House of Lords
(2 months, 1 week ago)
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Introduction: Lord Beamish
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Introduction: Lord Grayling
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Oaths and Affirmations
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Message from the King
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The Lord Chamberlain (Lord Parker of Minsmere)
My Lords, I have the honour to present to your Lordships a message from His Majesty the King, signed by his own hand. The message is as follows:
“I have received with great satisfaction the dutiful and loyal expression of your thanks for the Speech with which I opened the present Session of Parliament”.
Bread and Flour Regulations 1998
(2 months, 1 week ago)
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Lord Rooker
To ask His Majesty’s Government what plans they have to update the Bread and Flour Regulations 1998.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, although work on reviewing the Bread and Flour Regulations was paused due to the general election, I can assure my noble friend that I have picked this up as a personal priority. We have spoken to the devolved Governments about laying legislation later this year and I will update noble Lords on progress in the very near future.
Lord Rooker (Lab)
I thank my noble friend the Minister for her Answer. On 16 May, the previous Government said that the regulations for England would come forward in July, on the basis of an agreement with the four nations and the four Chief Medical Officers. There really should be no delay; this could be picked up, like other Bills are being picked up, and be done quite quickly. Is my noble friend aware of the Written Answer I received on 23 July, when I asked about the reform of the Bread and Flour Regulations? It said that it “could include” folic fortification. I want my noble friend to be more specific now than in that Written Answer and give a specific commitment that this Government will do the folic fortification of flour, as agreed by all the consultations and the previous Governments.
Baroness Merron (Lab)
My noble friend has been a tremendous campaigner. Indeed, he reminded me that this is, I believe, his 22nd Question on this matter, so I do not wish to test his patience. I absolutely assure him that, as he said, the policy is being taken forward as a UK-wide measure and all the necessary preliminary legislative steps have been taken, including the public consultations he mentioned, which were reported on earlier this year. Subject to renewed collective agreement in England, Defra will lay legislation later in 2024.
Baroness Walmsley (LD)
My Lords, I am hearing that, unfortunately, the Government are not being very ambitious in the level of fortification that they will propose. They are considering a level that will reduce neural defects by only about 20%, whereas 1 milligram of folic acid in 100 grams of flour could reduce neural tube defects by 80%, which is a massive amount. Can the Minister at least reassure me that the appropriate committees will look at the level of fortification being proposed, so that it is appropriate and safe?
Baroness Merron (Lab)
I assure the noble Baroness that that has already happened. As I am sure your Lordships’ House is aware, the proposal is to add 250 micrograms of folic acid per 100 grams of non-wholemeal wheat flour. I emphasise that this fortification would be in addition to the foods that are already voluntarily fortified, such as a wide variety of breakfast cereals, so we are not talking about just bread. The feeling among the experts, to whom we listen, and the committees to which the noble Baroness referred is that this is the right level at which we can provide reassurance, and so this is where we are focusing our efforts.
Lord Krebs (CB)
My Lords, I am delighted to hear that the Minister has confirmed that folate fortification of bread flour will proceed. However, I want to ask her about members of our population who do not eat white bread flour because, for example, they are coeliacs or gluten intolerant, or because they come from ethnic groups who get their main carbohydrate intake from other sources such as rice. In the United States, rice, maize and flour are all fortified with folate and have been since 1998.
Baroness Merron (Lab)
The noble Lord raises an extremely good point. Before we speak about the groups to which the noble Lord referred, I want to point out that fortification will not be enough in any case. We need to continue our encouragement for women to take daily folic acid supplements before conception and in the first 12 weeks of pregnancy, because doing so can prevent up to seven out of 10 cases of neural tube defects—I want to emphasise that. I will take on board the noble Lord’s very important point and ensure that it is part of our considerations.
Lord Kamall (Con)
My Lords, I start by paying tribute to the noble Lord, Lord Rooker, for his persistence in this matter. When I was a Minister, I found it rather frustrating to be told that the consultation process could not be speeded up, so I pay tribute to the Minister for the progress she has made. However, I want to ask about a possible unintended consequence. The NHS website says that folic acid is not suitable for some people: those who are allergic to folic acid, obviously; those who have low vitamin B12 levels; those who have cancer, unless they have folate deficiency anaemia; and to those who are having a course of haemodialysis or who have a stent in their heart. Given these warnings on the NHS website, can the Minister assure the House that she is confident that those who suffer from those conditions will not be harmed unintentionally by increasing the volume of folic acid in our bread and flour?
Baroness Merron (Lab)
I thank the noble Lord for his support in this area; I know that he also worked hard to make progress in it. I can give the assurance he asked for, and I would say to people that if they are concerned, they should seek expert advice about their own personal circumstances. All of the expert advice and relevant committees are content that this is the right way forward.
Lord Dodds of Duncairn (DUP)
I thank the Minister for her personal commitment to this issue. Can she give a categorical assurance that the regulations will be amended across the entirety of the United Kingdom at the same time? She will know that in Northern Ireland we have a different regulatory regime for some of these matters due to the Windsor Framework. Can she also assure the House that there will be a common approach across the United Kingdom in both timing and content?
Baroness Merron (Lab)
I know that the noble Lord takes a great personal interest in these matters and has also campaigned very strongly. The area he refers to is being pursued because we want collective agreement on this across the whole of the UK, so that we can confirm that it is government policy with absolutely no qualifications, and that everyone is moving on the same timescale. I can confirm that we have notified the EU Commission and the WTO in order to fulfil international obligations and have thus far received no responses; that is why we are able to proceed with the next legislative steps.
Lord Jackson of Peterborough (Con)
My Lords, the Minister is a great asset to the Front Bench. This is a bipartisan issue, and I pay tribute to the noble Lord, Lord Rooker, for his excellent work over the years. When I was a Member of Parliament in the other place, Shine—formerly known as ASBAH—the charity for hydrocephalus and spina bifida, was located in my constituency. I say gently to the Minister that we have been campaigning on this issue for almost 20 years, and to my own Front Bench that there is no demonstrable, empirical scientific evidence of any substantial side-effects of putting folic acid into basic foodstuffs, and that it should happen. Finally, more than 30 countries have pursued this policy; they have tackled the enduring tragedy of spina bifida and hydrocephalus, and the impact they have on families. Therefore, can we please do this as soon as possible?
Baroness Merron (Lab)
I certainly hear the very welcome points that the noble Lord makes. As we progress, this will make us the first European country to mandate folic acid fortification of non-wholemeal flour. While some European countries, including Ireland, have voluntary fortification, mandatory fortification is not the case. I and my ministerial colleagues are keen to be in this position.
Baroness Finlay of Llandaff (CB)
I am grateful to and congratulate the Minister on her perseverance on this issue and on decreasing neural tube defects. Can she also ensure that products are appropriately labelled with warnings that they are not fortified and that any woman who might become pregnant should take additional folic acid supplementation? Without that, we will not tackle the ongoing problem of neural tube defects. I do have a concern that there is inappropriate fear over toxicity, given that in 1991 there was a very good randomised controlled study. People were divided into groups, given fairly high doses, including with multiple vitamins, and compared with those on a placebo. There were no adverse neurological or other effects.
Baroness Merron (Lab)
I am grateful for the noble Baroness’s contribution and can reassure your Lordships’ House, and anyone else who may be concerned, that, as noble Lords have said, this has been gone through over many decades. Safety is paramount. On products that are non-fortified, I will have to look into this, but for those that are fortified, there will be a transition period for industry because the equivalent of some 11 million loaves of bread are sold in the UK every day but only 65% of the flour used in their manufacture is produced in the UK. We have to look at this huge diversity of food products, including biscuits and cakes, and where it is a food ingredient in ready meals and soups. It is quite an undertaking, but your Lordships’ House can be assured that we are on it.
HIV Care: Access
(2 months, 1 week ago)
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Lord Black of Brentwood
To ask His Majesty’s Government what estimate they have made of the number of people with diagnosed HIV in England who are not accessing HIV care.
Lord Black of Brentwood (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as a patron of the Terrence Higgins Trust.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, in 2022 England exceeded the joint United Nations programme on HIV and AIDS targets, with 98% of people diagnosed with HIV receiving treatment. The UK Health Security Agency estimates that between 6% and 15% of people living with diagnosed HIV in England did not access HIV care that year. Re-engaging people into HIV care is a priority for the current HIV plan for England and for the new plan that is in development.
Lord Black of Brentwood (Con)
My Lords, we know from the opt-out testing programme in A&Es introduced by the last Government that up to 15,000 people in England who are aware that they have HIV are not accessing life-saving care, with devastating personal consequences for them and profound ramifications for public health, because if you are not on medication, you can pass on the virus. Is the Minister aware of the case of a 45 year-old man, out of care for several years, who went to hospital with a headache and was found to have a CD4 count of just four. He was diagnosed with cryptococcal meningitis, an AIDS-related illness. He went blind and died three months later, one of a growing number of tragic preventable deaths. Can the Minister ensure that we get an HIV action plan as soon as possible and that this issue—with funding, if necessary—will be a key part of it, to ensure that we get those lost to care back into it?
Baroness Merron (Lab)
My Lords, Ministers have already commissioned officials for advice on how to progress the development of a new HIV action plan. On the very tragic case that the noble Lord refers to, he will be aware that since April 2022, NHS England has funded emergency departments in London, and in areas of very high diagnosed HIV prevalence, to provide routine blood-borne virus testing for HIV as well as for hepatitis B and hepatitis C in everyone aged over 16. That attention at the point of contact is crucial in this area.
Lord Fowler (CB)
My Lords, I declare an interest as an ambassador for UNAIDS. Is it not a fact that we have been extremely successful in developing the means to combat HIV and AIDS, but we still face the obstacle of stigma around the whole subject, which is a serious deterrent for treatment and continuing treatment, as the noble Lord, Lord Black, suggested? Will the Government make the fighting of stigma around HIV a priority, so that we can become one of the first countries to be absolutely AIDS free?
Baroness Merron (Lab)
The noble Lord’s campaign in this area is very well regarded, and for good reason; I certainly agree with him. The fact is that engagement in care is strongly affected by a number of factors, including a person’s well-being and quality of life, discrimination and, as the noble Lord says, stigma. That, alongside accessibility of service, will define how successful we are. I am keen that our new plan will absolutely take account of stigma.
Baroness Thornton (Lab)
My Lords, the crisis of people lost to HIV care is of course underpinned by serious health inequalities. Are the Government taking account of the pilot work by the Elton John AIDS Foundation in south London, which has successfully returned people to care through case-finding, focus follow-up and wraparound support for people when they return to clinics, thus saving the local NHS millions in the care that would be necessary if they were not receiving it?
Baroness Merron (Lab)
I can confirm to my noble friend that we are, and say how grateful we are to a number of charities, including the Terrence Higgins Trust and the Elton John AIDS Foundation. As she says, there have been pilots for emergency department HIV opt-out testing since 2018. A pilot that began in April has expanded that to 47 additional sites, and we will be looking closely at the impact of that.
Baroness Barker (LD)
My Lords, if that pilot in the 47 areas shows, as it did in London with the Elton John work, that such testing finds people who not only do not know their status but are lost to care, will that form a basis of the national plan the Government are working on? Will there be a particular emphasis on extending services to people in rural areas, who do not have the access to clinics that people in metropolitan areas do?
Baroness Merron (Lab)
Yes, and I thank the noble Baroness for making those points, which I certainly agree with. The challenge for us now is to reduce the number of people who live with undiagnosed HIV, but also to reduce the number not seeking care and treatment. For the first time, the latter has exceeded the former, which suggests that we have a challenge we must focus on in the new plan, and we will do so.
Lord Kamall (Con)
My Lords, I pay tribute to my noble friend Lord Black for his consistent campaigning on this issue, and especially for helping those with HIV. What has been learned from previous initiatives? We know that in recent years, the NHS and the previous Government looked at ways to address issues such as vaccine hesitancy, and the reluctance of some to seek tests and treatment at any time. What lessons have been learned from these previous initiatives for the HIV action plan—for example, by working with local communities and the charities that a number of noble Lords have mentioned to encourage more patients with HIV to seek treatment, especially in communities such as black and Asian communities, where there may also be a stigma, as the noble Lord, Lord Fowler, mentioned, around admitting that they have HIV?
Baroness Merron (Lab)
There is what I call a three-pronged approach to interventions to reduce the number of people not being seen for care, which is so important, as I know the noble Lord is aware: identifying people who have not been seen for care; contacting them and re-engaging them; and addressing the barriers to engagement, which a number of noble Lords have referred to. This means sustaining engagement with care in the long term and supporting people with HIV.
We will review what lessons we are learning from the HIV action plan for England, which runs to 2025, and that means we will be able properly to inform the development of the new plan. I look forward to updating your Lordships’ House on this.
Lord Cashman (Non-Afl)
My Lords, we have come a long way since the dark days of the 1980s and 1990s, when many lives were lost. Progress has been made primarily through the work of activists, NGOs, the commitment of Governments and, indeed, the commitment and leadership shown by the noble Lord, Lord Fowler, to whom I pay tribute. But we are seeing greater numbers of people disengaging from HIV care for many reasons, including stigma, mental health issues, poverty, discrimination, and the terrifying fear of isolation within families and communities. Will the Government therefore look at the projects carried out across the country, including in Greater Manchester, and, indeed, as has been mentioned, the NHS South East London Integrated Care Board project, which focused primarily on these issues and groups and successfully reintegrated people back into HIV care? Arguably, this approach must be in any national HIV action plan.
Baroness Merron (Lab)
Yes, we will be looking at all the work currently going on and at the successes—and there are many. I believe that my noble friend is referring to Fast-Track Cities, an international initiative involving cities tackling HIV through a multidisciplinary, multi- sectoral approach. There are 13 signatory cities in the UK, and all are beacons of good practice that we must learn from, including in order to find out what is not working. I also want to emphasise peer support, which has been shown to reduce self-stigma, but also to improve engagement in care and the taking of treatment, and to having low levels of virus. This area will obviously very much feature in the new strategy.
Baroness Sugg (Con)
My Lords, looking at HIV internationally, the UK has long been a proud supporter of the Global Fund. In 2022 alone the Global Fund reached over 15 million people with HIV prevention services, including 710,000 HIV-positive mothers, who received medication to keep themselves alive and to prevent transmission of HIV to their babies. Will the Government commit to continuing to support the Global Fund?
Baroness Merron (Lab)
Certainly, as the noble Baroness says, the Global Fund is crucial in HIV care. The UK remains a world leader in efforts to end the global AIDS pandemic and funds all the key partners in the global AIDS response. I confirm to your Lordships’ House that some £1 billion was recently pledged to the Global Fund. That will save more than 1 million lives, including by providing antiretrovirals for 1.8 million people, and provide HIV counselling and testing for 48 million people. It will also reach 3 million members of key affected populations with prevention programmes. We will continue to have discussions with the FCDO about the support this Government give.
Road Investment Strategy
(2 months, 1 week ago)
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Lord Snape
To ask His Majesty’s Government whether they intend to continue with the Road Investment Strategy 2: 2020–2025; and what are their plans for the road network.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the second road investment strategy is being delivered by National Highways and runs until 31 March 2025. The strategy covers the day-to-day running of the network, continuing operations, maintenance and renewals and the delivery of schemes and construction. Our plans for the future of the road network will be informed by the spending review and by the review of the department’s capital spend portfolio commissioned by my right honourable friend the Secretary of State for Transport.
