Grand Committee
Criminal Finances Act 2017 and Economic Crime and Corporate Transparency Act 2023 (Consequential Amendments) Regulations 2024
(2 days, 8 hours ago)
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Lord Hanson of Flint
That the Grand Committee do consider the Criminal Finances Act 2017 and Economic Crime and Corporate Transparency Act 2023 (Consequential Amendments) Regulations 2024.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
It is a pleasure to be here today, with the interest in the instrument before us, and I am pleased to see members of the Front Benches here with us this afternoon.
I shall give a little background to the regulations, if possible. The Economic Crime and Corporate Transparency Act 2023 contained a wide range of measures of reforms to reduce economic crime and increase transparency over corporate entities conducting business in the United Kingdom. That included a range of measures enabling targeted information-sharing, tackling money laundering and removing reporting burdens on businesses. Additionally, the Act introduced new intelligence-gathering powers for law enforcement and reform of outdated criminal corporate liability laws. It also introduced reforms to unexplained wealth orders, corporate liability laws and targeted information-sharing, which are already in force.
More recently, guidance for the new offence of failure to prevent fraud was published last week, and I was pleased to support that on 6 November. The offence itself comes into effect in September 2025, helping to support fraud prevention measures before this offence comes into force. The Act also introduced the new regime to tackle criminal and terrorist crypto assets; this is relevant to the debate today. The use of crypto assets in illegal activity is sadly increasing and, when introducing and reviewing legislation, we want to consider the emerging technologies and how they can be harnessed by criminals to commit crime or indeed hide their illegal gains.
The previous Government introduced a bespoke regime to the Proceeds of Crime Act 2002, which allowed effective seizure of both criminal and terrorist crypto assets. This regime was introduced in the Economic Crime and Corporate Transparency Act 2023 to make it easier to confiscate crypto assets from criminals and to forfeit crypto assets obtained from, or indeed to be used in, crime or terrorism. On 26 April, the crypto assets measure that this debate relates to came into force. The powers are operational in England and Wales and, as of the end of October, over 80 cases have exercised the new powers, including crypto asset seizures or confiscation cases involving crypto assets.
I want briefly to outline the purpose of this instrument, however. The regulations here will make a set of amendments that are consequential on the Criminal Finances Act 2017 and on the Economic Crime and Corporate Transparency Act 2023. The regulations make consequential amendments to the Proceeds of Crime Act 2002 and will ensure that the investigative powers of that Act include, for example, reference to crypto asset investigations in all the necessary sections for the powers to function properly and in accordance with their policy intention.
This draft instrument is required to complete that commencement of the Economic Crime and Corporate Transparency Act 2023, and will ensure that all the necessary legislation is now in place and there is legal certainty about how cases will be dealt with. I hope that noble Lords will see that this is an important aspect in the fight against crime, and particularly in the use of crypto assets. I commend the statutory instrument to the Committee.
Lord Sharkey (LD)
We support this statutory instrument but have a few observations and questions. It is clear that more needs to be done to combat fraud, now our most frequent crime. Fraud accounts for around 40% of all crimes in England and Wales, with an estimated 3.2 million offences per year, and was said by the previous Government in February to cost society about £6.8 billion a year. There are, in fact, much larger estimates. The Annual Fraud Indicator estimated that UK annual losses to fraud could be £219 billion in total, with £8.3 billion coming from individuals.
It is also clear that our current armoury needs extending. Both POCA and the Economic Crime and Corporate Transparency Act are either defective or inadequate, or both. It is not surprising that POCA 2002 requires updating—22 years is an aeon when it comes to the more exotic and newer means of being scammed. However, it is rather surprising that the Economic Crime and Corporate Transparency Act 2023, which received Royal Assent on 26 October last year, did not incorporate some of the variations introduced by this SI. The Act did, after all, deal with the seizure of assets, including crypto assets, in its Schedule 8. The Explanatory Memorandum, at paragraph 5.1, says that,
“a huge rise in the use of digital technologies in crypto assets has provided new methods to conduct crime and deposit gains from criminality”.
