Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, Divisions are expected in the Chamber this afternoon. The Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024
(2 days, 3 hours ago)
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.
Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, the order was laid in draft before this House on 24 July 2024. It will ensure that sustainable aviation fuel, also known as SAF—I hope that your Lordships will tolerate the use of that acronym—makes up an increasing proportion of the jet fuel supplied to the UK each year. As a consequence, the greenhouse gas impact of flying will be significantly reduced. The draft order, referred to as the SAF mandate, will contribute to fulfilling our manifesto commitment to secure the UK aviation industry’s long-term future and it has received significant cross-party parliamentary support to this point. No issues were raised on the draft order at the Secondary Legislation Scrutiny Committee or the Statutory Instruments Joint Committee.
The SAF mandate is a bespoke mechanism for guaranteeing demand for SAF in the UK. It will send a strong signal to industry that SAF will play a pivotal role in the future of UK aviation and will provide an incentive for SAF to be supplied. However, it is just one pillar of a wider approach to capitalise on the environmental and economic opportunities that SAF offers. The UK will also lay legislation to support SAF production in the UK by providing revenue certainty. This will strengthen the UK’s leadership in SAF production, improving its fuel security while fostering industrial development and generating green jobs.
We are pleased to see SAF starting to be brought to the UK market in small but increasing volumes. The SAF mandate will help to address barriers to widespread adoption and realise the full potential of this technology. The United Kingdom has a rich history of being at the forefront of aviation innovation and we will continue to show leadership by introducing one the world’s most ambitious frameworks to drive demand for SAF.
SAF is blended with conventional kerosene to be used in existing aircraft and engines without modification. It is a low-carbon fuel that uses sustainable feedstocks instead of crude oil, which achieves greenhouse gas savings across its lifecycle production and use. It can be derived from a wide range of sources that achieve carbon savings relative to fossil fuel in different ways. They include biomass derived from wastes and residues; fossil wastes that cannot be avoided, reused or recycled; and renewable and nuclear energy. This means that we can draw on resources that would otherwise be discarded, such as agricultural residues and black binbag waste, to make jet fuel. The existing renewable transport fuel obligation, or RTFO, rewards the supply of SAF but does not obligate aviation fuel supply. By introducing a specific obligation on aviation fuel, we will guarantee a minimum supply of SAF.
I turn to the specific content of the statutory instrument. It introduces two obligations on suppliers of fossil jet fuel: a main obligation and a power-to-liquid obligation. The obligations are placed on jet fuel suppliers at the point at which their fuel can be supplied only to UK aviation. Each obligation period is one year in length and runs on a calendar year basis. To fulfil the obligations, suppliers must redeem SAF certificates at the end of the obligation period. Certificates are awarded to suppliers of SAF that meets the sustainability criteria. The number of certificates that a supplier receives is in proportion to the greenhouse gas savings that it achieves.
Power-to-liquid fuel, a type of SAF made from carbon dioxide and renewable or nuclear power and heat, will be rewarded with specific certificates that can be used to meet the power-to-liquid obligation. This will specifically incentivise the supply of these fuels, given their potential for higher greenhouse gas emissions reduction and lower risk of environmental impacts.
SAF made from segregated oil and fats, such as used cooking oil, commonly called HEFA, will also receive separate certificates. Suppliers can use these certificates to meet their main obligation, but the amount will be capped, starting from 2027, to allow market space for novel technologies. All other types of SAF are rewarded with standard certificates, which can be used to meet the main obligation. All certificates can be traded between account holders for a price determined by the market. The value of these certificates therefore provides a revenue stream for producers of renewable fuels and demand for their products in the fuel market.
Where a supplier has a shortfall in certificates to meet the obligations, a supplier must pay the buyout, which is a fixed price per unit of energy. The purpose of a buyout mechanism is to provide a way for suppliers to discharge their mandate obligation in cases where they are unable to secure a supply of SAF, preventing excessive costs from being passed on to consumers. This price is set to be higher than the expected cost of producing and supplying the same unit of SAF under normal market conditions, thus incentivising the supply of SAF.
The instrument also sets out the criteria that SAF must meet in order to be eligible, to ensure that we maintain the highest sustainability credentials. The order makes provision for the administration and management of accounts for suppliers to ensure that a record is kept of obligations and certificates. It also sets out appropriate processes for the revocation of certificates and issuing penalties where certain provisions are contravened.
Renewable fuels already contribute one-third of transport’s emission reductions from the current carbon budget. However, this is almost exclusively in the road fuel sector. Introducing the SAF mandate will broaden the use of low-carbon fuels into aviation and secure the long-term future of this transport mode. It is projected that, between 2025 and 2040, the SAF mandate could deliver up to 25 million tonnes of SAF, securing a saving of up to 54 million tonnes of carbon dioxide.
To conclude, we must act now to address the global challenge of climate change. Historically, the aviation industry has faced difficulty in achieving carbon reductions. However, SAF represents an immediate opportunity to change this. The technology has been proven to achieve significant greenhouse gas savings and it can be used in aircraft today.
Lord Hendy of Richmond Hill (Lab)
My Lords, with permission, I shall start the concluding paragraph again.
To conclude, we must act now to address the global challenge of climate change. Historically, the aviation industry has faced difficulty in achieving carbon reductions. However, SAF represents an immediate opportunity to change this. The technology has been proven to achieve significant greenhouse gas savings and it can be used in aircraft today. The proposed instrument will facilitate the adoption of this technology on a large scale, which is essential for achieving net zero and delivering on the manifesto commitment to secure the future of aviation.
Baroness Randerson (LD)
My Lords, I thank the Minister for his explanation. There is no doubt about the need for action in relation to aviation. UK aviation fuel use more than doubled between 1990 and 2020, despite efficiency improvements in aeroplane design. By 2050, aviation will be one of our largest emitters. The technological advances are not looking optimistic in relation to battery and hydrogen-powered aircraft. Such flights are a long way off becoming long-distance or even medium-distance in terms of practicality. Combine this with the fact that the lifespan of an aircraft is 30-plus years and this is a huge challenge for us. SAF is far from a perfect answer, but it is all we have and it is welcome to see this draft SI here.
I have obediently read this complex and lengthy document and I have some fairly basic questions for the Minister. First, the consultation took place in 2022, I think. Why has it taken so long to get from the consultation process to this SI? I am aware, when I ask that question, that it is deeply unfair, because this was the previous Government’s problem, but I notice that, at the top of the front page, it says that this draft SI replaces one produced on 20 May this year. Is it substantially different in terms of its impact, or is the difference simply that a couple of mistakes have been ironed out? The length of time it has taken is disappointing, because the previous Government announced “jet zero” with a great fanfare several years ago, and therefore the slowdown is a problem.
Secondly, have the new Government changed the plans for the operation of the new system? They might have changed the SI, but have they changed their plans to any practical extent? Thirdly, the aviation industry has been pressing us for government action to stimulate production of SAF for many months or even years. It has been telling us that, if the Government did not take action rapidly, SAF production would take off, if I can use that term, in our competitor countries, we would fall behind and we would not therefore be a leader in SAF production. I am referring here to the manufacture rather than the use of SAF.
Although this SI seems to encourage the use of SAF, it does not seem to directly provide a mechanism to encourage and support the manufacture of SAF, along the lines of the mechanism that we have been pressed by the aviation industry to adopt. Can the Minister explain whether anything in the Budget will help encourage the production of SAF? I noted that money was available for the aerospace industry and was unsure whether that would cover this sort of thing.
Finally, there is good SAF and not so good SAF, which is referred to in this Explanatory Memorandum. Can the Minister explain how industry checks, and government process checks, will ensure that the SAF manufactured and used in the UK is up to the highest environmental standards?
Lord Trefgarne (Con)
I apologise to your Lordships for not being in my place when we resumed following the Division.
I have a simple question for the Minister. Can he say whether all this applies to general aviation, in particular aviation involving smaller aircraft which very often run on aviation gasoline and not the fuel that forms part of this agreement? This is important because the price of fuel is a critical part of operators’ costing, they need to know where and when they can get it and that it will be available when required. In essence, the question is, does this apply to general aviation and to smaller aircraft running on gasoline, as well as to larger ones running on turbine fuel?
Lord Moylan (Con)
My Lords, I am grateful to the Minister for arranging a briefing with officials so that I could better understand this complex proposal. The briefing was indeed helpful and I learned a great deal.
I find this a troubling statutory instrument not because I have any objection to the use of SAF by aircraft—indeed, I welcome that—but because of the chosen mechanism. We are still meant to be a free-market country and the normal means of market operation in this country is that, where there is a demand for something, a supply is forthcoming.
We are told that, despite the fact that SAF is estimated to cost between three times and seven times as much as standard kerosene-based fuel, there is a genuine and strong demand for it from airlines, not because they enjoy paying more for their fuel necessarily but because from their own reputational point of view they wish to do as much as they can to decarbonise the operation of their fleets. SAF is the principal technique available to them for doing that at the moment, as the noble Baroness, Lady Randerson, pointed out, so the demand undoubtedly exists. Why is the supply therefore not forthcoming? Why is it that they would have to go somewhere else to buy SAF—which is the implication of their position—when the demand exists here and we are home to major suppliers? Nobody seems to have explained this.
We have decided, despite the fact that we allegedly operate a market economy, that the Government are going to intervene so as to mandate the supply of this fuel. The means of mandating it is through this instrument —through the mandate—and that will not only oblige it to be produced but oblige it to be sold in certain quantities that will increase every year.
That addresses only the standard available type of SAF—the HEFA-type SAF that the Minister referred to. There are other, more exotic means of producing SAF not yet available, some of them perhaps even undreamt of. They will be subject to a separate mandate so that, to fulfil the mandate, it will be obligatory to produce some SAF by these alternative methods. That graph continues to grow over a period, as illustrated in the table on page 7 of the statutory instrument. What I would really like to know is: why can this not be done by the market?
Lord Hendy of Richmond Hill (Lab)
I thank all noble Lords for their contributions to this debate. I will take the questions from the noble Baroness, Lady Randerson, first. Her first questions were about the length of time that it has taken to bring this statutory instrument together.
We have engaged extensively with industry in this area. Two consultations have been completed and, in both cases, industry was generally supportive of our proposals. The most recent consultation, in March 2023, received 104 responses and the government response to this was published in April 2024. We received responses from a range of stakeholders, including fuel suppliers, airlines and NGOs, so it has been extensively consulted on. This statutory instrument replaces the previous one tabled, because there has been a change of Government; the current one was therefore tabled by the new Government.
The noble Baroness asked whether this is good SAF and what good SAF is. The Government have been clear that the mandate must deliver fuels with the highest sustainability credentials. We are therefore putting in place strict sustainability criteria that SAF must meet to be eligible under the mandate. SAF must be made from sustainable waste or residues, such as used cooking oil or forestry residues; recycled carbon fuels, such as unrecyclable plastics; or power-to-liquid fuels made using low-carbon, renewable or nuclear energy. SAF produced from food, feed or energy crops will not be allowed. We will continue to monitor the sustainability of SAF pathways to ensure that high sustainability standards are maintained.
The noble Lord, Lord Trefgarne, asked whether this applies to general aviation. I have been referred to a very complex answer, but I am not sure that I can do full justice to his question. If the noble Lord will indulge me, I will write to him fully on that.
Lastly, the noble Lord, Lord Moylan, raised some questions. He asked about the cost implications for passengers. I am assured that, although SAF will be more expensive than traditional jet fuel, it must be right that the costs of decarbonising the fuel are borne by those that produce the emissions. Providing that sufficient SAF is available, increases in average airfares will fall within the range of their annual variations, seen historically, from which it is not difficult to deduce that the effect on passenger numbers will be quite small.
The noble Lord, Lord Moylan, is correct that the guaranteed return is not in this instrument. That is why the Government have committed to a revenue certainty mechanism.
If there are any questions that I have failed to answer completely, I will write to noble Lords and the noble Baroness about them.
Lord Moylan (Con)
May I briefly ask the Minister something? There seem to be two guarantees going on here. Might the Minister be able to inform your Lordships about how they will interact? One is a guaranteed price mechanism. As I understand it, although I am happy to be corrected, the suppliers will be guaranteed a price for the SAF, the suppliers being the large companies that supply this type of fuel—the BPs and so on of this world. The other is a guaranteed return to the investors. The investors are presumably the people who will pay for the construction of the facilities that will produce this material, source it and so on—that is, the infrastructure required to generate it. Can the Minister say how those two guarantees interact, both legislatively and financially? Is the Minister saying that one is being legislated for in this instrument and one is to come later? Noble Lords would be interested to understand that, I think.
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his intervention. He is right that there are two mechanisms. The revenue support mechanism Bill will introduce revenue certainty for SAF producers looking to invest in new plants in the UK. Together with the SAF mandate, those measures will give the investment community confidence to invest in these novel and innovative technologies.
The revenue certainty mechanism aims to boost greener flying and support an industry estimated to add more than £1.8 billion to the economy. This will help secure the supply of SAF for UK airlines. The legislation for a revenue certainty mechanism will be in place by the end of 2026. If the noble Lord would like me to explain further how those two mechanisms interact, I would be absolutely delighted to write to him.
To conclude, greener transport is central to the delivery of the UK’s cross-economy climate targets. It directly supports the Prime Minister’s mission to make Britain a clean energy superpower and accelerate our journey to net zero. SAF is one of the key technologies that will facilitate this change. Introducing the SAF mandate will allow the UK to capitalise on the opportunity that SAF presents for decarbonising the aviation sector and will support the transition to net zero.
Franchising Schemes (Franchising Authorities) (England) Regulations 2024
(2 days, 3 hours ago)
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Franchising Schemes (Franchising Authorities) (England) Regulations 2024.
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, these draft regulations relate to access to bus franchising powers for all types of local transport authorities in England outside London. The regulations bring into effect paragraphs (b) to (g) of Section 123A(4) of the Transport Act 2000, such that the types of authorities listed in those paragraphs come within the meaning of “franchising authority”.
These powers were previously limited to mayoral combined authorities and mayoral county combined authorities. However, these regulations give all types of local transport authorities access to powers to franchise their bus services. In doing so, they will ensure that decisions are made at the right level. These regulations aim to give the power to local leaders to determine the most appropriate action to deliver an improved bus network, based on the needs and circumstances of their areas. This step does not mandate local transport authorities to franchise; it is about providing them with a suite of tools to support their communities and deliver better bus services.
The department will build on the progress of these draft regulations through the introduction of the buses Bill later in this parliamentary Session. The Bill will deliver further changes to make bus franchising easier to deliver, alongside other measures on areas such as accessible travel. It will also improve bus services for local transport authorities that choose not to franchise, allowing greater flexibility over bus funding and letting local leaders deliver their own local transport priorities. Alongside this, the department is building its capacity to provide practical support to local transport authorities throughout the franchising process, should they wish to pursue it.
I will now provide some background information about these regulations. Bus franchising powers for local transport authorities in England, outside London, were created in the Bus Services Act 2017. Powers were automatically given to mayoral combined authorities and mayoral county combined authorities to allow them to prepare a franchising scheme assessment—essentially a business case—if they chose to do so, without requiring consent from the Secretary of State for Transport.
Currently, all other types of local transport authorities wishing to prepare a franchising scheme assessment face a two-stage pre-assessment process. First, regulations must be made which switch on access to the franchising powers. Secondly, the Secretary of State for Transport must give her consent to any individual authority to prepare an assessment of their proposed franchising scheme. This instrument implements the initial stage of this process for non-mayoral combined authorities, ensuring that they will need to obtain the Secretary of State’s consent only to prepare a franchising scheme assessment. This will reduce the barriers facing these types of local transport authorities in pursuing bus franchising.
I turn to the detail of the regulations. Bus franchising is a model for providing bus services where a local authority determines the details of the service and private operators are contracted to run the services. Alternatively, in a deregulated market, any company, subject to minimum safety and operating standards, can operate and have control over bus services. These regulations seek to empower local leaders to choose the model that works best in their area to manage their bus services. Bus franchising is one of those tools. Alternatively, local transport authorities can pursue high-quality enhanced partnerships with private operators or public ownership.
These regulations are part of the Government’s delivery of their manifesto commitment to give
“new powers for local leaders to franchise local bus services”.
Bus franchising will give communities a greater say in the services they can use, connect people to opportunities and benefit those on lower incomes, who disproportionately use buses.
This instrument implements the first stage of this process for all types of local transport authorities so that they require the Secretary of State’s consent only to proceed with the assessment. The department is also revising the bus franchising guidance to streamline the franchising process. The Government consider that this onerous process has acted as a barrier to local authorities. Removing the first stage of this process will make it easier for local transport authorities to pursue franchising if they wish to do so. The regulations improve the suite of tools on offer for local transport authorities to deliver better buses.
I am pleased to say that the statutory instrument was cleared without comment by the Joint Committee on Statutory Instruments. To address the only request made by the Secondary Legislation Scrutiny Committee, for more information on franchising, the department is also revising its bus franchising guidance, which sets out the franchising process accessibly and in detail.
These regulations represent an important first step towards delivering on the Government’s aim of ensuring that local authorities have the tools they need to plan and deliver services in a way that suits their communities. The forthcoming buses Bill, which will be introduced later in this parliamentary Session, will build on this progress. Through this instrument and the forthcoming Bill, the Government will deliver on their plan for improving the bus network and ending the postcode lottery of bus services. The plan is centred on putting control of local bus services back into the hands of the communities that use them and will give local leaders the freedom to take decisions to deliver their local transport priorities. I beg to move.
Lord Grayling (Con)
My Lords, I stand to speak briefly about these regulations, as I was the Secretary of State when the original legislation was passed. While I understand what the Minister is trying to do—he comes at this, of course, from the perspective of somebody who has led the franchising operation in London—I have two big misgivings about this change.
We very consciously extended the franchising powers to the other metropolitan areas and mayoral combined authorities, believing that what was being done in London and the volume of passengers there made that a sensible and realistic option. Despite that, areas such as Manchester took several years before deciding to go down this road. Promises were made about franchising happening quickly, but it never actually did at that time. Of course, the mayoral combined authority areas have the critical mass to do this, whereas the reality is that, on the ground in other parts of the country, the idea that an alternative to what happens now is available through franchising is something of an illusion.
The reality is that local authorities in counties such as Surrey, where I was a Member of Parliament for 23 years, already plan their services because they pay for them where a gap cannot be filled commercially. It is not as if they can somehow suddenly dictate that this route happens and that route happens. Given the low level of ridership, getting any buses at all to run is a challenge and something they have to fund and develop themselves. So I do not really see how expanding franchising to counties such as Surrey will make any difference whatever. That in itself seems to make this change anything but what the Minister has just described it as. Of course, franchising is a realistic option in metropolitan areas and mayoral combined authority areas. That is why we gave that power in the first place, but I just do not see it going to other parts of the country.
I have a reservation that goes beyond simply not understanding why this is necessary. There is a danger that this will hold back the development of bus services for the future. The reason I say that is that it was clear to me during my time as Secretary of State that the future of bus travel in rural areas, in particular, is about demand-responsive buses. It is not about traditional routes going all day long from A to B and B to A. It is about buses that do different things at different times of the day, follow different routes and respond to passenger demand. Effectively, it is about Uber-type operations on a large scale, with routes changing all the time based on who wants to use them.
I do not see how demand-responsive buses fit within a franchise system. I would very much like to hear the Minister explain that to me. By definition, if you are dealing with a private operator that adapts the routes it follows all the time to reflect individual demand on individual days, which has to be the future of buses in some parts of the country, how on earth does franchising fit with that? Yet a local authority may decide on this for political reasons, for example—on the Labour side, there were great debates at the time about wanting to see local authorities have greater control over bus systems—and I fear a conflict between its desire to structure things in some areas, trying hard to do so even when it has to pay for a lot of the routes itself, and not unleashing the potential of demand-responsive buses. They will be the future of public transport in areas of the country that remain ill-served by buses, and where it is difficult to make them operate simply because the sheer demand that exists in our cities is not there.
So I would particularly probe the Minister about how he sees demand-responsive buses working within the system that these regulations create. I still think that they are not necessary. Franchising in big cities and major conurbations is fine. This feels like a set of regulations that will not achieve very much. As the notes say, there is no actual demand from non-metropolitan combined authority areas and this instrument may hold back the private sector from the kind of innovation that will be needed for the future.
Baroness Randerson (LD)
My Lords, I welcome the progress on franchising represented by this SI. I always felt it was a great pity that the 2017 Act made franchising so complex, so I am pleased about the removal of the first stage of the franchising process. However, I draw the attention of noble Lords to the report of the Secondary Legislation Scrutiny Committee, of which I am a member. That report criticised the Explanatory Memorandum because it had little information on what franchising is and how it differs from the current situation. Also—I think this is crucial—how many local authorities are expected to adopt franchising?
I do not agree with the points made by the noble Lord, Lord Grayling, in full, but he raises an issue which relates basically to capacity. I will come back to that in a moment, but if franchising is not suitable for Surrey, why was it regarded in that 2017 legislation as acceptable for Cornwall? It is my recollection that Cornwall was allowed to franchise buses. An element of doubt is sewn in this SI in the Explanatory Note, which says that no impact assessment has been produced because the SI is not expected to have any, or any
“significant, impact on the private, voluntary or public sector”.
I find that judgment worrying, because bus franchising is a very big undertaking, a multimillion pound undertaking, and it takes a long time. I have watched Manchester, for example, struggle with franchising in producing the Bee Network over many years.
Nevertheless, despite the deficiencies in the way the SI is cast, it is welcome because it removes the first stage, as I pointed out earlier, and also because it extends bus franchising powers beyond mayoral authorities. At the time that this legislation went through this House, I questioned why, having voted, as a local authority, for an elected mayor, that made you intrinsically more capable of running the buses. It struck me as totally illogical. Not all bigger local authorities have elected mayors: I think of Bournemouth, Christchurch and Poole, which is a fairly densely urban area that does not have an elected mayor.
So I am pleased that the complexity of the process is being reduced and I am pleased that it is being extended, but, in reality, the key barrier remains the capacity and expertise in our local authorities. I was pleased to read that the department is looking to build up its capacity to offer advice and assistance to local authorities, because on the ground that is what they desperately need.
When the Secondary Legislation Scrutiny Committee asked the Department for Transport why there was no proper explanation in the Explanatory Memorandum, the department provided a very clear paragraph, which was included in our report. I recommend that noble Lords read it if they are in any doubt about the importance of this legislation.
Finally, the same legislation in the 1990s that allowed London to franchise and fatally divided the country between the bus haves and the bus have-nots also encouraged local authorities to sell their bus services and their buses and forced them to run them on a strictly commercial basis. It has interested me ever since that the few local authorities that still have bus companies and run their own buses at arm’s length are largely successful and some of the best examples of bus services in the country.
Lord Moylan (Con)
My Lords, we recently had a Statement in the other place given by the Secretary of State on bus franchising. My understanding is that this instrument gives effect to that Statement—at least its initial parts. I recall that, when we debated that Statement in your Lordships’ House, I had the temerity to describe it as being essentially a bogus offer.
I gave two reasons for that, but I have now found a third, which is that the instrument does not actually allow local authorities to go in for bus franchising at all. All it does is allow them to apply to the Secretary of State for permission to prepare a plan for doing so, but nothing is said, and nothing has been said by the Minister, about what criteria will be applied when such plans are submitted. In order to understand the implications of this instrument, we need to understand that. The Minister has said nothing about how many applications he or his department expect to receive, or about what proportion of such applications he considers it likely that the department will grant. It is perfectly possible that the answers to all these questions is “zero” under this instrument, and that bus franchising will be no further forward as a result of this very grand announcement, which was made with great hoopla in the other place, and of this instrument than it is today. We really would like to know some of the answers to some of these questions in practical and not simply theoretical and legislative terms.
I return to the two reasons I gave when we debated the Statement in your Lordships’ House. The first is that the policy comes with no money attached to it. At the time, the Chancellor had not made her Budget Statement. She since has, so it should be open to the Minister to say how much money has been allocated to supporting local authorities to undertake franchising, because the whole purpose of franchising is to generate services which the market will not bear. Nobody denies that there is a cost to local authorities in undertaking franchising—a cost that they are most unlikely to be able to support from their own resources—so what money is the department, or are the Government in general, putting behind this greatly trumpeted policy?
My second cause for complaint in that earlier debate has already been referred to by the noble Baroness, Lady Randerson: the complete lack of capacity of local authorities, certainly outside the metropolitan areas, to put together and run a bus service as an integrated operation. There is more to this than simply saying “We’d like the buses to run here”. Route planning involves thinking about demand, the locations of passengers and their relationship to places of work, hospitals and other destinations, and so forth. That is a skill; it does not just come to a committee of local councillors sitting around a table. Even if you have experience of route planning, as we have seen in Manchester, you have to think about branding, fares and ticketing, and what you will accept by way of tender. Are you accepting cash or is it cashless only? You have to know what sorts of discounts, season tickets and so forth you are willing to offer. As the noble Lord knows, and as I have had the privilege of observing in the past, in the various positions that he and I have occupied, real skill is required to do this well.
The answer that we have had from the noble Lord so far is a mildly amusing one: the Department for Transport is going to set itself up as a centre of expertise in how to plan routes, and do branding, fares and ticketing, for bus companies and services throughout the country. Now, I fully acknowledge that there is at least one person in the Department for Transport who has the skill to do that, and that is the noble Lord the Minister. But he is going to be jolly busy doing all these jobs, being both a Minister and planning routes for modest settlements and hamlets in the remoter counties of England.
However, if it is not going to be the Minister, who will be recruited to do this skilled work in the Department for Transport? Will they be recruited on a sort of ad hoc consultancy basis? Is this department waiting speculatively for applications to arrive, which may or may not meet criteria that have not been vouchsafed to us so far, and which may then be rejected or accepted by the Secretary of State? How will this wonderful offer of skill and expertise inside the Department for Transport be achieved in practice? The noble Lord should not be allowed to leave this Grand Committee without explaining those things to us in some detail.
I come finally to a point that is new to me, because it struck me only yesterday evening when I went to a reception given by the Accessible Transport Policy Commission and found myself speaking to the chief executive of a private bus company—a commercial operation in a large provincial city; I will not say which. He described to me all the good work it was doing to make its fleet more accessible to people with disabilities. We even talked about something that was new to me, which I am interested to explore—dementia-friendly flooring.
He described to me the close relationship he had, working with the local authority, then he looked me straight in the eye and said, “You’re going to confiscate my business”. That took me aback, because I had not thought about it in those terms—but in practice that is what franchising will do. It is, in effect, the confiscation of a business. Of course, he may still secure the franchise, but then he would simply be operating services for somebody else, for a fee. He would no longer be running a business; he would simply be somebody else’s agent in doing that.
This is confiscation, like the nationalisation of the train operating companies, which is happening. I have to say to the Minister that there is an increasing whiff of Bolshevism about this Government’s transport policy—and we know that that did not end well.
Lord Hendy of Richmond Hill (Lab)
I thank noble Lords and the noble Baroness for their extensive comments. I turn first to the noble Lord, Lord Grayling, and his remarks about where this might apply and the circumstances in which it would be appropriate.
The primary thing to say about this is that it is a matter of choice. This statutory instrument extends choice to all local transport authorities, which might choose various solutions around the scale of public bus services in their areas.
I did not need to search for examples outside London because the noble Baroness, Lady Randerson, gave me some, including the very rural county of Cornwall, where the public transport network is now a model. It includes demand-responsive transport, to a limited extent, but it has also reintroduced bus services in places where they have not been seen for a very long time.
The noble Baroness’s example of Bournemouth, Christchurch and Poole is one of a combined conurbation where the bus services are, in my judgment, of quite a good standard. It may well be that the local transport authorities concerned decided that that service was sufficient, but there are many other places in England where the bus service is not judged to be of a sufficient standard, where it has fallen to a bare minimum and where the reintroduction of some service standards would not only be a good thing but would create revenue which would expand the total service provision.
Regrettably, I can find some examples of places—although I think it would be better not to name them—where sufficient short-term service cuts have been applied that the revenue generated is so low that the whole bus service is in a continual spiral of decline. There are other places where that has not happened. That is the supply side of the choice we are offering local authorities, so that they can do what they think is best.
The noble Lord, Lord Moylan, referred to demand-responsive transport. It is a solution, obviously, but the department is working hard on some experiments to seek to reduce the per-journey cost of DRT, which is very difficult. It is possible to register demand-responsive services, even in a franchised environment.
The noble Baroness, Lady Randerson, made a number of points; indeed, it was she who gave Cornwall as a very practical example of an extremely rural place that has, by experiment, succeeded in franchising and has a very good network. She referred to the criticism of the Secondary Legislation Scrutiny Committee. As I mentioned in my opening speech, the department is revising its bus franchising guidance in order to set out the process accessibly and in detail. I hope that this will satisfy the committee’s demand.
The noble Baroness, Lady Randerson, questioned the capacity of local transport authorities to do this job in rather more balanced terms than the noble Lord, Lord Moylan, did. The department recognises that active support is needed for local authorities that wish to franchise.
I draw both noble Lords’ attention to the Bus Centre of Excellence, which is funded by the Department for Transport and supported by the Chartered Institution of Highways and Transportation. The noble Lord, Lord Moylan, referred to my knowledge of this process as it applies to London. He will probably be very pleased to learn that the Bus Centre of Excellence is chaired by none other than Leon Daniels, who ran surface transport in Transport for London for seven years, I think, and has an intimate knowledge of how franchising works in London. Moreover, since leaving, he has got a very good knowledge of how it might work in the rest of England.
The noble Baroness referred to the impact of legislation and to the local authorities who have successfully continued to run their own in-house bus companies when many were disposed of. She is absolutely right that places such as Reading, Blackpool and Nottingham are good examples of where arm’s-length local authority companies have delivered very successful bus services. The Government intend for that route to be open to local authorities who wish to use it; it will be part of the scope of the buses Bill. It is right to offer local authorities a real choice about how they deliver their local bus services.
Lord Grayling (Con)
Will the Minister allow me to probe that? The Red Book shows that the Department for Transport has probably had the worst settlement in the Budget, with barely an increase in either capital or revenue budgets taking place, so is this new money?
Lord Hendy (Lab)
I am citing sums which are available in 2025-26. I disagree with the noble Lord in conceptual terms that it is the worst settlement for years, to paraphrase him. It is a very good settlement, bearing in mind the state of the national finances. Indeed, in real terms, local government support has gone up by 3.2%. My point is that there is enough money here to support local bus services in local transport authorities in whatever way they want to provide them, and this statutory instrument allows them to provide them in more ways than they currently can. Also, as I just said about Manchester, and as I would say about a consistent network anywhere in towns and cities in Britain, if it is provided consistently and planned rationally, revenue will go up and that virtuous circle will enable more provision.
I hope that I have answered all the points that noble Lords made, but if not, I will be delighted to write.
In conclusion, the regulations we are considering give all types of local transport authorities in England, outside London, access to powers to franchise their bus services. This Government’s plan to improve buses starts here. Our next stage of reform will be the introduction of the buses Bill. This legislation will seek to make bus franchising even easier to deliver, devolve funding and improve accessible travel. It will also improve bus services for councils that choose not to franchise. The transformative work the Government are doing will turn the tide by giving communities the opportunity to better control local bus services and have a real say in building local transport networks that work for them.
Animal Welfare (Livestock Exports) Enforcement Regulations 2024.
(2 days, 3 hours ago)
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Baroness Hayman of Ullock
That the Grand Committee do consider the Animal Welfare (Livestock Exports) Enforcement Regulations 2024.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, these regulations make provision for enforcing the live exports ban in the Animal Welfare (Livestock Exports) Act 2024. They create a robust and effective enforcement regime that builds on the existing requirements for animal welfare in transport and, importantly, ensures that the burden on industry is minimised.
Although animal welfare is a devolved matter, a joint approach to implementation and enforcement has been agreed with the devolved Governments in Scotland and Wales, as many export journeys begin in one jurisdiction and depart from ports located in another. This instrument therefore applies across England, Scotland and Wales to ensure a uniform, consistent enforcement of the prohibition across Great Britain.
This instrument provides powers to the Animal and Plant Health Agency, as the national regulator for animal welfare during transport, and to local authorities, which are responsible for enforcing it. First, to minimise circumvention of the ban and the need for enforcement action, this instrument provides for strengthened pre-export controls for livestock to be carried out by the Animal and Plant Health Agency. The current controls already require organisers of live animal transport to submit a plan of the journey, including departure and destination as well as rest stops. This plan, known as a journey log, must be submitted to APHA for approval for any long journey to a third country.