Lord Snape (Lab)
My Lords, I am grateful to the Minister for that reply. Does he accept that a substantial chunk of this budget ought to be spent on repairing the roads we already have, rather than building new ones? Will he consider allocating more funds from this budget to public transport, particularly to our bus network, in view of his recent welcome announcements about bus franchising? Finally, if there is anything left over, could he put it towards the enormous deficit left by the party opposite when in government?
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend. In the current circumstances, he is a bit optimistic about having any money left. Of course, a substantial amount of the road investment strategy 2 money is, in fact, spent on the operation, maintenance and renewal of the national highways network. The review of the capital spend portfolio embraces all the modes of transport the department is responsible for, so there will be the opportunity to choose the best schemes that deliver the most for growth, jobs and housing.
Lord Geddes (Con)
Can the noble Lord confirm the singularly ill-conceived and unbelievably expensive plan to tunnel under Stonehenge to avoid congestion on the A303, when there is plenty of open land immediately to the south of that single carriageway?
Lord Hendy of Richmond Hill (Lab)
I can confirm that, following the Chancellor’s Statement and a review of the Treasury’s spending audit, which identified more than £2.9 billion-worth of unfunded transport spend this year, the scheme for the A303 at Stonehenge will no longer go ahead.
Lord Trefgarne (Con)
My Lords, can the noble Lord say what progress has been made with constructing the new junction for the A3 and the M25, when he expects it to be complete and what he expects it to cost?
Lord Hendy of Richmond Hill (Lab)
I do not have the precise answer to that question, so I will be delighted to write to the noble Lord to clarify the questions he asked.
The Lord Bishop of Leeds
My Lords, the answers we have had so far, which are welcome, refer to future strategy in terms of economics and finance, but there is another element that this Government have built into their programme, which is making long-term decisions. Is any future road strategy being looked at holistically in relation to public transport development? They cannot run in separate grooves.
Lord Hendy of Richmond Hill (Lab)
The way the road investment strategy works is that the Infrastructure Act 2015 requires a road investment strategy—known as RIS to the initiated—to be set. As I said, this strategy expires in March 2025. We might normally have expected to see the publication of a draft road investment strategy 3, for the five years beyond 2025, published by the previous Government, but in fact it was not. We are now required to do that and the Government will, in due course, do just that. It is stand- alone, but it must be recognised that the department, which is responsible for all modes of transport, including public transport, will have to consider how it spends both its capital and its revenue in the best way to achieve the targets of growth, jobs and housing.
Baroness Randerson (LD)
My Lords, more than a fifth of the UK’s emissions come from surface transport, primarily from fossil fuel vehicles, so if this new Government value the future of our planet and the health of our nation, they will reconsider road-building plans. I am pleased to hear what the Minister said about that. Will he agree that the priority for government spending on roads should first be with the £20 billion backlog of road repairs, which makes our crumbling roads very dangerous at the moment, in order to put safety first? Will he commit to the completion of the ongoing programme to bring so-called smart motorways up to an acceptable safety standard?
Lord Hendy of Richmond Hill (Lab)
The point about emissions and the environment will be covered by the capital spend portfolio review. I think potholes are a major part of what the noble Baroness referred to. The state of the roads is pretty disgraceful, and the Government are committed to doing far more on filling potholes and making roads safe than the previous Government. There will be no more smart motorways, and my understanding is that the programme to modify those already installed will be completed.
Lord Moylan (Con)
My Lords, I welcome the noble Lord’s admission that road transport contributes to growth, jobs and housing, but when one looks throughout the country, wherever the Labour Party is in power, be it in Wales, London or many local authorities, one sees increasing costs and restrictions being imposed on the motorist, many of them felt most deeply by working people who are struggling to make ends meet. Does his welcome statement today about the value of road transport mean that Labour’s war on the motorist is now at an end?
Lord Hendy of Richmond Hill (Lab)
If the objective is economic growth, jobs and housing—I am pleased that the noble Lord agrees—we should choose those transport projects that contribute the most to it in various parts of the country. I have a wry smile because he was the deputy chair of Transport for London when I was the commissioner, and between us we probably removed more road space from the streets of central London for a Conservative mayor, so I am not sure that this alleged war on motorists is quite as one-sided as he might suppose. It is very important that the highways are managed in the best way possible because transport is a facilitator of growth, jobs and housing. The projects that we are able to choose to fund in these difficult circumstances should always be the ones that deliver the most in those categories.
Lord Watts (Lab)
My Lords, filling in potholes is a temporary measure. On many of our roads, the substructure has gone because of a lack of investment over many years, especially under the last Government. Are the Government trying to do something about the long-term state of our roads?
Lord Hendy of Richmond Hill (Lab)
I agree with the noble Lord that filling potholes is a temporary measure. It is a shorthand for having the roads in better condition. I could bore the House with how the condition of roads is measured, but I will not. Filling potholes is a temporary measure; we are using that phrase to seek to improve the general condition of roads for the safety of all road users.
Lord Forsyth of Drumlean (Con)
My Lords, will the noble Lord take this opportunity to rule out introducing road pricing as part of the Government’s plans to increase the tax burden on this country?
Lord Hendy of Richmond Hill (Lab)
There are no plans for road pricing. Indeed, to clarify what I thought I said on Monday to the noble Lord, Lord Moylan, there are no plans for the withdrawal, reduced eligibility or means testing of the English national concessionary fares scheme, commonly known as the freedom pass.
Lord Ranger of Northwood (Con)
My Lords, I welcome the noble Lord to his role. I worked with him at City Hall all those years ago, and we worked on smoothing traffic flow in London to improve journey time reliability and help motorists, especially as we knew that autonomous vehicles, electric vehicles and mass-person mobility would be a key part of the public mix in future. Will he look at that as he looks to the future of the road network?
Lord Hendy of Richmond Hill (Lab)
The noble Lord recalls the project to smooth traffic. A key element of that is the use of modern technology in managing traffic signals. The Government are enthusiastic for the use of modern technology. For too long, not enough modern technology has been used in the control of traffic signals, and we will endeavour to use the latest technology to improve the flow of traffic for all road users.
Ticket Sales: Dynamic Pricing
(2 months, 1 week ago)
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Lord Moynihan
To ask His Majesty’s Government, in the light of the selling of Oasis concert tickets, what action they plan to take against (1) dynamic pricing, and (2) other ticket sale practices.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
This Government are concerned to see fans prevented from going to live events by vastly inflated prices. We will launch a consultation in the autumn on options for introducing new protections for fans buying tickets. We welcome the Competition and Markets Authority’s announcement that it has launched a formal investigation into Ticketmaster. As it is a live investigation it would not be appropriate for me to comment on the specifics of that case, but I declare an interest as one of many people who spent a ridiculous number of hours in the queue, only to have the site crash when I got to the ticket selection page, and subsequently to be told I looked like a bot.
Lord Moynihan (Con)
I warmly thank the Minister for her reply. She is right that we are not in a position to reflect on the details of the review that is under way on dynamic pricing, but the second part of my Question is a request to investigate how tens of thousands of tickets end up being harvested illegally through bots and sold on sites such as viagogo and StubHub within seconds of officially going on sale, as evidenced in the conviction of Hunter and Smith, who are the tip of the iceberg of thousands of similar touts. They were found guilty of making millions fraudulently and dishonestly by buying and reselling tickets for high-profile music and entertainment events. Is the time to act not now? We have had nearly 10 years of extensive review since Waterson reviewed. Will the Minister come forward with legislation as soon as possible to protect genuine music fans from the criminal activities of modern-day ticket touts?
Baroness Twycross (Lab)
We committed to taking action on secondary ticket sales during the election, and we are consulting in the autumn on the best ways to implement our manifesto commitment to introduce new protections for fans in the ticket market. This will include proposals to protect fans on ticket resale and a call for evidence on price transparency that will include dynamic pricing.
Lord Clement-Jones (LD)
My Lords, the noble Lord, Lord Moynihan, has been a great champion of fair ticketing for many years. When we discussed his amendments at ping-pong on the digital markets Bill back in May, the noble Baroness, Lady Jones of Whitchurch, helpfully said,
“if elected, a Labour Government would strengthen consumer rights legislation to protect fans from fraudulent ticket practices, to restrict the sale of more tickets than permissible and to ensure that anyone buying a ticket on the secondary market can see clearly the original price and where it comes from”.—[Official Report, 23/5/24; col. 1193.]
That is very specific. The Labour Party manifesto outlined plans to cap resales. Is there a plan for legislation rather than yet more consultations and reviews, as the noble Lord, Lord Moynihan, said? After all, we had the Waterson review back in 2016.
Baroness Twycross (Lab)
It is appropriate to undertake further consultation in light of recent events. If we went on just the previous consultation—I know it is something we committed to—it would not necessarily have included this. It is right that we consult further on additional consumer protections, and the Government will do so over the autumn. I hope that noble Lords across the House will take part in the consultation and encourage everyone affected by this, as so many people are, to take part.
Lord Sikka (Lab)
My Lords, the correct expression is customer fleecing, not dynamic pricing. Too many companies are profiteering while luring customers with misleading advertising, misleading prices and violation of implied sale of goods contracts. This abuse is wide- spread. Train companies, airlines, hotels, theatres, Uber, Amazon and Airbnb are some of those engaging in this abuse. We need action. Can the Minister say when the first prosecution can be expected?
Baroness Twycross (Lab)
Dynamic pricing is not illegal. Businesses must follow consumer protection law when they engage with their consumers using dynamic pricing.
Lord Kirkhope of Harrogate (Con)
My Lords, a number of us have been very disappointed at being unable to obtain tickets for Oasis concerts, yet we are concerned that a number of members of the Front Bench of the Government elsewhere have appeared on television claiming that they have obtained tickets. Can the Minister kindly confirm that no special provisions were in place to give those people an advantage over mere mortals like ourselves?
Baroness Twycross (Lab)
I cannot speak for Front-Benchers to whom I have not spoken, but I know that a number of my noble friends on the Government Benches in this House spent, as I said, a ridiculous amount of time trying to get tickets on the day and failed miserably.
Lord Londesborough (CB)
My Lords, like it or not, dynamic pricing, driven by supply and demand, has been with us for centuries and is a key ingredient of economic growth. Does the Minister agree that Sir Keir Starmer’s pledge last week to
“make sure that tickets are available at a price that people can actually afford”
is at odds with the Government’s number one mission? Is the Prime Minister committed to economic growth or—with apologies to Oasis—is this a case of “Definitely Maybe”?
Baroness Twycross (Lab)
Noble Lords will note that I have taken a deliberate decision not to quote song titles. The Minister of State, Chris Bryant, described people being able to access live events as “a joy”. The joy of live events should be available to everyone and that has to be reflected in fair pricing.
Lord Fox (LD)
My Lords, unlike the Front Bench, I am more of a Blur man myself. This all demonstrates that at the top of the tree there is a huge amount of money to be made, but every headlining band started life in small, independent music venues and it is those venues which are suffering. They are closing and really have their backs against the wall. Can the Minister tell us what plans the Government have to support the research and development of our great music industry in this country? Are they considering adopting the proposals for a smart fund whereby a small levy on tickets in big venues can be used to support the small venues that created the bands playing there?
Baroness Twycross (Lab)
In Labour’s plan for the creative industries we committed to supporting creative small businesses and defending existing grass-roots music venues, nurturing fledgling arts spaces and working to prevent the loss of cultural spaces. One of our top priorities is to work closely with stakeholders and across government to ensure that the live music sector is financially resilient, and to explore potential further opportunities for support.
Lord Stevenson of Balmacara (Lab)
My noble friend will be aware from the mood of the House that there is really quite a feeling that action is required here. On all the issues discussed so far, we have talked about the impact of the primary market and now the secondary market but, in addition to the point made by the noble Lord, Lord Fox, what about the artists themselves? Their ability to reach out to their audience is often frustrated by the way that the system works against them.
Baroness Twycross (Lab)
If I understand my noble friend’s question correctly, this is about people starting out, at the beginning of their career. He is shaking his head so I will try again. We are committed to live music. We will do everything we can to make sure that live music is accessible to everybody but that there is that connection between artists and their fan base.
Lord Hannan of Kingsclere (Con)
My Lords, I am very grateful to the Minister for confirming a moment ago that dynamic pricing is not illegal. Will she also take the opportunity to remind the House that when more people want something than there is of that something —in this case, more people wanting tickets than there are tickets—the price will naturally rise? That is not a market failure; it is what is meant to happen.
Baroness Twycross (Lab)
There is an ongoing investigation by the CMA and it would not be appropriate for me to comment on the specifics of the case. However, we need to look into whether there might be a different pricing system.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, further to the mischievous suggestion made opposite that there might have been some preference for the Government on this matter, can the Minister confirm that, unlike for Covid, there was no VIP lane?
Baroness Twycross (Lab)
I am fairly confident. I am humble enough not to count myself as somebody who would have access to that. There were, however, VIP tickets, which were way beyond my means.
Property (Digital Assets etc) Bill [HL]
Wednesday 11th September 2024
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Wednesday 11th September 2024
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Wednesday 11th September 2024
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Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill [HL]
Wednesday 11th September 2024
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Lord Collins of Highbury
That the order of commitment be discharged.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Lord Collins of Highbury) (Lab)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Arbitration Bill [HL]
Wednesday 11th September 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Arbitration Bill [HL] 2024-26 View all Arbitration Bill [HL] 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 1-I Marshalled list for Committee - (9 Sep 2024)
Lord Hacking
“Safeguarding against fraud and corruptionIn section 33 of the Arbitration Act 1996 (general duty of the tribunal), after subsection (1)(b) insert—“(c) safeguard the arbitration proceedings against fraud and corruption.””
Lord Hacking (Lab)
My Lords, before I address my amendment, I would like to express to your Lordships complete support for this Bill. I had the honour to be a member of the Special Public Bill Committee, so ably chaired by the noble and learned Lord, Lord Thomas. I sat through all the hearings and then sat with my co-members of the committee throughout our deliberations.
Perhaps I can do no better in expressing my support for the Bill than to quote from the Explanatory Notes. Paragraph 6 reads as follows:
“The intent of the Bill is to further the principle found in section 1 of the Arbitration Act 1996: to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. Thereby, the aim is to fulfil the policy objective of ensuring that the Act is fit for purpose and that it continues to promote the UK as a leading destination for arbitrations”.
I now move to my amendment and, as I do so, I express thanks to my learned friend—or rather, my noble friend—the Minister. Unfortunately, he does not take the “learned” with his name, although he is very learned. I am very grateful to him for his letter to me of 15 August on the corruption issue. I have read the entire contents of that letter and express gratitude without reserve, but I am afraid to tell your Lordships—for reasons that I will now develop—that the reply in this letter is not complete.
First, we must look at the extent of corruption and I am afraid that it is bad news. There is the Nigeria case and the judgment of Mr Justice Robin Knowles on 23 October 2023; nobody in this Committee knows more about that case than the noble Lord, Lord Wolfson of Tredegar, KC, who took the role of a senior counsel throughout the long hearings before Mr Justice Knowles. The fact is, however, that in the arbitration proceedings resulting in that case, there were two very distinguished English arbitrators—former judges of the High Court—who made a very large award of $11 billion. Because of the corruption that was found by Mr Justice Robin Knowles, that very large award had to be set aside in its entirety.