Paragraph 5.3 says that,
“consequential amendments are required … so that search and seizure are exercisable and effective for the purpose of crypto asset investigations”.
Could the Minister expand on all this? Where were the provisions of the ECCT Act inadequate? What events or information triggered the realisation that the amendment was needed? The fact that the amendments were needed raises the question of what else was wrong or missing from POCA or the ECCT Act. What reassurance can the Minister give us that all the defects in these Acts are remedied by this SI? Do further aspects of either Act need at least an attempt at future-proofing?
I would be grateful for an explanation from the Minister of some of the detailed provisions in the SI. The term “substantial value” is used as a qualifier four times in Regulation 2(4); it is obviously an important qualification. What is the test for
“is likely to be of substantial value”,
and is it the same test—or tests—in all four appearances of the phrase in this instrument? Who decides what the threshold is in each case?
I have a couple more questions about interpretation. Regulation 2(4)(b) inserts new subsection (7G)(a), which refers to
“any other question as to its derivation”.
Does “derivation” here mean provenance, or has it some alternative meaning? The same question applies to the use of “derivation” in Regulation 2(6). Is not the phrase “any other question” in itself extremely wide in scope? What questions, if any, are excluded by this phrasing?
I was pleased to see the attempt at an impact assessment incorporated in the EM. I wondered, however, what weight to give to the assessment of benefits. The range offered is very large, even if the lower bound quoted in the EM, of £107.60, is a misprint of £107.6 million. The difficulty in assessing the usefulness and reliability of these estimates is exacerbated by the qualifying sentences in paragraph 9.2 of the EM, which say:
“The data and assumptions surrounding cryptoassets are limited due to the technology being relatively new and rapidly changing. It is also sensitive, and many figures and police data are not suitable for the public domain”.
This seems rather opaque. Can the Minister say whether enforcement authorities are significantly disadvantaged when it comes to dealing with likely crypto asset issues? Can he be a little less mysterious about that final sentence in paragraph 9.2 of the EM—in particular, is it reasonable to rely on unspecified and apparently secret data whose reliability we cannot estimate or properly qualify? After saying all that, I should repeat that we support this SI.
Lord Murray of Blidworth (Con)
My Lords, I apologise to the Committee for not attending promptly. I am glad to say that I welcome these regulations and I very much hope that they will allow the police to act decisively against criminals who abuse our corporate frameworks, ensuring that Britain remains an inhospitable environment for illicit financial activity.
The regulations extend two previous pieces of legislation designed to cover crypto asset investigations. Under the regulations, search and seizure powers will be able to be exercised for the purposes of investigating crypto assets. This is an entirely necessary move, born of the fact that many criminals use new and innovative ways to avoid detection in their illegal activities.
The National Crime Agency’s national asset centre estimates that illicit crypto transactions linked to the United Kingdom are likely to have reached at least £1.2 billion in 2021 and are surely even higher now. Recent figures from the law firm RPC and Action Fraud show that losses from crypto asset fraud increased 41% last year. Can the Minister provide the latest figures on the cost to the UK economy of crypto asset fraud and the number of illicit transactions estimated to be taking place?
Lord Hanson of Flint (Lab)
I am grateful for noble Lords’ contributions. I welcome the noble Lord, Lord Murray, to his new position. I wish him well—as well as I can do in government. I hope that he enjoys his position. He used to hold my position in government; he will know how challenging, diverse and enjoyable it is.
The noble Lord, Lord Sharkey, asked about the discussions in relation to the crypto asset legislation and why this instrument is being brought forward. The asset legislation is extensive. It branches into three detailed schedules on the new regime, covering criminal, civil and investigatory powers. I hold my hands up: at the time of drafting, some small omissions were made; for example, references to what a crypto asset investigation is are not included. That predates me, but these things happen. Legislation is for discussion. The noble Lords, Lord Murray and Lord Sharpe, were in office at the time, but it is not for me to throw rocks in this case. I simply say that we must tighten the regulations as best as we can.
The omissions were a drafting oversight, the reason for which is the complex, technical nature of legislation—in particular, the crypto asset provision. As the noble Lord, Lord Murray, will know, the legislation came into force on 26 April 2024. This instrument was scheduled to be debated prior to the general election but it fell with the election. It ha, therefore fallen to new Ministers to take the omission forward; that is what we have accordingly done.