The new provisions in this instrument will require organisers of such journeys also to provide evidence of the purpose of their export. APHA will need to satisfy itself that the consignment will not be exported for slaughter or fattening before it approves the journey log, and it can refuse to approve the journey log on that basis. To facilitate this process, we have worked with the national beef, sheep and pig associations and the British Pig Association to establish a system whereby they will be able to assess and verify evidence provided by journey organisers. This system should provide journey organisers with a simple way of providing APHA with the required evidence.
The national associations have provided a similar service to industry for many years to facilitate shipments with P&O Ferries, which has a no-slaughter shipment policy. The industry is, therefore, familiar with the process of working with the national associations; we believe that this will encourage engagement and compliance with the new requirement.
It is important to be clear that the pre-export controls set out in these draft regulations do not apply to horses. We are taking a co-design approach to identifying solutions to prevent horses being exported for slaughter. We are working together with stakeholders, who know their industry best, to find the most effective solution. We expect to present specific measures for horses in a separate instrument for consideration in due course.
Secondly, these regulations provide a range of powers to APHA and local authorities; they are to be used in relation to both livestock and horses should investigative or enforcement action prove necessary. These include the power to serve a hold notice to prevent the movement of animals if an inspector suspects that they may be exported for slaughter or fattening. They also include a power of entry and inspection to premises, including vehicles, vessels and dwellings, where inspectors believe an offence is being, has been or is about to be committed, or where there is believed to be evidence of an offence on the premises. This includes a power of entry to private dwellings, subject to obtaining a warrant.
Exporters of livestock and horses will be required to retain records relating to the export of those animals for three years, which must be provided to an inspector on request. It will be an offence to fail to keep these records, to fail to comply with a hold notice or to obstruct an inspector. The penalty for these offences would be an unlimited fine in England and Wales or, in Scotland, a fine limited to level 5 on the standard scale.
These regulations provide the Animal and Plant Health Agency with the power to suspend or revoke a transporter authorisation if there is evidence of non-compliance with the live exports ban. Such decisions may be appealed, first through reconsideration by the Animal and Plant Health Agency then, if unsuccessful, in the relevant First-tier Tribunal.
We are taking a risk-based approach to regulating trade to ensure that the burden on industry is minimised while preventing circumvention of the ban and so minimising offending levels. This instrument is essential to ensure that we can effectively enforce this important animal welfare measure.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome the regulations before us. I welcome the Minister to her position and thank her for setting them out.
We will not rehearse all the arguments we had in the debate on the Bill, but I welcome the fact that horses are not covered. I am sure that pony clubs across England, Wales, Scotland and Northern Ireland will be extremely happy to hear that. When does the Minister think she will be in a position to come back to the Committee to explain the position on horses and how it relates to the tripartite agreement?
I have a number of questions that reflect my concerns. I welcome the noble Baroness, Lady Rawlings, to her place; I think she is going to speak in a later debate. She will recall all the excitement around Brightlingsea, which was in my Euro constituency at the time, when one of the first incidents of live animals for export came to my attention. Of course, the cases have been small in number and heavily regulated by the EU and our own domestic regulations.
Paragraph 6.1 of the Explanatory Memorandum states that the regulations, certainly in England,
“will usually be enforced by the local authority”.
Has the Minister’s department done an impact assessment on the cost implications for local authorities and their resources, bearing in mind that we are well aware of the pressures on local authority budgets and resources at this time?
I regret that this is a unilateral measure and is not being imposed by our former partners in our erstwhile membership of the European Union. There is meant to be a legitimate trade in breeding stock and stock for racing. Obviously, it is excluded at the moment because of the prevalence of bluetongue disease. The last time we debated this, which was round about the time before the Bill gained Royal Assent, my understanding was that there were as yet no facilities to allow this practice to happen. This is a legitimate and very lucrative trade, and it is a source of great concern in the farming community that it will still not be permitted once we get over—in due course, I hope—the threat of bluetongue disease.
I perfectly accept that the Minister might not be able to respond today, but could she give us a written reply on where we are with the facilities? They have to be paid for. I understand that they could potentially be at Harwich, in my former Euro-constituency; they could be elsewhere, for example at Dover, but at the moment this is a very serious gap in a legitimate trade. Although it is not necessarily covered by the remit of these regulations, it is a great loss of earnings to those who ply that trade.
Lord Trees (CB)
My Lords, I welcome these regulations, which enforce and extend measures in the Animal Welfare (Livestock Exports) Act, which was passed earlier this year, to prohibit the export of certain animals for fattening or slaughter from or through Great Britain to countries outside the British Isles. These geographical restrictions are very precise and important; we will come to that in a minute.
I note that the Act has no restriction on export for breeding purposes and did not include poultry. Both of those exemptions are fully justified and remain, although, as the noble Baroness, Lady McIntosh, alluded to, there are problems with exporting live breeding mammals. I also note, as she has done, that the original Act included equids but the regulations under discussion do not. I repeat the question: when might consideration be given to having equivalent regulations for equids? Although I do not think that a functioning ferry for horses is working at the minute, the export of live horses for slaughter is something that potentially concerns a lot of veterinary and animal welfare bodies.
I further note that, because of the present occurrence of bluetongue in England, the movement of all live ruminants to Northern Ireland from England is currently suspended. We hope that that will not be indefinite, of course.
The original Act allowed movement for slaughter and fattening to Northern Ireland as part of the UK. Since there is, under EU jurisdiction, free movement of animals from Northern Ireland to the Irish Republic and to the EU beyond that, this is a potential loophole that could be exploited; like others, I drew noble Lords’ attention to it in the debate on the original Bill in February. This movement to Northern Ireland was and is subject to certain conditions, including direct movement to either an abattoir or a farm, at which there should be a standstill on movement for at least 30 days. However, unscrupulous persons could move animals after standstill, or even before that, to the Irish Republic then onwards to anywhere in the EU, perhaps even to north Africa.
Given the scale of movements between Northern Ireland and the Irish Republic—the figures I have suggest that, in 2022, 337,000 sheep were moved between Northern Ireland and the Irish Republic for fattening and slaughter—it is clearly possible that a substantial number of animals might be legally moved, ultimately for slaughter, into the EU or beyond by unscrupulous persons. So, again, I ask: to what extent will we be able to monitor those movements to try to detect whether there are illegal movements within that traffic?
I welcome the fact that the current regulations appear to try to close this loophole by requiring the exporter in Great Britain to submit evidence of the purpose of export to the APHA before the journey log can be approved. The APHA must be satisfied that the animals will not be exported for fattening and slaughter before movement is approved, and it will have the power to require supplementary evidence demonstrating that. This is a very welcome measure; I congratulate the Government on introducing it.
Lastly, do His Majesty’s Government have any plans to review movement regulations in the UK, now that we are no longer bound by EU rules? We all acknowledge that animal welfare can be compromised by long-distance live transport. As well as the total distance travelled, the frequency of loading and unloading is a hazardous procedure that can give rise to injury and welfare problems. The movement of sheep within the UK can involve very long journeys, for example from Caithness to Cornwall, and the normal rearing process for sheep involves frequent long-distance movements between owners. Are His Majesty’s Government satisfied that the current rules and regulations with regard to journey times and transport conditions within the UK are appropriate? Having said all that, I very much welcome these regulations on livestock export.
Lord Elliott of Ballinamallard (UUP)
My Lords, I thank noble Lords for giving me the opportunity to speak here. I welcome the Minister to her place. I declare an interest as a farmer in Northern Ireland; we heard some mention of Northern Ireland. I suppose I have a few queries around these regulations.
One of my concerns is how it will be managed, with animal welfare being a devolved issue in both Scotland and Wales. Will that cause any complications with these regulations, because quite often we find that devolved institutions are very precious and protective of their own rights? I am just concerned that it will fall between two stools.
The noble Baroness, Lady McIntosh, has already asked whether the farmer or haulier will be responsible when there is a check and an inspector looks at the issues.
I am also curious about journey log records. The regulations mention applicable guidance that will focus on changes to the application process for journey logs, especially the need to provide corroborating evidence on the purpose of the export. I am wondering what level of evidence will be required to corroborate that with the journey log, because quite often that can be manipulated. We have heard some instances of concern around export to Northern Ireland and how that may provide extended journeys that are not covered within the legislation.
The next point I am curious about is animals that are being transported from Northern Ireland to Great Britain; will they be required to have exactly the same journey logs? Will the same record-keeping system be required for them and will the corroborating evidence be the same as that required in other parts of Great Britain?
Those are just a few of the queries that I have on these regulations; I know that the debate on the main legislation has already taken place. I just have some concerns that we may find that some issues drop through loopholes and may not be fully accountable to the authorities that look over the regulations.
Lord de Clifford (CB)
My Lords, I also welcome this statutory instrument and the detail of it. A lot of my points have already been expressed by the noble Baroness, Lady McIntosh, and the noble Lord, Lord Trees. It is certainly very important from a farming point of view—I represent vets who work with farmers—and on the ability to export breeding stock in the long run, and with all respect to the bluetongue outbreak.
I also note that the equestrian side of it needs to be addressed in due course. We welcome that, so I will not go into any more detail on that.
Live exports to Northern Ireland were just addressed by the noble Lord. The time limit for exports of sheep et cetera from Scotland to Northern Ireland has been extended, because there is no direct ferry route from Scotland to Northern Ireland due to the ferry regulations. Is Defra going to monitor the number of live exports from England to Northern Ireland, and likewise from Northern Ireland back to England? That is important to ensure the numbers are tracked correctly.
Furthermore, when animals arrive in Northern Ireland, who is going to monitor what is in place, as requested by the RSPCA? Is Defra going to monitor that, as well as the Department of Agriculture, Environment and Rural Affairs in Northern Ireland?
I will further emphasise the final point of the noble Lord, Lord Trees: we would welcome, for improved animal welfare, a review of the current journey times within Great Britain.
Baroness Rawlings (Con)
My Lords, following the very good speech of my noble friend Lady McIntosh, I will say that animal welfare was the most debated subject when we were both in the European Parliament together. I wonder whether we are still abiding by all EU rules now.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for her introduction. It is a pleasure to support this SI. Since the noble Baroness, Lady Fookes, introduced this into the Chamber by way of a Private Member’s Bill, we have all been anticipating that it would be implemented as soon as possible. The instrument itself and the Explanatory Memorandum are clear as to what is to happen and who will perform the duties of enforcement. Much of it will fall on local authorities which, as we all know, are struggling to make their budgets balance. Can the Minister say whether local authorities will be recompensed for this additional work? The noble Baroness, Lady McIntosh of Pickering, also raised this.
No one has any doubt that animals should not be transported live to Europe or other countries specifically for the purpose of slaughter. It is unnecessary to have transported animals suffering cramped conditions, often with no access to water and food, and for disproportionately long periods. Animals which are going to slaughter should be dispatched as near to their living quarters as possible. The distress that transportation causes should be kept to a minimum and access to abattoirs should be within close proximity. Other noble Lords have referred to this.
I have received a brief from the RSPCA, which has asked two questions. First, how does the instrument ensure that transporting live animals for slaughter or further fattening, including horses, is not authorised to Northern Ireland from England, if they would then be re-exported to the Republic of Ireland? The noble Lords, Lord Trees, Lord Elliott and Lord de Clifford, also referred to this matter. Secondly, the RSPCA asks: when will the Government come forward with proposals on improving the rules on the internal transportation of live animals in England, now that it is no longer limited by the transport times in Regulation 1/2005? I would be grateful if the Minister could provide answers to these two questions.
I also have a question of my own relating to the date of implementation for this SI. In the EM, at paragraph 5.2, we learn that Royal Assent was granted for the Act on 20 May of this year. Then in paragraph 5.3 we learn that the prohibition on transportation of live animals from and through the UK
“came into force on 22 July 2024”.
Again, that is this year. However, in the SI itself, Regulation 1(b) states—I am sorry that this is very nerdy —that the regulations
“come into force on 1st January 2025”.
I would be grateful if the Minister could clarify whether the ban is already in place, as from 22 July, or whether animals will have to wait until 1 January 2025 to be totally protected. I realise that no animals have been exported for slaughter since 2020, but it is important that the dates on the legislation are accurate.
I look forward to the SI which will come forward to cover horses, as referred to by the noble Baroness, Lady McIntosh of Pickering. Apart from these queries, I totally support this vital SI and the sooner that it is enacted, the better.
The Earl of Effingham (Con)
My Lords, His Majesty’s Official Opposition welcome the Government’s Animal Welfare (Livestock Exports) Enforcement Regulations 2024. In government we took the issue of animal welfare very seriously, as evidenced by the passing of the Act to which this statutory instrument refers. The Animal Welfare (Livestock Exports) Act 2024 prevented the exportation of livestock for the sole purpose of slaughter or preparation for slaughter and received cross-party support.
We are pleased that the current Government continue to focus on this area by implementing the practical steps to ensure that the correct people are held responsible. Increasing the necessary requirements of evidence submission will allow inspectors to examine more closely the intentions of a transporter and ensure that there is sufficient evidence to indicate that an animal is not being taken to slaughter.
I thank the Minister for bringing this statutory instrument forward. We are satisfied that this is a sensible approach and have no issues to raise.
Baroness Hayman of Ullock (Lab)
I thank all noble Lords who have contributed to today’s debate. It has been a good debate and I am pleased that so many noble Lords have taken part in it, because this is an important piece of legislation and we were very pleased when in opposition to support the Bill through Parliament to becoming an Act.
As I said, the instrument contains a proportionate set of powers necessary for the Animal and Plant Health Agency and local authorities to enforce the live exports ban effectively. Without these powers to carry out checks and investigations and take enforcement action, there is a risk that the ban could be undermined.
I will check to make sure that I have answered the questions that were asked properly. If I have not, I will get back to noble Lords. There were some questions around equines—horses—from the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Trees. The noble Lord, Lord de Clifford, also mentioned horses. One question was around the delay in bringing in pre-export controls for equines. I am sure that noble Lords are aware that equines are currently exported for multiple purposes ranging from bloodstock moves to leisure activities. They can be privately or commercially transported and fall under numerous industry bodies or none at all. Registered equines are not subject to journey log controls, so at present there is no control point at which intervention by the regulator can occur to stop an export movement that might contravene the ban.
Baroness Hayman of Ullock (Lab)
My Lords, I was addressing some of the questions around equines. Due to the more complex nature of export movements of equines, we are taking a codesign approach to this issue, working together with stakeholders that know the industry best to find the most effective solution.
Questions were asked about the risks in delaying the controls. It is important that we take the necessary time to get this right. We want to ensure that equines will not be exported for slaughter but, at the same time, that the export of equines for legitimate purposes must not be impeded. We are working closely with industry to find that balance.
I was asked about the journey logs for registered horses. Again, we are working together with stakeholders to find the best approach to implementing the ban before we lay the draft enforcement regulations before Parliament, because we want to achieve a balance between ensuring that the ban is implemented effectively while minimising any burden on legitimate risks.
The noble Baroness, Lady McIntosh of Pickering, asked about the Government’s view on the live animal BCP issue. Clearly this is a commercial issue but we are sympathetic to the concerns of the businesses involved. Noble Lords may be interested to know that I have had a series of round tables with different groups of stakeholders to discuss the effectiveness of BCPs, how they work now and how to approach their future operability. We have a lot of feedback and information from stakeholders on this issue as part of tracking its progress, and are meeting with organisations such as the National Farmers’ Union that have a specific interest in live exports.
On enforcement, the noble Baroness, Lady McIntosh, asked about local authorities. Due to the robust pre-export controls and regulatory tools that will be in place, we anticipate very low offending rates. We have been working closely with local authorities to develop the right approach, and they agreed that enforcement action in relation to a live exports ban would have minimal impact on their finances.
The noble Baroness, Lady McIntosh, also asked about the capacity of abattoirs. As she rightly said, there have been no livestock exports for slaughter or fattening from Great Britain to the EU since the beginning of 2021. Prior to this, the number of animals exported for slaughter represented a very small proportion of the total number of animals processed in the UK every year. For example, in 2020, when we had issues with Covid and it stopped, slaughter exports from Great Britain to the EU accounted for less than 0.2% of sheep produced in the UK and around 0.02% of all livestock slaughtered in the UK. Slaughterhouse capacity has been able to absorb the additional supply of animals that may have previously been exported for slaughter, so we do not believe that any further steps are needed to ensure capacity.
The noble Baroness, Lady McIntosh, also asked about advice. Obviously, it is important that livestock exporters are made aware of any new requirements, and the Animal and Plant Health Agency will contact all authorised transporters to inform them of the new requirements before they are due to come into force. We are also engaging with the relevant stakeholder organisations.
I was asked—again, it might well have been by the noble Baroness, Lady McIntosh, who asked quite a few questions—about who is responsible for the hold notice. The transporter, or person responsible, has to comply. If they fail to do so, APHA can arrange for livestock to be returned to the place of departure or placed in suitable accommodation.
The noble Lord, Lord Trees, asked whether we would consider extending a live export ban to the whole of the UK, and other noble Lords asked about Northern Ireland. The live export ban does not apply to Northern Ireland. This is to ensure that farmers in Northern Ireland have unfettered access to both the UK and Republic of Ireland markets. Farmers in Northern Ireland routinely move animals to the Republic of Ireland for slaughter and fattening. I reassure noble Lords that I meet regularly with DAERA, and I have met the Ulster Farmers’ Union a couple of times, so we are very aware of the different pressures on transporting livestock in Northern Ireland and into the Republic.
The noble Lord, Lord Trees, and the noble Baroness, Lady Bakewell, asked about the importance of improving transportation of animals within the country—not going beyond. We need to monitor that very carefully, because animal welfare during any transport is obviously incredibly important. As a Government, we have said that we are committed to improving animal welfare. That is one reason why we are bringing in these regulations very early; we think it is important. At the moment, I am reviewing the animal welfare strategy more broadly and I hope to capture issues such as this within that broader strategy review.
The noble Baroness, Lady McIntosh, asked why records have to be kept for three years. The reason is that this is consistent with existing laws: at the moment, journey logs are required to be retained for three years.
The noble Lord, Lord Elliott, asked about the detail of assessment criteria. The assessment criteria have been developed and agreed with Defra, using the national associations’ knowledge of legitimate priming and breeding exports. This includes checking the pedigree status of animals as well as certain health requirements, such as sheep coming from an accredited scrapie-free flock. We do not intend to publish the assessment criteria, but guidance will be provided to journey organisers and transporters.
The noble Baroness, Lady Bakewell, asked for clarification about whether the ban is in force and how it works with this SI. The ban is already in force. The SI is just to enable the enforcement of the ban that came in previously, as she pointed out.
The noble Baroness, Lady Rawlings, asked about EU rules applying in GB. They do not apply. We have assimilated regulations and continue to protect animals in transport.
Finally, I thank the noble Earl, Lord Effingham, for his very kind words of support. It is important to recognise that the previous Government brought this legislation in. We strongly supported it and it is good to be working cross-party to ensure that it is now enforced effectively. We are committed to upholding the highest standards when it comes to animal welfare, and I am very pleased that we can now put forward these provisions to ensure that the ban on live exports for slaughter is implemented and enforced effectively.
Ivory Act 2018 (Meaning of “Ivory” and Miscellaneous Amendments) Regulations 2024
(2 days, 3 hours ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hayman of Ullock
That the Grand Committee do consider the Ivory Act 2018 (Meaning of “Ivory” and Miscellaneous Amendments) Regulations 2024.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, this instrument amends the Ivory Act 2018 to extend the prohibition on dealing in ivory from an elephant to include ivory from the following four magnificent species: common hippopotamus, killer whale, narwhal and sperm whale. Walrus was included in the original consultation. However, the SI does not include walrus as it will continue to be protected under existing regulations on trade in seal products.
The UK is committed to protecting these species, whose conservation status may be threatened by the trade in their ivory. All four species are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which regulates their trade internationally. Hippopotamus and sperm whale are listed as vulnerable on the International Union for the Conservation of Nature red list.
The objective of this instrument is to help conserve populations of the four additional species. The Act will prohibit commercial activities concerning trade in their ivories in the UK. This will prevent transactions involving items made of ivory from these species contributing to markets, which then create a demand for ivory, driving poaching and the illegal trade.
Extending the ban to these species will also make compliance and enforcement of the Act simpler and more effective, and will reduce opportunities for laundering ivory. It sends a strong signal that ivory should not be seen as a commodity for financial gain or as a status symbol.
This instrument also amends the Schedule to the Ivory Prohibitions (Exemptions) (Process and Procedure) Regulations 2022 on prescribed institutions to correct the names of some of the institutions prescribed under the Act. Lastly, it amends the Ivory Prohibition (Civil Sanctions) Regulations 2022 to make consistent the references to service of notices relating to civil sanctions. I beg to move.
Lord Carrington of Fulham (Con)
My Lords, I start by declaring my interests, as in the register. I am the president of the British Antique Dealers’ Association, which is an honorary and, sadly, unpaid position. However, I am of course speaking on my own behalf, not on behalf of any outside body.
I want to take this opportunity to review a little of the relationship that this statutory instrument has with the 2018 Act, as well as the way in which the two operate together. I hope that the Grand Committee will bear with me in this. I should start by saying that I hope we are all in favour of preserving wildlife, particularly endangered species and those threatened with extinction. We should all, therefore, be in favour of improving the Ivory Act so that it helps to achieve that aim.
The concern that some of us have about the Ivory Act, had when that Act passed through your Lordships’ House in 2018 and now have about this statutory instrument is not about their noble objectives. It is about whether they work to achieve their aspirations, the all-encompassing way in which both the Act and the SI are drafted and the unintended consequences that they lead to, not least the destruction of items made of or containing ivory above the de minimis limit—in other words, low-value items of historic interest and often of great beauty, but not of museum quality, being put in landfill because they cannot be sold.
The statutory instrument extends the definition of ivory to include whale teeth and narwhal tusks. I do not have a problem with banning the sale of modern products made from whale teeth and narwhal tusks, although I do not think there is much evidence that there is any market for modern items made from whale or narwhal.
Historically, whale teeth were used by sailors to make scrimshaw in one form or another. Whale scrimshaw can be a tooth, which has patterns or pictures inscribed into it using a sailor’s knife or another sharp object. They are of great historic interest because they shed light on the often difficult and miserable lives of sailors in the 18th and early 19th centuries. They are of particular value because of their being works of art made by the poor and working classes, so little of which has come down to us as compared to the art of the aristocracy and the upper classes. They are folk art. They are not of great monetary value. A good early example will typically sell for £100 to £200 at auction. They can be faked but rarely are because they cannot be sold for enough to justify the work that goes into them. In any case, modern scrimshaw is easily distinguished from old.
Narwhal tusks are rarely worked. Historically, they were mounted and displayed, sometimes whimsically as unicorn horns. Perhaps the most famous example is in Fishmongers’ Hall, used as a weapon to stop the terrorist on London Bridge in 2019.
The Ivory Act allows a limited trade in some antique objects containing ivory, hence the Act’s exemptions—including one permitting trade in registered antiques with less than 10% ivory content. I understand that, under this exemption, some 19,000 elephant ivory items and portrait miniatures painted on ivory have now been registered under the Act. A further 325 items of outstandingly high historical value have exemption certificates.
However, in stark contrast to elephant ivory, virtually all old objects in this statutory instrument are solid ivory, so scrimshaw cannot benefit at all from the Act’s de minimis exemptions. Nor are any of these items likely to be granted an exemption certificate for being of outstandingly high historical value, since they are folk art. So, for scrimshaw and old ethnographic objects, this statutory instrument means a 100% prohibition on sales to antique collectors—zero trade. If they cannot be sold, they will inevitably end up in landfill in time.
Why are we doing this? There is virtually no import/export trade in whale teeth or narwhal tusks. For example, in 2022, there were no commercial imports of sperm whale teeth, while just two teeth were exported. Narwhal are not on the International Union for Conservation of Nature’s endangered list.
The major concern about the way the Act and the SI work comes down to the impact on historical objects of beauty and artistic merit made of ivory. We debated extensively in Committee on the now Act whether antique ivory objects had to be destroyed to stop modern ivory knick-knacks being made in China and Vietnam. The market in Asia is for modern ivory items, often from newly poached elephant tusks, not for antiques.
One of the claims made to justify the draconian impact of the Act and statutory instrument is that it is impossible to tell whether the ivory came from an animal killed 100, 200 or 300 years ago or from one killed yesterday. However, now that we have experience of the working of the Act, it is clear that museum experts in antiques and specialists in the antiques trade can prove the age of ivory objects with or without using simple scientific tests. Indeed, the Act itself set up panels of experts to determine whether an ivory artefact of high artistic and historic importance was genuine and worth preserving. These panels seem to have no trouble distinguishing between old and new ivory. Now that it is well established that it is possible to tell the difference between old and new ivory, why can we not widen this vetting by a panel of experts to other ivory objects? It should be possible to allow them to be sold through licensed dealers and auction houses, for example.
The other argument used to justify the Act and this statutory instrument is the more nebulous one: it is all about the United Kingdom’s soft power—that is, if we crack down on the sale of ivory, Asian countries will wake up to their responsibilities to save endangered species and follow the UK’s lead, apparently not having realised that they should do so until we showed them the way. The view that we are the moral leaders of the world seems weird, patronising and possibly colonial.
How has our soft power worked? It has not had much influence on the European Union, which bans the import and export of ivory but allows it to be traded within the EU. That is very different from the UK, where the trade is completely banned. Dare I say, as a Conservative, that the EU’s response is much more logical and sensible than ours. As far as I can tell, ivory is also still freely available in much of Asia.
That brings me to a few questions for the Minister. First, what assessment have His Majesty’s Government made of the impact of the Ivory Act on the poaching of elephants in Africa? Secondly, which countries have followed the UK in introducing a total ban on the trading of ivory items? Thirdly, what assessment have His Majesty’s Government made of the number, type and value of objects containing ivory that have been destroyed as a consequence of the Act? Finally, what assessment have His Majesty’s Government made of the number of narwhal tusks and whale teeth imported into and exported out of the UK in recent years?
I know that this SI will pass but I hope that we can have a Government who understand our heritage in beautiful objects created down the ages, redolent of social and artistic history; and that such a Government can realise that saving the elephant, the whale and the narwhal can be done successfully without the destruction of hundreds of years of historic and beautiful art.
Lord Trees (CB)
My Lords, the Ivory Act 2018 and subsequent statutory instruments pertained only to ivory of elephant origin. Although those instruments covered the vast majority of ivory products, these new regulations extend the meaning of ivory to include the “tusk or tooth” of a hippopotamus, killer whale, narwhal or sperm whale. These species are listed under CITES, and although they compromise only a small amount of the broad definition of “ivory”, the amending regulations limit opportunities for laundering ivory under the guise of another species that is not prohibited. The regulations also mitigate the risk of poaching displacement—a lovely word I had not come across but which was in the Explanatory Memorandum—to non-elephant ivory-bearing species.
The current legislation places the burden of proof on anyone accused of potential ivory trading to prove that the ivory is not from a prohibited species. It is very useful that specific institutions are named as able to provide expert advice to the Secretary of State. I wonder whether that could partly satisfy some of the noble Lord’s concerns. I note that walrus products are already covered under the assimilated EU regulations, as the Minister mentioned.
The regulations sensitively recognise that certain indigenous communities, such as the Inuit, rely on subsistence hunting of some of these species for food and derive part of their income from the sale of ivory products as a by-product of this hunting. As I understand it, these regulations would not prevent UK tourists acquiring small amounts of ivory items made from the species covered by these regulations from these communities and bringing them back as personal possessions under CITES regulations—that is, with a permit and declaration at customs—but will prevent any degree of commercial trade and onward sale in the secondary ivory market in the UK. Can the Minister confirm my understanding of this permitted trade with indigenous communities?
The miscellaneous amendments in the instrument will further strengthen the protection of endangered species around the world. I welcome them, although I have some sympathy with the noble Lord’s concerns.
Baroness Rawlings (Con)
My Lords, I very much concur with the remarks of my noble friend Lord Carrington of Fulham. I declare my interests as listed in the register.
I will comment on the detrimental impact that extending the Ivory Act will have on the formation of collections of historical objects. Most museum collections in this country, whether quirky municipal ones or great national ones, were formed as a result of the philanthropy of community-spirited collectors. Those collectors may have spent their lives—and, I hasten to add, their own money—being passionate about and studying a particular branch of history, and acquiring historical artefacts or works of art to reflect their passion. After decades of forming a collection they may have wanted the public to have access to it, so they gave or sold it to their local museum.
One such example of this is the Scott Polar Research Institute in Cambridge, which has a scrimshaw collection formed by Surgeon Captain AWB Livesey RN. The collection comprises etched sperm whale teeth from the first half of the 19th century, depicting subjects such as naval engagements from the Napoleonic Wars, the War of 1812 between Britain and America, the bombardment of Algiers to release Christian slaves in 1816, and the struggle of many countries in central and South America to achieve independence from Spanish rule. All these etchings were created from the perspective of the ordinary sailor, armed with a sharp blade and some lamp soot. Had Captain Livesey been alive today, this statutory instrument would have prevented him forming such a remarkable collection.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for introducing this SI. It is right that the common hippopotamus, the killer whale, the narwhal and the sperm whale are to be included in the category of protection for their ivory. I have to say that it has taken a long time to reach this point. In 2018, when we were discussing the Ivory Bill, the Minister’s predecessor on the Labour Benches, the noble Baroness, Lady Jones of Whitchurch, who I am delighted to see in her place, was tireless in trying to persuade the Government to include narwhals and other species in the categories to be classed as having ivory, but to no avail. The then Conservative Government were content to leave it at elephant ivory. The passage of the Bill was not easy, with the antique ivory lobby pressing hard for exclusions to the Bill. I began to wonder whether we would ever get the ban on elephant ivory through, but in the end we succeeded.
I realise that the noble Lord, Lord Carrington, will not share my view. He referred to the destruction of items made of ivory that are of no antique value but are sent to landfill. He also referred to scrimshaw items made by sailors. I have some sympathy with his view on these items and I look forward to the Minister’s answer to his question about changing the policy on destroying ivory.
The noble Baroness, Lady Rawlings, referred to historical antique ivory collections that may have been donated to museums and form part of history. This is a very valid argument. I note that a public consultation that took place between 17 July and 11 September 2021 overwhelmingly supported the measures we have before us.
Paragraph 7.1 of the EM states:
“Walrus ivory is not included in the extension of the Act under this instrument because it will remain prohibited subject to certain narrow exemptions under Council Regulation (EC) No 1007/2009”,
which relates to the Windsor Framework. The Minister referred to this exemption, but I am slightly confused by it and would be grateful if she could explain exactly what it means in terms of protection for the walrus species.
I am reassured that items containing ivory or made of ivory will be protected. I am also pleased that the burden of proof will lie with any accused to prove that the item is not ivory from an elephant or from the other four species covered in the SI. Scientific tests are to be used to determine the exact origin of the article and the age of the antique artefacts.
I welcome that this debate has covered both sides of the argument and we have heard opposing views. Nevertheless, I fully support this SI.
The Earl of Effingham (Con)
My Lords, His Majesty’s Official Opposition are in favour of any measures to preserve the rich tapestry of species on this planet, particularly those threatened with extinction. However, we have some concerns, not with the objective of this SI and the Ivory Act more broadly, but with some of the consequences of its drafting.
The SI extends the definition of ivory to include whale teeth and narwhal tusks. Although we agree with the banning of selling of modern items manufactured from these sources, there is no modern market for whale teeth or narwhal tusks. Old pieces of art, such as inscribed sailor’s knives or mounted narwhal tusks, will fall foul of these regulations and will have to be landfilled.
As we have heard already from my noble friends Lady Rawlings and Lord Carrington, there is virtually no import or export trade in whale teeth or narwhal tusks. In 2022, there were no commercial imports of sperm whale teeth, and just two teeth were exported. Narwhals are not on the International Union for Conservation of Nature’s endangered list.
While it could be argued that this legislation is an important aspect of our soft power, it is debatable whether this soft power has worked. It has not had much influence on the EU, which bans the import and export of ivory but allows it to be traded within the EU. Will the Minister please clarify to the Committee what outcomes she foresees from this decision? Will she outline why these measures have been implemented and say whether she can see that they may have unforeseen and unintended consequences?
Baroness Hayman of Ullock (Lab)
My Lords, I thank all noble Lords for their contributions to the debate and for raising important points. As described earlier, extending the Act to these four species demonstrates UK leadership in support of international conservation efforts, setting an example at home to encourage similar actions globally. It makes the existing ban more effective and adds protections to four species that will complement those already in place internationally under the Convention on International Trade in Endangered Species.
I was involved with this the first time around, back in 2018, and, as the noble Baroness, Lady Bakewell of Hardington Mandeville, said, it seems to have taken an awful long time to get here. I wonder whether, like me, she had a stuffed narwhal on her desk—which my grandchildren have now chosen to play with. From our perspective, it is good to see these regulations in front of us.
