly or cheaply. We need to provide the wherewithal and opportunity for ZSL to invest for the long term, to get the opportunities that it offers more widely and to be sustainable.

That is what this Bill does. I heartily support it and am delighted that it has come through the Commons unscathed. As the noble Lord, Lord Randall, said, this is a simple Bill but it is an important one. I very much hope that we can pass it unscathed.

Lord Bethell Portrait Lord Bethell (Con)
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My Lords, it is a great privilege to follow the noble Lord, Lord Evans of Weardale. I completely endorse the argument that he made so well about the need for a long-term horizon for the zoo and for it be given the wherewithal to fulfil that vision. I thank my noble friend Lord Randall for his clear exposition of the zoo’s role as a national institution and the love held for it by a great many in this country.

For my own part, I have a huge amount of love for the zoo. I must declare my own interests in this matter: like the noble Baroness, Lady Featherstone, I am a member of the zoo—with my four horrible school-age children. We go there very frequently. I have had the privilege and excitement of visiting Tiger Territory, with the chief executive, Matthew Gould, to see the Sumatran tigers, Asim, Gaysha and their two lovely cubs, Zac and the improbably named Crispin. That experience absolutely lifted the spirits of us all, particularly my horrible children. It engaged them very much, and we have been very frequent visitors to that much-loved national asset.

My interest in this debate, and the case that I want to make for passing this very important, short but necessary Bill, comes from my experience as a Minister in the Department of Health during the pandemic. The importance of zoonotic knowledge was reinforced very clearly to me when we were trying to understand where the hell this horrible virus had come from. All of a sudden, having people to hand who knew about the habits of pangolins and fruit bats became a matter of incredibly important national security and policy-making. I am pleased to say that we were blessed, thankfully, by an enormous amount of expertise among our academics in the UK. The noble Lord, Lord Evans, made that point very well.

International expertise is critical in this. My experience was that no conversation about zoonotic transmission takes place without a large number of people based in far-flung parts of the world, often in jungles, on sierras or at zoos and universities. That is the nature of global pandemics; they start in extraordinary places but travel very quickly around the world, thanks to the blessings of modern globalisation. Having here in the capital knowledge and understanding of these animals is absolutely critical.

Perhaps I may cite as an illustrative example one of the many academics at the zoo, Professor Andrew Cunningham. He is an expert in Darwin’s frogs and the great Chinese salamander—expertise that may seem niche in our day-to-day lives but, when there is a pandemic kicking off, my goodness, you need people like Professor Cunningham. That is why he is a member of the One Health High-Level Expert Panel. Many of the WHO, OECD and WHA-type expert panels exchange critically important information, which is the underpinning of our One Health preparations for the next pandemic—which I am afraid is just around the corner.

The zoo is a fantastic place; I love it for what it is but, as other noble Lords have mentioned, it needs modernisation. It needs a serious upgrade, not just in the fabric of the zoo—to give the animals the best possible lives and visitors the best possible experience— but to give the science the platform that it needs to be conducted in the most professional and thorough way. That is why I am grateful to my noble friend the Minister for curating this Bill, and I wish it a safe progress through Parliament.

Lord Camoys Portrait Lord Camoys (Con)
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My Lords, it is a great privilege to follow my noble friend Lord Bethell at Second Reading of this important Bill, which I welcome and fully support. I refer Members to my register of interests and my chairmanship of the UK Trust for Nature Conservation in Nepal, a UK charity which has worked closely with ZSL on conservation projects in Nepal for over 30 years, as well as being a member of the international advisory board of Nepal’s National Trust for Nature Conservation.

A longer lease will allow ZSL to modernise London Zoo, one of Britain’s most loved institutions, enabling it to increase visitor numbers and income, which in turn supports its conservation work around the world. It is no surprise that this simple Bill of two short clauses received cross-party support in the other House.

We all remember our first visit to London Zoo and Whipsnade. Opened to the public in 1847, it is the world’s oldest scientific zoo, where Charles Darwin undertook much of his research. It has been the home to animals that have inspired characters beloved by generations of children, such as Winnie-the-Pooh and Dumbo the elephant. Today, it is home to critically endangered species such as the Waldrapp ibis, the Annam leaf turtle and the Lake Oku clawed frog, as well as 10,000 other animals. It is visited by over 1 million people a year, with thousands on income support benefiting from its community access scheme, which enables visits for as little as £3.

London Zoo is more than just a place for people to see animals, though. It is the global headquarters of one of the most important science-led conservation organisations. It operates with some of the most challenging issues facing the natural world, here at home in the UK but also around the globe. Its mission is to end the extinction crisis and really support the integration of nature into all different forms of decision-making.

As my noble friend Lord Randall mentioned, among other projects in the UK it is working to restore our native oyster population after the species declined by 95% due to a combination of habitat loss, pollution, disease and overharvesting. Last year, the project’s marine conservationists successfully released 10,000 European flat oysters on to a 7,500-square-kilometre newly created underwater living reef. This was a landmark moment in the restoration of the native species to UK shores, and there are similar plans for a native oyster reef in north Wales this summer. It is also working to improve the health of the Thames, including by monitoring marine mammals to better understand and conserve these top predators, improving and restoring the biodiversity of the Thames Estuary, restoring sea-grass habitats and installing eel passes on the Thames river basin, making extra habitat available to the species.

Each year, ZSL spends over £25 million on international conservation, working in over 60 countries. People might be surprised to learn that ZSL has 127 staff based outside the UK. As I mentioned at the beginning, I have direct experience of working with ZSL from the extensive conservation work that it does in Nepal. This provides a useful example of the extraordinary global conservation work that ZSL does. If Peers will indulge me, I will say a bit about that, as it helps to contextualise what this amazing organisation does every day around the world and underlines why it is so important that ZSL’s lease at Regent’s Park is extended.

ZSL’s work in Nepal started in the early 1990s, when it first helped establish a wildlife and domestic veterinary programme in the country. It was at this point that my predecessor as chairman of the UK Trust for Nature Conservation in Nepal, the late Field Marshal Sir John Chapple, also took over as president of ZSL. Sir John’s close connections to Nepal from his days as a Gurkha soldier and chairmanship of our charity meant that he could help assist ZSL as it started its work there. As a footnote, it was at this time that Sir John worked literally day and night, sleeping on the floor of his office at the zoo, to turn around the finances of ZSL, which had recently ceased received government funding. It is excellent to see ZSL’s CEO Matthew Gould here today, albeit it is a surprise not to see him in his usual zookeeper attire. It is great that this organisation has been, and continues to be, led by people who really do roll up their sleeves and get stuck in.

Historically, ZSL’s work in Nepal began with supporting the Government of Nepal’s priority of returning the greater one-horned rhinoceros from the brink of extinction. However, since 2014, its work has largely focused on conserving the tiger in Nepal’s Terai Arc jungle landscape—an area that spans several protected areas across the country where 335 tigers and more than 7 million people share the same space and natural resources. By prioritising umbrella species such as the tiger, you create conservation benefits for other wildlife that live in the same habitat.