Moreover, this is not the only case where corruption has evidenced itself. The charity under the title of Spotlight on Corruption has identified three recent cases in which serious corruption was found. There was the Mozambique case before the UK Supreme Court in September 2023; the Steinmetz case before the ICSID tribunal in Paris in May 2022; and the BSG case before the LCIA in April 2019. So this is a serious problem and I remind your Lordships of what I said at Second Reading: that I have had experience as an arbitrator in commodity arbitrations relating to Ukraine and Russia, where corruption was most evident, often with the bribing of officials to obtain export licences.
Lord Hoffmann (CB)
My Lords, I declare an interest in that, since retiring from the Appellate Committee of your Lordships’ House, I have practised as an arbitrator. More to the point, I was the presiding arbitrator in the Nigerian case to which the noble Lord referred. Of course, no one could object to the sentiment behind the noble Lord’s amendment—we all disapprove of bribery and corruption—but the question your Lordships have to think about is: what does that mean we arbitrators are supposed to do in practice?
Take, for example, the Nigerian case to which the noble Lord referred. It was a claim for breach of contract against the Government of Nigeria: they were supposed to supply the claimants with quantities of gas over a very long period, but they did not do so. The question was: was that a breach of contract? If it was, what were the damages to be? No objection was made on the validity of the contract. We heard the arguments about whether there had been a breach, and we decided there had. Eventually, at another hearing, we went into the question of what damages had to be paid. Arguments were again brought, with expert witnesses on both sides, and we came to the conclusion that it was a large figure, because the gas was due to have been supplied over a period of 25 years and it all added up. That was the rub.
As the noble Lord said, at the hearing before Mr Justice Knowles it turned out that there had been some bribery and corruption in obtaining the contract and in the conduct of the litigation. None of this was known to us. So the question is: what ought we to have done? Should we have said to the parties at the beginning, “By the way, can you please assure us that there has been no bribery and corruption?” It seems an extraordinary ritual that we would have had to go through, and it would have to be the case in every arbitration.
Arbitration is a consensual arrangement. The parties have agreed that each of them will come before a tribunal, that each will present his case and that the tribunal will decide on the basis of the arguments the parties present. Is it consistent with that form of decision-making that the tribunal should attempt to dig away at a point on which the parties have not relied? Of course, if one of the parties suspects that there has been bribery and corruption on the other side, so to speak, that would enable it to resist the application, it would no doubt do so. But, in a case in which neither party raises this point, it is difficult to see what the arbitrators can do.
It is also difficult to see why that should not also be the case in ordinary litigation in the Commercial Court. Is the judge in the Commercial Court to say to the parties, “Has there been any corruption? Nobody’s mentioned it yet, but can you please tell us and inquire as to whether there’s been corruption?” It is quite inconsistent with the way in which litigation and arbitration are conducted that the tribunal should have to take that sort of active investigatory role.
As far as I can see, all that introducing this amendment would do is add a formalised ritual to the conduct of arbitrations, and it may even provide a technical ground on which a party who has lost an arbitration can say, “Well, it’s true that I can’t say there was any corruption, but the tribunal didn’t do enough to investigate whether there was, and that was a breach of its duty under this new provision in the Arbitration Act”. It would therefore create uncertainty and unnecessary difficulties in the way in which arbitrations are conducted. For that reason, I invite your Lordships to reject the proposed amendment.
Lord Hope of Craighead (CB)
My Lords, I entirely endorse what my noble and learned friend Lord Hoffmann has said, but I would like to say a word about the procedure that the noble Lord, Lord Hacking, has invited the Minister to adopt. Surely the stage of conferring with people as to what they think about this amendment has passed. This matter could have been raised in the Committee of the noble and learned Lord, Lord Thomas —it was not, of course—but now it is a matter for this Committee to decide whether or not to accept the amendment. It is as simple as that. With great respect, I think it is a matter for the Committee and not for anybody else now. I agree with my noble and learned friend Lord Hoffmann that this amendment should not be accepted.
Lord Thomas of Cwmgiedd (CB)
My Lords, I agree with both the noble and learned Lords, Lord Hope and Lord Hoffmann, that this amendment ought not to be accepted. However, it seems to me, as the noble and learned Lord, Lord Hoffmann, said, that everyone agrees with the sentiment behind what the noble Lord, Lord Hacking, has proposed.
I had thought that we had agreed how to deal with this matter when the then Minister dealt with it at a hearing of the Special Public Bill Committee. I raised this point by way of an amendment to the old Arbitration Act. The Minister agreed, in response to that, that he would write to the arbitral institutions and we would see what the best practice was. I had assumed that all that would be made public, and I am entirely at a loss to understand why the letters that were written and the responses have not been made public. It would be extremely helpful to have all this information put into the public domain to show, for the benefit of London, what was being done to address this point. As I understand it, these were documents written by the Minister in his capacity of trying to deal with a problem that had arisen and was discussed in this House. It would be very helpful to have a discussion and look into the matter in detail. If something needs to be done—more than is being done—we can return to it. Certainly, we ought not to delay the Bill by this amendment.
Lord Beith (LD)
My Lords, in our Second Reading debate on 30 July, I asked the Minister to respond about these consultations that had taken place, which he did in a letter on, I think, 15 August. He set out in some detail the various ways in which the existing system deals with corruption.
It would be beneficial, as the noble and learned Lord has just pointed out, if the documents which the Minister was summarising were themselves made public, with the consent of the relevant organisations, because there is a lot of detail here that needs to be discussed. Indeed, the remarks of the noble and learned Lord, Lord Hoffmann, illustrate that we cannot proceed on the matter of this amendment without some pretty extensive discussion about how it could work and how it affects the role of the arbitrator. Although I am very sympathetic to the amendment, to try to introduce it at this stage would be an unnecessary delay to a Bill that has had quite a lot of delays already, not least because of the general election. That would be an unfortunate consequence.
The most reassuring thing in the Minister’s letter is the reminder that the case to which the noble and learned Lord, Lord Hoffmann, referred, and in which he was directly involved, was of course dealt with in the High Court. The High Court set aside the results of the arbitration, having discovered the corruption that had occurred. This is a demonstration that, even without new statutory provision, our system can deal with corruption of this kind. It is still there, however. There is a lot of corruption about and it is quite likely that it will emerge or be present in matters that are the subject of arbitration, particularly between states and very large commercial undertakings.
I therefore do not think that we should be content simply to set aside the amendment that the noble Lord, Lord Hacking, has introduced, but I do not think that we should attempt to insert it into the Bill at this stage. We should seek to establish whether both the substance of the law and our ability to enforce it would be improved by new statutory provision, and I am not yet persuaded that that is so. We strongly support the Bill and do not want to see its progress delayed.
Lord Bellamy (Con)
My Lords, in relation to the intervention of the noble and learned Lord, Lord Thomas, your Lordships will recall that on 27 March this year, when I was then the Minister in charge of the Bill, I said that I had written to the Chartered Institute of Arbitrators, the ICC, the LCIA, the London Maritime Arbitrators Association, GAFTA, the Law Society and the Bar Council to ask them
“what measures they have in place to mitigate the risk of corruption in arbitration, whether more should be done in the sector to mitigate corruption in arbitration”,
and any suggestions they had as to
“the best way to proceed and how the Ministry … could support the sector’s efforts”.—[Official Report, 27/3/24; col. 12.]
Before I had a chance to review or indeed see any of those replies, Parliament was dissolved, so I still do not know what the replies were. I understand from the Minister in a call this morning that there is some glitch in relation to the convention about what documents an incoming Government could see if those documents arose under the previous Government. I would have thought that this was an area where continuity between the Governments, transparency and a common approach were essential and necessary. I very much hope that in the meantime, any technical glitch about the change of Government should not interfere with the tackling of this problem.
As has been pointed out, the Minister in his letter of 15 August summarised the responses in some detail, but the question remains, as has been raised by two noble Lords—the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Beith—as to whether those responses should be made public, with the co-operation, of course, of the institutions concerned, from the point of view of establishing and reinforcing the reputation of the City of London and, in particular, reassuring those who wish to arbitrate in this country that the question of corruption is being addressed.
It is true that the ICC is conducting an international review of the approach to arbitration in this sector, but that review is not due to report until the end of 2025. It seems to me that there is an argument for the present Government—the Minister—to go back to the persons to whom I wrote and ask them whether they would be prepared to make public their responses, with a view to reassuring and continuing to protect the reputation of the City of London.
That said, although I think we are all with the noble Lord, Lord Hacking, in spirit, amendment to the Bill is probably not the best way to proceed at this stage. As I indicated when I was myself the Minister, I would not support an amendment to the Bill to deal with this particular matter, but I invite the Minister to give us an assurance that the Government will continue to monitor the issue, to keep in touch with the relevant arbitral institutions in London, and take such steps as the Government think fit to ensure that the arbitration scene in London is as free from corruption as can conceivably be achieved. Nothing less will do. At the same time, I also invite him to perhaps revisit the question of publishing the responses, as the noble Lord, Lord Beith, and the noble and learned Lord, Lord Thomas, have just invited him to do.
Lord Sentamu (CB)
My Lords, I associate myself with the wonderful words of the three noble and learned Lords and I share the concern of the noble Lord, Lord Hacking, but when I was reading theology, my then—wonderful—professor of theology said that the only way you know whether you have resolved a theological conundrum is to try to find some practical solution to your particular difficulty.
My greatest concern with the amendment is this. It talks about safeguarding the arbitration proceedings against fraud and corruption. Probably Queen Elizabeth I would have said to such a suggestion what she said to the troops at Tilbury:
“I have no desire to make windows into men’s souls”.
How do you safeguard proceedings against corruption? Corruption is in the hearts and minds of people. How do you do it? I cannot find a real, practical solution. Therefore, on those grounds, although the amendment is well intentioned, I think the burden it would put on the proceedings of arbitration is far too great, so please may we not have a desire to make windows in people’s hearts.
Lord Mance (CB)
My Lords, I declare an interest as an arbitrator, including in cases involving corruption in my practice hitherto. It seems to me that there are two types of corruption that we may be talking about. One is substantive corruption affecting the transaction which is the subject of an arbitration. That is regularly arbitrated and investigated, and tribunals do their best. With respect to the noble and right reverend Lord behind me who has just spoken, I am afraid that sometimes involves trying to see into men’s minds. Arbitrators do make findings of corruption. I will come back to what might be done with those findings slightly later.
We have been talking mainly about corruption in relation to the arbitration proceedings, which is the area to which the amendment of the noble Lord, Lord Hacking, is directed. We have heard of cases in which—one hopes, remarkably—it has been found in court that both sides were involved in some sort of collusion. I am thinking not of the case which has been expressly mentioned but of a case which I believe was decided in the Commercial Court by Mr Justice Butcher, where a non-existent arbitration award endorsed by a non-existent foreign court judgment was attempted to be enforced in the Commercial Court. That could happen only by some form of collusion between those appearing in front of the court, hoping that the persons to be affected by an English judgment would not get to know of it or involve themselves in time. As it happens, they did, and of course the non-existent award was not enforced. I believe the matter was referred to public authorities who might be interested.
I agree with my noble and learned friend Lord Hoffmann that such investigations into the propriety or ethical behaviour of those appearing in front of arbitrators as a matter of standard procedure would be difficult to contemplate, given the sort of exercise that would be involved. That said, I am sure that arbitrators, if they were on notice for any reason of possible complicity in some corrupt activity by those appearing in front of them, would be very concerned to try as best they could to get to the bottom of it. I suggest that the noble Lord’s proposed amendment would, if anything, be duplicative and unnecessary if read mildly, but if read widely, as involving the sort of initial admonition which he suggested, it would be problematic and would not carry matters very far, so I, too, do not support it.
I will make a general observation about corruption, which, as I have indicated, is regularly fought in the courts in a substantive respect. Of course, arbitrators have the problem that they are confined by the agreement to arbitrate, which usually relates to a specific transaction. However, if you are talking about a widespread scheme of corruption, perhaps involving fraud on a foreign state, the state may not be party to the arbitration, and it may be quite difficult to investigate all the other ancillary transactions that form part of the web of corruption. Corruption notoriously involves complexity designed to confuse and conceal. That problem is inherent in arbitration; it seems to me that it may be one of the disadvantages of arbitration. It is a problem that can, to some extent, be alleviated by court assistance. There is a valuable clarification of Section 44 of the Arbitration Act 1996 in this Bill, which will enable that assistance to be secure when third parties are involved.
It is difficult to foresee arbitrators being made into investigators. That would be a change of role for which they are not suited. The one possible area where I suggest that legal attention might be considered—but not in this Bill, for the reasons already given by noble Lords—is where corruption is found by an award. There might be something to be said in that context for an express provision permitting disclosure, to interested public authorities, of corruption that has actually been found. One would not have or contemplate a situation where arbitrators had to disclose allegations of corruption that they were concerned to decide. But once they decided that there was corruption, disclosure might then be contemplated. It seems to me that it is probably already permitted by common law, because there is no privilege in iniquity; on the other hand, I do not believe that arbitrators at the moment would, without express legislative backing, be likely to disclose even corruption that they had found in their award. That might be a possible area where an express legislative provision—so they could at least just disclose corruption —would be valuable.
Lord Wolfson of Tredegar (Con)
My Lords, I begin with an apology. I could not attend Second Reading because I was having my cataracts done. The happy consequence is that I can now see the Minister even more clearly on the Government Front Bench. I take this rather belated opportunity to welcome him to that place and to wish him well.
I declare two interests: first, as a barrister working in international commercial arbitration as both counsel and arbitrator. Secondly, in 2021, when I was in government, I invited the Law Commission to undertake this review of the Arbitration Act, to burnish what is generally regarded as a gold standard for an arbitration statute. It bears taking 30 seconds to put on record that the Law Commission is an underappreciated part of our legal landscape and does sterling work. Indeed, the Minister introduced earlier today the digital assets Bill, which also emanates from the Law Commission. The Government accepted all the Law Commission’s recommendations in this context.
I also pay tribute to my noble and learned friend Lord Bellamy, who, when he was a Minister, worked very hard on this issue and introduced a previous Bill before it fell, with others, at the general election. Nevertheless, this is a good Bill, and we should get it on to the statute book.
On the amendment before the Committee, the noble Lord, Lord Hacking, kindly referred to my role as counsel in the Nigeria v P&ID case. Of course, client confidentiality applies even now, but he was kind enough not to point out that I lost that case, and I am grateful to him for not making that clear. As to the other cases he mentioned, I appeared early on in the Mozambique litigation and acted in the Steinmetz proceedings before the ICSID tribunal in Paris. I also acted for BSG in the LCIA arbitration and the subsequent litigation in London. I won a number of those cases, fortunately.
Nobody wants corruption in arbitration—we all want to root it out—but we are not persuaded that the general duty either is necessary or would achieve its aims, for the reasons set out so clearly by the noble and learned Lord, Lord Hoffmann. It is not clear what arbitrators are meant to do; under Section 33 they already have a duty to resolve cases fairly, and if corruption disentitles a right to a remedy, the tribunal can say so.