This measure is part of a comprehensive package of UK leadership to tackle the illegal wildlife trade and reduce poverty, including through our Illegal Wildlife Trade Challenge Fund, which has allocated £57 million to 173 projects across 60 countries. These projects are reducing demand for illegal wildlife products, strengthening law enforcement, establishing effective legal frameworks and promoting sustainable livelihoods.
I turn to answer some of the questions, and hope that we do not have another vote in the middle this time. I will look first at the consultation and stakeholder engagement that took place ahead of this. There was a call for evidence in 2019 and a public consultation from 17 July to 11 September 2021 on extending the Act to other species. The consultation received 997 responses and a clear majority supported an extension to these species. The previous Government published their response to the consultation in May last year.
There is a conservation risk to each species as exhaustible natural resources, which includes the trade in their ivory, both legal and illegal, and how this relates to their conservation status and other threats that they face. There was a clear demonstration in the proportion of respondents who supported this option and the comments submitted that commercial exploitation of species that are endangered or accepted as being in need of protection from the threat posed by trade in their parts violates public morality. So that was the consultation and its outcomes.
The noble Lord, Lord Carrington, asked specific questions around the effectiveness of the Act. One was how many elephants had been saved to date. This is a cross-cutting policy, so it is not possible to say what impact the Ivory Act alone has had. For example, the Illegal Wildlife Trade Challenge Fund is a grant scheme that funds actions to tackle illegal wildlife and poverty reduction in developing countries. These projects contribute to reducing the demand for illegal wildlife products, strengthening enforcement and establishing effective legal frameworks, and promoting sustainable livelihoods through innovative approaches, partnerships and evidence-based interventions that protect endangered species, including elephants. So I cannot be specific, but it does play a role.
The noble Baroness, Lady Bakewell, asked for more information about why we are not extending it to walrus. As I said, walrus were included in the original consultation but are not now, because they continue to be protected under existing regulations on the trade in seal products. Under these regulations, seal products, including walrus ivory, can be imported and placed on the UK market for sale only in very limited circumstances and subject to strict conditions. You can bring seal products to Great Britain and sell them only if they qualify under the Inuit and other indigenous communities exemption and have a seal catch certificate. This is an attestation document that proves that the item is exempt and that the seal products are certified as coming from a traditional hunt carried out by the Inuit or other indigenous communities. The hunt must be carried out for and contribute to the subsistence of the community, and must consider the welfare of the animal. I hope that goes some way towards answering the question from the noble Baroness, Lady Rawlings, around the fact that we work with indigenous communities on these pieces of legislation.
Further questions from the noble Lord, Lord Carrington, were to do with trade and why we decided to add these species. The main problem is that international trade in these species needs to be regulated to ensure that it does not threaten the species’ survival. The UK is also a net exporter of ivory from these species, and we are concerned that it fuels global demand and the market for these ivories.
Lord Carrington of Fulham (Con)
The Minister is, I think, getting slightly confused about what I asked. I was not asking whether ivory is being exported; clearly, it is not now, because it is banned. But narwhal tusks are not banned and there is no evidence that they are being exported or imported. Also, the evidence we have is that, in 2022, no sperm whale teeth were imported and two were exported. What I am saying is that, distinct from the ivory market—we can probably dispute that—the products covered specifically by this SI are exported or imported in such small quantities as to have no effect on international trade at all.
Baroness Hayman of Ullock (Lab)
I thank the noble Lord for his comments. I still think that there are issues around the fact that these species are endangered. We should be covering them in existing legislation that could have an impact on them in future. It is important that that is covered.
The noble Lord asked about exemptions, so let me come on to them. If an item is 100% ivory, it can be kept or follow the exemptions in Section 2 of the Act, of which I am sure he is very aware. Several other countries have closed their domestic ivory markets so, again, it is not just the UK looking at this as an action.
I should say that I have some information about narwhal ivory, which has just come through—apologies. In the 10 years between 2009 and 2019, commercial imports and exports of narwhal ivory totalled 33 items, while those of sperm whale ivory totalled 203 items. I hope that helps clarify the matter.
It might be helpful, as this issue came up a bit, for me to remind noble Lords what the exemptions to the ivory ban are. There are five exemptions, which will apply to all species once this instrument has gone through: musical instruments made before 1975 with less than 20% ivory by volume; items made before 3 March 1947 with less than 10% ivory by volume; portrait miniatures made before 1918 with a total surface area of no more than 320 square centimetres—and we have another vote.
Baroness Hayman of Ullock (Lab)
My Lords, I was just going through the exemptions to the Ivory Act and had just finished talking about portrait miniatures. Also exempt are items a qualifying museum intends to buy or hire and items made before 1918 that are of outstandingly high artistic, cultural or historical value. I mention that because it has come up quite a lot during the debate, and for clarification because it is some years since the Act came into play.
The noble Lord, Lord Trees, asked a specific question about people going on holiday, small items and so on. This fits with the question from the noble Baroness, Lady Rawlings, about indigenous peoples. To be clear, the Act bans imports for the purposes of dealing. Individuals who are visiting communities outside the UK can purchase items from them directly and bring them into the UK as personal possessions as long as they meet the requirements under CITES. That provides clarification on that point.
With that, I hope I have answered most questions; I will check and come back to noble Lords if I have not.
The Earl of Effingham (Con)
I think the Minister said that narwhals are an endangered species, but we believe that they are not endangered; there are around 80,000 mature adults in their population. If the Minister could come back to us at some point, it would be much appreciated.
Baroness Hayman of Ullock (Lab)
I clarify that all four species being added to the Act are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora. I hope that helps to answer the noble Earl’s question.
House of Lords
Oaths and Affirmations
Education: Early Years Attainment Gap
(2 days, 3 hours ago)
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Baroness Hughes of Stretford
To ask His Majesty’s Government what plans they have for reducing inequality and closing the early years educational attainment gap for pre-school children.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, our plans for the best start in life, to reduce inequality and close the attainment gap, include delivering 3,000 new or expanded school-based nurseries to break down barriers to opportunity; funded hours for families of two year-olds receiving additional forms of support; supporting the workforce to develop skills and confidence to work effectively with children with SEND; funded early language and maths interventions; supporting parents through the home learning environment; and 400-plus family hubs.
Baroness Hughes of Stretford (Lab)
I thank my noble friend for that Answer. I know she will agree that the previous Labour Government made significant progress in improving the well-being of our youngest children and reducing the early attainment gap through Sure Start parenting and family programmes. The Institute for Fiscal Studies has shown recently that the benefits of that have been sustained through to the age of 16 at least, although of course now we are seeing those gaps widen because the coalition and Tory Governments abandoned those programmes. I welcome the commitments my noble friend has just outlined, but does she agree that there needs to be a broader, more comprehensive strategy for our youngest children that includes, as a minimum, excellent early years education, support for parents and families—she has touched on some of that—and a highly trained workforce? Can my noble friend assure me that that strategy will be forthcoming?
Baroness Smith of Malvern (Lab)
My noble friend is right about the progress that was made under the last Labour Government, and she played an important role in that Government in this area of policy. I assure my noble friend that, as well as the plans that I have outlined, the department is working on an early years strategy that will give consideration to all the areas that she has outlined.
Lord Storey (LD)
My Lords, this is a hugely important Question. I wonder if the Minister would take a moment to think that it is not just about provision; it is also about the quality of that provision and of the staff. Does she agree that all nursery staff working with children from the ages of two to four should have a relevant qualification, or be working towards that qualification, in early years?
Baroness Smith of Malvern (Lab)
The noble Lord is right that the quality of staff is fundamental, but so is the number of staff. We have a big challenge to ensure that we have sufficient staff in place by next September to deliver the outlined entitlement. We are working to provide additional training for staff. I take his point about the training and ongoing support that we need to provide for the staff who do such an important job at the beginning of children’s lives.
Baroness Gohir (CB)
My Lords, the largest number of nursery closures in recent years has been in the poorest parts of the country, particularly in areas with large minority-ethnic populations. Will the new and expanded nurseries that the Government are allocating be proportionately allocated in those hardest-hit areas?
Baroness Smith of Malvern (Lab)
The noble Baroness is right that those are the areas where need is very great. In our recent announcement of £15 million-worth of investment in the first 300 nurseries based in schools, we will be encouraging applications from those where there is a particular need. We will be using evidence of those applications to ensure that we are able to improve the provision in the areas that need it most.
Lord Young of Cookham (Con)
How confident is the Minister that she will be able to recruit the 35,000 additional staff that she needs to meet her target?
Baroness Smith of Malvern (Lab)
As I outlined to the noble Lord, it is a very big challenge and one that we inherited from the previous Government. We have reinvigorated the recruitment campaign and are focusing on ensuring that we have those staff in place. Although it will be very difficult, we are committed to ensuring that, next September, we deliver that improved entitlement for childcare.
Lord Dubs (Lab)
My Lords, it is good news about increasing the funding for school-based nurseries. Can the Minister say something about childminders? Is there a danger that, if the number of childminders goes down, the net benefit will be less?
Baroness Smith of Malvern (Lab)
My noble friend is right. We have already seen a halving in the number of childminders over recent years. Childminders play an important role for those parents who choose to use them, which is why we have implemented improved support for childminders. We want to maintain their important position in the market.
Lord Laming (CB)
My Lords, does the Minister agree that it is unrealistic to think that all adults are born with good parenting skills? Therefore, it is important that we have in place facilities that help some parents learn new skills and develop confidence about how to bring up their children. By doing that, we prevent a substantial number of children coming into care and save a great deal of money, as well as looking after the well-being of children. Can the Minister say that the facilities that she has described will help parents develop confidence and parenting skills?
Baroness Smith of Malvern (Lab)
The noble Lord is right. The first years of a child’s life, where they depend on their parents, are fundamental. Supporting parents to be able to take on that job—he is quite right that it is not always easy and does not necessarily come naturally—is really important. Evidence has shown that high-quality parenting programmes, alongside wider integrated support, can be really important. That is why the Family Hubs and Start for Life programme includes funding to improve the parenting support offer, including evidence-based parenting programmes. It is why we will work to ensure that there is further awareness of the importance of parenting in childhood development. We will consider how, through the development of family hubs, we can provide further support for parents, precisely because, as he says, it is good for children and saves money later on in life.
Baroness Barran (Con)
My Lords, could the Minister confirm that the Government’s childcare funding rates will be increased to absorb the increase in employers’ national insurance contributions?
Baroness Smith of Malvern (Lab)
We have increased the rates this year, but we will be looking at the implications of national insurance contributions for the early years sector.
Baroness Lister of Burtersett (Lab)
My Lords, given the importance of childcare to early years education and development, would our child-centred Government consider as part of their early years strategy, referred to by my noble friend, the extension of free childcare to children whose parents are not working at least 16 hours a week? At present, children from the lowest-income families, who are likely to benefit most, are excluded from free childcare.
Baroness Smith of Malvern (Lab)
My noble friend makes a very important point. On the entitlements, we are delivering the programme and the plans set out by the previous Government, but there are also provisions for some parents with children with particular needs, or where they are on particular benefits, to receive childcare provision. Notwithstanding the pressures on the public purse, we will want to think in the early years strategy about how we can extend the support of childcare to more families when we are able to.
Baroness Berridge (Con)
My Lords, this is a workforce with a large number of 18 to 21 year-olds. Following my noble friend’s question, will the department consider whether those increased costs are going to be absorbed? If the department decides to do that, what will be the implications for, for instance, hospices, which are charities delivering NHS services? Once one moves to support one sector to absorb the national insurance and minimum wage increases, is there not an issue of principle that other sectors should be supported too?
Baroness Smith of Malvern (Lab)
With respect to services delivering healthcare, my noble and honourable friends in the Department of Health and Social Care are considering the implications and will bring them forward. I point out to noble Lords opposite that there is no point demanding improved provision and arguing for, for example, a childcare entitlement that will involve considerable additional spending—which this Government have found in last week’s Budget—while being unwilling to find the money necessary to fill the £22 billion black hole that we inherited from them.
Baroness Whitaker (Lab)
My Lords, there is a certain amount of research which shows that children who attended early years education thrived more. They had higher incomes and they certainly benefited from higher and tertiary education, and I think they kept out of prison a bit more. Will my noble friend keep an eye on the continuation of this research, which might even help her get more funds for early years care from the Treasury?
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right that investing money in our youngest children demonstrably improves their outcomes later in life. It is the most effective place in which to invest that money. That is why my honourable friend the Secretary of State has made it her number one priority for the Department for Education and why we were pleased to receive from the Treasury additional money to enable us to make progress in this last week. I will certainly keep an eye on the evidence that my noble friend identifies, and I am sure my noble friends—including my noble friend Lord Livermore sitting next to me on the Front Bench—will be keen to hear about it when they find additional resources for this very important area of work in the future.
Sex and Gender: Official Data
(2 days, 3 hours ago)
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Baroness Fox of Buckley
To ask His Majesty’s Government, following the downgrading of data gathered from the 2021 Census question on gender identity, what steps they are taking to ensure accurate and consistent data on sex and gender are collected to ensure robust official data.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, the Government value the collection of high quality and robust data on this topic. The Government Statistical Service will publish a work plan for updated, harmonised standards and guidance on sex and gender in December this year. This will align with the Office for National Statistics regulation guidance on collecting and reporting data about sex and gender identity, which was published in February.
Baroness Fox of Buckley (Non-Afl)
I thank the Minister for that reply. In the meantime, can she look closely at one worrying consequence? NHS data standards were updated to reflect those very same compromised gender identity questions used in the census. Genspect UK research shows that a significant number of GPs also use them, which in theory means that every time someone registers with a new doctor, patients could informally change the sex registered on their health records. Does the Minister agree that this is concerning because biological sex influences everything from diagnosis to treatment? Therefore, the recording of accurate sex data in NHS records is essential for safe and appropriate healthcare.
Baroness Smith of Malvern (Lab)
The reason why it is so important that we allow the independent statistical services to develop the question appropriately is precisely that it will be used more widely in other public services. Of course it is important that that has the confidence of those responding to the question and of the services being provided. To that extent, therefore, I share the noble Baroness’s concern to ensure that that statistical collection is robust and appropriate and is informing services, including the NHS, in a way that users need it to.
Baroness Burt of Solihull (LD)
I hope the Minister will acknowledge that—given the downgraded English figures, which gave the trans and non-binary population as 0.55%, and given that the figure we found for Scottish, Welsh, Canadian, USA and GB patients is 0.44%—we can conclude that the English census figures are not a million miles out and that the actual number of people in question is tiny in proportion to the amount of time we spend talking about them. Can we not, instead, use these figures to help design services appropriately for them, and move on?
Baroness Smith of Malvern (Lab)
This is my first opportunity to answer a Question on this issue in this House, but I certainly take the noble Baroness’s point that it is important that we have accurate and respected statistics, but that we are also providing services to people on the basis of their needs, particularly for LGBT+ people, and that they are safe, included and protected from discrimination. That, along with protection of sex-based rights where necessary, is what this Government will focus on.
Baroness Deech (CB)
My Lords, the Minister may have noticed that in every questionnaire one comes across these days—applying for jobs and filling in a questionnaire online—the final question is always about sex, gender, identity, binary: there are umpteen choices. How can someone filling in the form know what they are supposed to be if they do not have a gender recognition certificate? What is the accurate answer? How does one get people whose first language is not English to understand, in particular, NHS forms, where the question is crucial?
Baroness Smith of Malvern (Lab)
I should point out that the most recent census was the first time this question was asked, and it is important that a range of questions is asked in the census, on a voluntary basis in this case. However, I also think it important that the questions are designed in an accessible way and that people understand the terms used in them. That is precisely why the Government Statistical Service will be undertaking the work I outlined in my initial Answer.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, the noble Lord, Lord Shinkwin, is participating remotely.
Lord Shinkwin (Con) [V]
My Lords, one area where the data in the 2021 census is accurate is disability. I cannot help thinking that, if a fraction of the energy and resources devoted to identity politics had been given to disability access in the 30 years since the DDA was passed by your Lordships’ House, the world—[Inaudible.]
Baroness Smith of Malvern (Lab)
I think I can probably understand how the noble Lord was going to finish his question. I tend to agree with him, and I will be committed, alongside my other equality responsibilities to this House, to ensuring that we make progress on disability access as well.
Baroness Thornton (Lab)
My Lords, having listened to the questions posed by noble Lords and the sensible responses from my noble friend the Minister, I think the Question is really about the need for accurate data on sex and gender identity, and finding the right way to get that data. A climate of distrust and defensiveness is unhelpful if our researchers are to advance our understanding in this area without fear of accusations of bias.
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right. It is important that academics and researchers can do their work. It is important that government statistics are determined and regulated independently of government and political arguments. The work plan that will be set out in December is intended to ensure that this happens.
Baroness Neville-Rolfe (Con)
My Lords, as this Question is about the census, will the Minister encourage the Cabinet Office to do something about the lack of comparability, between England on the one hand and Scotland and Wales on the other, of many vital statistics of importance to the public, such as waiting times in the NHS? This was highlighted by the excellent independent review of the UK Statistics Authority by Professor Lievesley, and it would be nice to see progress in that area.
Baroness Smith of Malvern (Lab)
I am not sure that waiting times in the NHS are part of the census, but I take the noble Baroness’s point, nevertheless. Although, as I have emphasised, the development of statistical measures should be done independently of government, I am sure that co-ordination between the devolved Administrations, where appropriate, would be a good idea.
Lord Strasburger (LD)
My Lords, throughout the criminal justice system, sex registered at birth is the most important variable in the analysis of crime and offending. It underpins the planning of policing services, risk assessments and offender treatment programmes. But recent freedom of information requests reveal that most police forces in England and Wales no longer record sex registered at birth. Instead, they record the offender’s self-declared gender identity—astonishingly, even when the offence is rape. What are the Government doing to stop this corruption of the fundamental data used throughout the criminal justice system?
Baroness Smith of Malvern (Lab)
The noble Lord identifies why it is important that we have clarity about the measures being used in order to ensure that services are appropriate to people. That is the objective of the work plan that will be set out in December, which will have engagement around it, so that we can be clear about the measures and the definitions not just in the census but for the broad range of public authorities, including in the criminal justice system, that need to use them as well.
Baroness Ludford (LD)
The previous Government commissioned an independent review, led by Professor Alice Sullivan of University College London, a statistics expert, to look at problems exemplified by the census fiasco and set out good practice on how to collect data. This review by Professor Sullivan was due to report back in August. Will the Government publish the Sullivan review and their response?
Baroness Smith of Malvern (Lab)
The first part of the review has been received by the Government, who are currently considering it. I undertake to come back to this House with a response to that.
Lord Lucas (Con)
My Lords, do the Government have a working definition of gender and gender identity and, if so, could they share it with the House?
Baroness Smith of Malvern (Lab)
The noble Lord would be well advised to look at the Equality Act, for example. I have to say that this would be a better debate if we spent more time worrying about how we provide services and account for people’s needs, and less about how we catch our political opponents out.
Lord Markham (Con)
As a previous Health Minister, I know that there is a serious health reason to have a proper understanding of the answer to the question of when a woman is a woman and needs to have treatment based on her sex. Please: this is a serious question that deserves a serious answer.
Baroness Smith of Malvern (Lab)
I agree—a woman is an adult female, and her biological sex may well determine what services she needs from the NHS. That is why it is important that, in statistics that are used both in the census and more broadly by our public services, we have a consistent and an agreed approach to that. That is what I have been talking about up to this point. Frankly, I was taking this seriously, and I hope that others around the House will as well.
Wales: Public Services
(2 days, 3 hours ago)
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Lord Wigley
To ask His Majesty’s Government what representations they have received from the Welsh Government concerning the Barnett Formula to fund public services in Wales.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, the Chief Secretary to the Treasury is in regular contact with his Welsh Government counterparts on funding, including the application of the Barnett formula. He spoke to the Cabinet Secretary for Finance on the morning of the Budget. As a result of the Barnett formula, the Welsh Government are receiving at least 20% more funding per person than equivalent UK government spending in England; that translates to over £4 billion more in 2025-26. The Budget delivered the largest real-terms funding settlement to the Welsh Government since devolution.
Lord Wigley (PC)
My Lords, is the Minister aware that Wales’s Finance Minister, Mark Drakeford, wrote to the Chancellor of the Exchequer ahead of the Budget last week, asking for a review of the Barnett formula, specifically Wales’s comparability factor for transport funding, which has fallen from 80% in 2015 to 36% in 2021 and, following last week’s Budget, is now down to 33%? What recent discussions have the UK Government had with the Welsh Government regarding this? Can the Minister explain why the Welsh Labour Minister’s pleas for fairness in this matter have been ignored, and when will the Government do something about it?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. The Welsh Government settlement for 2025-26 is the largest in real terms of any since devolution. The Welsh Government are receiving £21 billion in 2025-26, including an additional £1.7 billion for the operation of the Barnett formula, with £1.5 billion resource spending and £250 million in capital. On the noble Lord’s second question, the Chief Secretary has a very good working relationship with the Welsh Government’s Cabinet Secretary for Finance and spoke to him on the morning of the Budget. The Chief Secretary also met the devolved government Finance Ministers in person on 3 October for the most recent finance Interministerial Standing Committee.
Baroness Wilcox of Newport (Lab)
My Lords, the Minister in the Welsh Government said after the Budget:
“It is clear the Chancellor is listening to what Wales needs. I look forward to working with the UK Government on our other priorities”.
Can my noble friend confirm the strength of that renewed working relationship after what we have experienced for the past 14 years?
Lord Livermore (Lab)
I am grateful for my noble friend’s question; it is gratifying to hear what she says. As I said, the Welsh Government settlement for 2025-26 is the largest in real terms since devolution, and Treasury Ministers are in regular and constant contact with their counterparts in Wales and the other devolved Administrations.
Lord Davies of Gower (Con)
My Lords, the Budget delivered an additional £1.7 billion for Wales, and the Barnett formula means that Wales gets £1.20 of public funding for every pound spent in England. In light of this, can the Minister explain why the Labour-run Welsh NHS has waiting lists at record highs, with 22,000 people awaiting operations for over two years?
Lord Livermore (Lab)
The Barnett formula is a simple and efficient way of allocating finance and has stood the test of time. As the noble Lord says, it delivers a very good deal for Wales; the higher per-person funding broadly reflects the higher cost of delivering public services in Scotland, Wales and Northern Ireland compared with England.
Baroness Humphreys (LD)
My Lords, the Barnett formula has been in existence since the 1970s, when it was introduced as a temporary measure, and has since been discredited, even by Lord Barnett himself. Does the Minister agree that the formula needs to be reformed and replaced by a new, needs-based formula that meets the new and changing demands on the devolved nations in the 21st century?
Lord Livermore (Lab)
No, I do not think I agree, and I am not sure that the formula that the noble Baroness sets out would deliver a better deal for Wales or any of the devolved Administrations. The Barnett formula has been revised recently and now includes a needs-based factor to ensure fair funding for Wales in the long term. The recent Budget delivered a very good deal for Wales: the Welsh Government settlement for 2025-26 is, as I have said, the largest in real terms of any Welsh Government settlement since devolution.
Lord Forsyth of Drumlean (Con)
My Lords, might the Minister take the time to read the report of this House’s Select Committee on the Barnett Formula, which was delivered 15 years ago? It clearly showed that Wales loses out substantially under the Barnett formula and recommended that we move to a needs-based formula which would treat all parts of the United Kingdom fairly. The previous Government ignored that for their own reasons, but now is an opportunity for a Labour Government to help a Labour Administration in Wales.
Lord Livermore (Lab)
I always take the noble Lord’s recommendations extremely seriously. I will certainly read the report he recommends, although it is interesting that it came out 15 years ago and for the subsequent 14 years his own party was in government.
Lord Anderson of Swansea (Lab)
My Lords, the blunt fact remains that Wales is at or near the bottom of all the indices of deprivation within the United Kingdom, so will the Government look at this again, particularly in relation to Scotland, and try to align Wales’s position not just in comparison with England but with Scotland?
Lord Livermore (Lab)
I do not think the Government have any such plans, but the Budget delivered for all the devolved assemblies a record amount in settlements since devolution.
Baroness Randerson (LD)
My Lords, the previous Conservative Government decided that, despite the fact that not a single yard of HS2 would be built in Wales, it would not get any Barnett consequential funding from that. That decision was criticised from the Labour Benches and deeply criticised by the Welsh Labour Government. How is it that the new Government can defend the decision of their Conservative predecessor?
Lord Livermore (Lab)
As I understand it, as heavy rail is a reserved matter and the UK Government are therefore responsible for heavy rail infrastructure across England and Wales, they spend money on this in Wales rather than funding the Welsh Government to do so through the Barnett formula. This approach applies to investment in HS2 and is consistent with the funding arrangements for all other policy areas that are reserved in Wales, as set out in the Statement of Funding Policy.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, further to the excellent question from my noble friend Lady Wilcox of Newport, can the Minister confirm, following the resetting of relations with the Scottish and Welsh Governments after the 14 disastrous years of the Tory Government, that through Brand Scotland and its Welsh equivalent, Scottish and Welsh heritage and products will be promoted throughout the world by this United Kingdom Labour Government?
Lord Livermore (Lab)
As always, my noble friend says it far better than I could. I nearly always agree with him, and I do so on this point in particular.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, the Barnett formula was introduced for Scotland by a Labour Government in 1978; then it was applied to Wales and then to Northern Ireland. That is nearly 50 years ago. Surely it is time to look at a new mechanism that will reflect the modern devolved Administrations.
Lord Livermore (Lab)
I give the noble Baroness the same answer that I have given already: I do not think the Government have any such plans. The Northern Ireland Executive settlement for 2025-26 is the largest in real terms of any Northern Ireland Executive settlement since devolution. The Northern Ireland Executive will receive £18.2 billion in 2025-26.
Lord Harlech (Con)
My Lords, the Government have stated that one of their priority aims is to grow the economy, yet their counterparts in Wales cancelled all road-building projects in 2023. How will this help growth in Wales and across the United Kingdom?
Lord Livermore (Lab)
The noble Lord is quite right that growth was one of the biggest failures of the previous Government over the past 14 years. It is absolutely our priority to do something about that. Obviously, one Budget cannot turn around 14 years, but we have already seen its measures increasing growth throughout the United Kingdom in the medium term.
Lord Hunt of Wirral (Con)
Will the Minister answer the question, please? There is an urgent need for infra- structure investment in Wales. What meetings does the Minister propose to have with his Labour counterparts in Wales, to ensure that key projects—such as the third Menai bridge to Ynys Môn, and the Newport bypass—go ahead as quickly as possible?
Lord Livermore (Lab)
I am not sure what question the noble Lord thinks I have not answered. He asked me specifically about investment projects. Of course, under his Government, we were the only country in the G7 to have investment levels below 20% of GDP. We have introduced planning reforms, which the previous Government could have introduced at any point in the past 14 years but did not. We are doing more on investment in a few months than the previous Government did in 14 years.
Health-related Benefit Claims
(2 days, 3 hours ago)
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Baroness Hazarika
To ask His Majesty’s Government what plans they have to deal with the rising cost of health-related benefit claims.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, this Government are committed to supporting people into work, improving outcomes for all and ensuring long-term fiscal sustainability. Our plans as announced in the Budget include £240 million to tackle the root causes of inactivity through the “Get Britain Working” White Paper. In 2025 we will also bring forward proposals to reform health and disability benefits.
Baroness Hazarika (Lab)
I thank my noble friend the Minister for that Answer. Does she agree with me that whatever your politics, we should all care about helping more people back to work? It is good for the individual, the economy and the social security bill. Most people claiming health-related benefits are not feckless or lazy; they want to work but have often suffered bad luck, such as an accident or an illness. Has my noble friend seen the work of the Resolution Foundation, which highlights a particular concern with younger workers and mental health issues? Can she outline what the Government are doing to help our younger people get back to work?
Baroness Sherlock (Lab)
I thank my noble friend for some very good questions. Evidence shows that appropriate work is generally good for health and well- being, so we want everyone who can to get work and get on in work, whoever they are and wherever they live. But that means proper support for those who are living with health conditions or disabilities.
In relation to younger people, the Resolution Foundation report on this matter had some very interesting findings. One that struck me particularly was that young people who have lower skill levels are more likely to be workless as a result of health conditions than those with higher skill levels. That tallied with the evidence I have seen. Back in 2012, one in 13 of the young people who were not in education, employment or training reported a mental health problem. Now, it is one in five. We have a real challenge with young people and mental health.
We are doing two things: directly improving mental health support for young people in schools and in the community, and trying to do what we can to get them into work. The Budget money announced will help to establish eight youth guarantee trailblazer areas across England to test new ways of supporting young people into employment, training or apprenticeships, working with local suppliers. That will inform the development of a youth guarantee for all 18 to 21 year-olds.
The Lord Bishop of St Albans
My Lords, I pick up the Minister’s reference to mental health. Some estimates suggest that up to two-thirds of those claiming incapacity benefits are doing so on the basis of mental health-related issues. Can the Minister tell us whether a focus on young people, in particular their use of things such as smartphones and social media, is being both researched and fed into the Government’s early intervention strategy?
Baroness Sherlock (Lab)
My Lords, there certainly has been a growth both in the number of young people reporting mental health issues and in the number of people on sickness or disability benefits as a result of mental health issues—although, because the numbers still skew towards the older age, there are still more older people with mental health issues. However, we definitely have a challenge with young people and mental health issues.
If my department is doing any research on mobile phones, it has passed me by, but I will go back and ask that specifically. However, I am working with my colleagues in the Department for Education to look at the well-being of young people. For example, a children’s well-being Bill will put children’s well-being at the centre of their education. We are looking at providing every single school with a mental health professional who can work with young people. Outside that, we will have youth hubs, with drop-in services and mental health support. If we want our young people to go on to live fulfilling, thriving lives, we need to tackle this problem as early as possible and give them the help they need.
Lord Palmer of Childs Hill (LD)
My Lords, does the Minister believe that the reason for health-related benefits claims is the state of the health service, including people’s access to their GP for a face-to-face appointment? If we do not deal with that, we will not deal with health-related benefits. What are the Government doing to pursue those aims?
Baroness Sherlock (Lab)
My Lords, the noble Lord points out another of the contributory factors. A complex web of things brings people to this point. As far as we understand it, a number of contributory factors are driving the rise in health-related benefits. Disability has gone up in prevalence over the last 25 years, including a rise in mental health issues. Also, longer NHS waiting lists are thought to increase claims for benefits before people are treated, because they are waiting longer, and potentially after they are treated, because they have poorer outcomes as a result of problems in the National Health Service.
This Government are absolutely committed to fixing our NHS. We have seen record investments, and the plans that came out in the Budget mean that we are absolutely committed both to engaging directly in supporting the NHS and to tackling some of these problems. As part of “Get Britain Working”, we will have trailblazer areas across England and Wales bringing together health, employment and skills services. In three of those areas, money will go to the NHS to develop evidence on how the health system can prevent ill-health-related economic activity. We are going to sort this.
Viscount Younger of Leckie (Con)
My Lords, I remain to be convinced that the measures the Government are taking to get more inactive people on benefits into work, including those with mental health challenges, will bear fruit—I hope that they will. I have lost count of the number of consultations that have been announced. Crucial for this is a willingness of employers to hire. Have the Government not made matters much worse with the rise in national insurance contributions for employers announced last week?
Baroness Sherlock (Lab)
My Lords, I ask the former Minister not to prejudge this—we have not even published the White Paper yet. He may not be convinced by it, but I hope to convince him yet. When it comes out, I will happily talk him through it as there are some excellent plans.
He raises an important point about employers. My department is doing a lot of work with them, and we have plans to do even more. If we are to get people into work—particularly people who have challenges, such as mental health issues or other barriers—we need to get the right people into the right jobs with the right support. Otherwise, the danger is that we get people into jobs but they fall back out of them and do not stay there. We are absolutely committed to working with employers, making sure that we can get employers the staff they need and people the jobs they need.
Baroness Butler-Sloss (CB)
My Lords, is the Minister aware of whether CAMHS are being properly financed?
Baroness Sherlock (Lab)
My Lords, there is no doubt whatever that there are real problems with child and adolescent mental health services, but we will address them. In the meantime, we have plans in place to recruit another 8,500 mental health professionals to support both children and adults, and we will look carefully at that. We are very conscious that there is no point in identifying mental health problems if there is nowhere to refer young people when they need help.
Lord Turnberg (Lab)
My Lords, the most effective treatment for mental illness is cognitive behavioural therapy. It works very well and has been shown to save money because it is quick and effective. It requires clinical psychologists. Do we have enough of them, and what are we doing to fill the gap?
Baroness Sherlock (Lab)
Honestly, I have no idea—but I have colleagues in the Department of Health who will. As a Government, we are developing significant extra support and making sure that there is an NHS fit for the future, including by providing appropriate support. I am afraid that I will have to find someone to write to my noble friend about the number of CBT therapists.