The noble Lord, Lord Sharkey, asked about fraud generally. I accept fully the points that he made. He recognises, I hope, that I am now the first specific Fraud Minister. I have been tasked by the Prime Minister and the Home Secretary to look at fraud in particular. The Minister in the Commons, my honourable friend Dan Jarvis, is looking at economic crime. We have established a mechanism to review the fraud strategy put in place by the previous Government, which was published in May 2023. It had a number of strands of activity in it. Roughly 27 or 28 of those strands have now been completed, and another 17 or so are in the process of being completed.
I have committed to see through the previous Government’s fraud strategy. We are now refreshing it to look at a number of key areas, including data sharing, international co-operation and the technical abilities of both telecommunications companies and tech companies. We will revise the fraud strategy at some point during the first half of this Parliament to ensure that we address some of the issues and take it forward still further.
The noble Lord, Lord Sharkey, mentioned “substantial value”. Again, if he will let me, I will reflect with officials on how we can interpret that, but it is important to note the asset seizures that have taken place this year; this also goes back to the point that the noble Lord, Lord Murray, mentioned. Between April and October, 23 crypto asset seizures, with a value of £2.5 million, and 64 confiscation cases, involving identification of crypto assets totalling £6 million, have taken place. I regard those as substantial value in the terms of the instrument. I am pleased to have the noble Lord’s support for this instrument. If he will let me reflect with officials on whether we can define that further then I will certainly write to him, but I hope that will not be a bar to passing the instrument.
The noble Lord raised a number of other important but technical points on some of the issues in the economic statement. Again, if he will let me reflect on those I will make sure that he gets a full answer, but I hope they will not prevent him supporting this instrument.
I am grateful for the support for the instrument from the noble Lord, Lord Murray. I have tried to answer the points he raised relating to the seizures that have taken place. It is not for me to determine the number of prison sentences that might accrue as a result of that and of the changes we are making, but he needs to know, as I am sure he understands, that the Government, in passing this instrument and taking the action that we are on fraud, want to send a very strong signal to those who trade in or hold their criminal assets in crypto assets that we will come looking for them. If he wishes to know the impact of that, I can tell him that, under his Government between 2018 and 2024, £1.6 billion was recovered from criminals using asset recovery powers under POCA, and £140.7 million was paid in victim compensation from confiscation orders. With this statutory instrument, we want to ensure that we do not have that narrow misidentification that allows a problem to exist when we can take action under legislation that had mutual support from all parties in this House and in the Commons in the previous Parliament.
I hope that, with those points, I can assure both Front Benches that this is an important instrument that tightens a loophole and redresses the powers that were missing in the previous legislation. It is done for a purpose, which is to ensure that those who use and benefit from crypto assets have the ability to have those crypto assets identified and, if necessary, taken as assets.
Immigration and Nationality (Fees) (Amendment) Order 2024
(2 days, 8 hours ago)
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Lord Hanson of Flint
That the Grand Committee do consider the Immigration and Nationality (Fees) (Amendment) Order 2024.
Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, this order has been laid to introduce a power to charge a fee for UK visa qualification equivalency and English language proficiency assessment services, and to set the maximum fee that can be charged. For noble Lords’ benefit, I will provide some background to the fee structure we currently have in place. For the Home Office to charge for immigration and nationality functions, the Immigration Act 2014 requires that fees must be set in secondary legislation. The Immigration and Nationality (Fees) Order 2016, an amendment to which we are discussing, sets out the functions for which a fee can be charged and sets the maximum fee that can be charged. Fee levels are subsequently set in separate secondary legislation—the Immigration and Nationality (Fees) Regulations 2018—which is subject to parliamentary agreement through the negative procedure.
The fees for the services we are seeking to regulate are for assessments used on certain visa and nationality routes, including family, skilled worker, settlement, and student routes, where that route requires an applicant to demonstrate proficiency in the English language at a specified level or that they have gained a qualification that is equivalent to one obtained in the UK. There are a number of ways in which the English language proficiency test can be taken, using an academic qualification obtained in English and awarded by an educational establishment outside the United Kingdom.