As the noble and learned Lord, Lord Mance, pointed out, there are a number of issues here. Take a case where there is a London seat but the substantive contract is governed by Ruritanian law. Ruritanian law might regard as permissible that which English law regards as impermissible. Would this clause mean that the London-seated tribunal would have to decline to enforce or to give a remedy? The Act as presently drafted provides that public policy can trump an award in some cases. Section 103(3) deals with foreign awards, substantially reflecting Article V of the New York convention, and Section 68(2)(g) deals with appeals from London-seated arbitrations—that was a provision in the Nigerian case.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, I thank the noble Lord, Lord Wolfson, for welcoming me to my current position; I am very glad that he has 20/20 eyesight and is looking at these matters so closely. I am also thankful to my noble friend Lord Hacking for initiating this debate. He said very clearly when he introduced his amendment that he supports the Bill, and I am grateful for that. He is again raising the issue of protecting the arbitral process against corruption, and of course that is extremely important. Having considered this very carefully, the Government’s position is that our framework already provides a robust regime and that no law reform is necessary. A tribunal, like a court, must always guard against fraud and corruption, and I will explain what mitigations our existing regime already provides.
Under Section 33 of the Arbitration Act 1996, the tribunal is already under a duty to “act fairly and impartially”, and to
“adopt procedures suitable to the circumstances of the … case”.
An arbitrator who is corrupt would fail in their duties under Section 33. Furthermore, the arbitrator’s appointment can be revoked by the parties under Section 23, or an arbitrator can be removed by the court under Section 24. An arbitrator who acts in bad faith loses their immunity under Section 29 and can be sued.
When arbitral proceedings are tainted by fraud or corruption in the arbitral process, any arbitral award can be challenged in court under Section 68 for serious irregularity, as indeed was successfully done in the recent case of Nigeria v P&ID, which we heard about earlier. Indeed, the reason why arbitral corruption is currently a talking point is that the court identified corruption and prevented abuse in that case. Arbitral awards can also take account of corrupt conduct and deprive a corrupt party of any arbitral award which is sought to permit fraud or corruption. It would be unenforceable as contrary to public policy under Section 81. It is possible for an arbitrator to publish their award and denounce the fraud publicly. In ruling an award to be unenforceable, the court can also publish its judgment publicly. The scheme under the 1996 Act is sufficient and has not revealed any deficiency in practice.
The Government oppose legislative reform here precisely because it is unclear what additional benefit it would provide over the current regime, which provides both parties and arbitrators with routes to challenge and address corrupt conduct, as well as duties on the arbitrator to ensure fair and proper proceedings. A new, untested measure may simply introduce uncertainty for both parties and arbitrators.
The 1996 Act and the modernising impact of this Bill are designed to ensure robust and efficient arbitral proceedings. Our framework provides this balance and well equips the tribunal and courts to deal with corruption. The Government will continue to support the sector’s efforts on arbitral corruption. We will keep track of initiatives that are under way, such as that of the ICC anti-corruption task force, to which a number of noble Lords referred, and engage with the sector to push for the swift adoption of best practices as they are developed. I hope that this explanation reassures my noble friend and that he will withdraw his amendment.
To go a little further, as noble Lords are aware the previous Government wrote to leading arbitral institutions seeking views on the mitigations that are currently in place and whether more are needed. I understand that responses were received from the Chartered Institute of Arbitrators, the International Chamber of Commerce, the London Court of International Arbitration, the London Maritime Arbitrators Association and the Grain and Feed Trade Association, in addition to the Law Society and the Bar Council.
All those institutions mentioned mitigations they had in place against corrupt conduct. None expressed support for amending the Arbitration Bill to strengthen anti-corruption. In addition, concerns were raised that a one-size-fits-all approach would be ineffective and risk unintended consequences. Nigeria v P&ID was raised as a highly unusual case where the court effectively performed its proper role in setting aside the award. Where a role was suggested for the Government, it was in ensuring that the courts continue to be equipped to provide checks in cases put before them, as they did in the Nigeria case, and to engage in discussions with the sector and promote its work combating corruption.
The noble and learned Lords, Lord Bellamy and Lord Thomas, and the noble Lord, Lord Beith, raised the issue of the letters and whether they could be published. I am unable to share those letters. The noble and learned Lord, Lord Bellamy, can see the letters that were responded to when he was a Minister, but they were written specifically to him in that role. I would not necessarily be able to see those letters, which would create a difficult situation. I understand that a couple of letters came in when the new Government were formed. But I can say with complete confidence that the substance of those letters was explained and explored within the letter that I wrote to the noble and learned Lord, Lord Bellamy, which is in the public domain. I am confident that if I was wrong somehow in asserting that the substance was inaccurate, those various bodies would be able to draw that to my attention. I am confident that the substance of the letter I wrote on 15 August is completely accurate. I hope that noble Lords will accept that.
A number of noble Lords spoke of their reasons for opposing my noble friend’s amendment. They said that it might well be duplicative, unnecessary and problematic in various ways, which they explored. I have to say that I agree with the noble Lords who made those points.
In closing on one point, the noble Lord, Lord Wolfson, asked about relevant arbitral bodies being given a nudge regarding corruption. They are of course perfectly able to do that. It would be beneficial, and maybe they should remind themselves that they have that responsibility to give a nudge if they suspect corruption in particular cases. So, having said all that, I ask my noble friend to withdraw his amendment.
Lord Hacking (Lab)
My Lords, it is my intention to withdraw my amendment, but perhaps I could say just a few words after a fairly long debate on it. First, I thank those noble Lords—there were several—who accepted the principle that I sought to express. It was nice to have that support but, as was very clear, not one noble Lord accepted my amendment. Therefore, I am not exactly in a strong position to press it now, or indeed on Report.
I did not realise when I cited three cases put before us by Spotlight on Corruption that the noble Lord, Lord Wolfson, was counsel on every one. So he has extensive knowledge—greater than that I gave him credit for in my opening words.
One thing that has been missed in this debate—it was the first point I made—is that I wanted us, by legislation, to set out our standard. I described the first importance of my amendment as putting a flag in the ground so that the world may know that, in arbitration proceedings where England is the seat of the arbitration, we will not countenance corruption and fraud. I still think that is an important point.
I did not know when I got up to speak that there would be such a formidable line of noble and learned Lords alongside me, including the former Lord Chief Justice, who has not actually spoken but who has a devastating commitment to good argument, so I am not inviting him now to make any interventions because he will make some argument that will totally defeat what I am trying to say.
The noble and learned Lord, Lord Hoffmann, said that he thought my amendment was impractical, and of course arbitral tribunals do not have the power of investigation. The point I was making was that, at the commencement of the arbitration, the arbitral tribunal could speak to both counsel and the parties who should be present at the inaugural meeting and remind them of the seriousness of rooting out any corruption or fraud. I also point out, as a former counsel and solicitor, that when you take instruction from a client, and statements from clients’ witnesses, you have a lot of opportunity to know what is going on. So there is a role for counsel and the parties in rooting out corruption, and that is why I thought it useful to have this revision.
The noble and learned Lord, Lord Hope, said that the committee—which was so well chaired by the noble and learned Lord, Lord Thomas—had not reached any view about corruption. There was in fact a reason for that. I do not know whether the noble and learned Lord, Lord Thomas, is listening, but we received these two reports from Spotlight on Corruption at his instigation, and his view, and that of the committee, was that under the timetable we were working to, this was too big an issue for us to take on. That is why we made no pronouncement on that subject.
My Front Bench is getting a bit restless, but I am sure that there will be plenty of time to consider the next amendment. I rather get the feeling that there will be an intervention now in Committee on the Arbitration Bill and we will debate another excitement. I am withdrawing this amendment, but I hope that noble Lords have heard and agree that this is a continuing matter. I am particularly grateful to my noble friend for his promise to keep this under review—and may it continually be kept under review.
Social Fund Winter Fuel Payment Regulations 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:03 - Division on Baroness Altmann’s Motion - Ayes: 30 / Noes: 138 - Baroness Altmann’s Motion disagreed.
Baroness Altmann
That an Humble Address be presented to His Majesty praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, be annulled because they would significantly reduce state support for pensioners without sufficient warning and without a proper impact assessment, and because they present a significant risk to the health and wellbeing of many pensioners on low incomes.
Relevant document: 2nd Report by the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Baroness Altmann (Non-Afl)
My Lords, I would like to say from the start that I believe the noble Baroness opposite is a very, very good woman and I hope that the House will forgive me in some way for bringing this before your Lordships. But I have spent my life trying to stand up for people who have no voice and trying to do what I believe is right. On this particular occasion, with a heavy heart, I believe I must do so.
Let me read some of the words of those people from whom we are taking away £200 or £300 this winter. These are the poorest pensioners. We will hear that the Government is protecting the poorest. It is simply not the case. I apologise, but that is the reality. “I do not qualify for pension credit. I live on my state pension and one small occupational pension that pays me the cost of a couple of bags of carrots and potatoes a month in an annuity. I receive just a little over the qualifying limit and fall into that group of pensioners who are in limbo. I am 75 years old and not in great health. I will be trying very hard not to turn my heating on this winter. I have only a few pounds a week for food, toiletries, insurance or any other repairs. Why is this being done? I always turn off the lights and am very careful, but I don’t know how I will get through the cold weather this year. I have arthritis and COPD and need to keep warm for my health.”
Another says, “I am 82 years of age and live alone. I am on £220 a week state pension and therefore £2.85 a week over the pension credit limit. Since the cost of living crisis, I have not been able to afford any central heating for the last two winters. I did not put on my gas central heating and I will not be putting it on again this year. My welcome winter fuel payment went towards my electricity bill, which increased due to the single room heater I used. I work on the ‘heat the person not the room’ principle. I fall into that group of pensioners who do not qualify for pension credit, and I am not sure how I can economise further”.
One more example says, “I am 91 years old and my husband and I struggled to keep our home warm enough last winter. The fuel bills rose so much, and even though our home is small we were spending so much on heating that we only had the heating on in the sitting room and our bedroom. He had Parkinson’s and I have had cancer, but we looked after each other. We spent our time in the one room downstairs and used lots of blankets, as well as often having three cardigans on. We went to bed early so we could turn off the heating, and would try to keep the heating off in the bedroom most of the time, but we would cuddle up together to keep warm. My husband passed away a few months ago and I don’t know how I will manage this winter. I don’t have enough money to warm the house more, and my small pension has put me over the limit for pension credit”.
This is the reality of the statutory instrument we are debating. I agree with the Government’s aim of removing a tax-free payment from millions of people who do not need it. Indeed, I have called for that to be done for a long time, or for it at the very least to be taxed: it could perhaps be rolled into a higher state pension but then become taxable.
I would support this measure if it was dated 2025 instead of 2024, giving time to put in place some mitigation and protection for these poorest pensioners. Those on pension credit are not the poorest as they get extra help—as the Minister herself has said, some get thousands of pounds extra. It is those who are just a few pounds a week above the limit or those who are eligible but do not claim or receive it who are the poorest. Nothing in these regulations will ensure they receive the money they expected, which has been withdrawn from them with no warning or time for them to economise in time for November, when it was due, or for the colder weather this winter.
I believe that the Government do not want to hurt these people. I do not expect that the needs and situation of these very poorest pensioners were really considered when this announcement was made. The aim, which I fully endorse, was to take the winter fuel payment away from the quarter of pensioners who have assets worth £1 million, and from those higher up the income scale, who clearly can manage without it. But that is not the impact that I am concerned about if we pass this measure today.
I am particularly concerned because of the wording in the statutory instrument document itself:
“A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, public or voluntary sector is foreseen”.
If that had been the expectation, since that publication the voices of Age UK, Independent Age, Silver Voices and the trade unions have all warned clearly that what the Government perhaps did not foresee is indeed foreseeable and potentially about to happen.
The Government’s Explanatory Memorandum says:
“No consultation was undertaken ... Whilst making the necessary Exchequer savings, it retains support for pensioner households on the lowest incomes”.
This is simply not correct, and I am trying to help the Government see that what I believe they do not wish to do, they may not need to do. I understand that there are pressures on the public finances, and I completely support the idea that a universal payment to those who do not need it, especially one that is tax-free, should not be made. Why not work out a system whereby they do not receive it, but the consequence of taking it away is not that we also have to take it away from perhaps 3 million of the poorest pensioners in the land?
The Secondary Legislation Scrutiny Committee has brought this issue to the attention of the House:
“We are unconvinced by the reasons given for the urgency attached to laying these regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice”.
That is the problem I have, the short notice. It is not the aim of the policy that I query: there is no time to prepare, no time to increase pension credit—although that is a worthy aim, and I hope a few extra people will claim it. According to the Government’s own figures, more than 800,000 households are eligible but not claiming. The idea that they will receive the money this winter, having gone through the 243 questions on the application form, be approved and start receiving it, is simply fanciful. With the best will in the world—and I believe the Government have the best will to try to increase take-up—even if half the households were to receive it, the savings the Government say are so essential to make will be wiped out. This argument does not make sense. It is not logical to say that we have to take it away from the poorest because we want to take it away from the well-off.
Taking this money from people is, effectively, a 3.4% state pension cut this year. For anyone on the old basic state pension who is over 80, £300 is 3.4% of the money they received from the Government last year. This measure was introduced in 1997 and it has been an essential part of the state pension support package for pensioners ever since. No Government have said it will be removed; indeed, that was suggested and rejected time and again. I believe there could, and will, be a way of dealing with this. For example, to save money, you could tax it rather than axe it; or you could just say that anyone paying higher rate tax will have their tax coding adjusted and the money will be taken back from them. If you pay 40% or 45% tax, of course you do not need it.
Baroness Stedman-Scott (Con)
My Lords, this is the first opportunity I have had to congratulate the noble Baroness, Lady Sherlock, on her appointment as a Minister. I genuinely wish her well in that capacity and look forward to working with her on areas where we can.
The Government’s decision to end the winter fuel payment for all pensioners except those in receipt of relevant benefits will be a real blow to millions of older people across the country this winter. Reducing financial support for older people before the colder months will harm many who rely on their winter fuel payment. This is a betrayal on a shocking scale. The Opposition are critical of this policy for three primary reasons: it will leave millions of vulnerable pensioners worse off this winter; the Government are wrong to prioritise above-inflation pay rises for public sector workers over the interests of vulnerable older people; and the Government were not straight with the British people about their plans during the general election this year. The Government should listen to the concerns of noble Lords and take time to consider how they can make the savings they need without punishing older people. That said, it is not the place of this House to override the decision of the elected House, and that is why the Opposition have tabled a regret Motion today.
In government, the Conservatives showed a stalwart commitment to pensioners who had paid in all their lives, with the triple lock, pensioner cost of living payments, the warm home discount and winter fuel payments. All these measures were either introduced or maintained by the Conservatives because we on these Benches know what is right for pensioners and that it is patently unfair to put the most vulnerable pensioners in jeopardy as winter approaches. The Conservative Party consistently did what was right for pensioners throughout our time in office, and there are valuable lessons for the Government in that record.
The winter fuel payment has been a lifeline for millions of pensioners, with 11.4 million older people receiving it in 2023. Vulnerable pensioners rely on this support, and it is that group about which the Opposition are most concerned. The Government have said that pensioners in receipt of relevant benefits will continue to receive winter fuel payments, but the Government’s own estimates show that approximately 880,000 households are eligible for pension credit but do not currently receive it.