Baroness Fraser of Craigmaddie (Con)
My Lords, many schemes have been getting people on benefits into work, but research shows that one of the biggest challenges is keeping people in work and enabling them to move on to a second, third or fourth job and a career. What are the Government doing to support keeping people in work?
Baroness Sherlock (Lab)
What a great question. We are absolutely committed to this being a strategy not just to get people into jobs but to get people into good jobs, to keep them there and to help them progress over time. The focus of the “Get Britain Working” White Paper will be on that. In this country we need good jobs and we need people to get them. They need to be given the support to get there—and continuing support, if they need it, while they are there—and then to have the ability to progress. Our three-part scheme will not just include the youth guarantee but bring together the national jobs and careers service as well as skills and help-at-work support. It is all about trying to get people in jobs and make sure that they progress when they are there. I thank the noble Baroness for asking a great question.
Baroness Winterton of Doncaster (Lab)
My Lords, following the important points that my noble friend Lady Hazarika made about young people with mental health problems, and the point that was made about CAMHS, does the Minister agree that there needs to be a seamless transition between CAMHS and adult mental health services if we are to end fragmentation and help young people with mental health problems back into work? Will she emphasise that to the Department of Health?
Baroness Sherlock (Lab)
My noble friend makes an excellent point. I am sure that many noble Lords will have heard cases of individuals who found that they were getting appropriate support sometimes when they were children but then found the transition to adult mental health services problematic afterwards. The NHS, as well as investing in support for young people, is investing in mental health care, but I will make sure that specific point is conveyed to my colleagues in the Department of Health.
Budget: Implications for Farming Communities
(2 days, 3 hours ago)
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Lord Roborough (Con)
My Lords, I refer the House to my interests as set out in the register, including as a farmer. The removal of half of inheritance tax relief over £1 million under agricultural property relief and business property relief is an attack on all family-owned businesses. Working family farmers are the least able to afford this tax due to high asset values and low incomes. How can the Minister defend this tax to the family farming community and all family businesses, where investment, entrepreneurship and aspiration are now undermined?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, we understand farmers’ anxiety at changes to agricultural property relief. However, the vast majority of those claiming relief will not be affected by the changes. The latest data available shows that the top 7% of claims for agricultural property relief in 2021-22 accounted for 40% of the cost of the tax relief, with the top 2% accounting for 22% of the cost. Most families will be able to pass the family farm down to their children, just as previous generations have always done.
Baroness Ritchie of Downpatrick (Lab)
My Lords, farmers in Northern Ireland greatly appreciate that my noble friend the Minister has met the devolved Minister on a fairly regular basis to discuss a wide range of issues. When she next meets the Minister of Agriculture, the Ulster Farmers Union and the agricultural producers in the region, will she discuss the need for tax amelioration measures to provide for succession planning, to encourage young people into farming and protect farm families? There is a unique issue in Northern Ireland which needs to be addressed.
Baroness Hayman of Ullock (Lab)
As the noble Baroness said, I meet the Minister of Agriculture in Northern Ireland regularly and met the Ulster Farmers Union very recently, as well as the noble Baroness, to discuss these issues, and I know that my officials meet various organisations regularly to discuss them. I will be back in Belfast towards the end of this month and hope to meet the Ulster Farmers Union again shortly. As she pointed out, tax and succession planning is incredibly important. There is an issue with getting young people into farming, and I recommend that people talk to professionals about what is available to them for tax purposes going forward.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, a sustainable supply of food is essential for the country. The farming community is key to achieving this goal. The perception that farmers are wealthy is erroneous. Farmers have seen their income shrink as a result of the slow implementation of ELMS, and now they face the prospect of having to sell off or dismantle family farms to pay inheritance tax. The appalling headline “We can’t afford to let farmers die tax-free” is a gross distortion of the truth. What is the Minister doing to reverse this impression?
Baroness Hayman of Ullock (Lab)
As I mentioned in my answer to the first question, most family farms will not be affected. The latest data shows that the top 7% of claims for agricultural property relief accounted for 40%. Regarding food security, we have made the largest ever investment in sustainable food production through the environmental land management schemes and are securing long-term food production through them. As part of the Budget, we announced £60 million for the farming recovery fund to support farmers affected by unprecedented extreme wet weather last winter, which the previous Government had not paid.
The Earl of Devon (CB)
My Lords, UK farming suffers a chronic lack of productivity and an ageing cohort of farmers. They have been encouraged to hold on to their farms by virtue of agricultural property relief and the inheritance tax benefit of dying in situ. APR reform may therefore improve matters by encouraging earlier transfer to younger generations. However, it will unduly punish those elderly farmers who have estate-planned with APR in mind. What will the Government do to ensure that those elderly farmers who are terribly stressed by this reform and who will not survive seven years are not unduly punished?
Baroness Hayman of Ullock (Lab)
The noble Earl makes an incredibly important point. We are aware that this is an issue. I stress that farmers will be able to access 100% relief for the first £1 million and 50% relief thereafter. That means an effective 20% tax relief rate and that an individual can pass up to £2 million, and a couple up to £3 million between them, to a direct descendant inheritance tax free. It is important that we make that clear. However, I stress again that there is financial advice out there. Many businesses and individuals take tax advice. I encourage all businesses, including farms, to do so.
Viscount Hailsham (Con)
My Lords, I declare an interest; while I no longer have agricultural land, members of my family do. Last year, on 20 December, the NFU issued a press statement which stated that Steve Reed, then shadow Defra Secretary, had assured the NFU that Labour had no plans to change agricultural property relief. The then NFU president said that
“it’s good to see Labour has listened to our concerns and recognised the importance of keeping this policy”.
Did the NFU misunderstand what Mr Reed said? Was Mr Reed unaware of the Chancellor’s plans? Had those plans been concealed from Mr Reed—or was the NFU being misled?
Baroness Hayman of Ullock (Lab)
Clearly, I cannot comment on the detail of a meeting that I did not attend. However, the Government’s commitment to supporting farmers and rural communities is unwavering and we have demonstrated this by committing £5 billion in the agricultural budget over the next two years. That is the biggest ever budget for sustainable food production and nature’s recovery.
The Lord Bishop of St Albans
My Lords, can the Minister help us a little? The Treasury figures state that fewer than 25% of farm businesses will be affected by the changes to APR on inheritance tax. However, the NFU estimates that up to half of all working farms could be impacted by the new tax rules. Why is there such a large discrepancy? Can she help us to understand what is going on?
Baroness Hayman of Ullock (Lab)
There are two things here. People are looking just at the first £1 million and not at the opportunity for individuals to pass further tax reliefs on, of up to £2 million for one individual and £3 million for a couple. Also, there has been confusion around the data given out by Defra and the Treasury. The Treasury data shows that around 500 estates a year across the UK would be impacted to some extent and about 25% of the total number of estates currently making use of APR. What the Defra data shows is the asset value of farms in England so, by looking at that data, people have assumed that more farms would be impacted. But you cannot draw a straight line between asset value and what it means for inheritance tax, because the number of claims—how many people would be impacted by the change—is affected by many things, such as who owns the business, the nature of the ownership, how many owners there are, how they plan their affairs, and so on; this is where you have some of the confusion.
Lord Watts (Lab)
My Lords, can I congratulate the Minister and the Government on ending this unfair treatment of farmers? This is not about farmers; it is about landowners. As we know, millionaire landowners have been buying up land to avoid taxes, and it is about time the Government caught up with them.
Baroness Hayman of Ullock (Lab)
My Lords, I appreciate the concerns that farmers have. I think they should look accurately at the figures. My noble friend makes an important point that some large landowners have been using the APR relief as a tax loophole.
Lord Kennedy of Southwark (Lab Co-op)
We will hear from the DUP Benches now.
Lord Morrow (DUP)
My Lords, is the Minister aware that the average holding in Northern Ireland extends to about 101 acres? In England, it is about 200 acres. Agricultural land at present makes between £12,000 and £22,000 per acre. Then take the farm dwelling sum, between £300,000 and £500,000. If you add those figures up, you get far in excess of £1 million. How can the Minister tell us that some 50%, or maybe 60%—I read somewhere it was 70%—would be caught in this valuation? Surely the farmers, particularly in Northern Ireland, are getting a very poor deal—it must be clearly understood. In England, there are many tenanted farmers; that is to a much lesser extent in Northern Ireland. Many of these farm holdings have been handed down from one generation to another, and that has to be taken into consideration.
Baroness Hayman of Ullock (Lab)
As I mentioned, I meet the Minister in Northern Ireland regularly. The noble Lord says that most of the farms are very small. My understanding is that the buildings—the actual farmhouses themselves—are not included, so that should not have an impact; but if I am wrong, I will clarify that to him. I know that the noble Baroness, Lady Rock, was very keen to ask about tenant farmers. We are having close conversations with the Tenant Farmers Association. I know that the Farming Minister met George Dunn yesterday, and if she would like to discuss the tenant farming aspect further with me I would be very pleased to do so.
Crown Estate Bill [HL]
Tuesday 5th November 2024
(2 days, 3 hours ago)
Lords ChamberRead Full debate Crown Estate Bill [HL] 2024-26 View all Crown Estate Bill [HL] 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 5-R-I Marshalled list for Report - (1 Nov 2024)
15:52 - Division on Amendment 1 - Ayes: 193 / Noes: 226 - Amendment 1 disagreed.
17:36 - Division on Amendment 4 - Ayes: 220 / Noes: 139 - Amendment 4 agreed.
18:32 - Division on Amendment 6 - Ayes: 74 / Noes: 147 - Amendment 6 disagreed.
Baroness Vere of Norbiton
“(3) The Secretary of State must limit any borrowing by the Crown Estate under this Section by regulations made by statutory instrument, and these regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(4) The first set of regulations made under subsection (3) must limit borrowing to a net debt to asset value ratio of no more than 25 per cent.”Member's explanatory statement
This amendment would limit the amount the Commissioners may borrow by regulations subject to the affirmative procedure for statutory instruments.
Baroness Vere of Norbiton (Con)
My Lords, I thank my noble friend Lord Howard of Rising for his support on the amendment and for his very wise counsel in our discussions to ensure that the change that is proposed is both reasonable and rational. The Official Opposition have made a clear and consistent argument for the insertion of essentially two things: parliamentary approval to borrow up to 25% of net debt to asset value, and a second and simple check from the Government of the day when the borrowing is forecast to increase over that higher ratio.
This two-step process is quite important. The initial use of the power would ensure that Parliament and your Lordships’ House can take into account a revised business case. I am incredibly grateful to the Minister for publishing a business case that sets out the rationale as to why the Crown Estate needs this borrowing. Unfortunately, it does not include the partnership with GB Energy. Noble Lords will know that this partnership was announced with great fanfare, and one must assume that it is significant. Therefore, I believe it would be appropriate for the business case to be revised in due course and that that would be expected. I am sure that the Minister will agree that that will happen. However, on the basis of that business case, I think it is important that Parliament and your Lordships’ House can then say that it is wise for the Crown Estate to seek the borrowing required.
The second use of the power—which according to current forecasts, which I am sure the Minister would probably agree with, will not be needed for many years—to go beyond 25% of net debt to asset value based on the current total assets of the Crown Estate would mean going above a borrowing requirement of about £3 billion. That is a significant amount of money, and the Crown Estate is not forecasting that it will need that amount of borrowing, so the further use is for much further down the road. In terms of the initial use, our view is that it is appropriate to put that check in place now to ensure that all information is considered as the Crown Estate is given this new power to take on borrowing.
I am grateful to the Minister for his engagement to date on this important matter. I know he has had some useful conversations with myself and my noble friend Lord Howard of Rising. Underpinning all of this and many of the amendments before your Lordships’ House today is that the assets held by the Crown Estate are absolutely critical to the national, cultural and environmental importance of our nation. Not only are the assets incredibly important, but the Exchequer receives a very handy income from the Crown Estate, which then supports the nation’s public services. We must not put either of those things at risk unduly.
I believe that some form of parliamentary oversight is critical here. It is right that, under this Bill, there is a lessening of that oversight, as Parliament, particularly the House of Commons, will no longer need to approve the salaries and expenses of the commissioners of the Crown Estate. Given that reduction in parliamentary oversight, ensuring the correct financial structure of the Crown Estate is, to my mind, critical. Doing that on the basis of the new business case is also incredibly important.
This is a simple amendment. It is in two stages: one would have to happen quite soon, and one would happen many years hence, but I think it is right that we not only address the financial situation of the Crown Estate as it is now, following the partnership with GB Energy, but ensure that the Crown Estate does not risk the temptations of excessive borrowing in the future, which would therefore put our nation’s assets at risk. I hope noble Lords will be able to support the amendment.
Lord Howard of Rising (Con)
My Lords, I support my noble friend. In Committee, the Minister was good enough to agree that controls on borrowing by the Crown Estate must be in place and that they would be set out in a memorandum of understanding between the Crown Estate and the Treasury at a loan-to-value ratio not to exceed 25%. This figure is more than I would have wished for, and using asset value rather than capital reserves in the definition allows a still greater level of borrowing. Nevertheless, I am grateful that the Minister acknowledges that there should be a limit on borrowing. However, there must be a tighter control than a memorandum of understanding. Amendment 1 proposes an affirmative statutory instrument to achieve this. It requires the Government to limit borrowing to net debt-to-asset value of no more than 25%, purposely copying the wording of the Minister’s comment in Committee.
Should His Majesty’s Government need more flexibility in the future, this statutory instrument would provide for that. It would be better if the limit on borrowing were in primary legislation, but in seeking a solution which His Majesty’s Government might find acceptable, the amendment would be a fair compromise, retaining any flexibility that the Government might need while providing a stronger safeguard than a memorandum of understanding. As the Minister said, this limit is unlikely to be of concern to the present Government. Therefore, I hope he will accept this very modest suggestion to safeguard the Crown Estate for the future.
Baroness Kramer (LD)
My Lords, I think I started this hare running at Second Reading, when I basically said to the Minister that the Government were asking us to give borrowing power to the Crown Estate but we did not have the business case that argued why it needs a borrowing power—it is not evident from the annual report. Also, the framework agreement, which at that time governed the relationship between the Treasury and the Crown Estate, was silent on the issue of borrowing, other than to say it was not allowed, so clearly we needed changes to the framework report and we did not have them at Second Reading.
I am so impressed by the Minister’s response—and appreciative, because I have sat on these Benches looking at a Conservative Government for quite a number of years when every attempt to get transparency was rejected, I was handed documents based on Henry VIII powers and there was complete resistance to oversight by Parliament. Instead, the Minister has provided us with the business case—which is, frankly, virtually unheard of. It is an excellent document that completely clarifies why the change that this legislation contains has come to us. We can now understand that. It provides the draft changes to the framework document that we expect to see fully negotiated and enacted by the end of the year, we hope, but well ahead of any borrowing. Even more importantly, it provides a document that we usually cannot extract from the Treasury’s fingers, which is the memorandum of understanding that takes us into the much greater detail behind the whole rationale and sets out the rules in a very open and public manner.
This is the way that Governments should handle situations such as this. I want to respond from these Benches to those actions by the Government in a completely positive way. I understand that the Conservative Benches feel that opposition is a very different role from government and therefore they behave completely differently in opposition from the way that they would choose to do in government—that is their choice—but I am very content with the information that has been offered to us. As it has been given to us by the Government, it will last and will survive passage through this House and the other place. I think we can say with confidence that borrowing and financial liability in the Crown Estate are within a sensible and appropriate framework. Therefore, I ask that these Benches do not support the amendment proposed by the Conservative Benches and instead grasp the opportunity of a very responsible and appropriate offer from the Government.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I am grateful for the contributions from all noble Lords on this group of amendments. As I set out in Committee, the Government recognise that the matter of controls on borrowing is an important consideration for noble Lords.
I listened carefully to the concerns raised at previous stages of the Bill. I found the arguments put forward by the noble Baroness, Lady Kramer, to be particularly compelling. As such, I committed to sharing the underpinning memorandum of understanding, which sets out the parameters and controls relating to the power to borrow, as well as the original business case and the framework document. Following on from my commitment, these documents were shared with noble Lords and have been deposited in the Library. I am grateful to the noble Baroness for her words just now.
The memorandum of understanding set out that borrowing by the Crown Estate will be limited to a maximum of 25% loan to value, defined as net debt-to-asset value, and that any borrowing within that limit can be undertaken only with the consent of the Treasury.
The framework document will be amended, as I have shared, to include references to borrowing powers, and the original business case produced by the Crown Estate makes the argument for the Crown Estate being able to borrow with the consent of the Treasury, in line with its peers, to ensure that it can continue to operate sustainably and drive maximum returns to the Exchequer.
I trust that having sight of these documents has been useful for noble Lords and has provided an additional opportunity for scrutiny of the proposed borrowing. Let me be clear that the Government agree that controls on borrowing must be in place. As I have set out previously, borrowing can be undertaken only with the consent of the Treasury and, as outlined in the memorandum of understanding, borrowing is not to exceed 25% of loan to value, defined as net debt-to-asset value. This is a clear and carefully chosen guard rail to ensure that sufficient limits are in place. The proposed powers will enable the Crown Estate to draw on its cash holdings first and, as such, it is not envisaged that these borrowing powers will be used in the short term.
Amendment 1, tabled by the noble Baroness, Lady Vere, and supported by the noble Lord, Lord Howard, would require the Secretary of State to limit borrowing by the Crown Estate by affirmative regulations, and for the first set of regulations to set the limit at 25% net debt-to-asset value.
As debated in Committee, the principle here is whether a specific cap should be in statute. The Government’s view remains that the limit is better placed outside of legislation. The primary control, set out in the Bill, is the requirement for Treasury consent to be obtained prior to undertaking any borrowing. In addition to this important safeguard, we are retaining the requirement for the Crown Estate commissioners to maintain and enhance the value of the estate, while having due regard to the requirements of good management as set out in the 1961 Act.
Taken together, these two elements maintain and strengthen the existing and important fiduciary duty of the commissioners not to take decisions that could endanger the estate. The Government believe that these safeguards and the limits set out in the memorandum of understanding provide clear guard rails to the powers set out in the Bill.
The 1961 Act also contains a power of direction. This power is not altered by the Bill. It remains open to the Government to use in extremis; if, for example, there were concerns that the commissioners were endangering the core statutory purpose of the Crown Estate.
As I have set out previously, the Crown Estate is a commercial business, independent from government. It operates for profit and competes in the commercial markets for investment opportunities. To ensure that it can compete effectively, it needs the ability to borrow as its competitors can. Imposing a legislative cap on borrowing would likely place additional restrictions on the Crown Estate that its competitors in the private sector do not face. This would not be consistent with the Government’s vision for the Crown Estate: to ensure that it has flexibility to invest in activities that will drive increases in its revenues and, consequently, its returns to the public purse.
As set out in the Crown Estate’s original business case, which I have shared with noble Lords, the limit of 25% loan to value is consistent with its peers. I hope this demonstrates to noble Lords that these plans have been considered carefully.
Let me also be clear that any request by the Crown Estate to draw down on debt will be carefully considered by the Treasury in the context of the fiscal position and in line with our fiscal rules. As the Chancellor set out in the Budget, the Government have set out our robust fiscal rules alongside a set of responsible reforms to the fiscal framework to improve certainty, transparency and accountability. The stability and investment rules will put the public finances on a sustainable path while allowing the step change needed in investment to drive long-term growth.
I hope that these explanations are useful and reassure the House that the Crown Estate’s power to borrow will be carefully monitored and controlled within these parameters. I hope I have provided some clarity on the Government’s position and that as a result the noble Baroness, Lady Vere, feels able to withdraw her amendment.
Baroness Vere of Norbiton (Con)
My Lords, I am grateful to the Minister for his response and to the noble Baroness, Lady Kramer, although I am sorry to hear that she will not be able to support the amendment. Noble Lords will not be surprised to hear that I do not agree with her.
While I agree with the noble Baroness’s assessment of the documents that were published by the Minister—it was helpful to see the memorandum of understanding, the draft framework and the business case—that is not really the point, because they do not go far enough. Those documents can be amended by this or any future Government. As the Minister referred to, and as I tried to explain in my opening remarks, this is the original business case, but there is no business case that currently sets out what the relationship with GB Energy looks like and what it will do to borrowing.
GB Energy is going to invest billions of pounds. How much of that is going to come from GB Energy and how much from the Crown Estate? No one knows. It is important that we make sure that it is impossible for the Crown Estate to ramp up borrowing without at least some oversight from Parliament. The Minister said, “It’s okay—the maximum is 25%”, but of course this Government or any future Government can change that unilaterally.
The Minister mentioned that competitors somehow do not have any caps on borrowing. Of course they do; they are commercial businesses, so the caps on their borrowing will be set by their banks. If the Minister looks at the original business case that he shared with us, he will see that all the competitors sit around the same sort of level of loan to value.
To go back to the original point, this is a sensible, simple and reasonable amendment. It would put in place just two checks: first, whether the Crown Estate should be borrowing now, and up to 25%, with the assessment done on a new business case, including GB Energy; and, secondly, another check, at some point long in the future, if ever, should the Crown Estate ever want to go above 25%. I think our nation’s assets need that sort of protection, and I therefore wish to test the opinion of the House.
Baroness Vere of Norbiton
“5A The Chair of Commissioners may not be appointed until the appointment has been scrutinised by the Treasury Committee of the House of Commons, or any successor committee.”Member's explanatory statement
This amendment would require the appointment of the Chair of Commissioners of The Crown Estate to be subject to scrutiny by the Treasury Select Committee.
Baroness Vere of Norbiton (Con)
My Lords, I will speak to Amendments 2 and 14 in my name.
On Amendment 2, I am incredibly grateful to the Government for their engagement on the importance of pre-appointment scrutiny for the Crown Estate commissioners. However, I recognise that my initial amendment in Committee was a bit ambitious and have restricted the amendment before your Lordships’ House today on Report to the chair of the Crown Estate commissioners. It is important, as I mentioned in the first group, as there is a decrease in parliamentary oversight. It is not uncommon for the chairs of the boards, or equivalent, of such significant public sector bodies to at least have some form of questioning prior to taking up their role.
I note that, in his letter yesterday, the Minister said:
“The Government has not tabled an amendment on this matter because there is already an established process by which roles such as this are added to the Cabinet Office’s pre-appointment scrutiny list. The Treasury will work with the Cabinet Office to progress this matter”.
I am grateful to the Government for their assurance that the chair of the Crown Estate commissioners could be added to the Cabinet Office’s pre-appointment scrutiny list; we will be holding the Government to account as this is progressed.
Amendment 14 is, again, related to the importance of the assets for which the Crown Estate is responsible. It has the stewardship of billions of pounds-worth of very important assets for the benefit of the nation. Some of these assets are on land, some make up the seabed, some are incredibly important thoroughfares in our main urban centres, and others might be important agricultural land across the nation. I can see very few guardrails to prevent the Crown Estate commissioners deciding to sell those assets. Indeed, there have been quite significant asset sales over recent years, and I was not really able to find any information as to what has been sold.
We made this argument in Committee, and I am grateful to the Government for their assurance that they will bring forward an amendment or some sort of process by which the seabed might be protected. However, my understanding is that the law in this area is very complicated, so I am somewhat concerned that a process could not be found that is seabed-specific. Nevertheless, I welcome the Government’s engagement and their recognition that selling off elements of our seabed in perpetuity would not be wise and should not be done without some form of transparency.
However, as I said previously, it is not just about the seabed; I also remain concerned about other important assets owned by the Crown Estate. My Amendment 14 simply proposes that, should the Crown Estate sell more than £10 million-worth of assets—I am happy to look at a different figure—there would be some form of transparency to Parliament, such that noble Lords and colleagues in the other place could see the assets being disposed of and make at least some assessment of whether that is the right course of action for the Crown Estate.
Lord Berkeley (Lab)
My Lords, I wish to speak to Amendment 15 in my name, which is in this group. I tabled the same amendment that we debated in Committee because my noble friend had not yet been able to respond in his promised letter; but, of course, he has now responded, and I presume all noble Lords have seen the letter. I found it very helpful, and I thank him for it. However, my amendment provides an opportunity to debate what is in that letter and issues that affect quite a lot of people—not only in the Isles of Scilly but in some of the other places related to the ownership of the Duchies or the Crown Estate. There are a few principles I would like to discuss and see where we get to.
What I found most interesting was that my noble friend’s letter was quite clear that both Duchies are private estates—I do not think there is any debate about that now. The Duchy has been saying this for a long time, and it is in his letter from the Treasury. I am also grateful for the explanations about the finance and the involvement, or not, of the Public Accounts Committee in the other place, the National Audit Office, et cetera. But then we get into rather more interesting and difficult territory. In his letter, my noble friend says:
“Crown bodies … are not bound by the enfranchisement legislation”
that your Lordships’ House debated over many months earlier this year. I question how a private estate cannot be bound by legislation such as that—why should the Duchy be exempt?
We then get into an even deeper mystery about what are called “excepted” areas. There is a distinct lack of transparency here. I will not go into great detail about the problems faced by the tenants on the Isles of Scilly because noble Lords can read material from the previous year or two. During the legislation at the end of the last Parliament, the then Chief Whip, the noble Baroness, Lady Williams, read out a parliamentary undertaking that attempted to differentiate between what they call “non-excepted” and “excepted” areas. So my first question to my noble friend the Minister is: what is an excepted area, and who decides? Is it Parliament, the Government or the landowner—in this case the Duke of Cornwall—who decides what should or should not be included in legislation? That is interesting for a private sector company, and it needs debating.
Given that, last weekend, there was a lot of publicity in the media, including the Sunday Times, you start wondering what “private” means in this context. Presumably, all private bodies should pay tax—that is pretty fundamental to our life here—including income tax. The Duchy and His Majesty say that they pay tax, but it is voluntary. I would love to pay voluntary tax and to decide how much it was, as I am sure many other noble Lords would, but that is not what it is all about. They do not pay corporation tax, capital gains tax or inheritance tax. They get all that rental income, which noble Lords may have read about in the Sunday Times, from ambulances parking on their land, with the National Health Service being charged and paying the Duchy of Cornwall, I think it was. This seems to be a bit of a recycling of the cash that the Duchy claims it needs to charge people. This comes back to the Duchy claiming credit—I see this on the Isles of Scilly—for allowing bodies to use its land and charging them for it.
One example is that the farmers on the Isles of Scilly want an abattoir built so that they do not have to transport animals to the mainland, which I think is a good idea. The Duchy said, “You can have the land”. Many of us think that it does not own the land anyway, but, leaving that to one side, if it allocates land to an abattoir, it will then charge the farmers for using it. Is that right, when the land does not really belong to it and it is not contributing to the cost? That is another debate that we need to have on this.
Perhaps what is wrong is that the Duchy needs the money, but given what is in the rest of the Bill, it will result in His Majesty and other members of the family getting quite a lot more. One could surmise that they do not need the money and that it might be better if they paid their taxes and invested properly in an estate, like many large estate owners in this country already do. Noble Lords will have heard me speak about the appalling transport services between the Isles of Scilly and the mainland, where a single fare by ship or plane usually costs the best part of £100. The Duchy could contribute to that—it would just be small change.
Lord Young of Cookham (Con)
My Lords, I shall speak briefly to Amendment 15 in the name of the noble Lord, Lord Berkeley, which deals with lease extensions from the Crown Estate. I may do so with less republican overtones than we have just heard.
Those who have been following the proceedings of the Bill will know that I have raised the question of what happens to freeholds when they end up in the hands of the Crown Estate under an obscure process known as escheat. When a freeholder of a block of flats disappears or goes bankrupt, by default the freehold goes to the Crown Estate, whose policy is then to dispose of it, getting the best value, as is required by the 1963 Act. I raised the issue as to whether that obligation was trumped by a subsequent undertaking given by the Crown Estate to dispose of freeholds or extend leases in accordance with Acts relating to leasehold reform, when they would get less than market value.
In September I got a letter from the Minister saying that, against this backdrop, the Crown Estate
“does not believe the 1992 parliamentary undertaking applies to escheat”.
That crystallised the problem. On the one hand, clear undertakings had been given to Parliament by the Crown Estate that it would respect the Leasehold Reform, Housing and Urban Development Act 1993, which I happened to put on the statute book, but on the other hand, it would not respect it when disposing of freeholds back to leaseholders.
We then had a meeting with the Minister and the Crown Estate. I am most grateful to the Minister for his role in initiating it. At that meeting it became clear that, contrary to what the letter said, the Crown Estate would abide by the leasehold reform Act. This undertaking is now reproduced in the draft framework agreement, which says that the Crown Estate should comply with
“all public undertakings given on its behalf by ministers in Parliament to follow the law ‘by analogy’ where Crown bodies are not bound by the specific legislation in question”.
While issues remain in the specific case that I raised with the Minister, which I will pursue with him offline, I regard the principle as satisfactorily resolved and am grateful to him for the role he played in securing that agreement.
I end with one final suggestion. The process of escheat brings windfall gains to the Crown Estate. When a freeholder disappears or goes bankrupt, the Crown Estate acquires the freehold but, crucially, under the process of escheat, it does so free of any obligations that may have accrued to the previous freeholder. It then disposes of it, with a fee paid by the purchaser. This income is different from the rest of the income of the Crown Estate and should be shown separately in its accounts. I had a look to see whether this was the case, but could not find it. One could argue that these windfall proceeds are rather like unclaimed bank accounts and should go to charity via the Reclaim Fund, but that is a matter for another day. Does the Minister agree with the accounting change I have proposed?
Lord Lansley (Con)
My Lords, I agree with my noble friend on the Front Bench about the desirability of there being some form of prior parliamentary scrutiny over the appointment of a chair of the Crown Estate. My entry in the register of interests shows that I am chair of the Cambridgeshire Development Forum, of which the Crown Estate is a member. Sir Robin Budenberg has done a very good job but is retiring, so a question will rapidly arise. As we consider the Bill and think that it has been 63 years since the Crown Estate Act 1961, there is a good case for the public interest to be examined through that scrutiny when somebody is appointed whose principal purpose will probably be to represent the public interest in relation to the continuing functions of the Crown Estate.
However, I do not agree with my noble friend about Amendment 14. It probes the question—I hope the Minister will see it in that light—of how the disposal of assets by the Crown Estate is properly scrutinised. Noble Lords will recall that in Committee I referred to the duties of the Crown Estate commissioners under the 1961 Act, which the Minister just referred to. I also referred to their duty under Section 3 of that Act not to dispose of assets other than on
“best consideration in money or money’s worth”.
Given that we are trying to maintain the Crown Estate’s commercial operations, with prudential limits in relation to those assets, the duties in the 1961 Act should suffice.
I hope my noble friend will not press Amendment 14. Given the role of the Crown Estate as a major developer of potentially significant interest in the science parks to the north of Cambridge, for example, its disposals as a major developer may easily and rapidly reach £10 million in the course of a year. The bureaucracy and intervention that would be required thereafter by this amendment would be unreasonable, and I do not want us to impose those kinds of onerous obligations on the Crown Estate commissioners. If they fail to meet their duties, we can see that there are means by which the Treasury can intervene in order to establish that those duties are being met.
Earl Russell (LD)
My Lords, I rise briefly to speak to Amendment 2 in the name of the noble Baroness, Lady Vere of Norbiton. This simple amendment seeks that the chair of the Crown Estate commissioners be appointed by the Treasury Select Committee. On these Benches, this seems like a reasonably sensible idea. This is an important appointment and should have an adequate level of pre-appointment scrutiny.
I welcome the letter from the noble Lord, Lord Livermore, sent yesterday, pointing out the established process for the Cabinet Office and that this could be added to the pre-appointment scrutiny list. To our minds, that is a very sensible answer and a way forward. It is a way of resolving this issue. My only real question in relation to this is that the Minister says this will be done in “due course”. Can he give us a clearer idea of what he means by that? What is the timeframe?
Further to that, in relation to the amendment from the noble Lord, Lord Hain, calling for commissioners from individual countries to be appointed to the Crown Estate, I ask the Minister: will those appointments also be subject to this type of pre-appointment scrutiny?
I turn now to Amendment 14, also in the name of the noble Baroness, Lady Vere. It seeks to require the approval of His Majesty’s Treasury for the disposal of assets over £10 million, and the commissioners to inform the Treasury if assets over a value of £10 million are disposed of in a single year, then requiring the Treasury to approve of the disposal of those assets and to report that to Parliament within 28 days.
Again, the noble Lord, Lord Livermore, responded to this in his letter to all Peers yesterday, and we welcome that response. The Minister pointed out that this was a complicated matter, and that he would bring forward an amendment to address this concern. His engagement with that is welcome. This is an important issue—assets should not be disposed of by the Crown Estate without ministerial approval—but I seek further clarification from the Minister. When he says that this will be brought forward, will it be before Third Reading in this House? If it is not possible to bring that clarification forward before Third Reading, can the Minister give an undertaking that it will happen before Report in the other place?