Where an applicant is seeking to demonstrate that they have gained a qualification equivalent to one obtained in the UK, or their proficiency in the English language by using an academic qualification obtained outside the UK, these must be provided by Ecctis Ltd. Ecctis Ltd provides these services through a concession contract with the Home Office and has done so for over a decade.
It is important to be clear at this point that we are not introducing a new cost for applicants seeking to enter or remain in the UK: the requirement for applicants to use these services has existed for a number of years. Where a visa or nationality applicant uses the services provided by Ecctis, they apply through the website and pay an appropriate fee. The outcome of the assessment can take in the region of 10 working days for the English language assessment and around 30 working days for a qualification equivalency assessment. The maximum fee in this order for the qualification and English language proficiency assessment is set at £400. This will allow the Home Office to set fee levels later this year at the current levels, which are £140 for English language and £210 for the qualification equivalency assessment. By setting the maximum above this level, we have a reasonable degree of headroom to adjust fees if, for example, there is an increase in the cost of providing these services.
The Home Office is bringing this order forward today and legislation to regulate these fees now where they have already been charged and where the nature of the service itself, or the requirement in the Immigration Rules, have changed. This is due, again, to the department identifying, in the course of preparing for a reprocurement of the existing service earlier this year, that these fees should already have been regulated, due to the requirement to use the service in respect of applications on certain routes. Having identified this oversight, action was taken immediately to legislate at this earliest opportunity to ensure that the fees have an appropriate statutory footing, although this process was delayed, as indeed was the instrument we dealt with earlier, because of the general election in mid-2024.
Noble Lords will be aware that the Secondary Legislation Scrutiny Committee drew special attention to the Explanatory Memorandum that was published alongside this order, and produced a report on 10 October raising concerns that the Explanatory Memorandum did not provide a clear and open statement about why this instrument was brought forward. I fully appreciate the need for transparency. I recognise the committee’s view that further explanation of the context of this legislation was required, and my colleague the Minister for Migration and Citizenship sent a letter to the committee chair, the noble Lord, Lord Hunt of Wirral, on 15 October explaining in more detail why the order was brought forward now and the exploration of the possibility of pursuing retrospective legislation that would put fees paid to date on a statutory footing.
I am not yet able to confirm the specific approach to be taken on how we regulate those fees downstream and, given the uncertainty, it is not appropriate or helpful to go into further detail now. However, I emphasise that this department takes its responsibilities on parliamentary transparency seriously. I assure noble Lords that we are taking forward considerations in respect of previously charged fees as a priority and the intention of this order, subject to the approval of this House, is to lay an amendment to the Immigration and Nationality (Fees) Regulations in early December to set the fee levels that we have considered in the order today. I hope noble Lords will accept that we are trying to rectify an oversight that has crossed over from before the general election. We are regulating to close that loophole and I beg to move.
Baroness Brinton (LD)
My Lords, I cannot sit at the right desk, so I apologise for being in the wrong place.
I thank the Minister for explaining the reason for the order, although I think his description of “an oversight” for fees that have actually been charged illegally, because they were not approved by Parliament, is a bit of an understatement. I am also concerned that we still have no opportunity to see a new Explanatory Memorandum that sets out the record, but I will come back to that. I particularly thank the Secondary Legislation Scrutiny Committee for its careful and thoughtful third report of Session 2024-25.
However, before I come on to that, I want to note that this is the second Home Office SI on immigration matters that has come to Grand Committee since the Summer Recess which has not just been problematic. The other one—the Illegal Migration Act 2023 (Amendment) Regulations 2024—corrected policy matters in the Act that meant it could not be enacted because they were wrong, so it was also illegal. Therefore the amendments that the Grand Committee saw—I was going to say last month but it might have been a little before that—were to remove retrospective elements of the Illegal Migration Act that were themselves illegal.