Over the last 10 years, ZSL has invested over £12 million into these projects in Nepal. I am proud to say that our charity has raised more than £0.5 million of funding towards this, in particular for anti-poaching units and community-based conservation. Its team in Nepal of over 20 staff has worked closely with over 20,000 community members who live around the country’s protected areas and are reliant on natural resources for their daily survival. The projects support the recovery of flagship species, such as the Indian gharial crocodile, the one-horned rhino and the Bengal tiger, as I have mentioned, while minimising conflict between wildlife and people. Having been fortunate enough to spend time with ZSL staff working on these projects, I can say that it is an inspirational experience.

Since ZSL began working in Nepal 25 years ago, we have seen a tripling of the tiger population, four of which I was fortunate enough to see in the wild during a visit to Nepal last month, and a near doubling of the rhino population, making the Terai Arc landscape one of the most successful conservation stories in the world. More recently, in line with the conservation priorities and needs of the Government of Nepal, ZSL has expanded its conservation focus to other threatened species, including the pangolin and Asian wild dog, and to critical habitats outside protected areas, such as in its support to declare the country’s first bird sanctuary—something that I am sure has cheered my noble friend Lord Randall. It has also helped to provide enhanced conservation technologies, including GSM-enabled camera traps, for monitoring tigers and key species. Its outstanding work there is globally recognised, exemplified by it recently being awarded a five-year Darwin Initiative “Extra” grant to scale up its work in three protected areas in the west of Nepal. ZSL will be working to create better human-wildlife coexistence and conflict mitigation preparedness for communities.

ZSL’s global HQ in Regent’s Park is therefore both a zoo, through which it reaches over a million people each year, and a base for extraordinary conservation. Extending the lease on its site is essential to supporting this vital work. I hope the House will join me in supporting the Bill.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, I congratulate the noble Lord, Lord Randall of Uxbridge, on sponsoring this important Bill and on its introduction. I can honestly say I have never spoken in a debate on such a short Bill before—four paragraphs in two Clauses—but length does not indicate importance, and this is a very important Bill.

I am grateful to the House of Lords Library for their briefing. The Crown Estate Act 1961 grants a lease to the Zoological Society of London, for their use of the land in Regent’s Park. This Bill seeks to extend the length of the lease, in order to carry out much-needed modernisation. I remember in 2019, when the noble Lord, Lord Gardiner, was the Defra Minister in this Chamber, the passage of the Kew Gardens (Leases) Act, which had a similar clause to extend the lease to a maximum of 150 years. Both Kew Gardens and the Zoological Society of London require long leases in order to operate and plan for the long term—not dissimilar to farmers; for farmers, a much shorter lease than 150 years is required but certainly one that provides for future planning.

Members taking part this afternoon have eloquently listed the extensive benefits of the work of conservation done by ZSL. Both at its Regent’s Park base and at Whipsnade, ZSL does a tremendous amount of work ensuring the more vulnerable of our planet’s species do not become extinct. At one end of the scale, we have the black rhino in Kenya, which has been decimated by poaching, and at the other end, our own indigenous hedgehog, with currently dangerously low numbers. Both species are iconic in their own way. Sadly, it is the intervention of the human species that has led to the decline of both those species but in different ways.

The noble Lord, Lord Evans of Weardale, referred to the essential preservation work done by the ZSL. The zoo at Regent’s Park and the wildlife park at Whipsnade are efficiently and creatively run by ZSL. I am a great supporter of zoos, and while it is undoubtedly true that animals should be living in their natural homelands and habitats if at all possible—I have been very lucky to experience some of this—this is not always in their best interests, especially when their numbers are dangerously low. The noble Lord, Lord Camoys, told us about the vital work of the ZSL in Nepal, and I am grateful to have heard that.

The work done by zoos is essential in helping children to understand the breadth of species in the world, the difference in their habitats and the need to preserve those habitats for their survival. We can all watch wildlife programmes on the television, which broaden our knowledge of the animal, bird, insect and sea-life kingdoms, but there is nothing quite like seeing live animals at close quarters. The immense wonder and awe at standing the other side of the barrier to a giraffe, or watching a chipmunk scurrying at top speed through overhead tubes and tunnels, is something I and my children have enjoyed. I want this experience for every child, if possible, as demonstrated so eloquently by the noble Lord, Lord Bethell, and his—delightful, I am sure—children. My noble friend Lady Featherstone also referred to this sense of wonder.

I want this experience for every child, as I said. It is only by demonstrating the vast number of species there are in the world that children will grow to understand how important it is to protect them and preserve their habitat. The Zoological Society of London does a first-class job in conservation, preservation and education. It does not benefit from grants, as has already been said, and needs investment in order to expand its vital work. I fully support this Bill, which will allow the ZSL to continue well beyond my lifetime.

Baroness Thornton Portrait Baroness Thornton (Lab)
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My Lords, I congratulate the noble Lord, Lord Randall, on his introduction of the Bill and on this rather joyful debate. On Report in the Commons, my honourable friend Chris Bryant MP stood up, said “I concur”, and then sat down. I intend to say slightly more than that, but we on these Benches do indeed concur.

I want to say two things. We all have our favourite animals. I have spent 50 years living in London and have visited the zoo for 50 years. I have been a member, on and off, for all that time, taking my children and their friends, my nieces and nephews, and now my grandchildren, great-nieces and great-nephews to the zoo, and I intend to continue doing so. For some reason, members of my family are particularly fond of the warthogs. I personally love the penguins, and we all really like the tapirs. We all have our favourites in London Zoo. I just hope that this debate, and the enthusiasm, passion and pride that we all have in the zoo, will be conveyed back to the staff and all the people who work there, including the researchers. They should know how much they are loved by everybody.

The second thing I want to say, which has been explained extremely well by many noble Lords, is about the importance of this very small Bill to the zoo and its future. I thank the zoo for its briefing on this. The argument that the creation of the world’s first multidisciplinary nature campus, bringing together universities from across the UK, the USA and beyond, can be achieved only if the 150-year lease happens and secures the zoo’s future seems absolutely to make the case and we do not really need to say anything more. The Bill has our full support and, I hope, a fair wind.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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My Lords, I too thank my noble friend Lord Randall of Uxbridge and congratulate him on bringing forward this short but very important Bill. In opening, he declared some of his interests. He is a long-standing and passionate supporter of the other species with which we have the privilege to share our planet. That is something he showed throughout his time as a Member of Parliament in the other place, and which I had the pleasure of witnessing when I worked with him in 10 Downing Street when he was a member of the Policy Unit under Theresa May. It is reflected in his choice of neckwear today—if I spot it correctly, those are giraffes on his tie—in his Twitter handle, where he tweets as @uxbridgewalrus, and in his coat of arms, which contains a splendid heraldic joke. He is a keen ornithologist and, with self-deprecating humour, has included a bearded tit on his coat of arms.