On this amendment, our preference is that a compromise way forward is agreed. In fact, both amendments are matters that should be resolved without resorting to testing the opinion of the House.
Lord Livermore (Lab)
My Lords, I thank all noble Lords for their contributions to this debate. First, I would like to address the points raised by the noble Lord, Lord Young of Cookham. I thank him very much for his engagement on this issue since Committee. I am also extremely grateful to him for raising the issues around the law relating to ownerless land and the process of escheat. It is a legally complex area and long overdue for reform. As a result of his intervention, Treasury officials are now engaging with the Law Commission on options for longer-term reform.
On the specific issues raised by the noble Lord, I am grateful to him for meeting with me, Treasury officials and the Crown Estate after Committee to discuss his specific concerns in detail. At the meeting we gained useful clarity that in cases of escheat the Crown Estate follows the valuation formula set out in the Leasehold Reform, Housing and Urban Development Act 1993, as he said.
As the noble Lord requested in Committee, I have agreed to update the framework document that governs the relationship between the Treasury and the Crown Estate to make this clear. The addition in paragraph 7.2 will set out that the commissioners have a responsibility to ensure that all public undertakings given on the Crown Estate’s behalf by Ministers in Parliament are met. I have raised the noble Lord’s suggestion about the specific accounting change with the Crown Estate and will follow up in due course.
Amendment 2, tabled by the noble Baroness, Lady Vere, would require scrutiny by the Treasury Select Committee, or any successor committee, of future chair appointments before the appointment can be made. She spoke persuasively on this in Committee, and I agree with many of the points she raised. For this reason, I am happy to confirm that the Treasury will work with the Cabinet Office to add the role of chair to the official pre-appointment scrutiny list. This will be in accordance with the already-established process by which significant roles, such as this, are added to the Cabinet Office’s pre-appointment scrutiny list. As I have set out, I will be very happy to update noble Lords in due course. The noble Earl, Lord Russell, asked when that will be. I will come back as soon as I have relevant information. We are already working with the Cabinet Office, and I do not envisage there being a significant delay.
Baroness Vere of Norbiton (Con)
My Lords, very briefly on Amendment 2, I am grateful to the Minister for his words and his engagement on that, and I am content on it.
On Amendment 14, obviously, should I decide to test the opinion of the House, it will come slightly later in proceedings. However, I want to respond briefly to my noble friend Lord Lansley. I do not propose at all that the Crown Estate would not get best consideration; this is merely an obligation to report to Parliament and to get the consent of the Treasury. On the original business case—I do not know about the new business case because we have not seen it—the Crown Estate is planning £1.4 billion-worth of disposals of assets. That is quite a lot; I would be interested to know whether that is very important heritage assets or seabed, and at the moment I have no way to find out. That is an important element for noble Lords to be aware of. Therefore, I will take this away and consider my position on Amendment 14 in due course. However, I beg leave to withdraw Amendment 2.
Lord Livermore
“Annual reportsIn section 2 of the Crown Estate Act 1961 (reports and accounts), after subsection (1) insert—“(1A) The annual report for a year in which a partnership between the Commissioners and Great British Energy is in operation must include a report on—(a) the activities of the Commissioners during the year under that partnership, and(b) any effects or benefits experienced during the year which were the result of activities of the Commissioners under that partnership.”” Member’s explanatory statement
This amendment would require the Commissioners to include in their annual reports a summary of the things done, and of any effects or benefits or effects resulting from things done, under any partnership between themselves and Great British Energy. The duty will only apply in relation to a year in which such a partnership was in operation.
Lord Livermore (Lab)
My Lords, I will address other noble Lords’ amendments in this group during my closing speech, after listening to the debate.
I have listened to the arguments and concerns put forward at Second Reading and in Committee by the noble Baroness, Lady Vere, on how the new partnership between the Crown Estate and Great British Energy will work and the difference it will make. The Crown Estate is of course keen to ensure that details of this partnership are publicly available on an ongoing basis, and the Government therefore propose an amendment to require the Crown Estate to include, in its existing annual report, a report on the activities of the commissioners during that year under the partnership with Great British Energy, and any effects or benefits during that year resulting from activities of the commissioners under the partnership.
I am grateful to the noble Baroness, Lady Vere, for her engagement on this matter, and to other noble Lords who have raised similar concerns, and I trust that this amendment meets those concerns. I hope that noble Lords feel able to support this amendment as a result. I beg to move.
The Earl of Kinnoull (CB)
My Lords, I will speak to Amendment 5, which stands in my name. I thank the Minister and his Bill team for their time in what is always the busiest period of the Treasury’s life. He was happy to give time, and I am very grateful for that and for the sensible discussion that we had.
The amendment is designed to be the gentle pencil in the back, as I put it in Committee, in order that the Crown Estate Scotland be afforded the same freedoms and flexibilities that the Crown Estate will have following the passage of the Bill. I described in Committee how the Crown Estate Scotland had advised me that the Scottish Government were keen that it has those. I know that the UK Government are keen that it does so, as is the Crown Estate itself.
There are many opportunities for collaboration, particularly for energy projects in the North Sea at the moment, but there will be other opportunities as well for aquaculture. There is the ability to copy the good and avoid the bad, given that a number of copycat transactions might be done using Crown Estate property going forward. This is of course in all our interests, because ultimately this is very much part of the net-zero agenda, and the more the two Crown Estates can be aligned the better it will be for everybody in the long term.
The amendment is, as I said, a gentle pencil, designed to ensure that the UK entities do not down tools following the passage of this Act but carry on enthusiastically to ensure that Crown Estate Scotland benefits from the same freedoms and flexibilities. I therefore ask my only question of the Minister: does he share this aim of ensuring that those freedoms and flexibilities are afforded, and does he feel that this amendment is a proportionate way of going about it?
Earl Russell (LD)
My Lords, I rise to speak briefly to all the amendments in this group, all of which relate to reporting.
Beginning with government Amendment 3, I am grateful to the Minister for this important concession and welcome his listening to the concerns expressed across the House and his open engagement and willingness to look again at this issue. If he will forgive my saying so, we have come quite a long way since Second Reading, when the Government’s response was that the partnership with Great British Energy was not really a key part of the Crown Estate Bill. We support the clean energy mission—this is so important not only for our net-zero goals but in providing for our own energy security. Great British Energy promises to unlock £60 billion of private investment, and the Government themselves have committed £8.3 billion over the course of this Parliament. We have the third-best wind resources in the world, and we should be making best use of them to bring down the cost to bill payers and ensure that we have security of our own supply.
By 2030 this will, I hope, have led to the generation of enough electricity for the equivalent of 20 million homes. Everyone across the House has broadly welcomed this, but collectively we have wanted broader and greater scrutiny of the Crown Estate and the work it does. It is a long time since the 1961 Act came in, and simply updating the borrowing powers without updating any other measurements did not feel like the complete picture for providing that security going forward. We have campaigned for greater transparency and the Government have listened. I am grateful to them and welcome this.
We are happy to support Amendment 5, tabled by the noble Earl, Lord Kinnoull, but with one small caveat. It is very important that Crown Estate Scotland goes along with the energy transition and is fully invested. The noble Earl’s amendment is carefully worded, simply calling for a report to be laid before Parliament. Devolution is an important issue for us on these Benches: it is not for this Parliament to be telling devolved Parliaments what they should do or how they should act, although we recognise that the noble Earl’s amendment does not do that.
Equally, as I said, we support the amendment and would like to see progress made on this issue, just as we would like to see Scotland fully engaged with the Great British Energy partnership and contributing to our green energy. As the noble Earl said, the amendment is a pencil in the back. I have written down “a gentle nudge”, and they are probably similar things. We welcome the amendment, which puts down a marker to the Minister and the Government to continue their negotiations and conversations with their equivalents in the Scottish Assembly, the Scottish Government and Crown Estate Scotland so that progress can be made.
Finally, my Amendment 8 was tabled as a compromise, from my point of view. There has been a feeling around the House that we need greater scrutiny, and noble Lords have raised numerous issues that they feel should be subject to such scrutiny. The Minister responded by saying that under the original 1961 Act, too many legal powers were constraining the Crown Estate’s ability to act freely in the interests of the state. He consistently argued throughout the various stages of this Bill that he did not want to reimpose those conditions on the Crown Estate’s ability to operate. The idea behind my amendment is that, simply by putting chapter headings in the Crown Estate’s annual report, which goes before Parliament, there would be greater opportunity for the issues that have been raised collectively in this House to be scrutinised in Parliament, so that, in exchange for giving the Crown Estate greater borrowing powers and a greater role, there would also be greater scrutiny.
I have aimed to cover a lot of the issues that have been raised across your Lordships’ House. It is quite a simple amendment that simply asks for these topics to be covered. However, I doubt whether the Minister will respond positively to it.
Lord Vaux of Harrowden (CB)
My Lords, I rise briefly to support Amendment 5 in the name of the noble Earl, Lord Kinnoull. In passing, I still am rather confused by this Bill, which covers Scotland but not Crown Estate Scotland. That seems a bit of a contradiction, but it is clear there is a degree of overlap between the two. There certainly is an overlap of opportunity—we have heard about Great British Energy et cetera.
It is also clear that, while devolution must be respected and that is extremely important, Crown Estate Scotland and the Scottish Government want to have the same levels of flexibility. This simple amendment keeps the matter on the table and that is the key here, so I hope the Minister will be able to accept it.
Lord Forsyth of Drumlean (Con)
My Lords, I rise very briefly to speak to Amendment 5 in the name of the noble Earl, Lord Kinnoull. This is an entirely sensible proposal that I cannot imagine for a moment the Government would wish to resist, and which respects the autonomy of the devolution settlement. If I were a commissioner on the Crown Estate in England or the Crown Estate in Scotland, I would very much welcome this provision, and I congratulate the noble Earl on his ingenuity in tabling an amendment that would enable us to deal with this lacuna. I entirely understand why the Liberal Benches would not want to be accused of doing anything that undermined devolution. The noble Earl has found an elegant way of dealing with this, and I very much hope that the Government will support it.
Baroness Vere of Norbiton (Con)
My Lords, I entirely agree with my noble friend Lord Forsyth. In tabling Amendment 5, the noble Earl, Lord Kinnoull, has hit upon something here; it is a report that would be worth doing. When I was having discussions about the Bill between Second Reading and Committee, I spoke to people in the port sector and they were very concerned that, if there is to be investment in ports in one part of the country, that investment should be equally likely to happen in another part of the country—namely, Scotland. It is an important opportunity, and I am sure that the Minister will respond in a positive fashion, as far as he can.
Turning to government Amendment 3, I am grateful to the Minister, who listened to concerns from all sides of the House about ensuring that sufficient information is forthcoming about the relationship between Crown Estate and Great British Energy. I am somewhat disappointed that we never saw the partnership document. I still suspect that that is because it does not exist, so I am not entirely sure what the partnership is; but let us put that to one side. I am looking forward to seeing information come through on the results of this partnership as we go forward.
I note what the noble Earl, Lord Russell, said about the intention behind his Amendment 8. Any noble Lord who has looked at the Crown Estate annual report will know that it is already quite detailed, and I appreciate that a lot of work has been put into sharing information about the organisation with stakeholders. I suspect that his amendment is too detailed to be wholly useful, but I am sure that he has picked out various elements that the Crown Estate will no doubt take note of and include in future reporting.
Lord Livermore (Lab)
My Lords, I thank all noble Lords for their contributions to this debate. Let me once again say that I am particularly grateful to the noble Baroness, Lady Vere, for her constructive engagement prior to today in relation to Amendment 3, tabled by the Government. It is important that certain details on the partnership between the Crown Estate and Great British Energy are publicly available on an ongoing basis, and I trust that this amendment meets the concerns raised on this matter by the noble Baroness and others across this House.
Amendment 8, tabled by the noble Earl, Lord Russell, would create a new reporting requirement on the Crown Estate commissioners, requiring them to publish an annual report, to be sent to the Environmental Audit Committee of the House of Commons, which must consider the commissioners’ activity in the contribution to supporting local communities and economies, the achievement of the United Kingdom’s climate and environmental targets, the relationship with Great British Energy, a just transition to green energy, a jobs and skills transition into the green economy, the promotion of animal welfare in aquaculture on the Crown Estate, the protection of the foreshore on the Crown Estate and the protection of the seabed in the Crown Estate. It would also require the commissioners to appear before the Environmental Audit Committee if requested.
I thank the noble Earl for his constructive engagement on this matter prior to today. I agree with him that these are important areas and, as a result, we have agreed with the Crown Estate that we will make a further update to its public framework document to clarify that its annual report must continue to include a report on the Crown Estate’s activities in terms of sustainable development, covering the impact of its activities on the environment, society and the economy.
It is important that this Bill stands the test of time and that, as new, relevant areas of concern on the environment, society and the economy emerge over the coming decades, these are covered in the Crown Estate’s annual report too. The proposed changes to the framework document, which also directly address other concerns, have been made deliberately broad in an attempt to cover the wide range of specific concerns the House has raised, including those raised by the noble Earl. On Great British Energy specifically, as I have set out, the Government have also now tabled an amendment that creates a reporting requirement for the Crown Estate to cover in their existing annual report a summary of its activities in relation to Great British Energy.
I turn next to Amendment 5, tabled by the noble Earl, Lord Kinnoull. This amendment would require a report to be laid before Parliament within 12 months of the day on which this Act is passed, assessing any differences between the provisions made by this Act for the management of the Crown Estate in England and equivalent provisions for the management of the Crown Estate in Scotland. I am grateful to the noble Earl for his engagement on this matter. He has also raised specific concerns about ensuring that the Crown Estate and Crown Estate Scotland are in analogous positions should this Bill pass.
As I set out in Committee, Section 36 of the Scotland Act 2016 inserted a new Section 90B into the Scotland Act 1998. Subject to certain exceptions, Section 90B provided for the devolution in relation to Scotland of the commissioners’ management functions relating to property, rights or interests in land in Scotland, and rights in relation to the Scottish zone. Devolution occurred on 1 April 2017 under, and in accordance with, the Crown Estate Transfer Scheme 2017. The relevant property, rights and interests are now managed separately by Crown Estate Scotland under the Crown Estate Scotland (Interim Management) Order 2017 and the Scottish Crown Estate Act 2019, as enacted by the Scottish Parliament. They do not form part of the Crown Estate as currently managed by the Crown Estate commissioners.
I share the noble Earl’s commitment in this area, and I would like to make that clear. The Crown Estate and Crown Estate Scotland hold similar operational priorities, and, naturally, the chief executives of both organisations must be, and are, in regular contact. There is also significant collaboration between the two organisations, for example on the offshore wind evidence and change programme, which is an initiative led and funded by the Crown Estate and in which Crown Estate Scotland is a key partner. The programme aims to de-risk and accelerate the delivery of offshore wind projects by funding research and data collection. Both organisations contribute to and benefit from research projects that address knowledge gaps and support the offshore wind consenting process. At a project level, Crown Estate Scotland was a partner in the predators and prey around renewable energy developments project. That focused on Scotland, particularly the Moray Firth and the Firth of Forth and Firth of Tay regions, but the project had broad relevance for the whole of the UK. The improved understanding gained from the project informs marine spatial planning and guides future offshore wind development.
The two organisations also share data on offshore activities through their partnership with the Marine Data Exchange, a digital platform established by the Crown Estate to provide a more comprehensive and integrated understanding of the UK’s seabed. Founded by the Crown Estate in 2013 as the first resource of its type, the Marine Data Exchange provides a world-leading digital platform for gathering and disseminating vital information on a wide range of offshore activities. It currently holds one of the world’s largest collections of freely available data relating to the seas around England, Wales and Northern Ireland and, thanks to the partnership with Crown Estate Scotland, is now extended to cover Scottish waters.
The two organisations also hold frequent discussions through the carbon capture utilisation and storage collocation forum, which is a collaborative effort run by the Crown Estate with input from Crown Estate Scotland and other stakeholders to explore the potential for collocating carbon capture and storage with offshore wind projects. If there are further areas of potential co-operation, I know that the Crown Estate will be more than willing to discuss them with its counterparts in Crown Estate Scotland. The Treasury is, of course, open to any request for a meeting from the Scottish Government and Crown Estate Scotland to discuss this Bill, and we are more than happy to share any policy thinking to help inform any changes they may wish to propose in the Scottish Parliament. I hope these explanations have been helpful and have provided some clarity on these points. I hope that the noble Earls, Lord Russell and Lord Kinnoull, will not press their amendments as a result.
Lord Forsyth of Drumlean
“Salmon farms on the Crown EstateAfter section 3 of the Crown Estate Act 1961, insert—“3A Salmon farms on the Crown Estate(1) In carrying out their functions under this Act, the Commissioners must assess the—(a) environmental impact, and(b) animal welfare standardsof salmon farms on the Crown Estate.(2) If the assessment under subsection (1) determines that a salmon farm—(a) is causing environmental damage, or(b) has significant animal welfare issues,then they must revoke the licence for the farm in question.(3) The Commissioners must assess the potential—(a) environmental impact, and(b) animal welfare standardsof applications for licences for salmon farms on the Crown Estate.(4) If the assessment under subsection (3) determines that an application for a licence for a salmon farm—(a) may cause environmental damage, or(b) raises significant animal welfare concerns,then they must refuse the application.””
Lord Forsyth of Drumlean (Con)
My Lords, I am tempted to take this amendment, frame it and put it in my downstairs loo, given that it is supported not just by the noble Baroness, Lady Jones of Moulsecoomb, but by the noble Lord, Lord Sikka, and my noble friend Lord Strathclyde. This is a new experience for me and shows the extent to which this amendment makes sense. It is, of course, the same amendment as I tabled in Committee. I should perhaps re-declare my interest as a salmon fisherman; I never kill a salmon, but I fish for them and my family has a timeshare week on the River Tay.
I am sure the House will be relieved that I do not plan to repeat everything I said in Committee about the extensive damage that salmon farming can cause if not properly regulated. I gave a number of examples, and examples of countries that are going so far as to ban salmon farming altogether. That is not my purpose, but I made a reasonably robust speech about the dangers of salmon farming, and I am surprised that I have heard not a cheep from the industry or, indeed, from the Crown agents to push back on anything I said, so I assume that this perfectly sensible amendment causes no concern. Nor should it, because all it does is provide that the Crown Estate commissioners in carrying out their functions under the Act must assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. If the assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, they must revoke the licence for the farm in question. Who could possibly be against that? Also, the commissioners must assess the potential environmental impact and animal welfare standards of applications for licences for salmon farms on the Crown Estate, and if the assessment determines that an application for a licence for a salmon farm may cause environmental damage or raise significant animal welfare concerns, they must refuse the application. This is a perfectly sensible provision, which places a clear duty on the commissioners.
The Minister was kind enough to arrange a very short meeting with me at which he indicated that he might not be able to support the amendment. I am really looking forward to hearing why, because he was unable to tell me at that time what his reasoning might be. I was struck in the proceedings earlier today by the emphasis that he put on the essential duty for the protection of the seabed and, of course, protection of the seabed is central to some of the issues, apart from the protection of salmon and everything else.
Baroness Jones of Moulsecoomb (GP)
My Lords, on this day, 11 years, 2 hours and 20 minutes ago, I was introduced to your Lordships’ House, and I think that having signed this amazing amendment is a good way to celebrate those 11 years, 2 hours and 20 minutes.
I have spoken many times in your Lordships’ House about food and animal welfare and other connected issues, but I did not imagine that all this time later we would be talking about such a truly disgusting issue. I admit that I did not know all that much about it, but I know more now. I have seen the photographs of fish that have been eaten through by lice and the amount of debris that ends up on our seabed. It is unbelievable that we are allowing this.
Probably most of us eat salmon. I can only say to noble Lords: do not eat salmon unless it comes from Iceland or Canada. One noble Lord told me earlier that listening to the noble Lord, Lord Forsyth, made him feel sick—and I am sure that was for the right reasons.
I spoke at a PETA meeting just before this—that is, People for the Ethical Treatment of Animals—and used salmon farming as an example of how far we still have to go to live up to our reputation as a country that cares for animals. I argue that this is a very damaging situation. I hope that the debates on the amendment, today and in Committee, are read, understood and acted upon by the Crown Estate commissioners and the salmon farming industry.
It is clear that the current rules for the Crown Estate are not good; they are not good enough for the environment or for animal welfare. Although I imagine that the leases are quite profitable for the Crown Estate, they are shameful. A spotlight has been shone on these harmful factory farms, where fish are riddled with sea lice, pumped full of antibiotics and fed with pellets crammed with other, smaller fish, causing damage to their populations. The salmon can have double-digit mortality rates. Plus, these fish farms are detrimental to our native salmon populations, which are already at risk of collapse.
There is also damage to the seabed around these farms and damage to the ocean’s ecosystems. We still know very little about the ocean—it is apocryphal that we know more about the surface of Mars than we do about the ocean—so we really should not be doing this to our seabed; we can imagine the amount of damage that tonnes of faeces, drugs, antibiotics and corpses can do to it. That is horrific.
It is unconscionable that the Crown Estate should be profiting from such a harmful industry. As the Minister accepted in response to this amendment in Committee, the existing laws and regulations clearly are not working to protect to salmon populations from this toxic industry. I hope he has thought more about that and can give an update today.
In his opening remarks on day 2 in Committee, the noble Lord, Lord Forsyth, called this a modest and uncontroversial amendment. Having looked more closely into this issue, I say that the amendment is absolutely necessary, and it would be unforgivable of the Government not to accept it.
Lord Strathclyde (Con)
My Lords, I support the noble Baroness, Lady Jones, who has just spoken. She said that this was a very important amendment. I also support my noble friend Lord Forsyth, who spoke with great logic about the amendment he has proposed today and, indeed, the one he proposed in Committee, which had the benefit of being exactly the same.
When I listened to the Minister wind up the debate in Committee, he said:
“The Government wholeheartedly support the objectives behind these amendments.”—[Official Report, 22/10/24; col. 565.]
He did not say that he supported the amendments, but he did say that he supported the objectives. I was immensely encouraged to hear from my noble friend Lord Forsyth that a meeting had taken place. At that meeting, the Minister could say why he was not accepting them or indicate to my noble friend the kinds of tweaks and changes he could make that would make them more acceptable. But what has not changed in logic is that this is a very controversial issue and damage is taking place around the shores of this country.
I too should have declared an interest as being a salmon fisherman, although not a very good one.
I hope that the Minister, when he winds up, can be even more encouraging to my noble friend. The Government have had plenty of time to reflect and reconsider. My noble friend Lord Forsyth talked about a balancing duty. Surely that is an immensely important factor that we ought to take into consideration. My noble friend has laid out what that duty should be. In itself, it will enhance the reputation of the Crown Estate and I very much hope that the Minister will take all this into account when he winds up and, I hope, accepts the amendment.
The Earl of Devon (CB)
My Lords, briefly—I did speak at Second Reading but failed to be here for Committee—I thank the noble Lord, Lord Forsyth, for his excellent introduction. The challenge I give to those proposing this amendment—particularly the noble Baroness, Lady Jones—is: why is it so narrow? Why are we focused solely on salmon farms and salmon fishing?
The reason I rise—and I note my interest—is that the foreshore of the River Exe estuary is absolutely inundated with non-native Pacific oysters, which are carpeting the foreshore and depleting the stocks of crabs, and bait digging is now impossible across this foreshore. This pest was introduced by the Crown Estate’s junior cousin, the Duchy of Cornwall, which introduced Pacific oysters into the Helford down in Cornwall and this pest has now spread across all the estuaries of the south-west peninsula. If the Crown Estate had been responsible and had known what it was doing in granting leases to Pacific oyster farmers, this would not have happened and we would have proper, sustainable mussel farming and crab tiling, as we have had for centuries on the Exe estuary.
While salmon farming is obviously important and is a pest, this should expand to all sorts—
Lord Forsyth of Drumlean (Con)
If the noble Earl is concerned about the wider thing, he will find that two later amendments in my name cover the point he is making.
The Earl of Devon (CB)
I appreciate that from the noble Lord, Lord Forsyth. Perhaps he could cover that in his winding up.
I think it is important. The focus on salmon farming is perhaps too focused and this should be much broader.
The Lord Bishop of Manchester
My Lords, just briefly, I add to the wide range of support that the noble Lord, Lord Forsyth, has had on this amendment some from our Benches here.
I think it is incumbent on the Crown Estate to be an exemplar, and the salmon farming scandal around lice has been going on for so long and is so horrendous. As the noble Baroness, Lady Jones, has very clearly said, we need to take this amendment as a chance to do something about it.
I think it was the late Queen Mother, who, having been rushed into hospital with a fishbone in her throat, said that the salmon had begun their revenge. Please let us not give the salmon any more grounds to seek revenge against the Crown in any of its guises.
Lord Douglas-Miller (Con)
My Lords, briefly, I support my noble friend Lord Forsyth’s amendment, which I fully concur with—although I did feel rather left out not to be included in his elite triumvirate of supporters.
At previous stages of the Bill, we have heard many noble Lords express considerable disquiet about the state of aquaculture on Crown Estate land and the lack of proper governance by the Crown Estate commissioners. In Committee, the Minister seemed moved to look at this area and address some of the failings clearly apparent in the current framework. I sense today that the Minister seems reluctant to address these issues, which makes me wonder whether he has had any discussions with the fish farming industry. When responding to my noble friend Lord Forsyth, can the Minister confirm whether he has had any contact from the fish farming industry? If so, can he tell us the nature of these discussions?
Viscount Trenchard (Con)
My Lords, I support my noble friend Lord Forsyth of Drumlean in bringing back his excellent and very necessary amendment. I supported his identical amendment in Committee and had intended to add my name to this one too, but I was beaten to it by the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Sikka, who is not in his place. Nevertheless, I entirely and whole- heartedly support this amendment.
I remember that the Minister told your Lordships’ Committee:
“The Government wholeheartedly support the objectives”
behind my noble friend’s amendment. But he clearly did not think it is necessary and has not tabled his own amendment. However, he did acknowledge that the intent of the existing regulations
“is not currently being achieved”.—[Official Report, 22/10/24; col. 565.]
My noble friend Lord Forsyth has rightly tabled this amendment again and has so well explained the serious damage caused to the Atlantic salmon population by open-net salmon farms in Scotland, many of which are not adequately regulated. In particular, my noble friend has drawn your Lordships’ attention to the harm cased by the toxic chemicals used to treat the infestations of sea lice and the damage caused to the wild salmon’s DNA, which is specific to each river system, by interbreeding with escaped salmon from the open-net farms.
It is true that apart from one salmon farm in Northern Ireland, open-net salmon farms are at present confined to Scottish waters. However, we absolutely do not want them in England. I strongly support my noble friend in bringing back this amendment. I should also declare an interest as a salmon fisherman on the River Tamar in Devon. I strongly support the noble Earl, Lord Devon, in bringing up the problem of the oyster farming in the south-west river estuary systems.
Before I finish, I will ask the Minister again the question I asked in Committee concerning the unnecessarily restrictive licences issued for the shooting of cormorants which prey on wild salmon. Does he know how many gamekeepers are employed by the Crown Estate and how many cormorants they are licensed to shoot each year? I look forward to other noble Lords’ interventions and the Minister’s reply.
The Earl of Kinnoull (CB)
My Lords, I want to make two very short points relating to the reasoning the Minister gave in response to these amendments earlier. I should also say that my sympathies lie with my noble friend Lord Devon, in that I wish this were a wider aquaculture thing, and that the commissioners were able to consider the environment for all of aquaculture, for the reasons I gave in Committee; I will not repeat them.
The first logical problem I had with the Minister’s response was in relation to how many salmon farms there are and the intention of the current commissioners of the Crown Estate not to do any salmon farming. The difficulty I have is that salmon was an incredibly common thing to be fed to people in Victorian times. We are able to legislate on the Crown Estate for only the first time in 63 years, so if we are legislating for 63 years’ time, I feel that logically we need to think a bit more about protection further than however far out the current commissioners look, which, I imagine, is something like five years.
I feel that we are going to have to improve aquaculture around our waters because of the lack of calories that we are producing for our population. Therefore, it is poor logic to say that we do not need to legislate for salmon because we are not interested in salmon farming at the moment. I hope the Minister might address that in his remarks.
My second logical problem is that the Minister was able helpfully to list a number of statutory instruments in Scotland setting out the rules for salmon farms, but those all apply to salmon farms that have already been established. The problem I was told about by Crown Estate Scotland is that, because it is not really able to look at economic benefit, sometimes it might let through licence holders of lower quality that then create the problems. Then, as the noble Lord, Lord Forsyth, said so eloquently, they are not being held to account by these complicated rules because there is not really a police force. In any event, there is no one to fine, because often the reason that things have gone wrong is that the small entity that owned the farm has gone bust, even though it was, in fact, a subsidiary of a very big entity. That entire list is irrelevant. What matters is not what happens after you have established a salmon farm but the decision to establish it in the first place. I would be very interested in any help the Minister can give on those two logical issues.
Earl Peel (CB)
My Lords, I welcome the amendment from the noble Lord, Lord Forsyth. For those of us who have followed these issues over the years, there is no doubt that the impact of no environmental assessments being undertaken on these salmon farms has been a devastating effect on wild salmon stocks. It is about time that we had a system in place where proper assessments were undertaken, so I thoroughly welcome this amendment.
I have a question for the noble Lord, Lord Forsyth. How does he think the assessment would be undertaken? Would it be done by the Crown Estate itself or undertaken by an independent assessor? I would be much happier if it was independent rather than being done in-house, but perhaps the noble Lord can enlighten us on how he feels that might develop.
Earl Russell (LD)
My Lords, I rise to speak briefly to this amendment, and I might have a slightly different take on it. To start with, the amendment requires the Crown Estate to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. I thank the noble Lord, Lord Forsyth, for raising this issue and for the interest he has sparked in it across the House. His partnership with the noble Baroness, Lady Jones, is an unexpected one.
The noble Lord, in his personal conversations with me, as he has had with others, has spoken about his personal journey on these issues. He has gone from a time when he was in government and supported these farms to a time now when he recognises the damage that they do. I do not disagree with him at all on that. There is a real need to protect animals; there is a real need for animal welfare; there is a real need to look at the associated pollution and at the escape of farmed salmon and the impact on natural salmon that happens as a result of these farms. As far as all that goes, I have no problem with this amendment.
However, the issue here is that the Crown Estate is devolved in Scotland, so I have had to turn to the philosopher George Berkeley to try to analyse this amendment. He came up with the question: if a tree falls in the forest but nobody hears it, does it make a sound? My response to the noble Lord, Lord Forsyth, is: if his amendment protects no salmon, is it helping the salmon? There are literally no salmon farms in England. I have an assurance from the Minister personally that there is no intention from the Crown Estate to start producing salmon farms in English waters. In fact, I do not think those waters are able to support salmon. I do not think that is happening. I listened to the point made by the noble Earl, Lord Kinnoull, that we are legislating for the longer term—that is an issue —but, again, I see absolutely no plans for this to happen.
This matter is devolved. My strong suggestion to everybody in favour of stronger protection for salmon and the environment is to raise these matters with the Scottish Parliament, which is responsible for these matters. Noble Lords can put this in the Bill, but it will be overturned in the Commons. If not, it will have no impact on any salmon. I fail to see the point of this amendment.
On these Benches we are not able to support this amendment, not because we do not support animal welfare but because this simply does not impact any fish. There is no point in making bad, pointless legislation; that just makes us all look foolish. It does not do anything to increase animal welfare standards if the standards do not apply to any animals. It is pointless.
Lord Roborough (Con)
My Lords, I declare my interests in the register as an owner of fishing rights and president of South West Rivers Association. I will also speak briefly, as the arguments have been well made by many noble Lords.
We have heard from noble Lords around the House that this is an important amendment that strikes at the heart of our care for the environment and animal welfare. It imposes reasonable obligations on the Crown Estate to take responsibility for environmental damage caused by salmon farming on its property, and for the welfare of the fish being farmed. As I understand it, there is only one salmon farm in our waters, off the coast of Northern Ireland, although there are 210 in Scottish waters. But this amendment will ensure that any future salmon farms are developed with those obligations in place.
In Committee, the Minister highlighted existing legislation and regulations that cover the salmon farming industry. However, given that the wild Atlantic salmon in our country is now on the IUCN red list, and given the sometimes dire conditions that farmed salmon are kept in, it is hardly surprising that my noble friend Lord Forsyth of Drumlean continues to press this amendment. We are disappointed that the Government have so far failed to see its merits, and we hope for a more constructive reaction from the Minister today. We on these Benches will support my noble friend if he decides to test the opinion of the House.