Lord Murray of Blidworth (Con)
My Lords, I welcome this amendment order, which proposes to adjust the fees in relation to certain immigration and nationality services, and in particular the English language qualification process. It is one of the features of the complexities of the system that these kinds of situations arise, and I am not going to be critical of the Home Office for laying an amendment order in these circumstances. It is obviously right that the Secondary Legislation Scrutiny Committee has picked up on a perception that Explanatory Notes did not set out in enough detail the purpose of the instrument. Perhaps the Minister could let us know whether it is proposed to provide revised Explanatory Notes and, if so, when. Perhaps he could also reassure the Committee on the quality of Explanatory Notes, which I know officials in the Home Office strive hard to ensure are accurate and detailed. I am sure that the Minister will take back to the department the message that crystal clarity is required in Explanatory Notes.
Of course, the fees structure is essential in maintaining a secure system of immigration control, and indeed provides an element of being self-funding. That, of course, itself achieves the kind of immigration system that we wish to see and strengthens British immigration policy. Therefore, I welcome the order and would be grateful for an answer in relation to Explanatory Notes.
Lord Hanson of Flint (Lab)
I am grateful to both opposition Front Benches for their comments. I find myself in the genuinely strange position of moving an order to rectify something that happened when we were nowhere near the legislation that is being rectified. I hope that both opposition Front Benches will recognise the fact that my honourable friend Seema Malhotra bringing forward this order in the Commons and me doing so in in the Lords are attempting to rectify an issue that was spotted prior to the general election, which would have been brought forward had the general election not been held in July.
I genuinely cannot say with any certainty why the fees for the services were not regulated when they were first set out. The rules relate to the historic nature of the issue and potential changes in a complex interaction of regulations at the time. I do not know why that happened but I am grateful that previous Ministers, with the advice of civil servants who have reviewed this as part of the procurement exercise that commenced earlier this year, have noticed a gap and therefore have asked Ministers to sign off the measures that will close that gap. Minister Malhotra, who is the lead Minister for this area in the Commons, and myself as the responsible Minister here in this House, have both agreed to take this order through accordingly.
I say to the noble Baroness, Lady Brinton, that there are no issues on the quality of the education and training provided under the orders. I am not aware of a slew of complaints about the fee levels in the past. This is simply an order to rectify what was seen to be an illegality. The Committee should welcome that and understand that that is why this order is being brought forward.
The regulations are being laid at the earliest opportunity to begin the process of rectifying the issue that has been identified. I want to assure this Committee that structures and processes are in place to ensure that the fees for new visa routes and requirements are captured in the immigration and nationality fees regulations when associated changes are made to the Immigration Rules. As has been mentioned, we are hoping to bring forward at an early opportunity, we hope before Christmas, the revised fee structure to rectify where we are currently. That will, I hope, set those fees on a proper legal footing and rectify the challenges that we have had to date.
Again, the noble Baroness, Lady Brinton, mentioned the sharing of information between Administrations. I find that hard. I was in Parliament in 2008. I was in the Ministry of Justice then, not the Home Office, but to be honest with her, I cannot really answer on what happened in 2008 in the Home Office with this order and its background at that time. I can simply say to her again that it is unusual for previous Administrations’ paperwork to be passed to a subsequent Administration. It did not happen in 2010 and it is not happening now. I can ask questions of officials and get good responses about issues but there is not an automatic assumption of access to previous papers. That might be something to be considered but that is a far greater sandwich display than we have before us today, if I may put it that way.
I note and take the noble Baroness’s point. However, we have to reflect on the fact that this measure is brought forward as a joint enterprise between two Administrations handing over a baton to rectify a particular problem identified previously, which this Administration are now taking forward.
Both noble Lords asked about the Explanatory Memorandum. Again, it is important to recognise that it was not the best Explanatory Memorandum in place. It is what it is now. The noble Baroness, Lady Brinton, asked about a review. For the Home Office, and for other departments, given the view of statutory instruments and the importance of SIs to both Houses of Parliament, the new Government have asked for a Minister to be appointed in each department with oversight of the statutory instrument process. I am that Minister now in the Home Office, and I have to look at, clear and be held to account for the SIs that come through any part of the Home Office department. They will have to be cleared and signed by myself. That does not guarantee—because we are all human—that something that I see and clear is going to be perfect. But I hope it gives oversight to that process, which we have not had before. The Leader of the House of Commons, Lucy Powell MP, has been clear that both Houses of Parliament need to up their game on the Explanatory Memoranda, the oversight and the accountability of SIs to both Houses. Four months into the job, I ask the noble Baroness, Lady Brinton, to give me space but to hold me to account in due course, as I know she will, on the performance on SIs particularly.