I thank my noble friend for stewarding this Bill and for the way he introduced it. This is also an opportunity for me to echo the thanks that have been paid to my honourable friend the Member for Harrow East, Bob Blackman MP, who championed the Bill in another place, working with my honourable friend Julia Lopez, the Minister for Media, Tourism and the Creative Industries.

Noble Lords might wonder why it falls to me as Minister at DCMS to respond, rather than a Minister from Defra. My department’s interest in this Bill lies in the location of London Zoo, within Regent’s Park, the site on which the extension of the maximum lease term that the Bill seeks will be enacted. Regent’s Park is under the management of the Royal Parks, which are sponsored by my department. Ultimately, the Royal Parks are owned by the Crown, and responsibility for them lies with the Secretary of State for Culture, Media and Sport.

Under Section 7 of the Crown Estate Act 1961, the maximum lease term that may currently be granted to the Zoological Society of London is 60 years. As noble Lords have pointed out, this Bill seeks a small amendment, extending that to 150 years. It does not guarantee an automatic extension and it will not affect other parts of Regent’s Park.

Establishing the mechanism for a longer lease term will bring the Zoological Society of London in line with other, similar organisations. The noble Baroness, Lady Bakewell of Hardington Mandeville, rightly referred to the Bill brought before Parliament in 2019, which extended the maximum allowable lease for the Royal Botanic Gardens in respect of land in Kew Gardens from 31 years also to 150 years.

The Zoological Society of London’s lease was most recently renewed in 2021 for the current maximum term of 60 years, which would take it to 2081. However, as a well-managed and forward-thinking organisation, it wishes to further extend the maximum lease term in order to secure the longer-term investment needed for the continued development of its historic, important and much-cherished site.

The proposed change is uncontroversial, as has been reflected in the debate today, and will have a positive impact on the organisation. The extended lease term would enable the organisation to build its resilience, develop strategic relationships and increase the scope for potential commercial and philanthropic partnerships to support its growth long into the future.

We have heard from the Zoological Society of London that the impact of its work is currently being curtailed by the legislation that restricts the lease. The extension of the lease will allow key partnerships to be activated, which will help further unlock the society’s aims to offer immersive and accessible ways to connect people with nature, and to give the animals in its care the safest, most stimulating and natural environments.

The society’s impact extends beyond the premises in which it is based. London Zoo is an important and unique part of our capital’s heritage, culture and tourism. It is the capital’s 10th most visited attraction, contributing over £24 million annually to London’s economy and over £54 million to the national economy. It is also the world’s oldest scientific zoo, operating since 1828, and a pre-eminent force in wildlife conservation and biodiversity. The society works around the world, in regions as varied as Polynesia, India, Mongolia, the Caribbean and, as my noble friend Lord Camoys eloquently set out, Nepal.

In addition to the world-leading research and conservation science carried out by the 140 scientists in its Institute for Zoology, the organisation’s work protects and restores wildlife in 69 countries, from hazel dormice to the critically endangered European eel. In the coming months, London Zoo will return the previously endangered Guam kingfisher back into the wild, and recently, as my noble friend Lord Bethell pointed out, three endangered Asiatic lion cubs were born at the zoo. Neither they nor my noble friend’s own offspring could be described as “horrible”.

The zoo’s conservation of native UK species includes running oyster nursery projects, which a number of noble Lords mentioned, monitoring wild shark populations off Wales, the mapping and promotion of conservation strategies for hedgehog populations across London, and mapping species in the River Thames.

Since its opening, the zoo has achieved many firsts, including the first reptile house, public aquarium, insect house and children’s zoo. I think that is a zoo for children to enjoy, rather than be kept in. It is a historic asset worth championing and protecting long into the future.

Many of the zoo’s assets, beyond the wildlife, have notable architectural significance. Leading designers have contributed to its built environment, creating a collection of buildings that include two grade 1 and eight grade 2 or grade 2* listed structures. Of these, the penguin enclosure, completed in 1934, designed in the international modernist style by Berthold Lubetkin, remains a cultural icon, hailed as a classic of modernist architecture upon its completion. It featured in an episode of “Agatha Christie’s Poirot”, and recently in the video for a song by Harry Styles. The Snowdon Aviary, designed in 1960, was a pioneering project that would inspire future generations of architects.

Advances in our understanding of animal welfare have shown that many of these structures are, sadly, no longer suitable for their intended purposes, as they were once thought to be. The Zoological Society of London is therefore working hard to reimagine these spaces in new, innovative and sustainable ways, while ensuring that conservation remains at the core of its work and that it continues its important work caring for endangered species. That includes, as the noble Baroness, Lady Thornton, said, the creation of the world’s first campus for nature—a multidisciplinary centre of research and innovation dedicated to protecting biodiversity.

The zoo is also committed to making itself accessible to all. Last year, the introduction of a community access scheme helped families with lower incomes visit the zoo for just £3 a ticket. The noble Lord, Lord Evans of Weardale, spoke of its importance to schoolchildren from challenging backgrounds, including those who live nearby. The zoo puts on audio-described tours, sign-language tours and early-opening mornings for visitors with autism and neurodiverse needs. More than 80,000 students visit the zoo each year to learn about wildlife, conservation and the impacts of climate change.

In 2026, the Zoological Society of London will celebrate its bicentenary, and I am sure that noble Lords will wish it success over the next 200 years and long into the future. Looking forward, the society has ambitious plans to modernise and redevelop its site, creating naturalistic, multi-species zones that will allow animals to thrive, as well as this important new biodiversity campus.

It is a pleasure to echo the praise that has rightly been showered upon the zoo today, and to support this small but important Bill, which is part of our work to ensure that the zoo and the Zoological Society of London can carry on their important work for many years to come.

Lord Randall of Uxbridge Portrait Lord Randall of Uxbridge (Con)
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My Lords, I thank all those who have taken part in this joyful debate, as described by the noble Baroness opposite. It has been a great pleasure to hear all the contributions. The noble Baroness, Lady Featherstone, mentioned particularly the therapeutic nature of access, which I have experienced over the years. I am very grateful to the noble Lord, Lord Evans, for his contribution on access and the important conservation work.

My noble friend Lord Bethell was exaggerating, I am afraid, about his children, as we know that they are very, very nice children. I should say that I forgot to mention that I am a member, and have been for some time, and so are my children and grandchildren. I would recommend any Member of your Lordships’ House to join, so that, if it is all getting a bit much for them here, they can just get on the underground, walk across Regent’s Park and talk to the animals that do not talk back. My noble friend also mentioned the incredibly important work that has been going on. The Covid pandemic has made it more important that we understand zoonotic diseases.

To the noble Baroness, Lady Bakewell, I say that a short Bill is the ideal Private Member’s Bill. Speaking as the Friday Whip for many years down the other end, I can say that this is ideal, as you cannot put too many amendments down. I see there was an attempt by somebody who did it just to tease us, but it is the ideal Bill, not only because you will get it through but because it is very easy—particularly because I do not have to answer any questions.