It is important that we remember just what position those 880,000 people are in. To be eligible for pension credit, a single person must have a weekly income of less than £218.15; it is £332.95 for a couple. These are some of the most vulnerable people in our society and I ask the Minister: is she comfortable depriving 880,000 of the most vulnerable pensioners of the winter fuel payment this year?
In April this year, the now Prime Minister, writing in the Daily Express, said:
“I firmly believe that if you spend your lifetime working hard and contributing to society, you deserve a comfortable, secure retirement”.
He went on to say:
“It was that belief that meant the last Labour government introduced winter fuel payments, free bus passes and pension credits”.
Please can the Minister tell us in detail what has changed from that statement?
I trust noble Lords will forgive me if I pre-empt the Minister’s reply. We will hear, no doubt, that the previous Government left office with a £22 billion black hole in their public finances. This is not a fair statement of facts. When the Chancellor of the Exchequer stood at the Dispatch Box in the other place, setting out the Conservatives’ supposed profligacy, she included in that calculation a total of £9.4 billion of spending on public sector pay awards. The Chancellor claims that these were a result of Conservative decisions, but they are political choices. It is not a fair presentation of the facts to say that the Conservatives are responsible for a £22 billion black hole when almost half of that calculation is made up of public sector pay awards agreed by the Government.
Ministers have also claimed that the public finances were worse than they expected when they took office earlier this year. I need not remind the House that the Office for Budget Responsibility, which was founded under the Conservative Government, audited the public finances just 10 weeks before the general election was called. Indeed, since January this year the then shadow Chancellor, in line with constitutional convention, had privileged access to the Treasury Permanent Secretary. The books were open, yet the now Government did not come clean during this period about their plans to remove the winter fuel payment for most pensioners.
Indeed, if the public finances were as tight as the Chancellor would have us believe, Ministers would be showing pay restraint across the board. In fact, the truth is quite the opposite. Since taking office, the Government have allocated £8.3 billion for GB Energy, £7.3 billion for a national wealth fund and, of course, the £9.4 billion I spoke of a moment ago for vast above-inflation public sector pay awards. It is becoming clearer every day that the Government will prioritise train drivers, junior doctors and civil servants—their own political vanity projects—over the needs of the most vulnerable pensioners in our society.
In addition to these concerns, we must ask the Government whether this policy change will be successful in achieving its stated aim. During Treasury Questions in the other place last week, the Chancellor of the Exchequer confirmed that the Government expect to raise £1.5 billion a year by cancelling the winter fuel payment for the majority of pensioners. This led me to look up the total value of unclaimed pension credit. The latest official statistics show that up to £2.1 billion of available pension credit went unclaimed. If 100% of eligible pensioners claimed their pension credit, the Government would make no saving at all. We can conclude that the fact that 880,000 pensioners who are eligible for pension credit will be deprived of their winter fuel payment by the Government is not an unintended consequence. The savings the Government expect to make are predicated on those people not claiming.
We on these Benches put in a great deal of effort to drive up pension credit when we were in office. In June 2022 the Pensions Minister launched a campaign to urge pensioners to check whether they were eligible. In June 2023 the then Pensions Minister, Laura Trott, launched a further campaign and trialled the Invitation to Claim initiative through which the Department for Work and Pensions wrote directly to potentially eligible households that received housing benefit, encouraging them to apply. In July 2023 the DWP confirmed that these campaigns had been effective, and applications were around 75% higher in the year to May 2023 than in the same period the year before.
We have made progress on this in the past, and the Government’s new campaign is unlikely to succeed in getting every eligible person to claim pension credit. The Government should listen carefully to these concerns and take action to protect this vulnerable group.
While it is unlikely that we in this House will be able to convince the Government to change their chosen course—although I live in hope—I hope that the concerns raised by Members across the House will at least encourage Ministers to work on mitigating measures to ensure that pensioners eligible for pension credit are not left without the support they need.
I know that many noble Lords would want me also to highlight the needs of pensioners who are only just above the pension credit threshold. My friend, the noble Baroness, Lady Altmann, has already done this. Can the Minister confirm whether the Government have considered increasing the pension credit threshold so that pensioners in that group are protected?
Before I conclude, I ask the Minister whether she will commit—I implore her—to meeting concerned Peers to discuss other options to this policy, to suggest ways to make the pension credit uptake campaign more effective and to explore the alternatives. I know that noble Lords would appreciate the opportunity to engage with the Government constructively to protect the most vulnerable pensioners.
In conclusion, it is clear that the Government have the wrong priorities, putting public sector workers and their own vanity projects first while depriving vulnerable pensioners of a lifeline. Indeed, the Prime Minister is damned by his own words earlier this year, when he said he believes pensioners “deserve a comfortable … retirement”. This Government took office on a change theme, which we are so encouraged by, and said they would make money so that everybody would be better off and have a better quality of life. As yet I have not seen too much of the making of money, but I see a lot of taking and I hope it is not a trend that will continue.
Lord Palmer of Childs Hill (LD)
My Lords, I rise to speak to the Motion standing in my name, the third of the Motions on the Order Paper today. In doing so, I must stress sympathy with the sentiments spoken of so well on the Motion from the noble Baroness, Lady Altmann. However, I understand from reading the House that there is not a lot of support in your Lordships’ House for the fatal Motion—although, as I say, I have great sympathy with it.
My Motion calls attention to the most vulnerable pensioners, many of whom will lose support just as energy bills are set to rise again. About 10 million pensioners will lose winter fuel payments of up to £300 because of the decision taken by this Government, after years of Conservative mismanagement that has left the public finances in crisis. But this is the wrong answer to the challenges we face: it is clear that many pensioners rely on a winter fuel payment, which is not a luxury.
Lord Davies of Brixton (Lab)
My Lords, these regulations are a mistake and I want my concern on the record. I want to make it clear from the start that the financial mess inherited by our Government is a result of 14 years of austerity and financial mismanagement, and I reject any suggestion that public sector workers are benefiting at the expense of pensioners. That is simply a crude attempt to divide working people, and we should reject it as such. I will therefore vote against the cynical regret Motion from the Official Opposition, and I say to the noble Baroness, Lady Stedman-Scott, that she does herself no favours attaching her name to the Motion.
There are several key points I wish to make. First, even if the case for austerity measures were accepted, the cut in winter fuel payment was not a necessary element in the July package; it was a choice. Secondly, whatever steps are taken to increase the take-up of pension credit, millions of the poorest pensioners will still suffer from an increase in fuel poverty—Age UK came out yesterday with a figure of 2.5 million. Thirdly, the effect of the triple lock should not be double counted and, in any event, it will fail to offset the effect of the cut in the winter fuel payment over the lifetime of the current Parliament. I urge the Government, even at this late hour, to hold back on any change, pending full consultation on an alternative approach to tackling fuel poverty, while retaining the advantages of a universal benefit.
It is important to understand more about why the Government wanted to include the measure in the July package, despite its obvious political downside. Unlike other possible options, it achieved in-year savings and used an existing structure for means testing the benefit, rather than having to create a new structure. However, they failed to appreciate the two adverse consequences of using the pension credit means test. First, it has a ceiling that everyone agrees is far too low. Secondly, there is no form of marginal relief, as it is not relevant for the purposes of means testing pension credit.
In response, the Government—my Government—have attempted to head off the widespread opposition to the regulations. First, they have argued that the winter fuel payment had to be cut as part of the July package to make the figures balanced. Secondly, they have argued that the impact would be offset by increasing the take-up of pension credit and, thirdly, that the impact would be ameliorated by the existence of the triple lock on the state pension. All of these arguments, regrettably, fail.
First, the cut was not necessary, even as part of the July package. There is of course a debate to be had about the need for austerity, particularly as an instant response. However, even if the need for the July package were to be accepted, the question as to whether it had to include the cut in the winter fuel payment is a separate issue. Posed in those terms, it is obvious there is no a priori reason that it had to be a necessary element of the package. Whatever risks the Government faced, they were addressed by taking the package as a whole and not by its individual elements. Despite the Government’s protestations about tough choices, there is no avoiding the fact that it was, nevertheless, a choice, thereby raising concerns about their attitudes to universalism and pensioners in general.
The second issue is pension credit, which other speakers have addressed. We know that the increase in the take-up of pension credit will be limited. It is important to acknowledge what the Government are doing to increase the take-up of pension credit, but, regrettably, there is a long history of ineffective take-up campaigns for means-tested benefits, going back to the 1940s, for national assistance, and beyond. There is no evidence that we now know more than they did in the past about how to overcome the intractable problems arising from stigma, complexity and a lack of knowledge. I am sure other speakers will go into detail on that.
My third point is about the triple lock, which does not offset the impact of the cut in the winter fuel payment. The Government suggested—not today but in other commentaries—that the triple lock increases to the state pension over their term in office would
“outstrip any reduction in the winter fuel payment”.
Unfortunately, this is an obvious case of double counting. I have done the sums, and almost all the pension increases that will occur over the coming five years are required to protect pensioners against the impact of inflation. Pensioners cannot spend that money twice, covering both increases in the cost of living and at the same time replacing the winter fuel payment. The purpose of the triple lock is to protect pensioners against inflation, keep state pensions in line with general living standards and nudge the pension gently upwards. I have calculated that, based on the latest OBR assumptions, the impact of the triple lock, taken by itself, means that the new state pension and the basic state pension will be barely 1% higher than they would have been, even with the statutory minimum increases. This is less than the winter fuel payment, which pensioners are losing because of this measure.
In all the debates on the cut in the winter fuel payment, I am not aware of anyone arguing that there is no case for change. The winter fuel payment is and always was an anomalous benefit, particularly as it affects high earners. A payment that, in practice, recipients can choose to spend as they wish should always have been included in taxable income. The fact that it was not is a historical accident, arising from how and when it was introduced, rather than a clear policy decision.
I therefore agree with the 2015 Labour manifesto, which said:
“We will stop paying Winter Fuel Payments to the richest five per cent of pensioners”.
That was the right policy then, and something like it is the right policy now. In other words, those with the broadest shoulders should bear the burden of the cut, rather than the millions of the poorest pensioners who struggle to make ends meet. Given the case for change, the Government at this late stage should hold back on the cut to the winter fuel payment, pending a full consultation on an alternative approach to tackling fuel poverty while retaining the advantages of a universal benefit.
Lord Desai (CB)
My Lords, there seems to be rather a hurry to embrace economic rationality on the part of the new Government. We know what economic rationality always says: cutting income tax for the rich is good policy because that encourages growth, and cutting the benefits of the poor is good policy because that balances the budget. All through economics—the science that I teach—there has always been this root. The poor must be made to suffer because, as Malthus pointed out, if you give them more money, they will only breed more children. That is no good. Giving money to the poor is a loss, but give money to the rich and the rich will benefit.
I imagine that there is an idea that a big hole in the fiscal accounts was suddenly discovered. I do not think so: I think we all knew there was a fiscal hole. We have all been through the pandemic and through the last 15 years, when the economy has had a very low growth rate—in fact, practically no growth rate. We know all that. We also know the public accounts numbers that were available giving us the ratio of deficit to GDP. None of this was a surprise. If you want to really tackle the deficit, you need a 10-year horizon to do it. Do it rationally; do not do it quickly, do not do it in a haphazard fashion and do not just immediately say, “Oh, I have to make a very tough decision”. As soon as a politician says “tough decision”, you know the poor are going to suffer.
Lord Balfe (Con)
My Lords, I do not believe that this was in the 1997 manifesto of the Labour Party. It was introduced by Gordon Brown, I believe, because he had a vision that everybody should have a financial relationship with the state. I had a short time as the liaison person with Gordon Brown. I was appointed by the European Parliamentary Labour Party and our great leader then, Alan Donnelly, said, “I’m sending you to Gordon—he’s about the most difficult one, but you’ve got a thick skin”. I recall meetings where this was discussed; it was never discussed in the area of poverty, but always in the area of benefits and helping everybody. So this was introduced by Labour and is now being scrapped by Labour, which seems embarrassed by the size of its majority and is trying to make itself unpopular—and I would like to say that it is succeeding.
There have been economic problems all my life: in 1964, 1970, 1974, 1979, 1997 and 2010. Incoming Governments claim they have found big black holes—it has always been the same; but you cannot have it both ways. You cannot say, as Liz Kendall said in the House of Commons yesterday, that the Tories were spending like “no tomorrow” and at the same time say that there is a huge deficit in public services, that teachers need more, that schools and hospitals need rebuilding and that the National Health Service is in crisis. It just does not add up. You cannot have an economic crisis and a big black hole, and at the same time huge demands for more money.
Obviously, I read the three Motions and listened to the very good statement of the noble Baroness, Lady Altmann, but I am afraid that, on balance, because of the conventions of the House, I will be supporting the position my party is taking on that Motion. I have listened attentively to the noble Baroness, Lady Stedman-Scott, who made a very good contribution, but there is one point with which I disagree: point two, the decision to prioritise above-inflation pay rises for unionised public sector professionals.
The pay award bodies came in with awards, which the Government accepted. Is it now the position of His Majesty’s Opposition that the pay awards given by the boards that we set up would have been rejected by us? It does not add up. Quite frankly, public sector workers and trade unionists have had just about as much as they can take. All the time, everything is blamed on them, but these are the people who man the hospitals, schools and all the parts of the state we rely on, and they deserve decent pay and conditions. Although I am on the Benches that do not normally say that, I have been saying it for years and I will say it now.
I also remind the House that the British Medical Association may be a union, but it is not affiliated to the TUC and nor is the Royal College of Nursing. There is a widespread demand in society for fairness, and these pay awards were part of it. The Government did not prioritise the pay awards over the pensioners; those were two quite separate decisions. The pay awards were in line with the procedures set up and continued by our Government. The decision on pensioners was a grubby little decision, taken God knows why, which does not save much.
It is quite right that we should have made it a taxable benefit from the beginning. I was only ever asked once by a Chancellor of the Exchequer—he is now my noble friend Lord Hammond—what I would put in the Budget if I were Chancellor. I said that I would tax the winter fuel allowance and abolish the £10 Christmas bonus and the 25 pence for 80 year-olds, which I have had paid to me recently and does not even buy a packet of sweets these days. I would have consolidated this money into a better pension for all the other people. There was no basic reason why people like most Members of this House should get an untaxed winter fuel allowance. That would have been my solution, and I wish the Government had chosen it.
Having made this speech, I will support the Motion that our party has put down. If it comes to it, I will also support the Motion of the noble Lord, Lord Palmer. I regret that I cannot support the Motion of the noble Baroness, Lady Altmann, for the reasons I have outlined. That is not because I do not support what she says, but as an Opposition, we need to have respect for the traditions of the House and the way we conduct our business.
Baroness O'Loan (CB)
My Lords, I grew up in Barnsley in Yorkshire, which is a Labour stronghold, and I find it inconceivable, even as I look at this instrument, that the Labour Government are taking away the winter fuel payment from 880,000-plus very poor people, who will go very cold and hungry this winter as a consequence.
I thank the noble Baroness, Lady Stedman-Scott, for her clear explanation of the access available to the shadow Chancellor prior to the election. What she told us was important; I did not know it.
There are disabled pensioners who may not be in receipt of pension credit but who, as a consequence of this, will have grave difficulty keeping their houses as warm as they need to keep them. They cannot go and sit in the malls, shops and cafes, as so many other pensioners do, to keep warm. We should bear them in mind, and we should not be doing this.