If there are further points that I have missed, I will reflect on them with colleagues and respond in writing, certainly to the noble Baroness, Lady Brinton. I hope that we can agree this order today and rectify the gap that has been identified. I look forward to bringing forward future SIs to continue that process in relation to the meat of this order.
Radio Equipment (Amendment) (Northern Ireland) Regulations 2024
(2 days, 8 hours ago)
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Radio Equipment (Amendment) (Northern Ireland) Regulations 2024.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I begin by setting out the background to this instrument. The radio equipment directive—directive 2014/53/EU—establishes a framework of regulatory requirements for specific categories of electrical and electronic equipment that are placed on the EU market or put into service in the EU. When we were in the EU, the UK’s Radio Equipment Regulations 2017 implemented the radio equipment directive in domestic law on a UK-wide basis.
In November 2022, the EU formally adopted the common charger directive, which amended the radio equipment directive. The common charger directive requires, among other things, a common charging solution—based on USB-C—for smartphones and certain other portable electronic devices that use wired charging from December 2024, and for laptops from April 2026. To provide for its continued unique dual access to the UK internal market and the EU single market, certain EU legislation continues to apply in Northern Ireland—including the radio equipment directive, under the terms of the Windsor Framework. This instrument will therefore amend the UK’s Radio Equipment Regulations 2017, in order to implement these latest changes in Northern Ireland and enable them to be legally enforced.
Before I move on to the specific detail of the instrument, I want to explain at the outset that this instrument is expected to have a limited impact in practice. The reason for this is that many manufacturers have already moved to USB-C to continue to supply the EU market. As a result, USB-C has, in effect, already become the industry default in Europe. The industry tells us that it is also using USB-C for devices supplied for the whole of the UK in order to avoid supply chain complexity. Devices that comply with common charger requirements will also be able to be legally placed on the GB market. So we consider it highly likely that the same devices with USB-C charger ports will be available across the whole of the UK.
I also want to explain that the common charger measures aim to reduce environmental waste, increase consumer convenience and save money for consumers, as they will not need to buy separate chargers for each device. We consider that it would potentially help businesses, as well as deliver consumer and environmental benefits, if we were to introduce similar standardised requirements across the UK. We have, therefore, launched a call for evidence at the same time as laying this instrument before the Committee. The implementation of common charger measures in Northern Ireland also ensures our compliance with international law, which facilitates Northern Ireland’s continued unique dual access to both the UK internal market and the EU single market.
Having set out the context, I will now move on to the detail of the instrument. This instrument introduces new regulatory requirements for specific categories of electrical and electronic equipment that use wired charging and are placed on the Northern Ireland market. It amends the Radio Equipment Regulations 2017 to provide for the following: simplified charging whereby USB-C will be the common charging port, meaning that one charger will work for multiple devices and bringing cost savings and environmental benefits; standardised fast charging technology, meaning that charging speed is the same when using any compatible charger for a device; unbundling the sale of a charger, meaning that consumers will have the option to purchase new devices without a charger, thereby reducing electronic waste and costs; and additional visual and written information about charging characteristics, the power the device requires and whether it supports fast charging, thereby improving the information available to consumers. This will help consumers understand whether their existing chargers meet new devices’ requirements and help consumers select compatible chargers. The common charger measures will apply to certain categories of handheld devices, including smartphones that use wired charging, from 28 December 2024, and to laptops from 28 April 2026.