Finally, I thank my noble friend the Minister—apart from when he divulged some of my secrets, which I thought I had kept quiet. I was obviously mistaken in that. I am delighted that we have got to this stage. If we are lucky enough to pass this Bill, I would put it at the very top of my achievements in Parliament.

Bill read a second time and committed to a Committee of the Whole House.

Second Reading
Moved by
Baroness Young of Hornsey Portrait Baroness Young of Hornsey
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That the Bill be now read a second time.

Baroness Young of Hornsey Portrait Baroness Young of Hornsey (CB)
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My Lords, I declare my relevant interests: I am a patron of Anti-Slavery International, one of the sponsors of the Bill, and an honorary associate professor at Rights Lab at the University of Nottingham, where I also hold the position of chancellor. I express my gratitude to colleagues in the House and outside the House, especially Sian Lea from Anti-Slavery International, all colleagues at the Corporate Justice Coalition, and those in the fashion industry and at GoodCorporation. Consultation with businesses has been at the forefront of thinking about the Bill.

In many respects I am disappointed to be standing here today with this Bill. I often think about those who fought for the legislation that would abolish the enslavement of and trade in Africans in the 19th century, and wonder which of them would have thought that, almost 200 years later, legislators would still need to develop laws seeking to eliminate the gross violations and abuses that we know far too many endure in supply chains across the world today. That abhorrent trade was accompanied on a grand scale by deforestation, with a medium-sized galleon taking around 4,000 trees to construct. We may like to distance ourselves from that history, but it has become increasingly clear that, despite the efforts of organisations such as Anti-Slavery International, and despite the impact of the Modern Slavery Act on transparency in supply chains, too many commercial and public entities do not feel obliged to identify and prevent human rights and environmental harms in their supply chains.

What has brought so many commercial bodies, NGOs and trade unions to the conclusion that we need such legislation? We are in an era of complex corporate structures, where businesses operate with hyperextended supply chains. This is combined with the UK’s current legislative shortcomings, in failing to hold companies accountable for their value chain impacts. This presents substantial obstacles for victims seeking justice. This Bill highlights a critical need for new legislation to ensure corporate accountability and to protect human rights and the environment.

Forced labour continues to be a widespread and persistent issue within the supply chains of UK companies, and indeed companies elsewhere, and public authorities. The roots of this can be found in weak governance, poverty, discrimination and so on—things with which I am sure we are all familiar. There is also the fact that business models are focused on producing low-priced goods, turned around very quickly, and that companies have extensive outsourcing and long, globalised supply chains. These factors also contribute to forced, abusive and exploitative labour, and environmental harms.

Added to that is the continued reliance on weak auditing and certification schemes, and attempts to block workers’ access to their rights, such as restrictions on unions. This has produced the current situation, whereby these abuses take place on an all too regular basis. We believe that a due diligence obligation must cover all internationally recognised human rights and environmental standards.

There are connections between the environment and human rights. Some people have questioned why we have put these two together in the Bill, although it has to be said that the majority of people, particularly in businesses, are supportive of that. To clear this up, connections between the environment and human rights have been increasingly recognised by Governments, courts, and international organisations and societies. This is demonstrated by the unique and disproportionate way in which climate change and other forms of environmental damage impact vulnerable and marginalised groups, including increasing their vulnerability to modern slavery.

The United Nations guiding principles on business and human rights were seen as the first global standard for preventing and addressing this. The legislation that we are proposing would put legal responsibility on businesses, including the financial sector, and public authorities to prevent human rights and environmental harms in their value chains, and to conduct human rights and environmental due diligence as part of that prevention activity. The legislation would also allow victims of corporate abuses to access justice before the UK courts. This is a step forward from the Modern Slavery Act, in line with some of the most forward-thinking laws that are being developed globally, to push for corporate accountability for actions which contravene fundamental human rights. These principles, outlining how companies should undertake human rights due diligence by identifying, assessing, preventing, mitigating and accounting in order to address the potential for negative human rights impacts across operations and in value chains, have been widely accepted by Governments. Indeed, we are signed up to those principles.

A key point of the due diligence framework is that businesses should be proactive—this is critical—in addressing potential and actual negative impacts, and think in terms of harms and risks to people, not just to their own companies. Given that so many states have signed up the framework, and given that this model of human rights and environmental due diligence has been widely adopted, why do we need to enshrine such principles in law? It is because those frameworks are voluntary. Unfortunately, it gives me no pleasure to say that too many companies, commercial and otherwise, do not feel obliged to conform to or follow those principles or to acknowledge that framework. To put it simply, the voluntary approach has not worked.

We knew at the time of the passage of the Modern Slavery Act that it was ground-breaking and a world-leading piece of legislation, and many of our major and most trusted commercial organisations led the drive for transparency and supply chains, as in Section 54 of the Act. But it is no longer the case that Section 54 is at the forefront of legislation. Perhaps most importantly, it has not been as effective as we would have hoped anyway. I will not go into the detail of its merits and shortcomings; that review has already been undertaken by a committee of noble Lords.

Currently, there are several due diligence laws. The EU has recently passed its corporate sustainability due diligence directive, and this Private Member’s Bill—COPAD, for short—builds on the EU laws and existing laws, such as the German supply chain law, the French duty of vigilance and the Norwegian transparency Act. There is also draft legislation being considered in Belgium, Austria, the Netherlands and South Korea.

I realise that no Government want to impose burdensome procedures on business, but to claim that this proposed legislation would be too onerous and cumbersome is to miss the point. The Bill has been proposed and supported by businesses—again, by some of our most trusted and successful commercial entities.

Much is packed into the Bill, but I want to make sure that other noble Lords have the chance to express their opinion and, indeed, perhaps to suggest where we might wish to rethink some of the clauses in the Bill. We are open to receiving amendments.

If we adopted COPAD, we would be more aligned in terms of trading with leading global counterparts and we would be able to ensure a level playing field for business. That is the term that frequently comes up with the businesses with which we have consulted—to make a level playing field for those businesses that want to do the right thing. Such legislation aligns very much with the trade statement commitments that we made in 2023.

I started with historical references—and I know that we like to distance ourselves from that particular period of our joint histories and articulate the abhorrence we feel at that trade. But if we want truly to make a distance between ourselves and what happened then, we have to take the opportunity to right the wrongs that are currently going on around the world and affect millions of people. I beg to move.

Lord Browne of Ladyton Portrait Lord Browne of Ladyton (Lab)
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My Lords, it is a pleasure to rise in support of this Bill. In doing so, I congratulate the noble Baroness, Lady Young of Hornsey, not just on introducing the Bill but on the lucidity and moral force that characterised her opening speech.

In opening, I feel bound to observe that the Bill, or rather—I am anticipating, but I think I will be proved right—the Government’s reluctance to accept it, is part of a regrettably familiar pattern. The Government identify an injustice and vigorously concur that it must be remedied before declining to act, even when a proportionate and measured solution is offered to them.