Noble Lords have already indicated ways in which a similar saving could be achieved, through taxation processes or windfall taxes, et cetera. Noble Lords should reflect on whether they could keep themselves warm on £218 a week, and eat. The Labour Government should think again about what they are doing.
Finally, the conventions of this House are simply that: conventions. There are particular and extreme circumstances in which we should disregard our conventions for the benefit of those who have no voice. Pensioners will lose a benefit they so desperately need, and this is the one thing people have repeatedly stopped me on the street about since the Labour Government made this announcement. This is an occasion on which we should ignore convention and vote with these Motions.
Baroness Janke (LD)
My Lords, as other noble Lords have said, there is a sense of bewilderment for so many people at one of the new Labour Government’s first actions being to punish the poorest pensioners for the shortcomings of the previous Conservative Government by restricting winter fuel payments to those receiving pension credit.
Means-tested pension credit is renowned for its low take-up: 39% of those entitled to it do not claim it. At this point, I would like to welcome the Minister. I am sure she will recall that during her time in opposition, we worked on a cross-party basis to try to boost the take-up of pension credit, along with the noble Baroness, Lady Stedman-Scott, and the noble Lord, Lord Foulkes. However, despite a fairly vigorous campaign, its success was marginal and small. As the noble Lord, Lord Davies, has said, successive Governments have wrestled with this problem over the years and failed to crack it.
The reasons that emerged for the low take-up were the resistance of this generation of pensioners to what are perceived as state handouts; and that the level of bureaucracy, as has already been mentioned, but also the burden of proof of need are so demanding that many people are intimidated by the idea of claiming. Many older pensioners do not have access to the ICT equipment and skills which are essential to make a claim. I would be interested to know what action the Government will take, where so many people have failed, to increase take-up. Also, as the noble Baroness, Lady Stedman-Scott, has said, if they are successful, what will be the impact on the savings of £1.4 billion?
Age Concern tells us that more than 2 million pensioners will be harmed by this measure: some 1 million who are eligible for but not receiving pension credit; 1 million who are just below the pension threshold and on low incomes, about whom the noble Baroness, Lady Altmann, spoke so movingly; and 200,000 who have high energy costs due to disability or a health condition, or who have to live in poorly insulated homes. It is also true, as we have heard in this Chamber from many noble Lords, that many pensioners who receive winter fuel payments do not need them; but surely a blanket withdrawal with no time for those affected to plan and assess their financial circumstances is callous and arrogant.
It is also irresponsible to introduce such sweeping measures without a proper impact assessment, given the risk to vulnerable and elderly people. I was interested to hear from the Minister today that we need several months to conduct impact assessments and consultations on ticket touting, yet somehow this was inappropriate for a measure such as this.
The Lord Bishop of Southwark
My Lords, I, too, congratulate the Minister on her appointment and I declare an interest as a beneficiary myself hitherto of the winter fuel payment—but only in very recent years. Indeed, I wonder whether your Lordships’ House should not pass a resolution declaring a corporate interest. Members of this House are unlikely to be seriously affected by the measure. That is not the point. For many pensioners in my diocese and for considerably larger numbers, possibly extending to millions, across the country, this will be a significant financial hit, with adverse repercussions this coming winter.
As has been alluded to, the origin of the Chancellor’s decision to cut winter fuel payments lies in her view of the state of public finances. It is not a manifesto commitment. The Minister, for whom I have enormous respect, has appealed to the House to neither annul the regulations nor express regret, but I suspect that there are those on the Government Benches who are internalising their regret at this very moment. I fear, and I think this feeling is shared across the House, that the Government’s decision on this matter will define them in the public mind for years to come. It is a signal gesture on their part and one that I believe should be resisted, notwithstanding the Minister’s careful appeal.
First, all Governments should take scrupulous care with our public finances, and it is true that the national debt is now at a level not seen since the early 1960s. But a third of our national debt is owned by the Government themselves through the exercise known as quantitative easing. Secondly, deficit financing, investment, growth and reductions in debt went hand in hand in the decades following the Second World War. Thirdly, the principle of universality in public benefits, as here, is one that is being steadily eroded.
The advantage of a universal benefit is simplicity in administration, the certainty of application and the absence of a social stigma. Means-tested benefits attract doubtless unintended stigmatisation, with a burden to both applicant and state in terms of administration and, inevitably, a failure by those eligible to take up the benefit. Despite the sharp increase in those applying for pension credit, it remains the case that a significant number of people eligible for the credit have not applied for it and would not wish to seek special treatment, as they see it, by so doing.
The Beveridge report in 1942, at a time of desperate stress, identified five giants that needed to be slain on the road to reconstruction: want, disease, ignorance, squalor and idleness. The prescription for their demise was universal, as had been all the great reforms of the previous century, from public parks to museums and galleries, free lending libraries, open-air concerts, healthcare, pensions and unemployment benefit. Those principles were extended after 1945.
The prescriptions in more recent years have been of restricted access, increased commodification and means testing. Of these, means testing is always the costliest option. They have accompanied low growth, increased inequality and an atrophy of positive outcomes. After a wide consultation, the proposal suggested by other Members to make the payment a taxable benefit clearly has much to commend it.
I shall listen to your Lordships with care, but I am minded to vote for the Motion in the name of the noble Lord, Lord Palmer of Childs Hill, if not for that of the noble Baroness, Lady Altman.
Baroness Butler-Sloss (CB)
My Lords, I entirely understand why the Government want to get rid of a fuel payment to many people who can afford to deal with even the heightened cost of fuel for heating, but I make no apology for repeating what others have said, because it seems to me that it has to come from right across the House in order for—just possibly—the Minister and therefore the Government to listen to what we are saying. I do not think, from what I heard happened in the Commons yesterday—although I was not in this country—that there is more than a faint hope of that, but it is so important that we should be saying this from across the House.
We know that those eligible for universal credit do not always take it; we have been told that. But we also know of a large number of people who have an income just above universal credit and that is the group about whom I am most concerned when it comes to an increase in heating costs. The triple-lock pension increase does not come until April, but the heating cost is coming now. These people are going to suffer this year and I find it inconceivable that a Labour Government who have done so much for this country in so many ways should put themselves behind depriving ordinary, elderly people—and I speak as a very elderly person—of the opportunity to not have to choose between eating or heating. This seems to me the saddest thing I could possibly think of.
It may be a short-term problem in the sense that the triple-lock payment may help for next year, but, having heard what other speakers have said today in your Lordships’ House, that seems to me unlikely and it does seem that we will need a fuel payment for those on universal credit and those not on universal credit but earning very little more. I absolutely beg the Government to think again.
Baroness Stowell of Beeston (Con)
My Lords, I commend my erstwhile noble friend the noble Baroness, Lady Altmann, on her powerful opening of this debate. I agree with the arguments she put forward, as well as those of my noble friend on the Front Bench. There is very little for me to add to what they have already said about this decision that the Government have made and for which they have no mandate. They have not even had the respect to set out a proposal in a Budget in a much more rounded way, as put forward by my noble friend Lady Altmann.
I want to make a bigger point. What a lot of people find quite hard to take at the moment is that, alongside this decision, the Prime Minister has the gall to say that his Government are acting in a way which will restore public trust. He seems not to understand that all of us in the political class over the last few years have lost public trust—himself included—because of our disregard and disrespect for what the electorate have been demanding from us. For this Government now to take decisions that affect people so directly without any notice—believing that such decisions can be justified because the Prime Minister and his Chancellor are convinced that they know best—damages public trust further.
Of course, the impact of this politically on the Labour Party is a matter for it, but I urge the Minister and the rest of her Government to accept the arguments put forward by my noble friend Lady Altmann today. I hope that she does not mind me calling her my noble friend; she will always be “my noble friend” to me.
Baroness Stowell of Beeston (Con)
I also urge the Prime Minister to drop his misplaced belief that he and his Government are somehow morally superior and are acting in a way which will restore public trust. On the basis of this decision, they are not.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, the decision by the Government to remove the winter fuel payment for millions of pensioners is both cruel and reckless. It will mean that many elderly people will have to decide, as others have noted, between heating and eating this winter.
This is an attack on many who worked hard and contributed much to the prosperity of our country over their lifetimes. Many pensioners in Northern Ireland have no alternative to oil-fired burners for heating their homes and, with this Government’s proposal, 250,000 will lose this payment. Citizens Advice, Age UK and other charities across the United Kingdom have warned of the implications of this proposal—that low-income households that are already struggling will face intolerable choices—but their voices and warnings are falling on deaf ears. Surely Ministers must acknowledge that those now forced to live in cold home conditions are at increased risk of serious illness. Vulnerable pensioners and those with disabilities can add to the burden placed on our National Health Service this winter. In fact, it is believed that, through this proposal, many will die.
It is also noted that the Government chose to invoke the emergency provisions that permit them to bypass the scrutiny of the Social Security Advisory Committee. I thought that this Government proclaimed that, coming to power, they would be transparent and open and would restore integrity to our system of government, but at the very first hurdle they have failed miserably. I hope that the Minister will honour this House by giving us an answer to a simple question: when will they publish the impact assessment for these regulations? That question was asked three times in Prime Minister’s Questions today in the other House, and the Prime Minister gave no answer at all.
This decision was taken by the Labour Government also without consultation with the devolved regions. The action taken by the Government is callous and was not in the Labour Party’s general election manifesto. This is an attack on vulnerable pensioners, and a deliberate one. I know that the Prime Minister and the Chancellor of the Exchequer stated, “We had to do this”, but that is not true. They did not have to do this; they chose to do it.
Baroness Fox of Buckley (Non-Afl)
My Lords, there have been some very fine speeches, but I will not repeat them. I really hope that the Government Benches are listening because there is agreement across the House.
I will add a couple of points. Something I found very galling over the last few days is Members of the Government telling us that they are not frightened to be unpopular. I admire people who are not frightened to be unpopular, but sometimes you are unpopular because you are unpopular and not because you are brave. There is something to be said about the self-congratulations of people saying, “This proves that we’re proper leaders and that we’ve got courage”. Actually, it does not prove that. It sometimes can prove that you are tin-eared, not listening, and more interested in yourself and your internal party discipline than in the state of the country. Bravery might have been to have gone out on the doorsteps during the election to tell people that you were going to abolish the winter fuel subsidy. I might have had some admiration if that had been a campaigning tool from the manifesto, but it was not.
I am very worried about something else that is an implicit part of this discussion: this debate is in danger of becoming quite polarising and divisive in a very different way. I saw that in relation to what is known as boomer bashing. I do not know whether people have heard the insult “Okay, boomer”, but it is quite fashionable. There was a social media tweet—I do not know what it is called any more, maybe a posting—that went viral a few days ago. It was posted by a clinical consultant with quite some considerable followers, who wrote:
“I’ve elderly parents & most of my patients are elderly. However, I find it tough to sympathize with a demographic that’s been fortunate to see kids & grandkids grow up; voted for Brexit; got free education; triple lock pensions; and kept the Tories in power”.
I quote that because it completely split the audience. Thousands and thousands of people commented. Either people said that this is absolutely right—“These are the greedy boomers who’ve destroyed this country, the pro-Tories” and all the rest of it—or people said that it is a really unpleasant and nasty point of view.
I worry, and I warn the Government, that there is a danger of stirring up this notion of a gerontocracy. I have been doing quite a lot of media, and if noble Lords listen to phone-ins they will hear what I have heard frequently: that these are old, greedy people who have ruined the planet, ruined the country, ruined everything, and they deserve what they get. I do not in any way imagine the Government think that this is what they are doing, but it is a defence that people use to justify this policy.
I say that particularly because we have had a number of lectures from the Government about other people being the kind to use toxic language and stir up divisiveness—it is always the other people and not the nice people. In this instance, the “nice” party is in danger of having stirred up quite a lot of antagonism and hatred towards a generation who deserve better—ordinary working people who just happen to be old and proud enough to not want to claim benefits. They really deserve better, as do we all.
The Lord Bishop of Sheffield
My Lords, I speak in broad support of the regret Motion in the name of the noble Lord, Lord Palmer. I appreciate the very tight fiscal constraints under which the Government are having to operate, and the need for tough choices to be made. I also accept the recent Statement by the Prime Minister that tough choices are almost by definition unpopular choices. Tough choices must also be wise choices, however, and I confess that I harbour misgivings about the wisdom of this proposal for two reasons.
First, as others have observed, I worry about the speed at which these regulations have been laid, given the likely impact on some of the most vulnerable people in our communities. There has been no careful assessment of this impact, which is bound to be exacerbated by the fact that the energy price cap has just been lifted, meaning that this winter many pensioners will face increased fuel tariffs precisely when they are bound to incur increased fuel consumption, and just when a relief that they previously enjoyed has been withdrawn.
Secondly, I wonder whether the threshold for continued receipt of winter fuel payments is the right one. I understand that pinning continued payments to pension credits will make it straightforward to administer and, given the speed with which the Government feel that they need to act, I appreciate the appeal of this simple solution. However, I doubt that in this situation a simple solution is the best solution. All Members of this House recognise that many either do not claim pension credits to which they are entitled or are marginally ineligible for those credits and will inevitably experience considerable additional hardship on account of these regulations.
I am grateful to the Minister for the encouragement she has been giving this week to all those who are entitled to pension credits to apply for them, and I assure her that I shall do everything I can to communicate that message across South Yorkshire and the East Riding. However, I ask her, in a constructive spirit, whether the Government are confident that they have calibrated with sufficient care the eligibility bar for continued receipt of winter fuel payments. Will the Government not consider again the possibility that the bar has been set too low?
Baroness Verma (Con)
My Lords, I have listened to the noble Baroness, Lady Altmann, and my noble friend Lady Stedman-Scott on the Front Bench, and I have sat here thinking, “How did we come to this?”—a first-world country that could treat our pensioners so badly. How could we sit here and have a debate about taking away really needed money from the elderly and most vulnerable people in our communities? Today is quite a cold day; it suddenly went cold, and I am feeling it, and I am pretty certain that most pensioners in their households will be thinking, “Should I switch the heating on or leave it off?”
I speak on behalf of the 10,207 pensioners in the city of Leicester who are now not going to receive this payment. I feel sad, but also ashamed that we are standing here debating a very small saving in the bigger scheme of things. I do not understand it—I do not get it—because I felt that we were a country that looked after the most vulnerable. I felt that we were this gold standard that people looked at, and that we were able to say that we protect those who cannot protect themselves. Yet here we are, quite happy to debate £1.4 billion. I am not going to challenge the public sector workers’ pay award; I just want to focus long and hard on why we are sitting here thinking that we have no hope in changing the Government’s mind. If the Government really want to help, they need to take this ridiculous notion back and rethink. If the Government want to save £1.4 billion there are plenty of other ways of doing it, and I urge the Government to use them.
Lord Empey (UUP)
I, and I think many colleagues in the House, were surprised when this measure was selected to save money. We understand why Governments have to save money from time to time; we seem to have forgotten that we spent our way out of the Covid crisis, which has contributed very substantially to the debts this nation has and which the next generation will be paying back—and maybe their children as well. The Labour Party has just won a very convincing election victory, and while I understand what the noble Baroness, Lady Altmann, and indeed what the noble Baroness, Lady O’Loan, said with regard to challenging this measure, I personally do not think it is appropriate for us to challenge a newly elected Government at this stage, even though this measure was not in their manifesto and must have been clearly in their mind before the election—they did not just invent it on 4 July.