Lord Livermore (Lab)
My Lords, I am grateful to all noble Lords for their points. The amendment tabled by the noble Lord, Lord Forsyth of Drumlean, would require the Crown Estate commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate on an ongoing basis. Where that assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, the Crown Estate would be required to revoke the relevant licence. The commissioners would also be required to make the same assessment of any applications for new licences for salmon farms and, where the commissioners determine that an application may cause environmental damage or raises significant animal welfare concerns, the Crown Estate must refuse the application.
The noble Lord, Lord Forsyth, again made a powerful speech on his amendment. As I noted in Committee and can repeat today, I wholeheartedly support the objectives behind it but I regret that the Government are unable to support it. I recognise that this is not what the House wants to hear, but it remains the Government’s position that this amendment would duplicate protections that already exist in legislation or that are required by regulators as part of the licensing process for aquaculture. I say to the noble Lord, Lord Douglas-Miller, that, like the noble Lord, Lord Forsyth, I have had no contact with the industry. I may have written to the noble Viscount, Lord Trenchard, following Committee, but, if not, I will absolutely ensure that I do.
All salmon farming in England is regulated with the intention to ensure that it is carried out in a responsible manner that respects the environment and protects consumer health and animal welfare. As noble Lords know and some have observed, the management of the Crown Estate in Scotland is a devolved matter. My officials have been in contact on this matter with the Scottish Government, who have said that it is their view that salmon farming is strictly regulated to ensure that the environment on which the aquaculture sector and others rely is protected for future generations. They have also stated that Crown Estate Scotland works to ensure responsible use of Scotland’s seas through leasing the seabed. However, as is proper, it is the role of local authorities and the Scottish Environment Protection Agency to conduct a thorough assessment of development proposals, including environmental impact assessments and habitats regulations appraisals, with advice from statutory and other consultees.
I am aware of the strength of feeling on this matter, and I recognise that many noble Lords will not agree with the case I have set out. However, I respectfully ask the noble Lord, Lord Forsyth, to withdraw his amendment.
Lord Forsyth of Drumlean (Con)
My Lords, it is not much fun being a Minister when you have to read out a speech like that. I suspect that, like all of us in the Chamber, the Minister is concerned about the animal welfare and environmental issues. What he had to say about the Scottish Government, as opposed to the Scottish Crown Commissioners, was rather revealing, but I shall not go there. However, I thank everyone who has spoken in this debate, particularly my noble friends Lord Strathclyde and Lord Trenchard, and the noble Baroness, Lady Jones—our being so aligned must be a first. I am also grateful to the noble Earl, Lord Kinnoull. The noble Earl, Lord Peel, asked who would do the assessment. The Minister said that, in Scotland, SEPA and other agencies are charged with looking at the damage caused.
I gently point out to the Scottish Government, in their complacency, the number of fish that have escaped from farms, doing real damage and destroying the wild population. As far as I am aware, no sanctions have been imposed against a billion-pound industry operating around the world where Governments have been forced to intervene and close them down in some circumstances. We are well aware of the danger.
I am very disappointed by the Liberal Democrats; this is almost a permanent condition for me, but on this occasion I really am very disappointed. I think it was Amendment 8, which we discussed earlier, on which the noble Earl, Lord Russell, argued that there should be a report which could then be considered by the environment committee and others. He was actually arguing for a method allowing some parliamentary scrutiny. I have always thought of the Liberal Democrats as very determined to put a duty on, for example, landlords and others, as property owners, to behave responsibly, and that is what this amendment would do. I find this new alliance, whereby the Liberal Democrats do all kinds of somersaults in order to support the Government, very intriguing, and wonder what can possibly be behind it.
Earl Russell (LD)
There are no somersaults here. My previous amendment did not relate to devolution. I return the question: does the noble Lord admit that his amendment applies only to one salmon farm? Does he recognise that that is not a good way to make legislation? I fully support what he is trying to do, and am not doing somersaults to protect the Government, but the issue needs to be resolved with Scotland. This is not an English issue but a Scottish one. On these Benches, we believe strongly in devolution. The amendment sounds good but it does little, and that does damage to us as lawmakers, to the standing of this House and to devolution. It does nothing to protect any fish.
Lord Forsyth of Drumlean (Con)
I am grateful to the noble Earl. He may be disadvantaged, compared with others in this debate, because he is not—I do not think—a salmon fisherman. If he were, he would know that English salmon go through the Crown Estate waters up into Scottish waters, where there are salmon farms. Therefore, this amendment does impact on English salmon. There may be only one salmon farm, but if he was concerned about preserving salmon which occupy the rivers in England, he would be much more enthusiastic about this amendment than he appears to be. My noble friend Lord Douglas-Miller, who was chairman of the Atlantic Salmon Trust, has done wonderful work on this, so I am afraid that the noble Earl will not get away with the idea that, because there is only one salmon farm in English waters, a duty on the Crown Estate commissioners to consider the environmental impact has no impact on salmon south of the border.
I will repeat a point made earlier in the debate. In response to the amendment of the noble Earl, Lord Kinnoull, with enthusiastic support from the Front Bench, we agreed that there should be an exchange of views between the commissioners and that they should learn from each other. We have also heard from the Minister how the Scottish Government are utterly complacent about this. We have seen the results of that and the near extinction of this noble fish, the salmon.
Baroness Jones of Moulsecoomb (GP)
Pollution of the seabed does not exist only in Scotland, obviously. It will move around.
Lord Forsyth of Drumlean (Con)
I am very grateful to the noble Baroness—I feel I should call her my noble friend. I find I am being asked to have meetings with the activists who film the salmon farms illicitly. I will have to go on a protest march if the Government do not accept this amendment. I know that the Minister has done everything he can on this, but I do not think the response is satisfactory. I beg to test the opinion of the House.
Baroness Humphreys
“Devolution of Crown Estate management to WalesAfter section 1 of the Crown Estate Act 1961, insert—“1A Devolution of Crown Estate management to WalesThe Treasury must complete a transfer of the responsibility of the management of the Crown Estate in Wales to the Welsh Government.””Member's explanatory statement
This amendment would require the Government to devolve Welsh Crown Estate responsibility to Wales.
Baroness Humphreys (LD)
My Lords, I will speak to Amendment 6 in my name and Amendment 11 in the name of the noble Lord, Lord Hain. I thank the noble Baroness, Lady Smith of Llanfaes, for signing my amendment. We debated a similar amendment in Committee, where those of us who argued for the devolution of the Crown Estate to Wales made strong arguments in favour of it. Other noble Lords, including the noble Lord, Lord Wigley, and the noble Baroness, also presented strong cases for their amendments on the transference of the management of the Crown Estate in Wales to the Welsh Government, on separate reporting within the annual accounts of the activities of the Crown Estate in England, Wales and Northern Ireland, and on other issues. I thank both noble Lords for their commitment to this issue.
Public opinion in Wales is behind the devolution of the Crown Estate, with a YouGov poll last year showing that 58% of the people of Wales support such a move. Senedd Cymru has supported its devolution, as have the majority of political parties in Wales, including my party—the Welsh Liberal Democrats and our federal party. I was encouraged this week to find that, in their response to the final report of the Independent Commission on the Constitutional Future of Wales, the Welsh Labour Government said:
“Our longstanding position is that the Crown Estate should be devolved to Wales in line with the position in Scotland”.
That being so, I am disappointed that the Welsh Government were not consulted when this Bill was being prepared.
There are frustrations in Wales, as Scotland is seen to be benefiting from the devolution of Crown Estate powers to the Scottish Parliament, not only through the receipts paid to it but in the control, power and influence that Scotland has over the use of its resources. Scotland appears to move on while Wales lags behind. For us, the process of devolution appears to have come to a stop. There are real concerns that, by the time Wales has control over the Crown Estate, much of the wealth will already have been extracted.
As we appear to have reached something of an impasse, the way forward might be to follow the process followed by the Scottish Affairs Committee in the other place in the lead-up to the devolution of the Crown Estate there. It published a number of reports, one of which in 2014 identified issues in the management of the Crown Estate’s responsibility, particularly in relation to the seabed and foreshore. It looked at issues including
“accountability and transparency … communication and consultation with local communities … cash leakage from local economies … arising from the way the CEC operates … The evidence did not identify such problems with the CEC’s management of its urban and rural estate”,
only those relating to the seabed and foreshore.
We would therefore welcome any decision of the Welsh Affairs Committee to initiate an inquiry to determine if similar problems apply to Wales. It is not of course our place in this Chamber to call for that, but an evidence-taking committee of inquiry would provide the evidence to move this issue forward and address any lessons learned since the devolution of the Crown Estate to Scotland.
As I said in Committee, my amendment does not call for a timescale for the devolution of the Crown Estate to the Welsh Government, because I accept that this will not be completed overnight. However, I am also disappointed that the amendment of the noble Lord, Lord Hain, which the Minister has signed, does not lay any foundation or route map for the transference of powers to Wales. Because of this, I am minded to seek the opinion of the House on my Amendment 6.
I want to make a couple of comments on Amendment 11, but as the noble Lord has not had the opportunity to speak to his amendment yet, my comments will be brief. I am grateful to the noble Lord for tabling his amendment and recognise the time and the cross-party work he put into its preparation—I know it was no easy feat. I am also grateful to the Minister, who has signed Amendment 11. This represents a major change in his stance since Second Reading and Committee of the Bill, and I also acknowledge how difficult this process must have been for him as Treasury Minister.
However, this major change in the Minister’s stance will be seen as the smallest, most insignificant step for those advocating the devolution of the Crown Estate to Wales. Amendment 11 calls for three commissioners to be appointed, one each to represent England, Wales and Northern Ireland and to be
“responsible for giving advice about”
their respective nations.
I have two questions, which I hope the noble Lord or the Minister will be able to address. First, proposed sub-paragraph (3C) refers to
“the giving of advice to the Commissioners about conditions in that part so far as relating to their functions in relation to land there”.
I assume that the use of the word “land” excludes the giving of advice about the more lucrative foreshore and seabed. If it does exclude the foreshore and the seabed, why are they not included?
Secondly, in a nod to devolution, in sub-paragraph (4B) Welsh Ministers are to be “consulted” about the commissioner for Wales before the recommendation is made to His Majesty. Can the Minister confirm that “consulted” means that Welsh Ministers are to take no part in the actual appointment of the commissioner for Wales?
I am seeking more for Wales than Amendment 11 provides. With the devolution of the Crown Estate, we could see an economic boost built on the success of renewable projects around our coastline, reviving coastal communities and ensuring the benefits from these projects are actually felt by those living near them in Wales. I beg to move.
Lord Murphy of Torfaen (Lab)
My Lords, I will speak to move Amendment 11 on behalf of my noble friend Lord Hain, who cannot be with us this afternoon. I was present in Committee on the Bill and listened with great interest to noble Lords discussing the issue of devolving the Crown Estate to Wales. I had a great deal of sympathy with the points that were made. I believe it is incongruous that it has already been devolved to Scotland but is not devolved to Wales or Northern Ireland. I speak as someone who was Secretary of State for both Wales and Northern Ireland. Therefore, I welcome the amendment tabled by my noble friend, in so far that it means that there will be commissioners specifically responsible for giving advice to the Crown Estate itself on behalf of Wales and Northern Ireland—which is very good.
I take the point made by the noble Baroness, Lady Humphreys, about consultation, but it is pretty clear to me that it would be a very foolish Government to appoint commissioners who were not approved by the First Minister in Cardiff and the First and Deputy First Ministers in Belfast. It is a start, though it is not exactly everything that was wanted. I agree with the noble Baroness, Lady Humphreys, that my noble friend the Financial Secretary has indeed moved his stance to one which would be agreed to by lots of people in Wales, and I guess in Northern Ireland.
We are living in different times; we now have a Labour Government in Cardiff and in Whitehall. I believe it is important that Governments can get together and talk about these issues in a very special way. That is why this amendment is before us this afternoon: exactly because there have been proper discussions, which I guess the Secretary of State for Wales has also been involved in. Personally, I do not think it goes far enough, but as I said, it is a start.
In the new regime—in this new Britain since the general election—there is a very serious case to be made for a much better relationship between the devolved Administrations and the United Kingdom Government. We have a new Council of the Nations and Regions, which will do a great deal of good for that relationship. We have a situation in Northern Ireland where we now have the Executive up and running, at last, and I congratulate the previous Government on the work they did on that. In this new era, where devolution means something very different from what it has meant over the last number of years, we have to believe that this new relationship will result in decisions such as this one.
I hope that this is not the end of the discussions between the Treasury, the Government, the Welsh Government and the Northern Ireland Executive; I hope it is the beginning of discussions on these issues, not just on this one, but on other ones as well. In my personal view, I hope that, ultimately, the Crown Estate should be devolved. However, we are where we are: the Government have made a concession, the Financial Secretary has very kindly signed my noble friend’s amendment, and I very much look forward to what he has to say in the course of this important debate.
Baroness Smith of Llanfaes (PC)
My Lords, I will speak to both amendments in this group. I thank the Minister for the comprehensive letters he wrote to Members who took part in Committee, addressing some of our unanswered questions.
I will set out the context of how I am approaching this group. At Second Reading, I outlined clearly how the draft legislation did not deliver fairness for Wales for four key reasons: first, the Crown Estate profits will not be retained in Wales; secondly, the proposed changes to the Crown Estate board do not include Welsh representation; thirdly, expanding investment and borrowing powers for the Crown Estate may undermine the Welsh Government; and, finally, the Bill does not make provisions to promote the economic or social well-being of Wales. In Committee, I tabled three amendments, and my noble friend Lord Wigley tabled an additional three, which sought to remedy these four key issues from a Welsh perspective—issues on which Plaid Cymru has long campaigned.
Lord Thomas of Cwmgiedd (CB)
My Lords, I will speak briefly because so much has been said already, particularly by the noble Lord, Lord Murphy of Torfaen, about the structure of the two amendments before us.
I thank the noble Lord, Lord Hain, in his absence, and the Minister for making a step forward; it may be small, but it is a step. It is an important recognition for the people of Wales that Wales is different. It is interesting that, in the last debate, we talked almost exclusively about English salmon and its difference from salmon in Scotland—no one seemed to mention Wales at all. It reminded me of the Encyclopaedia Britannica entry for “Wales”: “See England”. Part of the debate we had earlier exemplified that. Wales needs to be recognised as being different; it is a proud and long-established nation with its own resources, people and interests. I welcome what the Minister has done, along with the noble Lord, Lord Hain, and I am grateful to him.
I will make two further comments before turning to Amendment 6. It is very important that the commissioner is not seen to be a patsy. He or she must be able to stand up for Wales. My experience has been that, when people have been appointed to represent and give advice about Wales, they can make a very powerful difference—we see this in many committees and bodies across the UK—but they have to be visible. The people of Wales will expect two things. First, the advice must be transparent: what are they saying about the advice they are giving about Welsh resources? Secondly, when looking retrospectively at the advice given, they must say what the benefit to Wales has been. I do not see how you can give advice without explaining the benefit. Therefore, I hope that there will be full transparency in the Crown Estate commissioner’s report.
That is why this amendment may be much more important than is appreciated. It inserts the opener into the can by beginning to explain how Wales will be treated in the new way in which the Crown Estate commissioners will work, recognising Wales and Northern Ireland as having different and separate interests. I am deeply grateful to the Minister. He told us last week that Wales will look forward to benefits from the Budget, but I did not expect this benefit.
I support Amendment 6, because that is where we are going. As the noble Lord, Lord Murphy, said, it is what the people of Wales want. I can see the possible argument that maybe now is not the right time—but when is ever the right time?
Wales is a poor country, much poorer than England; you only have to spend time in Wales and in London to appreciate the huge disparity of wealth. In the 19th century, Wales had a natural resource that never benefited it properly by long-term investment. The same must not happen again. So I support Amendment 6 but I am extremely grateful to the Minister for Amendment 11.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I am delighted to follow the noble and learned Lord, Lord Thomas of Cwmgiedd. I support the amendment in the name of my noble friend Lord Hain, which was ably promoted by my noble friend Lord Murphy of Torfaen. This amendment was also signed by the noble Baronesses, Lady Smith and Lady Humphreys, the noble and learned Lord, Lord Thomas, and the Minister.
I view this amendment from my noble friend Lord Hain as a step in the right direction because it enables Wales and Northern Ireland to be represented by commissioners. I said in the debate on the devolution amendments in Committee that devolution is particularly important. In the words of the noble and learned Lord, Lord Thomas, it should not become a patsy; it has to have something of meaning. To have a commissioner from the devolved regions means that you should have somebody there who understands the issues of the Crown Estate in those areas. In Northern Ireland there is the issue of escheat, where in some instances freehold land can become ownerless. On those occasions it is the local commissioner who will have that understanding of where those areas of land are, their impact and the need for their development for the benefit of the whole community.
I raised other issues in Committee, such as Great British Energy and the fact that in Northern Ireland there is an all-island electricity market. Can the Minister consider how that issue will be dealt with? There are also issues to do with fishing rights in the Irish Sea. Those issues all need to be investigated and supported by the commissioner who will represent Northern Ireland, as well as the renewable technologies, so that they are all in the right space in the seabed and do not interfere with fishing effort. The local person is best placed to do that.
I am very pleased that my noble friend the Minister has signed Amendment 11. Like my noble friend Lord Murphy, I think it shows that there is a determination and a willingness on the part of the Government to recognise the principle of devolution. I hope that in the fullness of time, the Government will move that little stage further and see the validity of devolution in all its holistic aspects. In the meantime, I am very happy to support Amendment 11.
Lord Wigley (PC)
My Lords, I am delighted to follow the noble Baroness, Lady Ritchie, and I am so glad she had the opportunity to bring in the Northern Ireland dimension, building on the comments that the noble Lord, Lord Murphy, made in introducing this debate. There is a synergy of interest in getting a balanced pattern to develop.
I will speak briefly in support of Amendment 6 in the name of the noble Baroness, Lady Humphreys, and my noble friend Lady Smith of Llanfaes. I would have added my own name to this amendment had I not been away on family duty last week, for which I apologise. Of course, I have awaiting Second Reading a Private Member’s Bill with a similar objective to Amendment 6.
I will not detain the House by repeating the case I made at Second Reading and in Committee for the Crown Estate to be fully devolved to Wales as it is to Scotland. Let us remember that it was a Conservative Government who delivered the Act to devolve the Crown Estate to Scotland, and there is cross-party consensus among Senedd Members in Cardiff Bay, who ask, “If this is acceptable for Scotland, why on earth is it not acceptable for Wales?”.
In practical terms, the activities of the Crown Estate in Wales have mushroomed over recent years. Its financial take from Wales has grown from about £400 million a year two or three years ago to now approaching £1 billion a year. There is growing resentment that such money should flow to a body that contributes little to the Welsh public purse, and this at a time of chronic underfunding of Welsh public services.
Lord Morgan (Lab)
My Lords, I will not take up much time, but very much agree, in general and in detail, with the remarks of the noble Lord, Lord Wigley, and many other noble Lords who have spoken. There is a detailed matter and a more general principle which justifies this form of devolution to Wales. The environment in Wales is exceptionally important and the estates referred to are central to the economic and social life of Wales. More generally—I echo what we have just heard—the whole history of devolution in Wales has been a very slow process and the battle goes on. In the mid-19th century, it took the form of political demands from the Liberal Party in Wales. The Labour Party provided devolution and other parties have taken up the baton in that way.
The history of devolution in Wales has for a long time been a sluggish process. It has not arisen with the buoyancy that we have had, perhaps not always happily so, in Scotland and Ireland. The Barnett formula indicates how Wales has been treated—in an indirect and offhand way—and this is a valuable addition to it. Given the happy congruence of government in Wales, the United Kingdom and Northern Ireland, we would like a full embrace of this, bracketing the Welsh Government and the devolutionary process emerging from Westminster. Wales has suffered for a long period from a kind of half-colonial attitude towards the nation. This is an excellent example of a way in which that could be reversed.
Lord Berkeley of Knighton (CB)
My Lords, as someone who lives and farms in mid-Wales as well as writing music, I support this amendment. Living among people there, to me it seems that the comments we have just heard are very apposite. There is a feeling that we are slightly out on a limb and that, if devolution is to mean anything, this is a perfect example of where some empowerment could take place and, as the noble Lord, Lord Wigley, said, we could see a certain amount of money returned to Wales to help with the preservation of all those things that people value there, not least the coast and countryside. We are threatened with all kinds of things—possible massive pylon building and massive problems with the Wye, which has been coming up today in various amendments. To be able to decide for ourselves, or for the Welsh Government to be able to decide on our behalf, seems an extremely important point in this debate. Therefore, I very much support the amendment.
Lord Livermore (Lab)
My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments from my noble friend Lord Hain and the noble Baroness, Lady Humphreys.
Turning first to Amendment 11, tabled by my noble friend Lord Hain with my noble friend Lord Murphy speaking on his behalf, I thank my noble friend Lord Hain for his constructive engagement on this topic and thank other noble Lords across the House who have spoken in favour of this amendment, which the Government support. The amendment requires that the board of Crown Estate commissioners must include a commissioner who is knowledgeable about Wales and that such a commissioner, alongside their existing responsibilities, must be responsible for giving advice about Wales to the board. It also requires equivalent positions for Northern Ireland and England and grants Welsh Ministers and the Executive Office in Northern Ireland the right to be consulted about the Welsh and Northern Irish appointments. These legislative requirements will ensure that the board of commissioners continue working in the best interests of Wales and Northern Ireland alongside their existing duties as commissioners. To answer the noble Baroness, Lady Humphreys, I say that I do not believe that the amendment in any way deliberately excludes the seabed.
I reassure the noble Lord, Lord Wigley, that the Crown Estate absolutely welcomes the opportunity presented by the increase in the number of commissioners from eight to 12, to bring knowledge of the devolved nations even more directly to the board table. It is an enthusiastic supporter of this amendment. This will supplement the expertise of its director for the devolved nations, who is based in the Crown Estate’s recently opened Cardiff office and whose knowledge and extensive local engagement over the last two years is evidence of the importance to which it attaches understanding local conditions in Wales.
The commissioner responsible for giving advice to the board on Northern Ireland will provide valuable insight as the Crown Estate’s engagement and activities in Northern Ireland continue to evolve. For example, the Crown Estate’s chief executive was in Belfast last month meeting officials and Ministers from the Department of Agriculture, Environment and Rural Affairs and the Department for the Economy. That form of engagement will move from strength to strength with the knowledge that such commissioners will offer to the board. These commissioners will certainly strengthen the Crown Estate’s ability and mission to deliver benefit for the whole UK at a time when devolution of the estate would significantly risk fragmenting the energy market, which would undermine international investor confidence and delay the progress towards net zero by an estimated 10 to 20 years, to the detriment of the whole UK.
Amendment 6, tabled by the noble Baroness, Lady Humphreys, would require the Treasury to complete a transfer of the responsibility for the management of the Crown Estate in Wales to the Welsh Government. As I have set out previously, the Government’s position is that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form. As I set out in detail in Committee, the Crown Estate Act 1961 requires the Crown Estate commissioners to manage the Crown Estate as a commercial enterprise and with due regard to the requirements of good management. While the Crown Estate has goals which, under its own strategy, align with wider national policy objectives, the 1961 Act provides the Crown Estate with independence and autonomy to set and achieve its goals. It has shown itself over the last 60 years to be a trusted and successful organisation with a proven track record in effective management.
The Crown Estate is required to place profits into the UK Consolidated Fund each year, worth more than £4 billion over the past decade. This enables those revenues to fund UK government spending in reserved areas in Wales and Northern Ireland and supports the funding provided through the block grant. Those revenues are then allocated to public service priorities by the Government, subject to the usual parliamentary controls. As I have noted previously, that is a valuable outcome which we must be careful not to undermine. Devolving the Crown Estate to Wales would, as I have explained, most likely require the creation of a new entity to take on the role of the Crown Estate in Wales. As I have previously set out, this entity would not benefit from the Crown Estate’s current substantial capability or capital and system abilities, nor benefit from the Crown Estate’s marine investments currently being made on a portfolio-wide basis across England and Wales. To devolve to Wales would disrupt these existing investments, since they would need to be restructured to accommodate a Welsh- specific entity.
I will not repeat the examples that I gave in Committee, but it remains the point that to devolve at this time would risk jeopardising the existing pipeline of offshore wind development in the Celtic Sea, planned into the 2030s, and the vital investment and jobs that this would bring across south Wales. As I noted in Committee, in addition to energy, the extensive jobs and supply chain requirements of the round 5 offshore wind opportunity in the Celtic Sea would also likely deliver significant benefits for Wales and the wider UK. As I mentioned in Committee, an advisory firm to the Crown Estate estimated that manufacturing, transporting and assembling the wind farms could create around 5,300 jobs and a £1.4 billion boost for the UK economy.
Devolution would also delay UK-wide grid connectivity reform. For Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its current pipeline of Welsh projects, the biggest of which is round 5—which is expected to contribute enough energy capacity to power 4 million homes across the United Kingdom—can benefit from this co-ordinated approach to grid connectivity up front. Introducing a new entity, which would have control of assets only within Wales, into this complex operating environment where partnerships have already been formed, would not make commercial sense. A devolved entity would be starting from scratch midway through a multi-million-pound commercial tendering process when the Crown Estate is undertaking critical investment in the UK’s path towards net zero. I therefore respectfully ask the noble Baroness, Lady Humphreys, to withdraw her amendment.
Baroness Humphreys (LD)
I thank the Minister for those comments and everyone who has spoken in this debate, especially those who have supported the devolution of the Crown Estate to Wales. I was looking for a little more from the Minister about the responsibility of the commissioners. It seems that they are there to give advice, but there is no responsibility to report to Welsh Ministers or to discuss with them, which I hope that they will do in any case.
Earl Russell
“Climate change and nature duty of Crown Estate CommissionersIn the Crown Estate Act 1961, after section 1 insert—“1A Duty of the Commissioners to contribute to climate change and nature targets(1) In complying with the general duty under section 1(3) and in exercising their functions the Commissioners must take all reasonable steps to contribute to—(a) the achievement of targets set under Part 1 of the Climate Change Act 2008,(b) the achievement of biodiversity targets set under sections 1 to 3 of the Environment Act 2021, and(c) adapting to any current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008.(2) In carrying out the duty set under subsection (1), the Crown Estate Commissioners must include conditions in all seabed leases that require the leaseholder to contribute to the conservation and overall enhancement of the natural environment.””Member’s explanatory statement
This amendment would give the Crown Estate a new climate change and nature duty requiring it to take all reasonable steps to contribute to the achievement of the Climate Change Act 2008 and Environment Act 2021 targets in exercising its functions. The duty requires the inclusion of nature conservation measures in all seabed licences granted by the Crown Estate.
Earl Russell (LD)
My Lords, I rise to move Amendment 7 on behalf of the noble Baroness, Lady Young of Old Scone, who is not able to attend the House today. This amendment mirrors that laid in Committee by the noble Baroness, Lady Hayman, and supported by the noble Baroness, Lady Young, my noble friend Lord Teverson and the noble Lord, Lord Young of Cookham. It would lay a duty on the Crown Estate to contribute to the Government’s climate change and nature targets as laid out in the Climate Change Act and the Environment Act.
The Crown Estate’s role in enabling these targets to be met is significant. The Crown Estate is the third-largest landowner in the United Kingdom; in particular, it owns significant land in coastal areas and on the seabed, which is important for the big growth in renewable energy that is required and for the recovery of our biodiversity. The deal with Great British Energy means a major uplift in the Crown Estate’s contribution to net zero. The Crown Estate is also a major developer and can contribute to zero-carbon homes and construction, sustainable procurement, and the circular economy.
Since Committee, the noble Baroness, Lady Hayman, has been involved in discussions with the Minister and the Treasury, and Amendment 10 in her name and that of the noble Lord, Lord Livermore, is the result. This requires commissioners to keep under review the impact of their activities on the achievement of sustainable development in the UK. I understand that the Minister will also commit to an addition to the framework agreement between the Treasury and the Crown Estate which would mean that the Crown Estate would have to have regard for the impact of its activities on the environment, society and economy and will include them in considering relevant legislation in the Climate Change Act and the Environment Act. I thank the noble Baroness, Lady Hayman, and the Minister for their negotiations on this occasion.
However, I am concerned that it does not go far enough. While I recognise that the primary purpose of the Crown Estate is to maximise financial contributions to the Treasury from the estate and to do this in a socially and environmentally responsible way, I am concerned on two accounts.
First, as the Crown Estate ramps up its development activities in renewable energy and a range of other activities, the possibility of conflicts between its economic objectives and its environmental responsibilities will become more acute, and the risk is that the primary economic objective will take priority. That might be good for renewable energy, but it could be a very bad for biodiversity. To “have regard” is a particularly weak requirement. Putting in the Bill a clear objective to help meet the legally binding climate change and biodiversity targets alongside the Crown Estate’s economic objective would mean that solutions would be brought that combine the benefits on all these objectives.
Secondly, the status of the framework agreement is not wholly clear. It is negotiated periodically between the Crown Estate and the Treasury. Revisions to it could be subject to negotiation without Parliament being any the wiser. What if the Crown Estate decided that it was going to downplay the guidance on the legally binding targets? Over the 60 years since the power of direction over the Crown Estate was brought into existence in 1961, the Treasury has yet to insist on any provisions of the framework agreement. As a last resort, Ministers have the power of direction over the Crown Estate, but the legal advice is that it can be exercised only in a way that is consistent with the statutory duty under the Act, hence the need for the objectives on targets to be on the face of the Bill. Can the Minister tell the House how much welly the framework agreement has in law and what action the Treasury could take if the Crown Estate did not come up to the mark on the climate and environment targets?
I do not want to repeat the arguments made by noble Lords, including the noble Baronesses, Lady Young of Old Scone and Lady Hayman, in Committee. I will, however, remind the House that the Minister laid considerable stress throughout Committee, in his response to several amendments, on the need for the primary purpose of the Crown Estate to be the effective economic management of the estate. I point out to the House that a nearly identical duty to the one proposed in this amendment, requiring contributions to the legally binding biodiversity targets, was applied to NHS trusts throughout the Health and Care Act 2022 by the previous Administration, with the support of the Labour Party. It is questionable why the environmental considerations in the Bill, which were previously supported for the NHS, are not now considered appropriate for a public body with probably more natural habitats under its control, and more potential for reducing carbon, than any other.
In conclusion, I ask the Minister to reassure the House that the environmental objectives will not end up being second fiddle when the pressure is on; how the framework agreement renegotiations, in future, will be transparent and safeguarded from sliding back on environmental requirements; how the Treasury will measure and hold the Crown Estate accountable for the contribution to the climate change and biodiversity targets; and, finally, what sanctions the Treasury has on the Crown Estate if it does not deliver the framework agreement.
In a personal capacity, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Livermore, for Amendment 10. Speaking now as me, I think that it is extremely important that the commissioners
“must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.
This is a welcome development, and I welcome the compromise. I think this helps to strengthen the Bill, and it is great to have it in the Bill. I am very pleased that this has taken place. I beg to move Amendment 7.
Baroness Hayman (CB)
My Lords, it is a pleasure to follow the noble Earl, Lord Russell. He clearly set out the reasons why in Committee, we, along with the noble Baroness, Lady Young of Old Scone, who I am sure we all wish a quick recovery, were very concerned to ensure that the Crown Estate, given its potential influence in these areas, plays its part in achieving the Government’s statutory commitments under the Climate Change Act and the Environment Act. Across the Committee, there were contributions that supported that view.
Of course, in some ways I would like the amendment that has just been moved to be put in the Bill. Here, I should declare my interest as chair of Peers for the Planet. Like others, I thank the Minister and his officials for the time, care and effort they have put into trying to resolve the issues that would arise if the full amendment were included in the Bill. From my point of view, it has been an exemplary process. The noble Baroness, Lady Kramer, made this point as well, as have many other noble Lords. The care and transparency that the Minister and his officials have provided throughout the passage of this Bill have been extremely welcome.
In Committee, when we were debating the amendment then in my name, the Minister made two things absolutely clear. One was the Government’s commitment to achieving the same ends by ensuring that the Crown Estate is a good citizen in respect of these events, and that is also manifested in what the Crown Estate is doing and the way it is reporting on its activities. So I think there is a shared objective between the amendment proposed by the noble Baroness, Lady Young of Old Scone, which we just heard spoken to, and the Minister and the Crown Estate. It is certainly shared by me.
Concerns have been articulated about the importance of safeguarding the prime objectives of the Crown Estate and not putting the detail into the Bill. I think we have come up with a solution that will achieve, certainly from my point of view, the vast majority of what I was looking to achieve in my original amendment. Amendment 10 would implement the climate and nature objectives by inserting in the Bill an obligation on the Crown Estate to conduct its affairs in a way that ensures sustainable development. That, of course, is a much wider and not very precise term that covers economic, environmental and social issues. Mind you, there has been a lot of debate this afternoon about the importance of the Crown Estate covering exactly those issues and taking them into account.