Even if I restrict myself to the last couple of months, the Bill takes its place as but one example of this apparently contradictory approach to policy. It is true of the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill, which had its Third Reading in your Lordships’ House earlier today. It was true of my amendment to the Rwanda Bill, on which the Government were forced to concede only after weeks of self-inflicted delay. Several recently departed Ministers, and a couple of incumbents, have admitted that they understand the necessity of reversing persistent cuts to the size of our Armed Forces—but again the Government have failed to rally to a clarion they themselves have sounded. So while the Government once more offer their imitation of the deaf adder of scripture, what opportunities are they missing in refusing to support the Bill?

The Bill engages a real moral imperative. It replaces a patchwork of admittedly valuable provisions under the Companies Act 2006 and the Modern Slavery Act 2015, among others, with something that is at once clearer and more effective. Crucially, it is proportionate and realistic in what it demands. Clause 2, which establishes a duty for commercial organisations to prevent humanitarian and environmental harms in their own activities and those of supply chains

“so far as is reasonably practicable”,

is hardly demanding Promethean levels of ambition from responsible agencies. It is simply establishing in law the very least that anybody should expect.

Likewise, I point to the Bill’s stipulations around reporting requirements for companies whose income exceeds a certain level as a welcome adjustment to the current regime. The requirement that they must be both backward-looking and forward-looking is essential if they are to mean anything. Too often, reporting under the current regime involves an annual compilation of aspirations in respect of the environment and modern slavery, with far too little, if any, accountability in terms of their translation into reality.

In adopting the measures in the Bill, we would not blunt our attractiveness to inward investment or stultify our economy but ensure future regulatory alignment with France, Germany, the wider EU and south-east Asian economies that are working on similar provisions. Of course, I understand the need to avoid stultifying regulation, but in many cases it is the companies themselves that have asked for the promulgation of these measures. These include Jupiter Asset Management, Tesco, Charles Stanley plc, Legal & General, Investec Wealth & Investment, and Microsoft. If these are agents of what the current Prime Minister’s predecessor enjoys referring to as the “anti-growth coalition”, its parameters must be much wider than even she has suggested.

In 2022 the noble Lord, Lord Callanan, sent a letter to Darren Jones, now the shadow Chief Secretary to the Treasury, explaining why the Government are not minded to introduce a comprehensive due diligence framework like that proposed in the Bill. In it, he asserts that any attempt to mandate due diligence in law must be “practical” and “proportionate”, and must

“deliver tangible improvements to human rights and the environment”.

He goes on to outline the Government’s preference for “voluntary due diligence approaches” and voluntary compliance with the UN guiding principles on business and human rights and the OECD guidelines on multinational enterprises. What severe punishment awaits businesses that fail to meet this test of voluntary compliance? It is the grim prospect of the national contact point for businesses making “voluntary recommendations” and following up with businesses to implement these. Where companies or public bodies are indifferent to environmental and humanitarian concerns, or where they are an afterthought, it seems unlikely that these powers of the national contact point will be a stimulus to action.

Although I understand that there are supply chain transparency requirements in place for large UK companies under the Modern Slavery Act and some due diligence requirements because of the Environment Act, it is increasingly clear that we will be an international outlier in failing to adopt mandatory, as opposed to optional or anaemic, due diligence. We have been told of the possible unintended consequences of a more robust regulatory regime, but equally we must examine the conspicuous failures of the current approach.

Mindful of time, I will remind your Lordships’ House of just one notable public procurement failure that this legislation would have prevented. In 2015, a UK subsidiary of the Malaysian Supermax Corporation received a contract of around £350 million from the NHS. As the pandemic loomed, the NHS bought a further £311 million of PPE from a Supermax healthcare brand. By December 2021, the UK Government, in the shape of NHS Supply Chain, had named Supermax as an approved supplier, entitled to pitch for contracts worth £6 billion of UK taxpayers’ money. This was even though, three months earlier, the US Government had decided to institute a ban on Supermax products, owing to concerns around forced labour, detention, inhumane living conditions and passport confiscation. It was a further year before a High Court challenge compelled NHS Supply Chain to place a ban on Supermax products and to review their procurement processes. That is but one consequence of our current regime.

YouGov polling suggests that four-fifths of UK adults support mandatory—and active rather than passive—due diligence in terms of human rights and environmental concerns. Many of the companies upon which these obligations would devolve have requested rigour and certainty. Why do the Government neither accept this Bill nor seek constructively to amend it? In so doing they could provide far greater reassurance that neither British companies nor, more seriously still, British taxpayers’ money can ever inadvertently support the destruction of our planet or the exploitation of workers. I look forward to supporting this Bill as it makes its way through your Lordships’ House.

Baroness Coussins Portrait Baroness Coussins (CB)
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My Lords, I am very pleased to offer my strong support for this Bill, introduced by my noble friend Lady Young of Hornsey.

In preparing for this debate, I looked back in Hansard at what I tried but failed to achieve 12 years ago during the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, when I was unable to persuade the then coalition Government to accept an amendment to make it easier for victims of corporate human rights and environmental abuse in developing countries to take legal action in the UK against UK-listed companies. It was already possible to take action in principle, but in practice it was out of the question because of financial and other obstacles. I therefore sincerely hope that my noble friend will have more success with her Bill, which is much more comprehensive and coherent than anything that I proposed then.

The passage of 12 years since my lesser efforts has seen significant developments in the global consensus for the provisions in this Bill for a due diligence duty, liability and accountability. On top of that, His Majesty’s Government have also been a prominent and leading supporter at the United Nations of the Guiding Principles on Business and Human Rights, sometimes referred to as the Ruggie principles. This Bill is a logical next step and should by rights be a no-brainer for the Government to adopt.

Sadly, although support for these measures has grown substantially across business sectors and resulted in equivalent legislation in a number of other jurisdictions, the kind of abuses that the Bill is designed to prevent have persisted. This Bill is a perfect opportunity not just to provide for accountability and remedy after the fact of abuse but to be proactive and preventive.

We should be doing all we can to prevent the kind of cases that I was referring to in 2012, such as the one against Trafigura on behalf of 30,000 residents of Côte d’Ivoire who were affected by the dumping of toxic waste, or the one against Monterrico Metals in Peru, where 28 people who objected to the mining company’s development plans were detained and tortured. Other cases have involved asbestos miners in South Africa and campesinos in Colombia and Peru.

The situations that I am most familiar with, and which provide a good and helpful illustration of what this Bill could help to prevent, are from my engagement with NGOs working on human and environmental rights in Colombia. Groups such as ABColombia and the Corporate Justice Coalition have provided clear evidence of persistent abuses linked to UK companies in the extractive and other industries. These harms affect indigenous and local communities, workers and important ecosystems.