I turn to offences and enforcement. Offences will be amended to cover the common charger requirements already mentioned, including to ensure that consumers are offered the choice of purchasing specific categories of electrical and electronic equipment without a charging device if they wish; and that the equipment is accompanied by visual information showing whether a charging device is included. However, I assure noble Lords that enforcement authorities will continue to take a proportionate approach to compliance and enforcement activities in accordance with the Regulators’ Code. In almost all cases, we expect that, by working with and supporting businesses, compliance will be achieved without recourse to the use of criminal penalties. The Northern Ireland Department of Justice has confirmed that it considers that the offences provided for by this instrument are consistent and proportionate, and will have no negative effect on the criminal justice system in Northern Ireland.
We are taking action to help industry with these new requirements. My officials in the Office for Product Safety and Standards will provide industry guidance to ensure that businesses have the information they need on how to comply with the new requirements. My officials are also liaising with the Northern Ireland district councils, which are responsible for enforcing the Radio Equipment Regulations in Northern Ireland, ensuring that they have all the necessary information they require in order to do so.
With USB-C charging becoming the industry default, in effect, it is the Government’s view that, by providing regulatory certainty, it would potentially help UK businesses and deliver consumer and environmental benefits if we were to introduce similar requirements across the whole of the UK. We therefore launched a call for evidence at the same time as laying this instrument in the House.
We expect this instrument to bring consumer and environmental benefits in Northern Ireland. It also ensures our compliance with international law, which facilitates Northern Ireland’s continued dual access to the UK internal market and the EU single market. I am pleased to commend these draft regulations to the Committee. I beg to move.
Lord Sandhurst (Con)
My Lords, I thank the Minister for her helpful explanation. This is an important legislative instrument to regulate electronic devices in Northern Ireland. It implements the common charger directive, which in turn amends the existing radio equipment directive 2014/53/EU. The purpose now is to standardise the charging solutions for electronic devices, ensuring that they use a common USB-C charging solution. It aims to improve consumer convenience, reduce electronic waste and streamline the tech ecosystem across the EU and Northern Ireland.
At face value, the intention behind these changes should benefit consumers by simplifying charging and reducing the environmental impact of electronic waste, but the question remains: what will be the effect on UK businesses, particularly small and medium-sized enterprises, of complying with them? The Government assert that these changes will support innovation and enhance consumer choice. That will be good if it is the effect but the impact on businesses, particularly smaller ones, must be carefully considered. What will be the impact on production costs in particular, and thence on competition?
The Government have announced that they intend to include provisions in the Product Regulation and Metrology Bill to allow Ministers to amend the Radio Equipment Regulations 2017 to a similar end. It is crucial that the findings of the Government’s call for evidence on radio equipment, which began at the beginning of October, are published before any further action is taken in this jurisdiction. The Government must ensure that any regulatory framework proposed is evidence-based.
In considering whether these common charger regulations should be rolled out further across the United Kingdom, it is essential first to assess the impact on businesses, particularly SMEs. Costs related to product redesign, new testing requirements and potential delays in getting products to market could harm competition. We must first be confident that the benefits of this charging standardisation outweigh any burdens placed on manufacturers in this country.
Furthermore, the regulations introduce stricter penalties for businesses that fail to comply with the new rules. These include possible imprisonment. The exact terms of these penalties have not yet been fully clarified. Given the scope of the changes and the potential for confusion about what constitutes full compliance, the Government must first ensure that the enforcement mechanisms are clear in order to ensure fairness.
Lord Browne of Belmont (DUP)
My Lords, this is yet another example of Northern Ireland being subject to EU laws under the Northern Ireland protocol and Windsor agreement so, first, I declare that I remain 100% opposed to the Windsor Framework and the protocol. I will ask the Minister a few questions but, before that, I should say that many chargers on the market are extremely dangerous. They are coming in from abroad and have been responsible for setting fire to many properties, so I believe that these chargers should be regulated.
Having said that, does this instrument apply to Great Britain? If it is so important in Northern Ireland, why has it not been rolled out across the rest of the United Kingdom? Also, who will be responsible for enforcement? Will the prosecutions apply to the manufacturer, the distributor or the retailer? Because the instrument will apply to just Northern Ireland, will these chargers have to be stamped with something like, “Suitable for use only in Northern Ireland”? This will add to the cost.