However, this idea is bonkers. It is not going to save £1.4 billion and, as the noble Lord, Lord McCrea, said, it will probably increase the number of people who will have to engage in health service requirements. If we manage to increase the take-up of pension credits, that is well and good, but that will also take away from the £1.4 billion saving. The Secondary Legislation Scrutiny Committee, a very highly respected committee in this House, has rarely produced a more depressing commentary than that on how the Government have dealt with this.
I would also like to localise the impact of this measure. The noble Lord, Lord McCrea, made a point about how my own region in Northern Ireland will be affected. We have 306,000 households that get the allowance, but that number will be reduced to 57,000, plus whatever additional pension credit is claimed. The noble Lord, Lord Davies of Brixton, made a forensic assessment of these proposals, but we all know that that is going to be at the margins; no matter how we push these things, there are a whole variety of reasons why we cannot achieve them. Nevertheless, of all the issues that we could look at to save money, this is the last area at which we should look. I just do not understand it. This is a poll tax moment for the Labour Party—it is on that scale, and it will last. It will not go away.
I can only suggest to the Government what I think has happened: they have got themselves on to the hook, and for tough-guy leadership reasons the Prime Minister does not want to be seen to be backing off —blah, blah, blah. The Government forced their MPs into the Lobby or sent them off with a slip for the day. They said, “Get out of the way, do not vote against us”, et cetera. I understand all that.
However, I think that we all would respect and acknowledge a Government that said, “Okay, perhaps we haven’t gone about this the right way. We will find other savings, but we will start a consultation process as we normally would, through the system, and see what we can come up with”. We all know that many of us in this House get the benefit, and we do not need it. So, tax it, or do whatever you like—the noble Lord, Lord Palmer, is an accountant and he knows these things—but, whatever can be done, let us do it. “Please”, we must say again to the Government, “this is bonkers”.
Lord Morrow (DUP)
My Lords, I have a few brief comments in relation to what is before the House. As far as my party is concerned, we will not have any trouble supporting either the noble Baroness, Lady Altmann, the noble Baroness, Lady Stedman-Scott, or the noble Lord, Lord Palmer, because we are infuriated by this matter.
The decision to discontinue paying the £300 winter fuel payment to pensioners is a shock and a surprise, as it comes after just 68 days in office by the Labour Administration, who often declare their support and concern for the most vulnerable in our society. I suspect that this is an opportunity at the start of their tenure to get the bad news out of the way quickly so that, when they come back for another mandate, most people will have forgotten who “done them in” and when it happened. However, I suspect that people will not forget. I implore the Government to think carefully, even at this late stage.
We have all heard much about the £22 billion black hole in our finances. If this is the case, one is left wondering why the most vulnerable should be targeted in an attempt to balance the books. Surely there are other ways, as the noble Lord, Lord Empey, has just mentioned. Why pick on the most vulnerable, on those who cannot answer back? It is very difficult to take this.
Pensioners who already find it very difficult will find it even more difficult to survive following this measure by a Labour socialist Government. I was speaking to some folk today who said to me, “I voted for the Government, a new Labour Administration, for change, but I didn’t realise that this was the change they had in mind”. They are now learning that they may have made a mistake and misplaced their vote on this occasion. They were quite moderate in their condemnation of the Government, but they said, “I did not expect to get this slap in the face, and I certainly did not expect it within two months or so of Labour taking over”.
The Government say, “We didn’t know that we were going to be confronted with a £22 billion black hole”. I suspect that we will hear some of that when the Minister responds. I used to sit in a degree of awe when the Minister was on the other side of the House, and every time she finished, I used to say, “Well, there is one Peer at least with a social conscience”. I am not saying that she has now lost her social conscience, but she has a wonderful opportunity now to demonstrate it. I look forward to hearing what she has to say.
Now that this Administration are in office, it seems that the rich will get richer and the poor will get poorer. In my part of the world, they will say, “Well, when was it ever any different?” I said to them that Labour is now in and has promised that there will be change. The footnote to everything that they said was that they wanted change. Well, this is a change in the wrong direction. I am sure that the Minister will give us the reason why they had to change and hit, below the belt, the weakest and the poorest in society. I look forward to hearing it.
Was there a single word in the manifesto that this is how it would be? Labour has been returned with a very convincing majority—overwhelming, some of us would say. However, I suspect that, had they hinted that they were going to target pensioners, that majority would not have been so overwhelming; it would have been much less, if it existed at all.
I suspect that many Labour Peers here today are uncomfortable with this and they will find it difficult to walk through the Lobbies here this evening and say, “This is exactly what I came into this House to do: to punish, punish, punish the weakest in society”. I implore Labour now to step back and think again. How many more punitive measures will this Government foist upon us and particularly on the vulnerable? Balancing the books is important, but balancing the books on the weakest in society is not the way to go. I say to the Government, “Please rethink your goal”.
When Labour was in opposition, it boldly declared—and these are the figures not from the bad Tories, my colleagues or the Lib Dems—that to scrap the £300 fuel payment would cost as many as 4,000 lives, as OAPs would be unable adequately to heat their homes. Are they still saying that? Is that still their position? If not, why has it changed so quickly? Just when they get their hands on the levers of power, they decide, “We’ve a very convincing majority: we can think, do and say what we like and show everybody who’s in control”. Yes, they can, but please can they reconsider what they are doing here? They have not endeared themselves to very many.
That £1.5 billion is a small amount in the scheme of things. My noble friend Lord McCrea has already alluded to the fact that there will be no savings at the end of the day. What about those who get cold, are taken to hospital and must be cared for? Where will the savings come from? I am sure that the Minister will outline in some detail where she sees them coming from.
Lord Hannan of Kingsclere (Con)
My Lords, I will not detain the House for long, but I want to just say one thing. I may be the only person who speaks up for the Government Front Bench, for which I do not expect them to thank me.
It is appalling to suggest that Members of this House are somehow personally lacking in social conscience when it is other people’s money, rather than their own, that we are talking about. Again and again, we see this conflation between the public need for economy and people’s personal morality, as though it was their own meanness or generosity. We had the noble Lord, Lord Palmer, talking about them as Scrooge. Scrooge was dealing with his own assets, not somebody else’s. The noble Lord, Lord Morrow, who knows how much I admire him, just said that the Minister has a chance to re-establish her social conscience. It is not her social conscience.
We can disagree with this policy. I would have done many things differently from this Government, as they know. One thing, which will make me even more unpopular, is that I would not be putting up the cost of energy as we do in this self-congratulatory way in vote after vote and then complain about the consequences, as we have been doing today. But can we please conduct our debates on the basis that, if you happen to favour the idea of benefits as a last resort for the needy rather than a universal entitlement, that does not make you a bad person? People on both sides of this issue are motivated by humanity and decency and, ultimately, by a concern for the welfare of the nation as a whole.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, that seems a good place to start. I start by thanking all noble Lords who have contributed to tonight’s debate. We have covered a lot of ground and there have been many thoughtful and constructive contributions. I thank the noble Baroness, Lady Stedman-Scott, for her welcome and I welcome her, in turn, to her place on the Opposition Benches. We have worked well together over the years, although I must admit I prefer it this way round—if not tonight.
Before I turn to the specific issues and questions that have been raised, I want to start by clearly setting out why the Government feel the need to take action and what we are doing. Then I will do my best to answer all the questions that have been asked tonight. I might not manage to attach everybody’s name to them, but I want to try to hit all the questions, so please bear with me if that is what happens.
The reason for the change is simple: there is a huge hole in the public finances. The noble Baroness, Lady Stedman-Scott, started by addressing the projected £22 billion overspend for this year which the Chancellor found when she came into office. The noble Baroness seems to think that the OBR knew all about this. The OBR has clearly specified that it was not told about the overspend. It described it as
“one of the largest year-ahead overspends against … forecasts outside of the pandemic years”.
Beyond this figure that we are bouncing back and forth, what does it mean in practice? It means that the day-to-day departmental spending by the previous Government as set out in the Spring Budget was, frankly, not even close to reality. Some noble Lords might remember that my first appearance at this Dispatch Box was to answer questions from around the House calling to keep the household support fund, which helps local authorities to help people with the cost of living, until the end of the year. The fund was due to run out in September, and I was called upon not to let that happen in the middle of the financial year. I went back to the department, but there was money in the budget to fund it only until September; there was nothing for the second half of the financial year. We found the money to cover that, but doing so, plus the Barnett consequentials, came in at an estimated £500 million—which had to be found from nowhere.
Ask my colleagues on the Front Bench what they found—a £6.4 billion overspend on the asylum system; a £2.9 billion overspend on the transport budget; and new roads, hospitals and train stations promised but not funded. There has not been a spending review since 2021. As a result, the public sector pay rises were not budgeted for and our reserves were spent three times over. This needs to stop. I take very seriously the comments made by the noble Baronesses, Lady Stowell and Lady Fox, about the importance of public trust, but the manifesto on which we were elected began with a promise that we would regain economic stability and by that means deliver growth. To do that means that we have to take difficult financial decisions right now to stabilise our economy before we can start the rebuilding, and then we can start to give the people we are all here to serve the better future they deserve.
No one thinks that things are okay in our country—do they, really? Public services are struggling, the prisons are full to bursting, the courts are overrun, and NHS waiting lists are sky high. We must deliver the change the country needs, but none of that is possible if we simply ignore the overspends right in front of our faces and put economic stability and credibility at risk.
That is why, as well as our plans—the noble Lord, Lord Desai, may be glad to hear this; I cannot remember what economic rationalism is, but it probably does not include this—to scrap non-dom tax status, close the loophole enjoyed by private equity investors and introduce a proper windfall tax on energy company profits, we are having to make some difficult in-year spending decisions. This has included cancelling capital projects, stopping discretionary spend and, yes, means-testing the winter fuel payment so that it will no longer go to all pensioners—many of whom are clear that they do not need it—but to those who need it most.
I say to the noble Baroness, Lady Fox, that I am absolutely with her. I do not want to see this as being about pensioners versus young people or public sector workers versus pensioners. The fact is that pensioners are not a homogenous group—we can tell that by looking around the House. There are rich pensioners and poor pensioners, and our job is to try to have a system that does its best to be fair across the piece.
I think most noble Lords would agree that the winter fuel payment should not be going to the richest, so we are therefore going to target those who need it most. Let me be clear for the record: those on pension credit, and those over state pension age living in a household that gets universal credit, income-based JSA or ESA, income support or tax credits will still receive £200 or £300 a year. That is on top of the significant rises in the state pension, which I will come back to in a moment.
I am not saying that this was an easy decision, and nor were many of the other decisions the Chancellor has had to take; but she believes that it was a necessary decision, and so do we. These are difficult circumstances, and we should be targeting.
I have heard very few noble Lords, if any, call for no reform of the system, with the possible exception of the right reverend Prelate the Bishop of Southwark. I would love to have a conversation with him on another day about how we balance means-testing versus universal benefits, because there is an interesting conversation to be had. But when public money is tight as it is right now, it is completely legitimate to decide to prioritise those who need it most.
I would like to see an end to the stigma around benefits. The benefits system is like social security insurance for all of us—it is there because needing it could happen to any of us. That is why putting money into it should not be stigmatising, and we should all encourage people not to see it that way.
Baroness Altmann (Non-Afl)
My Lords, I too welcome the noble Baroness to her position on the Front Bench. She brings huge expertise and value to that position. I hope that we can work together in the future on other pension-related issues—but on this issue, I have listened carefully to all noble Lords who have spoken and I have not heard any reasonable justification at all for the hurry to take this money away from the poorest pensioners this year. I have heard a marvellous case for changing it, and about the excellent work that is being planned to try to improve the take-up of pension credit and maybe to help people get the support fund, but none of these off-sets the loss for the possibly 3 million of the poorest pensioners—I repeat, the poorest pensioners, who are not the ones who are already on pension credit or might have a chance to receive it with the current take-up increase plan. This year they are at risk in their homes. This is the last chance to protect them and help them keep warm this winter.
For me this is about policy, not politics. I do not welcome any of the undertones or overtones that have tried to look at politics in this. There is none for me. My whole pensions policy life’s work has been about the idea that pensions are about not just money but people and giving them a better life in retirement. On that basis, I have not heard how the Government can possibly protect the poorest this winter.
We have heard about the triple lock. A triple lock increase of 4% on the basic state pension next April will give pensioners—many of whom, demographically, will not survive that long, regardless of the winter fuel payments—an extra £6.80 a week. They will not recoup a £300 loss until about February 2026. They need the money for their bills this winter. As I said, if the Government were to talk about this for next year, I would not be here—and believe me, I wish I was not here.
I know how hard it is to defy a Whip. I also know, though, as the noble Baroness, Lady O’Loan, said, that the conventions of this House are just that: conventions. We are the only mechanism left to protect the poorest pensioners and help them keep warmer this winter. With a very heavy heart, I believe that I must now test the opinion of the House.
Social Fund Winter Fuel Payment Regulations 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate
19:17 - Division on Baroness Stedman-Scott’s Motion - Ayes: 164 / Noes: 132 - Baroness Stedman-Scott’s Motion agreed.
Baroness Stedman-Scott
That this House regrets (1) that the Social Fund Winter Fuel Payment Regulations (SI 2024/869), laid before the House on 22 August, will leave pensioners worse off in winter; (2) the decision to prioritise above-inflation pay rises for unionised public sector professionals over the needs of the elderly, including many households that are eligible for Pension Credit but do not claim it; and (3) the lack of transparency on these policy decisions during the election period.
Relevant document: 2nd Report by the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Baroness Stedman-Scott (Con)
I thank all noble Lords for their contributions to the debate on the regret Motion tabled in my name. I cannot think there is anyone in this Chamber who wants this to happen—withdrawing the winter fuel allowance in the way the Minister has so eloquently outlined. The two phrases that come out time and again are “take time” and “think again”, and I live in hope that that may happen. I look forward to the day when we will meet with people in this House to see if there is anything we can do to make this more palatable. To that end, I wish to test the opinion of the House.
Social Fund Winter Fuel Payment Regulations 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate
19:31 - Division on Lord Palmer of Childs Hill’s Motion - Ayes: 65 / Noes: 132 - Motion disagreed.
Lord Palmer of Childs Hill
That this House regrets that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, will remove support from many of the poorest pensioners at the same time as the energy price cap is being lifted; and calls on the Government (1) to take steps to identify those who are eligible for pension credit but do not claim it so that they can receive both benefits; (2) to support vulnerable pensioners this winter; and (3) to take action to end fuel poverty, including with an emergency home insulation programme and a windfall tax on the profits of oil and gas companies.
Relevant document: 2nd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Lord Palmer of Childs Hill (LD)
My Lords, for the third time, here we go again. I thank the Minister for responding in so much detail and with so much fervour. I know she believes that we can find a way through this morass.
The point of the Motion in my name is not to make political points at all but to guide the Government on things I think they will 100% agree with. Therefore, it is unlike the Conservative Motion, with which I mostly agree but which added the political aspect of union pay, which the noble Lord, Lord Balfe, referred to as one thing he found regrettable.
I hope noble Lords will feel that this regret Motion will not be confrontational. It is meant to be something that both the Government and the Conservative Opposition could live with, and I would like to test the feelings of the House.