Business activities such as Glencore’s Cerrejón mine in Colombia can lead directly to widespread environmental destruction, with the consequent loss of peoples’ ability to enjoy a clean, healthy and sustainable environment. In 2020, Cerrejón’s activities were denounced by no fewer than seven UN special rapporteurs, who are independent experts assisting the Human Rights Council. One said that the company’s operations in what is Latin America’s largest open-pit coal mine had an impact on the Wayúu indigenous people, Afro-Colombians and campesinos and was one of the most disturbing situations he had ever witnessed as special rapporteur on human rights. For example, air pollution far exceeded WHO defined limits, increasing the risk of cancer and DNA damage. His Majesty’s Government should take the opportunity provided by this Bill to do something about the impact of this UK-listed company.

In addition, in Colombia community leaders and human rights and environmental defenders face immense risks when reporting human rights abuses. According to Global Witness, Colombia is the worst country in the world for killing these human rights defenders, with 60 killings in 2022.

This Bill could make a real difference, and it has the advantage of strong, widespread multisector support. UK businesses such as John Lewis, Tesco, Sainsbury’s and Twining have called on the Government to be ambitious in bringing forward urgent legislation to mandate the kind of due diligence described in the Bill. As my noble friend has said, businesses want clarity and a level playing field, and their support is echoed by investors such as Legal & General. Our own Joint Committee on Human Rights has recommended the measures before us, which crucially include subsidiaries and the whole supply chain. There is public support too: a YouGov poll showed four out of five adults in the UK backing a new law requiring this sort of proactive, preventative action by UK companies.

The Bill, as we have heard, would also align the UK with legal developments in other countries, such as France and Germany, and show that when it comes to the UN guiding principles, the UK is willing to walk the walk as well as talk the talk. The Bill is a logical extension to our innovative and world-leading failure to prevent model of the Bribery Act and builds on the ground-breaking Modern Slavery Act, which still excludes the public sector.

There is an overwhelming case for His Majesty’s Government to close the legislative gap that currently allows human rights-abusing companies to evade liability. My noble friend Lady Young’s Bill has done the heavy lifting for the Government, and I hope the Minister will be able to tell the House that the Government will now grasp this opportunity and give the Bill their full and speedy support.

Lord Prentis of Leeds Portrait Lord Prentis of Leeds (Lab)
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My Lords, the Bill before us is not a panacea for all the harms caused by our global economic system, but if passed it will be a significant milestone in the continuing work to offset the negative impacts of some companies on communities, the environment and human rights. It will create a level playing field. It seeks to tackle forced labour, child labour, sexual abuse and union busting, so endemic in global supply chains. But it is not just about corporate responsibility; it is also about access to justice for the victims.

This new UK legislation, modelled on the failure to prevent provisions of the UK Bribery Act 2010 and recommended by Parliament’s Joint Committee on Human Rights, would give teeth to the Modern Slavery Act, which we now know places few sanctions on employers who fail to comply. As Parliament’s BEIS Committee stated in 2021, in reference to Xinjiang, the Modern Slavery Act is “not fit for purpose” in ensuring that supply chains are free from forced labour.

This Bill is about having new legislation which reflects the calls for action, as we have heard from my noble friend, from so many UK businesses—from the British Retail Consortium and the John Lewis Partnership through to Sainsbury’s and Tesco—and it mirrors developments in Germany, France, Norway and the United States. Most importantly, it would place a requirement on not just commercial organisations but public authorities to conduct due diligence on their own operations, their subsidiaries and their supply chains. The public sector procured almost £400 billion-worth of goods and services in 2022 and 2023, but public service contracts are often weak, with the wrong priorities at the tender stage, poor contract management and limited knowledge of the exploitation that is happening. If public authorities are excluded, as they still are, from the Modern Slavery Act, they themselves become part of the problem.

An intensive care nurse in our health service may use electronic goods made by forced labour in Malaysia, possibly powered by solar panels made with the forced labour of Uighurs in Xinjiang province. She may be using cannulas made by child labour in Sialkot, Pakistan. Maybe her patient is then referred to a private care home, commissioned by a local authority and staffed by care workers and nurses from the Philippines who have had their passports taken by their UK employer. It is all too easy to see how public authorities have become part of the problem. That is why this Bill is so important, in ensuring that the requirement of due diligence is extended to the public sector.

I support this Bill, but with hindsight there are a couple of sections where the role of trade unions, especially public service unions across the world, could have more emphasis. Clause 3 could reinforce trade unions as key stakeholders to be consulted and Clauses 7 and 8 could include provisions to make it clear that trade unions can take the complaints of affected workers. I mention this to my noble friend only because it is unlikely that vulnerable workers in the supply chains of large companies will be aware of the new legislation or have the resources to bring a claim. Vulnerable workers in overseas jurisdictions may find it exceptionally difficult to lodge a claim with a UK regulator or court.

We urgently need new UK legislation to hold companies and public authorities to account if they fail to prevent human rights abuses and environmental harms in their operations and global supply chains. We urgently need clear and comprehensive legislation, which is vastly preferable to delaying the inevitable under the mistaken impression that inaction is more business friendly. Nothing could be further from the truth. That is why I ask this House to support the Bill.

Lord Deben Portrait Lord Deben (Con)
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My Lords, I refer to my declaration of interests, not least that I spend much of my life working with firms to help them deliver the kinds of things that are in this Bill. I must underline the fact that very large numbers of great companies want legislation of this kind, because otherwise they are undermined by people who do not take these things seriously.

However, I would not fail to support the Bill even if they did not want it, because it seems to me that there are some things that are right and some things that are wrong. This is right. It is not proper for rich people to live off poor people, or to use exploitation as a means of improving their own lives. Therefore, for me, this is the kind of Bill we in this House ought to be supporting and pressing.

Secondly, I say to the Minister that I hope he realises we will want an answer on whether the legislation now going through Parliament—which restricts the ability of public authorities to invest and procure, with these matters in mind—is going to have an exception to make sure that at least we do not make the situation worse. I am seriously concerned about that. I think it is likely that the present legislation will make the whole system much worse. That is why I feel very strongly we should support the Bill. The situation in Britain is not getting better. At this moment, we are actually legislating to restrict the proper decisions of public bodies in the way they procure and invest. So I hope my noble friend the Minister will confirm that the Bill will exclude matters of human rights so that we do not find ourselves worsening the situation.

Thirdly, I rise to point out that we are now in a community of nations which is beginning to understand the responsibility of the rich to the poor and it would be very peculiar if Britain were behind the others. We did not “take back control” in order to get worse. We would have been better had we not “taken back control”, because it turns out that that is the opposite of what has happened. But, having done so, to then make our standards worse than those of our fellows in the European Union would surely be a terrible denial of our duties.

Fourthly, I believe that this is the moment to say to the world that we are no longer going to live off others. We are going to live with others and help them to solve the global problems that are now our common problems. I refer particularly to climate change, which the noble Baroness mentioned. Things are going to get worse because of climate change; we need the legislation now, because of climate change.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
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My Lords, I start by thanking the noble Baroness, Lady Young of Hornsey, for bringing such an important Bill before the House and for giving all of us an opportunity to debate this significant topic. I also thank the many trade unions—particularly Unison and the TUC—who have campaigned so strongly in this area.