In a sense, having placed that in the Bill, we then have a paving amendment on to the framework agreement. I was very reassured by the letter we all received on 4 November, stating that the specific concerns about two aspects of the Climate Change Act—mitigation and our net-zero obligations, and the importance of adaptation to existing climate change and the nature protection objectives under the Environment Act—would be spelled out in the framework agreement and reported on publicly in the annual report, so that we can judge the contribution made to achieving those objectives through the publication of the framework agreement. Such reporting is another theme that has run through today’s debate.
In my view, it is better to achieve 80% of what we achieve in legislative terms than to have 100% judged by this House, which I am not at all sure we would win on. What matters is the endgame and the results, not whether my phraseology or the noble Earl’s goes in the Bill. What matters is the impact we have and how much we have shifted the dial in terms of what the Crown Estate achieves in support of the Government's climate and nature objectives. So, I am very pleased to be able to propose Amendment 10 and I am grateful to the Minister for adding his name to it.
I will say only one other thing, which is that I have spent the last four and a half years putting provisions like this into individual Bills as they go through this House. I hope the Government will recognise that, when they say that climate and environment issues are for everybody and that all departments, private industries and public bodies are affected and ought to be looking at the implications, they act on that realisation and do not rely on Back Benchers making Ministers’ lives miserable because they have been missed out. The Government should cut out all that argument and do it for themselves by including those issues in Bills. They were not included in the first place in this Bill, which was silent on the climate and nature. Now they are included, albeit in slightly convoluted but, I hope, effective way.
I end by saying once again how grateful I am to the Minister and his team for the constructive way in which they have handled this issue.
Baroness Vere of Norbiton (Con)
I rise only briefly to say that we on these Benches want to see the Crown Estate taking action to improve our environment, and we share the concerns of other noble Lords in this area. We note that the Government have expressed their support for the amendment in the name of the noble Baroness, Lady Hayman. I agree with her that it is all about outcomes in these circumstances. We agree that this is a sensible amendment and that it deserves the Government’s support.
Lord Livermore (Lab)
My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments tabled by my noble friend Lady Young of Old Scone and the noble Baroness, Lady Hayman. Before I respond to the amendments relating to the environment, I reaffirm my strong support for the intention behind them. As I set out in Committee, it is right that the public and private sectors make every contribution they can to achieving our climate change targets. The Crown Estate should continue to be a national trailblazer in this regard.
The Crown Estate’s commitment to becoming a net zero carbon business by 2030, aligning with a 1.5 degree trajectory, and its commitment to prioritising activities that help enable a reduction in a national carbon emissions, such as building net-zero homes, transitioning its holdings to sustainable agricultural practices, and working in partnership with government to meet the national renewable energy targets, speaks to how seriously it is already committed to these goals.
Earl Russell (LD)
My Lords, speaking on behalf of the noble Baroness, Lady Young: yes, she is prepared to withdraw her amendment. I welcome the Government’s response to her amendment; I think even she realises that it was perhaps the gold-plated version. As the old saying goes, a bird in the hand is worth much more than a bird in the bush.
I return to my own persona to close this group of amendments. I congratulate the noble Baroness, Lady Hayman. It is extremely important that these duties are there, that they are written in the Bill and included in the framework agreement, and that the Crown Estate needs to report on them. These, taken together, are not constraints but real responsibilities that the Crown Estate will need to meet. They are safeguards that exist for evermore; that is a powerful thing in protecting the environment. I congratulate the noble Baroness, Lady Hayman, on all the work that she does; here we have another Bill, with another of her amendments being accepted.
Before I sit down—I know the hour is late—the noble Lord, Lord Krebs, has a Bill before this place to do some of this stuff for evermore, so that we can free up parliamentary time to discuss other things. As a final word, I encourage the Government to consider lending support to his Private Member’s Bill so that we can free up parliamentary time, put this in all the places where it needs to be, make sure that these protections are in place, and use our parliamentary time for other matters. But I am delighted that this has happened in this case. I thank the Minister, and I beg leave to withdraw Amendment 7.
Earl Russell
“Regional Wealth Fund and Skills Training FundAfter section 4 of the Crown Estate Act 1961, insert—“Regional Wealth Fund and Skills Training Fund (1) The Commissioners must use the funds from the Crown Estate to establish a Regional Wealth Fund and a Skills Training Fund, as set out in subsections (2) to (9).(2) The Commissioners must ensure that a percentage of the Crown Estate’s license fee for leases of Crown Estate land for offshore wind power development is given to a regional wealth fund.(3) The Commissioners must agree regional boundaries of the regional wealth fund in consultation with local government.(4) Funds from the Crown Estate’s license fee for such leases must be distributed to the nearest regional wealth fund to the offshore wind power development.(5) The Commissioners must ensure that a percentage of the Crown Estate’s profit is given to a skills training fund (“the fund”).(6) The Commissioners must ensure that the fund works to provide persons residing or employed on the boundaries of or on the land of the Crown Estate with skills training to equip them to perform jobs in the green economy.(7) The Commissioners must ensure that those administering the fund consult with appropriate national and regional organisations and industry to agree the type of training that the fund will provide to meet the requirement under subsection (6).(8) The Secretary of State must by regulations set the percentages under subsections (2) and (5).(9) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””Member’s explanatory statement
This amendment would require the Commissioners to establish a Regional Wealth Fund and a Skills Training Fund.
Earl Russell (LD)
My Lords, it is quite late and we have run over our time, so I will be brief with this amendment. To be honest, my plan was never to call it to a vote. This is an amendment that I tabled at previous stages of the Bill. It calls on the commissioners to do two things: to establish a regional wealth fund and a skills training fund. I believe that both are important. That is why I have brought this amendment back today. As I said, I will speak to it very briefly.
On the regional wealth fund, we are going through one of the biggest energy transitions that this country has experienced since the dawn of the Industrial Revolution. A lot of stuff needs to be built; a lot of change is coming. The Government need to take people with them on that journey. It is not for Whitehall and central government to do this to people. It is for this Government to do things with people, for people, and to take people with them on that journey. I say these things because they are important. We on these Benches want to see Labour succeed in these missions. If public support wanes, that will not happen.
I believe also in devolution; we believe in devolution on these Benches. We believe that local communities should benefit from the energy that they host, and from the infrastructure that sits in their communities. We believe very much in community energy as well. In legislation to come, we will have GB Energy. From these Benches, we will be pushing the Government strongly to go further on community energy. We think it is an important part of the puzzle that can be achieved within the GB Energy Bill.
I move on finally to skills and training. The green revolution is a revolution; it will change all our lives. It offers real opportunities, not just to decarbonise and meet our climate commitments but for Britain to grow new industries to be new world leaders and to train people to take on new jobs, the jobs of the future, which we need to grow our economy.
The Budget this week, for all the investment, had very little growth coming out of it. I personally worry that there was very little money in the Budget for skills and training. The year 2030 will be here in a blink of an eye. To meet our targets, we need people to be able to build all this stuff, to make this thing happen; otherwise, our targets will not happen and will not be met.
The Crown Estate sits at an important juncture between the big industries and the local communities. It is already doing a very good and imaginative job in this area. I simply call on the Government to do more: to work with the Crown Estate to help create these skills; to help support our local communities; and to help bring people with them and alongside them on this journey, so that we can all transition together. I beg to move.
Lord Livermore (Lab)
My Lords, I will respond to Amendment 9 tabled by the noble Earl, Lord Russell, on the topic of local and community benefits. As I set out in Committee, the Government are committed to working closely with the Crown Estate to support our target of clean power by 2030 by collaborating to accelerate and derisk the sustainable delivery of technology such as offshore wind. As I noted in Committee, local communities already benefit from onshore and offshore developments in the form of the economic benefits that such developments bring, including job creation and increased business for local suppliers. Individual developers also contribute to local initiatives.
Over the longer term, local communities will also benefit as we accelerate our transition away from volatile fossil fuel markets to clean, homegrown power to boost Britain’s energy independence and security. The Crown Estate has also specifically designed the leasing process for the offshore wind leasing round 5 opportunity in the Celtic Sea in such a way that developers have to make commitments to deliver social and environmental value as part of the development of their new windfarms.
I turn to the second part of the amendment, on a skills training fund. As I have previously made clear, the Government of course support the spirit behind the amendment. We are committed to clean energy by 2030, accelerating to net zero and promoting biodiversity. To meet those ambitions, we need to make sure that our workforce has the knowledge and skills to succeed in the green economy, both now and in future.
As part of that effort, the Department for Education has set up Skills England, a new body that will tackle skills shortages and support sustained economic growth. The Government also introduced the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill in this House last week, which among other things will help to support the establishment of Skills England. As I highlighted in Committee, the Crown Estate is dedicated to supporting skills and training.
As I have said previously, the Crown Estate consults extensively with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies to keep them relevant and effective. The Government consider it important that the Crown Estate retains that flexibility in how its skills initiatives are funded and delivered to ensure that it can contribute to skills training in the best possible way.
I hope these explanations have been helpful and I have provided some clarity on the points raised. I hope the noble Earl, Lord Russell, feels able to withdraw his amendment as a result.
Earl Russell (LD)
My Lords, I thank the Minister for his response. I am of course able to withdraw my amendment. I recognise the work that the Government are doing in these areas, but there is a need for more to be done. I do not think that working with the Crown Estate would impact other work; it would actually strengthen it. As I said, it sits in a unique juncture that would be particularly helpful in bringing industry together with communities to create local jobs and provide training. However, I note the work that the Government are doing and I thank the Minister for his response. I beg leave to withdraw the amendment.
Baroness Hayman
“Sustainable developmentIn section 1 of the Crown Estate Act 1961 (general provision about the Crown Estate Commissioners), after subsection (3) insert—“(3A) The Commissioners must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom.””Member's explanatory statement
The amendment would require the Commissioners to keep the impact of their activities on the achievement of sustainable development under review. Sustainable development goals as recognised by the United Nations, the Commonwealth and other bodies refer to human development that aims to meet the economic, environmental and social needs of the present while also ensuring the ability of future generations to meet their own needs.
Lord Murphy of Torfaen
“Commissioners with special responsibility(1) Paragraph 1 of Schedule 1 to the Crown Estate Act 1961 (constitution etc), is amended as follows.(2) Before sub-paragraph (4) insert—“(3B) The commissioners appointed under this paragraph must include—(a) a commissioner responsible for giving advice about England,(b) a commissioner responsible for giving advice about Wales, and (c) a commissioner responsible for giving advice about Northern Ireland.(3C) References in sub-paragraph (3B) to “giving advice about” a part of the United Kingdom are to the giving of advice to the Commissioners about conditions in that part so far as relating to their functions in relation to land there.(3D) A commissioner’s responsibility for giving advice under sub-paragraph (3B) is additional to the other responsibilities of a commissioner.”(3) Before sub-paragraph (5) insert—“(4B) No recommendation may be made to His Majesty for the appointment of a person as a commissioner under sub-paragraph (3B)(b) or (c) unless—(a) the Welsh Ministers have been consulted about the appointment, in the case of an appointment under sub-paragraph (3B)(b), or(b) the Executive Office in Northern Ireland has been consulted about the appointment, in the case of an appointment under sub-paragraph (3B)(c).””Member's explanatory statement
This new Clause would require the persons appointed to be Crown Estate Commissioners to include three commissioners who are able to provide the Commissioners with advice about conditions in England, Wales and Northern Ireland respectively, so far as they relate to the functions of the Commissioners.
Hezbollah: Threat to the United Kingdom
(2 days, 3 hours ago)
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Lord Godson
To ask His Majesty’s Government what assessment they have made of the threat from Hezbollah to the United Kingdom (1) since the group was proscribed in its entirety in 2019, and (2) since the assassination of its leader, Hassan Nasrallah, on 27 September.
Lord Godson (Con)
My Lords, there is now an impressive consensus across all the mainstream parties in this House on the global threat of the Islamic Republic of Iran and its allies in the so-called axis of resistance. Hezbollah, which has been proscribed here in its entirety since 2019, is of course the jewel in the crown of Iranian proxy organisations. Its reach extends across south Asia, south-east Asia, North America, South America and Africa. Its part in forging its own unique version of a Shiite crescent in the Middle East under the tutelage of the regime in Tehran is well known, above all to many of the UK’s closest allies in the region.
However, my focus today is on the impact of Hezbollah on the domestic security and extremism policies of the United Kingdom. Noble Lords will be only too aware that this widespread agreement on the danger of Iran has been powerfully articulated in testimonies from the director-general of the Security Service, Ken McCallum, and the assistant commissioner for specialist operations, Matt Jukes.
How do we build on this widespread political agreement to shape more effective policy, the better to protect ourselves and our allies? The current rapid review of extremism being conducted by the new Home Secretary gives us a chance to undertake a reappraisal of counter- measures against Hezbollah, its allies and its sponsor in Tehran. In particular, the review needs to look at every aspect of the Home Office’s work, from security and policing to immigration policy. All these functions, interconnected though they are, are still too often not regarded as such.
That does not simply mean countermeasures against the use of physical force by Iran and its proxies. It also means countermeasures against violent extremism and proselytisation: as my noble friend Lord Cameron of Chipping Norton, once put it, the need to combat the spread of a grievance culture that poisons the minds of some young Muslims.
It also includes the disruption and prosecution of criminal activities by Hezbollah, described by my right honourable friend Tom Tugendhat MP, an outstanding Security Minister under the last Government, as the most prolific traffickers of drugs and children in the Middle East. Indeed, such is its criminality that the former US FBI official Matt Levitt, in his new book on Hezbollah, has described it as not so much the party of God as the party of fraud.
First, we need much more public information from the Government about the nature of the threat of the so-called axis of resistance to our society. There is a growing tendency of successive Governments of all hues—and I very much hope that the new Government will break with this approach—to take refuge in the formula that they cannot discuss basic public policy questions in this area by invoking “operational reasons”. The term “operational reasons” is thus beginning to suffer from real mission creep.
There is one other dimension to this lack of information. I noticed that in recent weeks the noble Baroness, Lady Hoey, asked two Written Questions that to my mind did not receive the Answers they deserved. First, she inquired how many convictions there had been in the past year relating to Hamas and Hezbollah. The noble Lord, Lord Ponsonby of Shulbrede, replied that it is not possible to identify offences relating to specific groups and that it would be too expensive to examine individual court records for that. I have the greatest respect for the for the noble Lord and have enjoyed my dialogue with him, not least on the affairs of Northern Ireland, but I do not agree with that formulation in this case.
Likewise, in response the next day to the second Question from the noble Baroness, Lady Hoey, on how many had been arrested and charged for Hamas and Hezbollah offences in the last 12 months in this country, the Minister here, the noble Lord, Lord Hanson of Flint, referred her to the data in the quarterly Home Office publication, Operation of Police Powers under the Terrorism Act 2000. There is a welcome breakdown in that document by nationality but, again, not by proscribed organisation. Once more, I have the greatest respect for the noble Lord, Lord Hanson, not just for his service in Northern Ireland and his work on the Intelligence and Security Committee but for being so open and having his doors open to Members, just as he pledged he would in his maiden speech last July, but I wonder whether Ministers should start taking a harder look at the time-honoured approach of the official line—and of some of their officials—that it is simply not worth the effort to provide the requisite breakdown by proscribed organisation. The interests of officialdom are not always identical to those of the political echelon. At a minimum, surely someone in counterterrorism policing must know the figures at hand.
In this connection, under the Pursue strand of the Contest strategy, I ask the Minister how many priority investigations are currently being undertaken by the agencies on the activities of Hezbollah and the wider so-called axis of resistance? What percentage of priority investigations do these investigations into the axis of resistance comprise?
But the task for Ministers goes beyond that of focusing on the immediate threat of physical force from terrorism; it also entails countering in the ideological realm. Thus, the 2023 Independent Review of Prevent stated of the Home Office’s Research, Information and Communications Unit, RICU:
“Since early 2019, the government has proscribed both Hizbollah and Hamas in their entirety. I would have expected to see research from RICU providing an in-depth investigation on the pro-Hizbollah support network within the UK, and a commitment to do so for the more recently proscribed whole of Hamas”.
The Prevent review was accepted in full by the previous Government. Will the Minister tell us today what research into Hezbollah networks in the UK has been or is now being conducted by RICU and how many Prevent referrals relating to Hezbollah and key entities in the wider so-called axis of resistance there are?
I also ask the Minister whether we should not now consider following the example of Germany’s Office for the Protection of the Constitution—the Verfassungsschutz —and other European partners to produce regular analyses for public consumption of key ideological strains in Islamist and other very real extremist challenges. In particular, can the Minister assure us that rebuttal is being undertaken by RICU of relevant narratives emanating from some supporters of all branches of the axis of resistance?
For example, when the Houthis began attacking western shipping lanes in the Red Sea, leading to retaliatory strikes, so-called “anti-war protesters”, as we all know, chanted “Yemen, Yemen, make us proud, turn another ship around”. The threat posed by the Houthis and their patrons to our economic well-being is obvious, and the Security Service Act 1989 states that one of MI5’s statutory responsibilities is that of
“the economic well-being of the United Kingdom”.
Another area where Ministers need to keep a close eye is the interaction between the security and immigration workstreams of the department. In the last Parliament, I asked the then Conservative ministerial team at the Home Office how many minister of religion and religious worker visas had been issued to Iranian nationals. It emerged that just under 100 such visas to enter the UK had been issued since 2005. Doubtless, there will be many genuine individuals among that bunch, but we cannot be sure. Similarly, the UK has now allowed 52 Lebanese civilians to enter the country on religious worker or minister of religion visas since 2005. Again, information is not recorded in terms of the denomination or the sectarian affiliation of those Lebanese citizens who have received visas. Should they not now start to be recorded as such? Is it not time to consider giving a more detailed breakdown of those to whom we accord the significant privilege of the right to work in this country?
Indeed, when the right honourable Member for Newark, Robert Jenrick, was Immigration Minister, a review of visa policy concerning Iran was flagged prominently in the media; was that review ever conducted, let alone completed? If not, will those issues now be addressed in the rapid review of extremism policy and security policy being conducted by the present Home Secretary?
I come back to the long-term question of charitable networks and giving. Inevitably, after the events of 7 October last year and following recent events in Lebanon, there will be a rise in giving to alleviate genuine human suffering in the region. This is, of course, to be welcomed, but it inevitably poses new challenges to our overstretched system of charitable regulation when funds may go to those posing as humanitarian bodies but which have other sectarian and even terrorist agendas. How many regulatory cases or statutory inquiries does the Charity Commission have open in relation to those involving Iranian, IRGC and other Iranian proxies such as Hezbollah, bearing in mind that the Charity Commission is accountable to Parliament under the Charities Act 2011?
I end, as I began, with the point about cross-party consensus on the threat of Iran and its proxies. Considering the measure of accord here in Westminster, there is no excuse now for an absence of action. As things have worked so far with successful proscriptions, there is a suspicion that it is too often treated as a symbolic act, as a kind of glass ceiling, and too often not implemented in full. I very much hope that this will change with the outcome of the forthcoming review by the Home Secretary. If the Minister in responding today can show real progress towards addressing the global threat of the axis of resistance more effectively, bringing all the elements of national power together, both at home and abroad, then I am sure those measures will enjoy the widest possible support across this House.
Lord Browne of Ladyton (Lab)
My Lords, I am grateful to the noble Lord, Lord Godson, for affording us the opportunity to examine this Question today. It is a debate that is timely and of significance, and the forensic nature of his opening remarks is wholly concordant with the significance of the issues we are discussing. Mindful of severe time constraints, I wish to ask my noble friend the Minister three questions. Before I do, though, I think it is worth examining one of the premises of the Question before your Lordships’ House, and that is the efficacy of proscription.
In examining that, I do not resile from the basis on which Hezbollah was proscribed in its entirety in 2019. I concur with the judgment of the then Home Secretary that a distinction between the political and military elements of Hezbollah had become academic, if not meaningless. Equally, I concur with all those who have highlighted the appalling anti-Semitism that is not an adjunct to Hezbollah’s world view but central to it.
But we must be clear that such proscription largely is a symbolic gesture, offering British police the ability to prevent open displays of support domestically, but little more. Our proscription of Hezbollah does not degrade its operational capacity nor its ability to foment violence and conflict in the Middle East. In this context, proscription puts me in mind of Douglas MacArthur’s somewhat jaded observation:
“Whoever said the pen is mightier than the sword … never encountered automatic weapons”.
I seldom quote that observation, save with disapproval, but it finds an unfortunate echo in this context.
Hezbollah and those who range themselves under its banner care nothing for our moral disapproval. In the longer term, the only answer to Hezbollah is to degrade its capacity, cut off its avenues of funding and vigorously contest those who seek to give it endorsement or legitimacy. Given the limited ability of proscription, it is surely important that the few provisions it does offer are enforced.
Could I ask my noble friend the Minister about the recent comments of a Metropolitan Police officer who, in the face of open support for Hezbollah evinced at a recent march in London, responded with the somewhat circular statement “Your opinion is your opinion”. It is, of course, contrary to the provisions of the Terrorism Act 2000 to display or incite support for a proscribed organisation. Proscription is not merely a gesture but an empty gesture unless the police are briefed adequately in advance of such events.
On a related matter, I should be grateful if my noble friend could update your Lordships’ House on the Government’s current thinking around the possibility of proscribing the Iranian Revolutionary Guard. I ask that not because I am hoping to elicit a specific answer but because I am conscious of the possible cost of so doing in relation to our diplomatic channels with Iran.
In my last few seconds, I would like to ask for the views of my noble friend on the first speech given by Sheikh Naim Qassem, the successor to Hassan Nasrallah. In the same address, he claimed that he “doesn’t want war” and is only aiming to “respond” to aggression while also threatening to strike the Israeli Prime Minister’s residence and expressing his contentment for the current conflict to last many more months. Given this, to put it generously, somewhat opaque set of remarks, I close by asking my noble friend to share any assessment the Government have made of any changes to Hezbollah’s operational approach, consequent on the change of leadership.
Lord Carlile of Berriew (CB)
My Lords, I thank the noble Lord, Lord Godson, for his inspiration in having this debate and for his searching speech. We look forward to the Minister’s answers.
I would like to approach this issue in a slightly different way. In my view, one of the answers to the question posed by the noble Lord, Lord Godson, is by increasing the efforts that our country makes in diplomacy in Lebanon and the region. If Lebanon could emerge from its current political stasis and from the tragic situation it finds itself in militarily, then Hezbollah would matter but little in that country. It would be diminished by Lebanon becoming once again part of the comity of nations.
As it happens, I have a very close friend, Dr El Zein, who is a distinguished academic working in Beirut. He is a family man who is connected with many politicians there; he is not a politician himself. He and I have been speaking every day for the last few weeks, and he has been sending me his daily diary which includes his family moving to their little flat in the mountains but with another 20 people there with them. It is part of what has been happening in Lebanon.
I ask our Government to recast their approach to Lebanese politics and to resist merely following in the slipstream of the United States, which since 2006 has been responsible for what has become inept diplomacy and the increase of the power of Hezbollah. The Lebanese people are now hugely angry with Iran, the proxy warrior that supplies the weapons and experiences almost none of the grief.
Our Government should engage with other European Governments, as well as with the United States, and with all parliamentarians in Beirut, including Hezbollah. I know that our Government are very reluctant to talk to even Hezbollah members of parliament there, but that is an unrealistic approach. They do not like what is happening in their country at the moment either.
Why do we not help them towards, for example, the election of a new President, through the parliament system of electing a President? They have been without a President for two years. There are candidates who could become President of Lebanon who would be recognised throughout the world for what they have done as economists, bankers and businesspeople, and in other ways. Lebanon will not have its place in the world without a new President. This would also increase the respect in which our country and our Foreign Office are held. Iran has betrayed Lebanon. We can help the Lebanese back into a position of welcome among nations.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, I thank my friend, the noble Lord, Lord Godson, for bringing this important issue to the Floor of the House today and for his comprehensive introduction to this short debate. As someone who has lived with and through terrorism, I want to reflect, albeit briefly, on the nature of terrorist organisations and what must be done by democrats to fight them. Iran-backed Hezbollah is a vicious terrorist group that must be defeated.
There are three elements in the battle against terrorists. First, at a strategic level, democratic Governments must engage and destroy the narrative of the group. The noble Lord, Lord Godson, referred to this. Propaganda, of course, provides a strong crutch to these terrorist factions and in some cases allows them to justify their existence and operations to those who do not know better. I would like to see from the Government a stronger action plan—if there is an action plan at all—to deal with the claims put forward by Hezbollah and its proxies here in the United Kingdom. We should not just condemn their actions but deal with the narrative, including their ultimate goal of the eradication of Israel.
Secondly, at an operational level, we must erode and subvert the networks these organisations work through for money and support generally. Hezbollah, as we have heard, is a global terrorist and criminal organisation and works through often complicated systems to build its empire. We must do all we can to make it not just difficult but impossible for these people to work in the way they do at present. Sadly, without proscription of the IRGC in the UK, any threat of Hezbollah will continue to rise under its protection and support. I ask the Minister why the Government appear to have changed their stance on IRGC proscription since taking office in July.
Thirdly, at a tactical level we must be intelligence led to deter and prevent attacks not only here in the UK but across the world and particularly in our British Overseas Territories, such as our sovereign base in Cyprus. It is so important that we break up the terrorist infrastructure and reassure the public that they are being protected. In that regard, I pay tribute to our security services for all their unseen work in keeping us safe.
Strategic, operational and tactical: these are the three levels at which we must deal with terrorism whether domestically or internationally. Operationally and tactically, on the whole the UK Government and security services were good at dealing with the IRA and terrorism in general in Northern Ireland. Unfortunately, they did not deal with and challenge the narrative and the propaganda set up by terrorists and their spokespeople, and we still live with that legacy today.
I ask the Minister, who knows Northern Ireland very well, to bear the lessons of Northern Ireland in mind when dealing with the threat from Hezbollah. I ask him and his colleagues to engage and destroy the narrative of these evil men, to proscribe the IRGC and, by doing this, to take the propaganda rug from under their feet.
Baroness Foster of Oxton (Con)
My Lords, the threat of terrorism has increased. Long before the recent and welcome assassination of Hassan Nasrallah, we can recall 7/7, the Manchester Arena suicide bomber—the worst atrocity carried out on British soil—and others not that long ago.
Like many here, I have spent my entire life being aware of the consequences of inadequate security, both national and international. As a young woman I was trained to deal with hijackings and bomb threats, and witnessed terror groups such as the PLO, Black September and the IRA causing carnage and death. But the influence of the Muslim Brotherhood and the rise in Islamic extremism across Europe and the West, along with the barbaric regime of the Islamic Republic of Iran and its proxies, are without doubt the most potent threat.
The massacre and slaughter of men, women and children last October in Israel, along with the hostage-taking, were war crimes. Yet the UN and its corrupt agencies turned a blind eye and continue to kowtow to our enemies, such as Russia, North Korea and the Islamic Republic of Iran. Meanwhile, authorities here have permitted weekly protests—screaming mobs spewing hatred, death and destruction of Jews. Anti-Semitism is the order of the day, with Nazi placards held high and anyone daring to challenge often arrested and locked up. These people are sympathisers who are guilty by association and have been allowed to become emboldened by weak leadership. The police and too many spineless politicians stand by, wringing their hands and clutching their pearls like so many others.
Multiculturalism is a myth, while political correctness has stifled debate, particularly if you are on the right, like me. Clerics from mosques across the UK are still calling for jihad, whipping up hatred and brainwashing children. There is concrete evidence and nothing is done, leaving many decent people too scared to speak out. As I said a year ago, staying silent is not an option.
In conclusion, as Lady Thatcher once said:
“The first duty of any Government is to safeguard its people against external aggression. To guarantee the survival of our way of life”.
Without that, there is no future. What steps are this Government taking to strengthen our protection?
Lord Bew (CB)
My Lords, I thank the noble Lord, Lord Godson, for securing this debate. I know, as I read the wording of the debate, that when he refers accurately to the proscription of Hezbollah in its entirety since 2019, some noble Lords in this House will sigh—noble Lords whose opinions I respect—and say “Proscription? Is this all we can talk about? What use is that really?”. I am sure that is an inevitable emotion that accompanies this debate. However, we are still in a world where proscription is necessary and required, and possibly has to be extended for the reasons given by the noble Baroness, Lady Foster.
While we are in this world, let me explain that for 12 years I was the chairman of the Anglo-Israel Association. I regularly argued to my Israeli audiences that there was a requirement to support a two-state solution. I regularly said to them, “Do not be obsessed with the ideology of the other side”. Had David Trimble been so obsessed in 1998 about what the IRA was saying —every word in the green book—there would never have been a Good Friday agreement. In the aftermath of that, I was very keen to say, especially to Israeli audiences, “Don’t be obsessed about this talk of Hezbollah leading to the extinction of Israel and so on. Let’s see if we can have a dialogue; let’s see what understanding we can have”. I am well aware that there are many people who still believe in that. They look at the reference to proscription and say that it is the wrong way to go and that a free-flowing, open dialogue is the way forward, however difficult it is.
However, the truth is that since 7 October the world has changed in this respect. I can no longer make the advocacy I made for so many years as chairman of the Anglo-Israel Association. I still believe in a two-state solution—at least, I refuse to rule it out—but I can no longer say, “Forget the underlying ideology of the other side, in the way that we did”. The ideology of Hezbollah and its amazingly self-destructive decision to back Hamas following the events of 7 October show that the form of dialogue that one once advocated no longer exists. Therefore, unfortunately, we are in a world where we have to talk about proscription. That is the realpolitik at the moment.
Baroness Fox of Buckley (Non-Afl)
I thank the noble Lord, Lord Godson. I would like to follow his excellent introduction by raising concerns about the very same ideological threat posed by Hezbollah to the UK that we just heard about. It is extraordinary how normalised it has become at demonstrations on UK streets that, alongside aggressive, inflammatory anti-Israel chants, we are likely to see placards or hear slogans lauding Hezbollah as freedom fighters and rebranding its recently killed, warmonger leader Nasrallah as a brave warrior. We might ask: are such attitudes solely the spontaneous reactions to a brutal geopolitical conflict?
Something that might give us pause for thought are the words of Mohammad Raad, head of the Hezbollah group in Lebanon’s parliament, who boasted in an interview with Russia Today in June:
“We’re currently investing in protests and demonstrations in Western countries, especially among college students. We already have Muslim students agitating, but it’s the Western students themselves who will destabilize their own countries”.
No doubt there is a bit of hyperbole here, but it is really chilling to hear this explicit threat to the stability of western society, and it needs to be taken seriously. Can the Minister respond to the claim that Hezbollah is investing in demonstrations in the West? Do the Government have any knowledge of such financial support for UK street protests and campus encampments?
There seems to be a concerted attempt by agitators to give popular legitimacy to proscribed organisations, such as Hezbollah, Hamas, the Houthis and so on, whose USP is the destruction of Israel and whose propaganda is dripping in visceral anti-Semitism. Can the Minister explain how the criminal offence of supporting a proscribed organisation such as Hezbollah is understood? When it is so brazenly vocalised on our streets, but seemingly ignored by the police or authorities, it causes public confusion.
I am resistant to criminalising such verbal support, not only because of the importance of freedom of speech—one of those western values that Hezbollah and other Islamists want to destroy—but because I think we need more speech to counter this threat. If pro-Hezbollah propagandists are agitating on campus, we need to join that battle of ideas to win hearts and minds; but it feels like there is some inconsistency here. The Government seem unabashed at calling out some forms of extremism—rather promiscuously, in my view, calling too many people far right—but where is the high-profile government campaign to name and shame and expose the ideas of those peddling Hezbollah et al’s hateful anti-Jewish ideologies?
In a week that has witnessed the daubing of red paint on Jewish charities, for God’s sake, and respectable opinion calling for boycotts of Jewish authors, perhaps we must take more seriously the bigotry being peddled in the West and realise just how urgent it is that we tackle radical Islamist ideas in public.
Baroness Helic (Con)
My Lords, I thank my noble friend for securing this debate, though I regret that it is a brief one. The Middle East’s challenges profoundly affect our national security, our social cohesion and the security and well-being of our citizens. Given this, I hope more time can soon be allocated to ensure a thorough debate, not only about the crises themselves but about their profound impact on communities in Britain, including the Jewish community, in the wake of the terrorist attack last year.
The proscription of any group that could endanger British lives and interests is an essential part of any Government’s strategy to disrupt terrorist organisations and their supporters. Whether it is al-Shabaab, Hezbollah, Sonnenkrieg, Hamas or the Wagner Group, the Government’s response sends a strong and important message of our society’s rejection of terrorism and support for measures against it. This we must support. But while proscription may be a visible and necessary short-term measure, achieving what is best for the United Kingdom and her citizens also requires more comprehensive strategies that address the root causes of extremism itself.