Arbitration Bill [HL]
Wednesday 11th September 2024
(2 months, 1 week ago)
Lords ChamberRead Full debate Arbitration Bill [HL] 2024-26 View all Arbitration Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 1-I Marshalled list for Committee - (9 Sep 2024)
Lord Hacking
“Award of costsIn section 61(2) of the Arbitration Act 1996 (award of costs), for the words from “costs should follow” to the end substitute “a reasonable amount of the costs of the successful party should be paid by the other party or parties, but account should be taken of costs incurred by the successful party which were unnecessary or excessive in whole or in part and which should not fall to be paid by the other party or parties.””
Lord Hacking (Lab)
My Lords, I will pause for a moment to allow Members of the House to leave, so that only those taking part in this Committee remain. I look to my right with some caution, because when I stood in support of my Amendment 1, I was unaware of a bank of noble and learned Lords on my right-hand side—there were three of them. Now there is only one: the noble and learned Lord, Lord Hoffman, who is sitting in his place. He told me over tea that the reason he is remaining is to oppose my next amendment. He opposed my Amendment 1 with some fierceness, and now he is staying back to oppose my next amendment.
This amendment goes back 28 years to the passage of the Arbitration Bill in 1996. I then objected to the introduction of the principle of “costs following the event”, which was in general usage in the English courts when the successful party was seeking costs against an unsuccessful party or parties. It was generally thought then that the event meant the winner won the costs, but Mr Justice Bingham—later Lord Bingham, Lord Chief Justice and then a senior Law Lord—said that was not right. It was in a case called Re: Catherine that Mr Justice Bingham said we should look at which party was responsible for what costs, and that the costs order should accordingly be made. My argument was that this obscure phraseology went against the drafting of the whole Bill.
Noble Lords who remember those days and now look at the Bill may remember that there was much praise for Mark Saville, later the noble and learned Lord, Lord Saville, who was chairman of the DAC that drafted the Bill—assisted by the secretary of that committee, the young barrister Toby Landau, and the wonderful parliamentary draftsman Geoffrey Sellars. The joy of the 1996 Act is that you can read it, passage by passage, in its clear, logical way and its clear, logical language. What a contrast that is to so many Bills that come before us—the detail and complication of many clauses cause most of us to put cold towels around our heads before we have a chance of understanding what is meant. I am not sure what the phraseology was then, in 1996, of the rules of the Supreme Court or the county court—in other words, the White Book and the Green Book—but I know now what the rules are in the new CPR. In particular, CPR rule 44.2(2)(a) says that
“the unsuccessful party will … pay the costs of the successful party”.
That is in the clearest possible language, so why should we continue to inflict upon the international community these ancient words of “costs following the event” when they are not used anywhere else? Why do international parties have to seek out the meaning? I am not suggesting that my drafting is perfect—indeed, noble Lords who have been looking at the Marshalled List will note that I made a mistake and had to re-draft—but it can all be quite simply done without any delay. For example, my drafting could be put in front of the rules committee of the Supreme Court, which can be consulted, as can the Chartered Institute of Arbitrators, the London Court of International Arbitration, the ICC and so forth. There is no cause for delay. If the drafting of my amendment is thought to be worthy of improvement, I accept that, but can the Minister—and this is the second time I am asking him, almost imploring him after the response I got to my earlier amendment—keep an open mind and not leave this strange phraseology of “follow the event” in Section 61(2) of the Arbitration Act?
Lord Hoffmann (CB)
My Lords, I greatly regret that the noble Lord should have cast me as his personal nemesis, particularly since it is entirely desirable that an arbitration tribunal should have the power to do what he said Lord Bingham did in the case to which he referred; that is, to distinguish between the cost of issues on which people have been successful and those on which money has been spent and on which they have been unsuccessful. However, the tribunal has such a power already.
I am sure that my friend the noble Lord, Lord Hacking, would recognise that in the end the power to award costs is entirely a matter for the discretion of the tribunal. It can take into account whether it thinks the party has spent too much or whether it has succeeded on this or that issue. All these issues can be taken into account. What it says that is salutary—this is something which attracts persons to come to London and have arbitrations under English law—is that in the ordinary way, if you have not spent too much and not lost on some issues, if you have won the case you will get your costs. That is a very attractive thing to offer to people who are about to launch an arbitration.
We have in the 1996 Act a time-honoured formula which everybody knows. They know exactly how it works and I really see no advantage in substituting a new formula, when nobody quite knows now how it is going to work.
Lord Wolfson of Tredegar (Con)
My Lords, I hope that I can be relatively brief because this is a short point. As the noble and learned Lord, Lord Hoffmann, said, the costs of any arbitration are in the discretion of the tribunal. I would add only a slight gloss on that. As the noble and learned Lord knows, there is provision in the Act that if the parties have agreed the result or the provisions on costs, the tribunal has to respect that agreement, with one exception in the Act. Of course, that underlines a very important point: the whole arbitral process is consensual and contractual. We should therefore tread very lightly in this area generally, and especially when we are considering making changes to the terms of the Act.
With respect to the noble Lord, Lord Hacking, I have a certain amount of sympathy with his language point because we do not use “follow the event” anymore. That phrase is no longer used in the CPR, as he pointed out, but I took the opportunity this afternoon to have a look at the DAC report. At paragraph 268, it said in terms that the intention was to follow the normal rule in this jurisdiction—that the successful party should get the costs. That is one of the reasons why people choose to arbitrate in London and not somewhere else, and certainly not to litigate somewhere else where you can win and not get your costs back. I would be reluctant to do anything which would undermine London arbitration.
We could of course change the words to track CPR 44.2(2)(a), but I suggest that would be unnecessary and ill advised. I am not aware that there is any confusion in the international arbitration community as to what “follow the event” means. Arbitrators are perfectly able to make what are effectively issues-based awards of costs, or to reflect the fact that the claimant might have won on two issues but the defendant has won on another. Although I understand the noble Lord’s language point, I suggest that we should leave matters as they are.
As for the amount of costs or recoverable costs, which is the other point that the noble Lord, Lord Hacking, deals with in his amendment, Section 63(5) of the Act already provides that the tribunal can limit its award on costs to those costs which have been reasonably incurred. As someone whose fees are often challenged on the basis that they are unreasonable, that is a provision with which I am personally familiar. We appreciate the thrust of the amendment but, certainly on these Benches, we would suggest that it is not needed.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, perhaps I might read out from Rule 44.2 of the CPR. It says that
“the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but … the court may make a different order”.
There is then considerable further guidance on the assessment of costs in the remainder of Rule 44. I can say, as a non-lawyer, that I think that is pretty clear. I note the point that the noble Lord, Lord Wolfson, made about having some sympathy with the language used, but the language which I just quoted is quite straightforward.
My noble friend Lord Hacking said that he was imploring me and he called the noble and learned Lord, Lord Hoffman, his nemesis. I might be my noble friend’s nemesis as well, because I will be arguing to reject his amendment. Of course, I thank him for tabling it. It is right that it is common practice that arbitrators already have great discretion on this matter under Section 61 of the 1996 Act. The Law Commission has made no recommendations for reform of Section 61, so we believe there is no reason for having a reform that may introduce some level of uncertainty, which we do not believe is necessary.
The previous arbitration Acts of 1889 and 1950 simply provided that costs were at the discretion of the arbitrators but the 1996 Act then provided the current default rule, which mirrored the position in the rules of the Supreme Court, which were the court rules then in force. Although the language has changed with the CPR now in force, the underlying principle is still the same. The CPR, and the RSC before them, take the view that costs should follow the event as a fair default rule. Section 61 allows arbitrators to depart from that rule as appropriate. In substance, therefore, Section 61 already allows the arbitration tribunal to award whatever costs it thinks fair.
The Law Commission received no representations from stakeholders that Section 61 was causing any difficulties in practice, and it is unusual to change the language of an Act if there is no change in principle. Indeed, it is possible that the amendment could be interpreted as a new, untested principle. In the light of this, I am grateful for the opportunity to clarify the current arrangements and would suggest that no amendment is needed. I therefore invite my noble friend to withdraw his amendment.
Lord Hacking (Lab)
My Lords, I intend to withdraw this amendment but perhaps I could say a short word before I do that. Of course, I have to do it because I have no support from anybody; I am doing no better than I did 28 years ago. I still say that this is unfortunate terminology and that it would be much more sensible if we brought the description of what decision should be made by the tribunal on costs into modern language, but if noble Lords like this ancient phrase of following the event they can chase around and look at Mr Justice Bingham’s judgment in Re: Catherine and so forth.
So I am in no better position than I was 28 years ago. However, there is one point I would like to make, which the noble Lord, Lord Wolfson, correctly made when he drew attention to Section 55. He could have drawn attention to Sections 62, 63, 64 or 65, because all of them deal with various provisions that are applicable to the cost issues that the tribunal faces. I respect and agree with that. I agreed with it 28 years ago and I agree with it now, but I still think it would be much nicer if we dropped this strange phraseology of costs “following the event”.
“Appeals to Court of Appeal from High Court decisions(1) In section 18(1) of the Senior Courts Act 1981 (restrictions on appeals to Court of Appeal), for paragraph (g) substitute—“(g) from a decision of the High Court under Part 1 of the Arbitration Act 1996 in a case where that Part makes provision about appeals from the decision, except in accordance with that provision;”.(2) In section 35(2) of the Judicature (Northern Ireland) Act 1978 (appeals to Court of Appeal from High Court), for paragraph (fa) substitute—“(fa) from a decision of the High Court under Part 1 of the Arbitration Act 1996 in a case where that Part makes provision about appeals from the decision, except in accordance with that provision;”.(3) In Schedule 3 to the Arbitration Act 1996 (consequential amendments), omit paragraphs 34(2) and 37(2).”Member’s explanatory statement
This clause corrects a drafting error identified in the House of Lords’ judgment in Inco Europe v First Choice Distribution and makes clear that appeals from High Court decisions under Part 1 of the Arbitration Act 1996 may, subject to provision in that Part, be made to the Court of Appeal.
Lord Ponsonby of Shulbrede (Lab)
My Lords, in this group I will speak to Amendments 3 and 4, tabled in my name.
It has come to light that Clause 13 does not adequately codify the case law on appeals under Part 1 of the Arbitration Act 1996. I have tabled Amendment 3 to replace Clause 13 and correct the root cause of this issue: a drafting error in the 1996 Act that provided for an incorrect approach to appeals under Part 1 of the Act. Allow me to explain both the underlying issue and the approach I am taking to resolve it.
Clause 13 of this Bill as introduced seeks to codify case law regarding leave to appeal decisions on staying legal proceedings under Section 9 of the 1996 Act, namely the House of Lords decision from 2000 in Inco and First Choice Distribution. As such, the current Clause 13 inserts into Section 9 provision that
“the leave of the court is required for any appeal from a decision of the court under this section”.
During the passage of this Bill, certain noble and learned Lords raised the point that Clause 13 as drafted would permit leave for appeal to be sought only from the High Court—the High Court being what is meant by “the court” in the provision. However, the current situation established by case law provides that leave to appeal can be sought directly also from the Court of Appeal. It seems that Clause 13 as drafted would have the effect of inadvertently narrowing the existing position, which was never the intention.
The root cause of this issue is that the 1996 Act made an incorrect consequential amendment to Section 18(1) of the Senior Courts Act 1981 and Section 35(2) of the Judicature (Northern Ireland) Act 1978. In Inco and First Choice Distribution, the late Lord Nicholls of Birkenhead identified that this provision in the Senior Courts Act was originally meant to give effect to restrictions on the right to appeal contained in Sections 1 and 2 of the Arbitration Act 1979. The Senior Courts Act then needed updating to reflect additional appeal restrictions in the 1996 Act. But, as Lord Nicholls put it,
“for once, the draftsmen slipped up”.
The provision in the Senior Courts Act, when read literally, suggests that no appeals against decisions under Part 1 of the 1996 Act are allowed, except where expressly provided for in the 1996 Act. However, the intended and correct position is that appeals are indeed permitted unless expressly restricted by the 1996 Act. Due to this misunderstanding, Clause 13, in inserting its express language on appeals into Section 9 of the 1996 Act, establishes restrictions on those appeals. Accordingly, the provision that
“the leave of the court is required for any appeal from a decision of the court under this section”,
as used in other sections of the 1996 Act, is intended as a restriction providing that leave under those sections can be sought only from the High Court. As it was not the intention of the Law Commission or the Government to add such a restriction on Section 9 appeals, we must correct it.
Simply amending Clause 13 to permit direct appeals to the Court of Appeal under Section 9 could raise questions about other sections of the 1996 Act and whether similar provision should also be made elsewhere. Deleting Clause 13 would maintain the current appeal process but miss the opportunity to fix the issue properly. This seems remiss, given that the clear objective of this Bill is to refine and clarify our arbitral framework.
Amendment 3 therefore rectifies the underlying issue. It replaces the current Clause 13 with amendments to the Senior Courts Act 1981 and the Judicature (Northern Ireland) Act 1978. These clarify that appeals against High Court decisions under Part 1 of the 1996 Act, including under Section 9, may, subject to provision in that part, be made to the Court of Appeal. This will establish beyond doubt the current position on appeals.
Amendment 3 also necessitates a change to the Bill’s Long Title, which is currently:
“A Bill to amend the Arbitration Act 1996”.
However, under Amendment 3, it will now also amend the Senior Courts Act 1981 and the Judicature (Northern Ireland) Act 1978. This will not practically widen the scope of the Bill, given that it modifies that other legislation only to the extent that it relates to the 1996 Act. Nevertheless, Amendment 4 is required and updates the Long Title, adding “and for connected purposes”. I beg to move.
Lord Beith (LD)
My Lords, we support this amendment and are grateful to the Government for bringing it forward. The Minister’s remarks could usefully be framed and provided as an object lesson in the fact that drafting really does matter and that, when it goes wrong, the consequences mount up in subsequent legislation. He illustrated that well.
Lord Wolfson of Tredegar (Con)
My Lords, I am personally grateful to the Minister for engaging with me and others on this. These are technical matters, but it is important to get them right. I acknowledge the assistance I have had from my colleague Toby Landau KC, who, as the noble Lord, Lord Hacking, said on the previous group, did a lot of work on the original DAC report. I also acknowledge members of the Law Commission team with whom the Minister and I have both engaged, especially Nathan Tamblyn.
As the Minister said in moving his amendment, in Inco Europe, Lord Nicholls of Birkenhead, with whom the rest of the Appellate Committee agreed, said:
“I am left in no doubt that, for once, the draftsman slipped up”.
He put it in those terms because, again, as the noble Lord, Lord Hacking, said on the previous group, this is an extremely well-drafted Act. It is probably one of the best-drafted Acts on our on our statute book. To pick up the other phrase that Lord Nicholls used in that case, for once, Homer had nodded. This amendment rectifies the position—I am not sure what the opposite of nodding is, but, whatever it is, it puts Homer’s head back upright. I am grateful to the Minister for bringing forward this amendment, which we support.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank both noble Lords for their support for this amendment. I agree with noble Lord, Lord Beith, that drafting matters, and I agree with the points made by the noble Lord, Lord Wolfson. I note the support given to him by those individuals, including Toby Landau, who was an expert witness in the previous consideration of these matters.
Member’s explanatory statement
The amendment amends the long title to cover my amendment to replace Clause 13.