I echo the concerns raised, and that is why I am proud that Labour wants to see our businesses do all they can to make sure that they are not profiteering from the misery of others or the degradation of our environment. It is why we work both at home and internationally on this. It is why it is so important that we not only keep pace with but lead on human rights, the environment and ESG, with nations not just in Europe but across the globe.

As the noble Baroness, Lady Young of Hornsey, and my noble friend Lord Browne of Ladyton pointed out, many other nations—France, Norway, Germany and recently the EU—have been developing policy within this area. It is important that we look at the lessons they are learning and their experiences from the implementation of similar policies. We must, as the noble Lord, Lord Deben, said, be a champion for justice on the global stage, promoting human rights and environmental sustainability in everything that we do.

That is why, looking wider, Labour is committed to protecting and embedding workers’ rights in future FTAs and trade deals, including by using human rights protection clauses to tackle the use of modern slavery. The next Labour Government’s trade strategy will deliver economic growth at home, while building security and resilience into global supply chains and driving progress on fundamental issues such as climate change, anti-trafficking and workers’ rights. In line with international standards, we will assess the best ways to prevent environmental harms, modern slavery, and human and labour rights abuses in both private and public sector supply chains, including the use of due diligence rules.

As such, we are supportive of the principles of this Bill. In recent discussions on the CPTPP and other free trade agreements, we have been arguing to include them within those trade deals. Nevertheless, we have some concerns around the potential burden that this Bill could place on both businesses and public bodies, without full and proper consideration. That is why we want to properly assess the best ways to prevent these harms, while ensuring new legislation is not overly burdensome.

On the specifics of the Bill, I am keen to seek clarification from the noble Baroness, Lady Young of Hornsey, on what kind of annual worldwide turnover thresholds she envisaged for the regulations mentioned in Clause 5(1). Would it follow something like the Modern Slavery Act’s £36 million figure, for example, or would the duty be placed on a broader number of businesses? It is in no one’s interest to overly burden our SMEs or smaller organisations, which often lack the capacity to report under this or a similar duty. We must ensure that reporting mechanisms are as straightforward as possible. Currently, supply chain and scope 3 reporting is often nothing more than a guesstimate, and, as the noble Baroness, Lady Young, mentioned, there are no standards for auditing or reporting. We must look to deliver on this.

We would like to see more work done within this area, and I want to see further consultation with trade unions, businesses, NGOs and other organisations to review how best to bring this policy into action in a timely and considered manner. We want to balance the needs of these regulations with the need to minimise the burden on businesses. Although at this stage we will not be supporting the Bill, we support the principles of it. I am sure we will be back here—sooner rather than later, I hope—to put these principles into action.

Lord Offord of Garvel Portrait The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)
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My Lords, I join your Lordships in thanking the noble Baroness, Lady Young, for tabling the Bill, and I thank all noble Lords for their valuable contributions today. This debate is timely given recent developments in the European Union, and I share noble Lords’ views on the abhorrent practice of slave labour. I therefore welcome the opportunity to explain the Government’s current thinking on mandatory due diligence and why I am unable to support the Bill today.

I begin by noting that the Government are committed to tackling human rights and environmental abuses. The Government have consistently supported the UN guiding principles on business and human rights, which the noble Baroness referred to in her opening remarks. We are a signatory to the OECD guidelines on responsible business conduct for multinational enterprises, and for some time we have encouraged businesses to conduct due diligence voluntarily. Importantly, as the noble Lord, Lord Browne, mentioned, the UK also operates the national contact point, which provides a non-judicial mechanism for cases to be brought to when a company contravenes the OECD guidelines. The national contact point does important work and many of the cases that it mediates result in positive change.

Although the contact point does valuable work, the Government recognise that it is a non-binding mechanism and that harder legislative requirements also have a role to play. Some 13,000 statements have been submitted to the modern slavery statement registry under the Modern Slavery Act 2015, but the Government recognise that there is more to do. The Government have therefore committed to take forward an ambitious package to strengthen the Modern Slavery Act, which includes a proposal to mandate the topics covered in the modern slavery statement. This would mean that a company must publish details of its due diligence processes in cases where it has them.

Pressures on parliamentary time mean that these new measures have not been taken forward as quickly as many in this House would like. I understand that frustration, although I note that the Home Office has recently taken steps to update the modern slavery registry. I also urge noble Lords to consider that the Modern Slavery Act sits alongside a wider set of initiatives that are designed to tackle environmental harms and human rights abuses. Specifically, three initiatives are pertinent to this debate.

First, the 2013 timber regulations already require due diligence from organisations that place timber products on the market. Defra is building on these by taking forward new due diligence legislation in relation to specific commodities at risk of being produced following illegal land use and illegal deforestation. These regulations will be published shortly, and I encourage noble Lords to review them when they are available.

Secondly, noble Lords will be aware of significant reforms occurring in relation to public procurement and supply chains. Following a review of NHS supply chains, the Department of Health will be introducing regulations in relation to them. I note that the noble Lord, Lord Browne, drew attention to the case of Supermax, which the Government investigated. Since then, steps have been taken through the Procurement Act 2023 to strengthen the rules on modern slavery and environmental misconduct in relation to those supplying public authorities. Among other things, the Act will allow procuring authorities to exclude suppliers where there is evidence of modern slavery, even in cases where a conviction has not taken place. I appreciate, given his speech, that my noble friend Lord Deben has some concerns about this Act, and I will be happy to ask my colleagues in the Cabinet Office to take this up with him further.

Finally, the Government recognise that corporate transparency can be a powerful tool, and we are taking forward a process to assess the suitability for use in the UK of the IFRS Foundation’s recently published international sustainability disclosure standards. The IFRS Foundation’s initial standards focus on climate issues, but companies that choose to use the standards would also report on nature-related risks where they are material to their business, thereby raising greater awareness of potential environmental harms.

These initiatives demonstrate that the proposed Bill enters a crowded landscape, interacting with a wide range of existing and forthcoming legislation. I therefore worry that it would create confusion and cost for businesses, which would need to wrestle with multiple requirements articulated in competing ways. That is at odds with this House’s desire for a coherent legislative framework.

Turning to the proposed Bill, I start by observing that the evidence base for the success of mandatory due diligence remains extremely limited. A small number of jurisdictions have enacted similar legislation to the proposed Bill, but those pieces of legislation are relatively recent and their complexity can make them hard to implement, partially due the global nature of the supply chains that noble Lords have referred to.

Rather than introducing legislation to tackle both environmental harm and human rights abuses, the Government intend instead to observe how new developments unfold while taking targeted due diligence measures in relation to forest risk commodities and testing their effectiveness following implementation. For instance, Defra’s legislation will focus on a specific list of products that are connected to illegal deforestation. By contrast, the proposed Bill would require companies to make complex assessments for a potentially unlimited range of goods and services.