Two immediate examples come to mind. The first is Lebanon. While the original confessional formula—derived from the French colonial dispensation—was good for civic peace and gradual democratic development, it created other problems, including an eventual extension of regional politics into domestic affairs. This system has been maintained by various groups, particularly the Shia community in southern Lebanon, where Hezbollah holds influence. It has also enabled external actors—especially Iran, Syria and occasionally Israel and Saudi Arabia—to interfere in Lebanon’s affairs. It is tragic to see the people of Lebanon pay the price for the lack of peace in the region.
The second example is the instability of the Middle East, including the unresolved issue of a Palestinian state. Addressing the interconnected challenges of Israel’s security and broader Middle East stability is impossible without resolving the Israeli-Palestinian conflict through a commitment to justice and adherence to international law, bringing about a two-state solution premised on two states living side by side with secure and recognised borders, with Jerusalem as the shared capital of both.
What is my noble friend the Minister’s assessment of the future of the Middle East peace process? If it is truly over in the form in which we have known it for years, what is going to be put in its place? For absolute clarity, I fully support the proscription of organisations that endanger Britain and her interests, but we cannot treat only the symptoms without looking at the causes. For long-term security, we must make sure we do both.
Lord Alderdice (LD)
My Lords, I have listened with great interest to the various contributions to this debate on the threat to the UK from Hezbollah. My concern for a peaceful outcome to the tragedy of the Middle East goes back many years. After the negotiation of the Belfast/Good Friday agreement in 1998 and the IRA’s decision in 2005 to decommission its weapons, I explored similar possibilities elsewhere. I met with Hezbollah in Beirut in July 2005, and it asked me to prepare a paper on the decommissioning of weapons. After it received and studied the paper, it asked me to return and discuss with it the possibilities for a process, and I did that. Sadly, the 2006 south Lebanon war destroyed the prospects for that initiative: of course, groups do not give up weapons if they think they might need them. Since then, as the noble Lord, Lord Bew, said, the situation has deteriorated, and we face a very different world now.
Every community has the right to defend itself, including ourselves in the United Kingdom. Tonight we focus on the defence of the United Kingdom. My concern, however, is that, while it is appropriate, and indeed vital, for the security services to do all they can to protect us and for the Government to take this seriously—we will listen with interest to what the Minister says—it is important for us not to focus all our thoughts on the escalation of rhetoric and force. That is happening globally and is leading us to an existential crisis that could envelop the whole of that region—and much more widely—in a terrible war, going beyond even that which there has been.
For that reason I particularly welcome the intervention by the noble Lord, Lord Carlile of Berriew, talking about trying to engage with those constructive people in the Middle East and more widely. Of course it is true that this may not work, but we must be careful not to focus all the time on force as the way to address it. This is why I called in the SDR debate for us not only to build up our forces and our matériel but to focus on the stratagems for de-escalation. In all the wars we are currently facing, the situation is getting worse; people are increasingly tossing around the possibilities of the nuclear option in almost all these conflicts. It is said so easily—it drops so easily from the tongue—and I think that people have forgotten the consequences of any kind of nuclear intervention: they are utterly catastrophic. So in all that we say and do, while we take care to defend and to oppose those who do and say what is wrong, we must try to de-escalate rather than add fuel to the fire.
Lord Wolfson of Tredegar (Con)
My Lords, I thank my noble friend Lord Godson for securing this admittedly short debate on such an important matter. I apologise to him and the House for missing the first five seconds of his remarks.
I will make three short points, picking up some of the points made by others. First, who or what is Hezbollah? It is an Iranian proxy. Iran’s recent direct attacks on Israel are a stark reminder of the existential threat that Israel faces. These Benches unequivocally support Israel’s right to defend itself, including in Lebanon against Hezbollah, whose attacks have led thousands of Israelis to be and remain refugees, in effect, in their own country. I hope the Minister can reassure us that the Government will rally the international community to reaffirm its commitment to the implementation of Security Council Resolution 1701, which is the basis for the peace we all crave.
My second point is on Hezbollah’s threat to the United Kingdom. There is a clear risk that the UK could be threatened through an attack on our sovereign military bases in Cyprus. In April, the then leader of Hezbollah—the leadership of these organisations has recently changed so quickly—issued a threat to Cyprus, which was widely seen as a threat to our bases there. The head of MI5 has warned that the threat of Iran-backed terror activity in the UK itself is very high, confirming that the agency had dealt with 20 Iranian-backed plots on British soil in the last couple of years. Of course, Hezbollah has form for such attacks. Earlier this year, an Argentine court ruled that the 1994 bombing of the Jewish community centre in Buenos Aires, which killed 85 people and wounded more than 300, was carried out by Hezbollah, at the direction of Iran.
My third and final point is on enforcing the law, and there are two parts to this. First, in the UK, as we have heard, Hezbollah has been proscribed as a terrorist organisation in full since 2019—that means that inviting support for Hezbollah is a criminal offence. But we also invite the Government to enlighten us again this evening on the current status of proscribing the IRGC. The noble Lord, Lord Coaker, was very vocal about this, as is his wont, and we look forward to the Minister updating us on this issue.
Secondly, Parliament makes the law and our independent police and the independent CPS enforce it. When people chant at a demo, “Yemen, turn a boat around”, they mean not Yemen but the Houthis. When they shout, “Lebanon, turn a tank around”, they mean not Lebanon but Hezbollah. So we as a Parliament are entitled to look to our independent police and CPS to enforce the laws that we have passed. We on these Benches will support the Government in working for peace in the Middle East but also in keeping the peace on our streets here in the United Kingdom.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
I am grateful to the noble Lord, Lord Godson, for securing this debate, and to all noble Lords who spoke. I have a little more time than I initially anticipated to respond to the points made. I hope I can cover them in that time. A lot of ground has been covered, but it is worth reflecting back.
I note the points made by the noble Baronesses, Lady Helic and Lady Fox, on the reasons why Hezbollah was proscribed in the first place. It was proscribed as an external security organisation in 2001, the entire military wing was proscribed in 2008, and it was proscribed in its entirety in 2019. I put on the record that this reflects the assessment that was made then by the previous Government that the political and military wings were no longer distinguishable and the whole organisation was concerned with terrorism.
It is important that I begin my response to the noble Lord, Lord Godson, by reflecting upon that because, when Hezbollah was proscribed in 2019, this House heard about the organisation’s long history of involvement in terrorism; I note the reflections of the noble Baroness, Lady Foster, on those issues. The Home Secretary then was extremely clear that Hezbollah was an organisation that was committed to armed combat, that violently opposed the Israeli people, that destabilised a fragile Middle East, and whose terrorist attacks had reached into Europe. I hope that reassures the noble Lord, Lord Wolfson of Tredegar, that this new Government share that assessment and that view.
Hezbollah has been involved in, or responsible for, numerous atrocities over decades. Hezbollah’s attacks on Israel over the past year, referred to by the noble Lord, Lord Bew, have driven more than 60,000 people from their homes, and the terrorist violence directed by Hezbollah over many years is, quite simply, unacceptable and intolerable—that view is shared across this House. This House should support the proscription, as it has previously.
It is important to put on the record that proscription is a powerful counterterrorism tool. It sends not only a strong message but a message about the morals of this House, this Government and the cross-party consensus on that. That has served not just in this context but in others, as was mentioned by a number of noble Lords and noble Baronesses across this House. It is right that the Government call out terrorism wherever it exists in the world. I say to the noble Baroness, Lady Foster, that this Government share the aspiration that the first duty of government is to protect its citizens from attack. I hope that that is not a dividing line between the noble Baroness and this Government, because we will not stand for terrorist attacks on our people or for organisations permitting the undertaking of terrorist attacks.
The UK’s proscription regime is respected around the world, and I say to my noble friend Lord Browne that it is an opportunity for us to ensure that proscription does in fact make it harder for Hezbollah to finance and fundraise. It makes its assets subject to seizure as terrorist property, and it makes it an offence to wear clothing or carry articles in a public way to arouse reasonable suspicion that an individual is a member or supporter of Hezbollah. Those linked to Hezbollah may be excluded from the UK using immigration powers. I say to the noble Baroness, Lady Fox, that those are severe and strong penalties, and it is the job of the law enforcement agencies to make and continue that assessment. RICU, which has been mentioned in this debate, continues to make ongoing assessments of these matters, reporting to Ministers across government. Those are key issues that we need to reflect on concerning the powers that can be exercised by this Government.
A number of issues were raised, and I will refer to each in turn. First, what are the Government doing to tackle individuals who support terrorist organisations such as Hezbollah in the UK and online? The tools and powers captured in government policy on Pursue, Prevent, Protect and Prepare are flexible and agile enough to make the assessment—with the support of the security services, the crime agencies and RICU—to ensure that the Government can tackle all forms of terrorism, including support for proscribed organisations.
In response to the noble Lord, Lord Godson, I say that this House should note that, since October last year, there has been a 15% increase in intelligence submissions following the 7 October attacks, compared with the same period the previous year. By June, the national counterterrorism referral unit had received more than 3,000 public referrals relating to the conflict between Israel and Hamas. We will take those issues into account, assess them and examine them in key ways. Some of those were due to other forms of radicalisation, but certainly there is an assessment that that pressure is still there, which is why proscription exists to date.
The noble Lords, Lord Alderdice and Lord Carlile, mentioned the relationship with Lebanon. I think they would wish it to be reconfirmed that the UK Government have given aid to the Lebanese authorities of some £10 million in the last month to respond to issues of shelter and reduced access to clean water. But there is a need to ensure that we have that dialogue and communication, which were mentioned, to tackle some of the long-term areas of concern. To do that, we need a dividing line—and proscription is it—between this Government, their international responsibilities and organisations that seek to commit terrorism.
That brings me on to the assessment, rightly mentioned by the noble Lord, Lord Godson, made by the director-general of MI5, who outlined on 8 October that, since the start of 2022, the UK has responded to 20 Iran-backed plots presenting potentially lethal threats to British citizens and UK residents. This debate is on Hezbollah, but he has mentioned the link with Iran, and it is important that we recognise that link to date.
We have been clear that the behaviour of the Iranian regime, including the actions of the Islamic Revolutionary Guard Corps, poses a threat to the safety and security of the United Kingdom and our allies. That is why we will continue to take strong action and hold the Iranian regime to account. More than 450 Iranian individuals and entities have been sanctioned to date, including the Islamic Revolutionary Guard Corps in its entirety. As the Home Office, we will lead work on countering those Iranian state threats, making use of the full breadth—and please understand what I mean by that—of expertise of this Government and our world-class intelligence services and law enforcement agencies.
A specific question was asked about proscribing the Islamic Revolutionary Guard Corps. I am clear that Iran has malign activities and those activities, including the work of the IRGC, are unacceptable. We will continue to keep the full range of tools and powers available to us to tackle the threats that we face from Iran under continuous review. Both the noble Baronesses, Lady Foster of Aghadrumsee and Lady Foster of Oxton, raised a similar issue and both understand, I hope, what that sentence means in terms of our continued assessment of those powers.
My noble friend Lord Browne, among others, mentioned policing of public disorder and the response by police officers to particular protests. As someone who has taken part in many a protest, not necessarily on this topic, I fully accept, understand, respect and wish to have the right of peaceful protest entrenched in our society, but that does not extend to criminal activity. The proscription order on Hezbollah sets down certain actions which are dividing lines between peaceful protest and criminal activity and spreading hate. I say to my noble friend who raised the issue of comments that he has reported from police officers that I think we should give the police powers to act on criminality when they make that judgment. It is not for me, as a Minister, to determine whether a criminal act has taken place, but it is for the police to make their judgments, to use the powers that are there independently—rightly—of government operationally to ensure that if criminal activity in protests takes place, it is dealt with by the police authorities.
Overall, our priority as a Government is to ensure that the decisions that we take strengthen the UK’s national security and support our intelligence services and law enforcement agencies. However, I am sure that noble Lords will understand, and I hope that they will bear with me on this, that many of the points raised about operational issues of the monitoring and deliberation by our security services are ones on which I cannot comment because I do not wish to give succour to anyone. We cannot routinely comment on whether groups are being considered for proscription; we cannot routinely comment on operational activities. However, the National Security Act 2023 provides a significant toolkit for us to fight against individuals working for state entities, like the IRGC, and the UK is now a harder target than it was two years ago. We will continue to keep under review hostile acts against this United Kingdom, including espionage, interference in our political system, sabotage and, indeed, assassination. I hope that noble Lords can be assured that the full armoury of government powers is continually being monitored. Ministers will be kept informed and will report to this House in the event of any changes or decisions on policy issues as a result of that monitoring.
The noble Lords, Lord Carlile and Lord Godson, mentioned Prevent. It is important that we look at the Government’s Prevent programme in the broader sense; it is at the core of reducing the threat from terrorism in the United Kingdom, not just from Hezbollah but across the board. It will continually evolve, and the Shawcross inquiry in February 2023 had 34 recommendations to the previous Government about how Prevent can be improved. We have met 33 of those recommendations. It is important, and transparency is important, but we will soon release further statistics on the referral period from April 2023 to March 2024 in a new publication. I hope, again, that this will be something that this House can scrutinise.
In closing—my 13 minutes are coming to an end— I thank the noble Lord, Lord Godson, for shining a light on the issues in this debate, and thank Members who have contributed. It is of the utmost importance that the Government focus on the security of our citizens at home and abroad and the security of our allies at home and abroad. For this Government, and indeed any Government, the top priority will always be the security of our country and safety of our citizens. Through the deployment of the tools we have, we as a new Government have a resolute commitment to tackling terrorism in all its forms.
Higher Education Reform
(2 days, 3 hours ago)
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Baroness Barran (Con)
My Lords, after relative silence in the Budget about the higher education sector, we on this side very much welcomed yesterday’s Statement from the Secretary of State for Education, but it raises a number of questions. I appreciate that the noble Baroness may want to write on some of them, but I hope that others require just a yes or no.
In the Statement, the Secretary of State talked about being “crystal clear” with students that their monthly repayments, once they graduate, will not increase. She was less than crystal clear about the fact that their total repayments will typically go up over the life of the loan. Can the noble Baroness confirm that I have understood that correctly? Have her officials calculated how much more the average student will repay once they have graduated?
The Secretary of State also talked about how she will
“secure the future of higher education so that students can benefit from a world-class education for generations to come”.
In his recent blog, Nick Hillman of the Higher Education Policy Institute took figures from the Institute for Fiscal Studies on how much the income of universities will increase as a result of the changes announced yesterday and the increase in the national insurance contributions they will need to make as a result of the changes announced in the Budget, as calculated by the Universities and Colleges Employers Association. He estimates that the net benefit to universities will be about £18 million, or £45,000 per institution.
The noble Baroness said earlier today that we on this side of the House need to understand that you have to raise money to fund public services. I assure her that we understand that very well, but the serious point is whether the two decisions the Government have made in recent days will make a material difference to universities or not. It would be helpful to be clear on that. There is also the impact of cutting fees for foundation-year courses. Is there a figure for the impact of that? Can she clarify what this means for undergraduates who have already started their course, as there was some confusion in Wales when fees were increased recently and it played out differently in different institutions? It would be helpful to know whether this will be applicable to those already part-way through their studies. The Statement was also silent on how this impacts postgraduate student fees and the disabled students’ allowance. It would be helpful to understand those changes.
In the Statement, the Secretary of State spoke of her ambition to spread opportunity to disadvantaged students, which every part of this House will firmly agree with. However, she then asserted that:
“The gap between disadvantaged students and their peers in progression to university … is the highest on record”.
I looked at the data that the department helpfully published recently and, while she might technically be right, the spirit of what has happened and the reality for disadvantaged students is very different. I am not quite sure why she chose to use free school meals as the definition of “disadvantaged” rather than the POLAR4 quintiles. Leaving those technicalities aside, if we look at what has happened in access to higher education between 2013-14 and 2022-23 for disadvantaged students using the Secretary of State’s definition, there has been a 43% increase in the percentage going to higher education compared to 25% for their peers. For high-tariff universities, the numbers for those on free school meals are up 109% compared to 48%. The percentage of more advantaged students is much bigger than that of disadvantaged students, but opportunities for disadvantaged students, which we all care about, have really improved. I hope the noble Baroness will acknowledge that.
The Secretary of State talked about a “renewed drive for efficiency” and said that the Government will not accept “wasteful spending”. We agree in principle, but can the noble Baroness give the House a sense of where the Government see waste in the sector and whether they have an estimate of what it amounts to. Can she reassure us that this will not threaten the independent status of our universities?
The Secretary of State talked about an uplift of £414 on maintenance loans. I would be grateful if the noble Baroness could confirm that this was calculated on a maximum loan for a student studying and living in London and that the average will be closer to £223 per student or 61p per day.
Looking to the future, the Secretary of State promised a policy paper on HE reform. Can the noble Baroness confirm what colour it will be—white, green or neither? Can she give the House any sense of the Government’s thinking on improving access to universities for those who have worse access today? Will it be a positive focus on particular groups or through new penalties?
Given the delay in the introduction of the lifelong learning entitlement, it would be good to hear that the Government remain committed to that, and to the work on sharia-compliant finance.
As my remarks have shown, the Statement left many unanswered questions, and I hope we see more in the forthcoming policy paper. However, despite the rhetoric in the Statement, the bottom line is that the net financial impact is hard to see for universities, so the policy paper will need to come quickly and tackle the real issues they face.
Lord Storey (LD)
My Lords, we welcome the Secretary of State’s Statement on universities in the Commons yesterday. Labour introduced student loans, and in opposition Keir Starmer wanted to abolish them. No doubt he cannot because of the £22 billion black hole.
We know that in 2015, the Liberal Democrats paid the price for making a pledge on tuition fees that we could not keep, but our reforms at least made the system fairer by giving more support to pupils on low incomes and ensuring that the least well-off graduates repaid the least.
Now, our universities are crying out for government to look at their funding, which has remained frozen for eight years. The Conservative Government, while espousing their importance, did nothing but abolish the maintenance grant, so that living costs became a barrier to university learning for disadvantaged students. The previous Government also cut the repayment threshold to £25,000, so that today’s students have to repay hundreds of pounds more per year than older graduates on the same salary. They lengthened the repayment period from 30 to 40 years, so today’s students will still be paying back their loans in 2066.
Does the Minister agree that the crisis in funding must be addressed, and have the Government considered how to support universities without raising fees? Will the Minister look at the benefits of international students and give universities stability in this area of policy? Finally, will the Minister look at how universities spend their allocation of £10,000 per student, so that students get value for money and a good university education experience, and the money is spent as efficiently as possible?
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, first, I welcome the positive response to yesterday’s Statement and announcements. I think we all understand that this country is blessed with a world-class university sector whose teaching, research, contribution to the staffing of our public services, international reputation, earning and impact are significant and something we want to defend and ensure continues into the future.
Sadly, on coming into government we feared that the crisis in the funding of higher education put all these things at risk. That was the reason for taking the action we announced yesterday: to increase tuition fees by 3.1% and to reflect the challenge that students have faced, particularly from the cost of living, by increasing maintenance loans as well. We were also very clear that alongside that increase in investment that students will make in our higher education sector, we also expect to see considerable reform, which I will come on to in a moment.
Let me respond to the points raised by the noble Baroness, Lady Barran. First, on repayments, she is right that the way in which both tuition and maintenance loans are repaid means that no student will pay more per month. Of course, no student pays anything, up to £25,000-worth of annual income. The total amount a student pays depends on whether they repay within the 40-year time limit for the loan. Any student who currently would not repay within the 40 years—because they were on a low income or had gaps in work—will not pay any more with the increase in tuition fees. It is of course right that anybody who would have repaid during that time period will now have a larger debt to repay; but to reiterate, that is no cost upfront and no higher repayment per month after graduation.
On the impact of both the national insurance contributions and the changes to foundation degrees, we will publish an impact assessment alongside the statutory instrument that will bring about the increase in the fees, and we will spell out the analysis at that point. Regarding students who have already started, the intention is that the tuition fee increase will apply to new and existing students, but that could depend on the contract and arrangements made between the university and the individual student. We will make further announcements on the changes to postgraduate support and the disabled students’ allowance in due course.
The noble Baroness also raised the issue of the gap in respect of disadvantaged students. I think she conceded, as my right honourable friend stated yesterday, that this year the gap between those who are more advantaged and those who are more disadvantaged has widened. Although there are more students, both advantaged and disadvantaged, going to university now, it is not good enough to rest there: not only have we been incapable of closing that gap, but it has widened in the last year. That is why, as the first of the elements of the reform programme, we will undertake serious work with the sector, with those who support students in applying to higher education and with schools, and think about what more we can do to support anybody who could benefit from and wants to take part in higher education, so that they can access it.
We are determined to close—
Baroness Barran (Con)
Before the Minister moves on, first, I would be grateful if she could confirm that since 2013-14, the percentage of disadvantaged children going to university has grown faster than the percentage of those from advantaged homes. Secondly, while the free school meals measure has shown an increase in the gap, if we take the POLAR4 quintiles—I am sorry to be, as the noble Baroness, Lady Sherlock, would say, a wonk about this—the gap has decreased. Does the Minister agree with her department’s data on that?
Baroness Smith of Malvern (Lab)
I am sure that my department’s data on that is correct, but I stick with the point made yesterday, which is also correct: if we take the free school meals measure in the most recent year, in contrast to what happened previously, we have seen the gap widen. My broader point was that, frankly, it does not matter which measure you take, we have not seen a sufficient closing of that gap. It is still wrong that students from disadvantaged backgrounds who could benefit from higher education are not getting that benefit. That is why we will take action, alongside the sector and others, to make sure that we can improve both access to higher education and the measures of continuation and progression out of higher education. In those figures, we have seen a differential between those who are disadvantaged who come into higher education and those who are advantaged. Not only is it more difficult to get in but it is more difficult to continue in their courses and to succeed. That is where we need to take action to improve the situation.
On efficiency, we are absolutely clear that providing additional funding for higher education brings with it a responsibility for the sector to spend that money as efficiently as possible—to provide the quality of experience that students have the right to expect, and in a transparent way—and we can use appropriate metrics to measure that. We will want to do that work alongside the sector itself, but we are clear that we need to see improvements in efficiency in exchange for the increase in investment, and that that is non-negotiable.
On the maintenance loan, the important point is that the maximum loan for any student will be going up by 3.1%.
On the other areas of reform, access is very important, but we have also made it clear that universities need to play a crucial role in the Government’s growth mission. We need to see them working alongside Skills England. We need to work with them to see what more they can do to contribute to growth in the economy. They already play a crucial civic role; we want to see that strengthened so that all those who argue for universities in their areas—quite rightly, because they understand the social, cultural and economic benefit—will see that maximised. We recognise the quality of what is provided in English higher education, but we want to ensure that where there are pockets of bad quality that is tackled, and that everywhere there is an emphasis on improving the quality of teaching provided for our students.
On the alternative financing mechanism, we will make progress on that, building on the work of the previous Government and the noble Baroness in particular—she knows that we are reconstituting the working group on that because she will be invited to be a member of it, so she will share in the responsibility for the progress that I hope that we are going to make.
The noble Lord, Lord Storey, asked whether other methods of funding universities had been considered. We have given considerable thought to the options for how we can help to bring some stability to the financial position in HE and to support students. Given the current financial situation and the constraints on spending, this was the most appropriate way to provide some additional income and certainty for HE. As a matter of principle, it is right that students who benefit from higher education—it is still the case that a degree or a qualification through a university will give you on average higher lifetime earnings—make a contribution to that through repaying their loans, alongside the contribution made by the taxpayer and the Government more broadly, particularly for those students who do not end up paying off all their loans, and the strategic priorities grant and other forms of support for higher education.
I agree with the noble Lord and hope that he has seen a very different tone towards international students from this Government than was the case previously—universities tell me that they have seen that. We will continue to welcome international students, not only because of the finance that they bring but because of the benefits to students and our role in the world that come from that. I think I have already covered the point about value for money, which we are absolutely committed to ensuring.
Baroness Morris of Yardley (Lab)
My Lords, it is difficult to be pleased that fees will have to be raised, but I acknowledge the parlous state that HE finds itself in, and I welcome that the Government have taken as much early action as they can to try to make the situation better.
I will put just two points to the Minister. First, can she clarify what I think I just heard in response to a previous question, that for students who are already at university—that is, not becoming first-year students from the start of the next academic year—whether they are charged the increased fees may vary from university to university depending on the contract? If I heard that correctly, when might that be announced, so that we have certainty as to what will happen for the majority of students in September?
Secondly, I very much welcome what the Minister said about looking to do more to widen participation. In the work that she and the department carry out on that, will she have a look at the statistics for students from less advantaged backgrounds who are already at university to see what the dropout rate is? I know that it has been higher than for other groups. One challenge is getting those young people to university, but if they then drop out, we have not achieved a great deal. I would be grateful if she could confirm that that could be part of the considerations.
Baroness Smith of Malvern (Lab)
I thank my noble friend and wholly agree with her. It has been a difficult decision to ask students to pay more to safeguard the future of higher education, but I think it was the right decision. On the point about students who are already there, yes, it is the case that the increase in tuition fees will cover students who are already studying. In some ways it is not for the Government to clarify the position. Higher education institutions are autonomous and will need to be clear with their students about the impact on them of the increase in fees. I will correct myself if I am wrong but for most, the assumption would be that the increase in tuition fees will go ahead in the way we have described. My noble friend is right that there is a big differential in those who drop out of university, with more disadvantaged students being more likely to drop out, less likely to continue and less likely to have good outcomes at the end of their time at university. As well as widening access, that is another area where we want to make progress with the sector.
Baroness Fraser of Craigmaddie (Con)
My Lords, I declare an interest as the mother of a third-year undergraduate student at a Scottish university. I support the Government’s determination to break down barriers to opportunity and agree that higher education is central to this. I also welcome the promise of a wider review and hope that despite education being a devolved issue, this Government will carefully consider what influence they can bring to bear to address the now even greater funding gap between universities in Scotland and those in England.
The Minister will be aware of the shameful record of the Scottish Government in promising free tuition but not giving universities the funding to deliver it. But I am also concerned that a consequence of this will be that the brightest and best Scottish students are not able to take advantage of the wider opportunities that are offered within higher education across the whole of the UK. In 2023, Scotland had the lowest Cambridge acceptance rate of any UK region, at just 14.1%. Only 45 students were admitted to the university from the entirety of Scotland, compared with 844 from Greater London. Will the Minister do all that she can to ensure that talented Scottish students are not forgotten?
Baroness Smith of Malvern (Lab)
The noble Baroness makes an important point about honest policy-making. While sometimes it is politically easy to make extravagant promises, what is important is that you are actually able to deliver them for the good of both students and universities. She makes a strong point there.
The work that we will do alongside universities—and to be fair, this will include universities in Scotland—to broaden access and ensure that students have a successful experience when they get into university will also benefit Scottish students, whether they are studying in Scotland and or at English universities. I very much share the noble Baroness’s objective of ensuring that students can get the very best possibility of the very best university option for them. That is something that I think all of us want to see from the system.
Baroness Hodge of Barking (Lab)
My Lords, I refer noble Lords to my interests in the register. I welcome the Statement. It is high time the Government recognised the financial challenges that face the higher education sector, which were, I am afraid, ignored and swept under the carpet by the previous Government. However, responding to these challenges by raising fees risks making it even more difficult for young people who are eligible for free school meals. They are the ones who we are most interested in seeing go to university, but they are simply petrified by the debt they will incur. I know, as a Member of Parliament before the general election, that I had really talented young people in my constituency who were getting three As at A-level but turning down university places because of the fear of debt. This will add to that.
Can the Minister assure me that when she undertakes the review that is being proposed by her department, she will focus on ensuring that both the Government and the sector prioritise widening participation and bringing more people who have received free school meals into higher education, and that this becomes something that is measured by the Government and the universities?
Baroness Smith of Malvern (Lab)
I understand my noble friend’s point about young people, particularly those from less well-off backgrounds, being worried about their student debt. We all, therefore, have a responsibility to continue pointing out that this is a very different type of debt to a credit card or another form of loan. There is no upfront payment for their university education, and their repayment is dependent on their level of income; and if that is not paid off at the end of the period of the loan, it will be written off completely; that is a very different category of debt. I understand her point, which is why I can give her the commitment that we will prioritise, as part of the reform programme we will work on, how we improve participation, how we close that gap, so that disadvantaged students can achieve the ability to go to university when that is something that they want to do and they have the ability, and we will ensure that their experience when at university makes them more likely to continue and be successful.
Lord Lucas (Con)
My Lords, I too welcome the Statement and look forward to the ideas that are coming forward over the next few months. The Secretary of State said:
“I heard too often from students of the gap between the course they were promised and the experience they had”.
In that context, will the Government encourage universities to give much better information to students about what courses lead to and what jobs and careers their students go on to from each course? At the moment, it is extremely thin, and it is very hard for a student, who will after all invest a large amount of money, to see whether a particular course actually does lead on to the career that they hope to follow.
Secondly, the Secretary of State said she had heard from international students that they felt “neither valued nor welcomed”. Will the Government, therefore, put their weight behind the British Council’s excellent Alumni UK initiative, which would give international students a real and lifelong sense of belonging to the UK, with real, lifelong practical benefits and connections? It would considerably benefit this country, but it seems to me that universities are being very slow to sign up at the moment.
Lastly, in deciding to increase fees, did the universities provide evidence of why it costs them 50% more than a sixth form college to educate a student when universities provide less contact time and less pastoral care by a considerable margin? If they provided that information, will the Government share it with the House?
Baroness Smith of Malvern (Lab)
The noble Lord is right in his demand and his expectation that universities need to improve the information that they provide for students about the course and about potential progression. That is an important area that we will want to work with the sector on improving.
On international students, I would strongly support anything that enables international students to maintain their contact with the university and with the country. One of the big benefits of our ability to attract international students is precisely that, for example, nearly 60 world leaders are former students at UK universities. That is an enormous amount of soft power, as well as very strong relationships that have been built up, and I would support any initiative that ensures that continues.
On the noble Lord’s final point, one of the first things that we did in government was to ask the Office for Students to focus more clearly on identifying the financial situation of universities. I cannot say that, at this point, we have the metrics around the value for money that the noble Lord is asking for, but that is one of the areas where, in terms of the efficiency work, we need to have much better transparency within the sector about how money is being spent, how it is being allocated, for example, between research and teaching and how that then results in student experience. That will be one of the things we expect to see.
The Earl of Effingham (Con)
My Lords, the Statement said:
“We have paused the commencement of the last Government’s freedom of speech legislation”.
It also said that
“universities must be home to robust discussion and rigorous challenge”.
How will the Minister guarantee appropriate freedom of speech, robust discussion and rigorous challenge in those universities?
Baroness Smith of Malvern (Lab)
Yesterday’s Statement was less about freedom of speech than about the funding of universities but, to reiterate the point I made when we covered this issue previously, I and the Government are absolutely committed to ensuring freedom of speech and academic freedom within our universities. That is why we continue to consider the way forward, to ensure that this can happen without some of the disproportionate burdens and impact on minority groups that the Act in its totality would have brought to our higher education sector. I will return to the House with a way forward on that in the near future.
Baroness Pinnock (LD)
My Lords, I have an interest as a vice-chair of the University of Huddersfield, which takes on a considerable number of young people from poorer backgrounds. The finances of the university sector as a whole are in a fairly parlous state—I have to make it clear that the University of Huddersfield’s are not. The Minister has said that the increase in tuition fees is a stopgap to stave off the worst consequences of the very serious financial pressures that some universities are facing. I would like to hear from her whether this relatively small amount of additional funding for universities will indeed stave off quite drastic actions being discussed in the sector, such as mergers between some universities. Can she give us assurance that the additional funding will achieve that? If not, what actions is her department intending to take?
Baroness Smith of Malvern (Lab)
I have it on good authority that the University of Huddersfield has a very good reputation for its work to provide access and opportunity for students, and it should be congratulated on that. The noble Baroness is right, however, that the financial situation for all universities is serious. The Office for Students identified that, this year, 40% of universities would be in deficit. That has already had an impact on courses and on staff being made redundant. The decision that the Government made yesterday about this year’s inflationary increase in tuition fees is a measure to stabilise the system at this point in time. While we have not made decisions about the future, we are committed to the reform package that I have outlined. Alongside that, we will think further about what we need to do to maintain the world-class higher education system that we are so proud of in this country and to ensure that institutions can continue to do excellent work. That might not necessarily mean that they continue to do that completely unchanged as institutions; there are some challenges that should be recognised about the business model and the organisation of higher education, and we will want to consider that.