Moving on to the detail, I have several concerns about the Bill’s contents and I share many of the sentiments expressed on the Benches opposite by the noble Lord, Lord McNicol. Unlike the EU and German legislation, which applies only to the largest businesses, this Bill would apply to all 5.5 million companies in the UK. This would include 3 million sole traders and 2.5 million SMEs, many of which will lack the resources of the 8,000 larger organisations in our country to undertake the required checks. As a result, it runs a very real risk of creating an unlevel playing field in the UK economy, as well as creating real difficulties for suppliers in developing nations, which might struggle to provide the data required by companies in developed nations. I understand this all too well, having observed some of these difficulties just four weeks ago while undertaking—

Lord Browne of Ladyton Portrait Lord Browne of Ladyton (Lab)
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I am concerned that the Minister or his officials have perhaps misunderstood this legislation’s provisions. It proposes that the threshold for these obligations will be set by regulations, which will emanate from a Secretary of State in government and be approved by this Parliament. You cannot just aggregate all the businesses in the country and say that they will all be subject to this, when the Government themselves will have the ability to make it cut at a particular point.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank the noble Lord for that point. I think that proves the point that there is complexity here. We have a very wide matrix of businesses in this country, which need to be legislated on quite separately. That is not what is currently in the Bill.

As I was saying, there is also the issue of suppliers in the developing nations having to provide data to developed nations. I saw that myself in Colombia and Bolivia recently, in the context of discussions on climate change and sustainable development.

The Bill would also impose an obligation to conduct reasonable due diligence, with Clause 3(3) listing a series of contextual factors that are relevant when determining what can be considered “reasonable”. As drafted, this list means that companies would find it incredibly difficult to know whether they have complied with the Bill. In practice, the application of the term “reasonable” could be debated in the courts for years, leading to an unsatisfactory situation in which companies within the Bill’s scope face significant legal uncertainty. When combined with the fact that criminal offences and substantial fines rest on this term, this undermines the goals the noble Baroness seeks to achieve, as it may incentivise well-run but risk-averse companies to terminate commercial relationships entirely rather than seek to remediate issues when they find them.

Clause 8(1) would introduce civil liability for businesses that fail to prevent human rights abuses or environmental harms in their operations, subsidiaries or value chains. The Bill attempts to give businesses grounds for defence where they have conducted due diligence, but I am concerned that this provision, when applied in practice, would shift legal responsibility to UK companies, with cases being introduced against UK companies in UK courts in the first instance. It would be preferable for claims against individuals and companies that are directly responsible for harms to be brought in the jurisdiction in which they occur.

Lord Deben Portrait Lord Deben (Con)
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The reason for that, of course, is that the jurisdictions we are talking about are very often complicit in what happens. Therefore, if cases cannot be brought here, they will not be brought at all. Surely, Britain ought to be the place where you can stand up for what is right.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
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I thank my noble friend for that. Indeed, talking to Ministers in Colombia and Bolivia, we were talking very much about how we strengthen their legal position, and they want help from us to do that, so that is ultimately the direction of travel.

This issue is one of many that demonstrate that mandatory due diligence legislation is incredibility complex and requires detailed consideration and consultation, as I am confident that there is a wider range of business opinion on this issue than the organisations mentioned by the noble Lord, Lord Browne, and the noble Baroness, Lady Coussins. I thank the noble Baroness for prompting this important debate, but I urge noble Lords to wait for the forthcoming legislation that I mentioned and to support the Government’s intention to review the success of due diligence requirements as they are implemented over time.

Baroness Young of Hornsey Portrait Baroness Young of Hornsey (CB)
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My Lords, I thank all noble Lords who have spoken in this debate, particularly those who spoke in support of the Bill, which seems to be the majority. I shall draw attention to a few remarks that noble Lords made and then come back on some of the issues that the Minister raised in his final remarks.

The support from the noble Lord, Lord Browne, is very much welcomed. I appreciate and acknowledge that, in his view, it is a realistic endeavour. It strikes me that, whenever you want to bring in something progressive that aspires to make us better than we are now, there is always that pushback that says “Wait a minute. Hold on. It’s too complex. We can’t deal with this. We shouldn’t be so aspirational. It’s not going to work with this sector or that section”. I am not going to draw the obvious allusions to those that preceded this debate, but they continue. It is not just frustrating; it is incredibly annoying.

For example, to cut to some of the Minister’s remarks, when he talks about feeling frustrated about the delay in implementing the strengthening of the Modern Slavery Act, I am not trying to boast, but I introduced two Private Members’ Bills, one in 2017 and one in 2018. There has been an independent review of the Modern Slavery Act, which made a whole suite of recommendations. We were promised that Section 54 would be strengthened and that the list of suggested headings would become mandatory headings under which companies should report, and that was five years ago. Of course, we are frustrated and annoyed because nothing has happened. To say that is because there is not enough parliamentary time seems quite bizarre to me in terms of what we need to deal with in this House.

We may feel frustrated and annoyed, but meanwhile I am constantly reading reports that are sickening, distressing, depressing—whatever you would like to say—about numbers of suicides, women being forced, virtually, to have hysterectomies so that they do not have children or periods and can stand up and work all day, millions of children in child labour. And we are going to sit here and say that it is a bit complicated, it is a complex piece of legislation and there are flaws in it. Guess what? There are flaws in every piece of legislation that comes before this House and the other House, and we work through them if we have a will to do so. That is what strikes me.

Where is the real will to deal with these issues demonstrated? For how much longer are we going to go on saying that it is too much of a burden? Think of the burden on those families and on people who live in poverty, because they have no choice about the kind of employment they can seek and so are continually exploited so that we can wear cheap clothes, have nice cheap food and have a nice time as we swan around Westminster. It is just not acceptable.

On the Minister’s response, I am sorry if I am being rude or insulting, but I feel very strongly that we have had these kinds of proposals in the past, where people have sought to upgrade what we are doing, and we get the response: “Well, we can’t expect people to do this”. Actually, many SMEs have been consulted—I am quite happy to accept that it is a limited number—and have said that they want to do this.

Interestingly, when we did the consultation for the independent review of Section 54 of the Modern Slavery Act, it was businesses that were saying “Don’t have any threshold—£36 million is too high”. They wanted to acknowledge the fact that many of those sectors, particularly the fashion sector, are comprised of a huge number of SMEs. If you cut them out from the equation, you are not dealing with the problem. Of course, we are saying that these things should be proportionate and be determined by the Secretary of State, in consultation.

I had probably better finish here. I am very disappointed with the Government’s response. I am slightly encouraged by the Opposition’s response and happy to have any conversations—and to pass on contacts and networks, and so on—so that people can judge for themselves what is going on. I guess I ought to conclude now.

Bill read a second time and committed to Committee of the Whole House.
House adjourned at 1.51 pm.