At present, British Telecom is installing new digital telephones in Northern Ireland, but these will not be able to contact the emergency services if there is a power cut. There is a battery, which will last for one hour; after that, they will not be able to contact the emergency services unless they are attached to a battery or a charger. Will this instrument also apply to chargers for these phones so that elderly people can contact the emergency services?
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, further to what my noble friend Lord Browne mentioned, when the United Kingdom left the European Union we were told that we left as one. When the votes were counted and it was said that in Scotland and in Northern Ireland people were against leaving, we were told, “No—we left as one”. This is another example of how that statement is not true. How could we have left as one when the Explanatory Note says:
“The Windsor Framework requires that the European Union … legislation listed in its Annex 2 is implemented in Northern Ireland”?
Surely this is another example of how the Windsor Framework and the protocol differentiate Northern Ireland from the rest of the United Kingdom. It is another example of regulations that are placed on Northern Ireland, over which Northern Ireland’s elected representatives or even this Parliament have no authority but a foreign jurisdiction, the EU, says it must be done.
Lord Morrow (DUP)
My Lords, I agree entirely with what my two colleagues said. However, can the Minister give us the commencement dates, please? I think she said this but I missed it; I am not sure whether she said 2025 or 2026.
We are also told that the Northern Ireland Assembly will have a vote, albeit a type of vote that has not happened in Northern Ireland for over 50 years, because we do not do majoritarianism any longer in Northern Ireland. That is not the way it is done, but it is very clear that the process is that it will be a majority vote. That is a complete departure from what the Belfast agreement says on how Northern Ireland will proceed and go forward.
If this measure comes into force before there is a vote in the Northern Ireland Assembly, will it just be another example of saying, “You folk over there, you don’t really count. We’re not too much interested in democracy; we’re just doing this because of an agreement with Europe”? We were told that Northern Ireland’s position within the United Kingdom would be decided by the people of Northern Ireland. I suspect that, with all those decisions, whether they are being done by statutory instruments or not, this is a substitute for a proper Bill and a proper debate. This is all coming through piecemeal.
To be very fair and honest, I do not so much blame the present Government for this, although they are now the Government and have the authority and power to make legislation and change things. However, I would be grateful if the Minister would go over those points again. I accept that she may already have said it, but I hope that she will indulge me.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank noble Lords for their consideration of this instrument, and for their excellent questions and contributions to this debate. This instrument will implement common charger measures in Northern Ireland but, in practice, as I hope that I explained in my opening statement, it will have a very limited impact, because the USB-C has effectively become the industry default, not only across Europe but, increasingly, across the world. We consider that similar measures introduced across the UK would potentially help to deliver business benefits and environmental and consumer savings.
To pick up on a few of the questions that have been raised, I thank the noble Lord, Lord Sandhurst, for his comments about the consumer and environmental benefits. That is a very strong point. All too often, we find that we are forced to buy another charger, even though we already have one, because they all come as a package. Like most people, we end up with an awful lot of chargers lying around the house that no longer charge anything, and we do not know what to do with them and it is all very frustrating. The fact that these are now being streamlined into one standard benefits consumers and, as the noble Lord said, will cut down on environmental waste, which has to be a good thing.
The noble Lord asked that, when we do the call for evidence for the UK, we make sure that it is evidence based. He makes an important point there. We do not want to rush this; we want to make sure that we get it right.
We judge that the measure will not have a huge impact on small businesses. The producers of this equipment are mainly the big multinationals, so the cost to small and micro-businesses will be very small.
The noble Lord, Lord Browne, made the point that chargers should be safe. I absolutely agree with that; we all know of the awful cases where these materials are misused or mis-sold, causing fires. As we know, my noble friend Lord Leong is taking the product safety Bill through the Lords, and it will address some of those safety issues.
I was asked whether the measure would apply to the whole of the UK. We hope that it will apply to Northern Ireland and the rest of the UK. That is what our call for evidence is about. Although the timeframe is slightly different, we hope that this will happen to everybody across the board; there will not be a distinction between Northern Ireland and the rest of the UK. If things go to plan—and I think that businesses will support this—we will have a standardised process across the UK that uses the USB-C, a standardised thing that we will all use. It is a standard system and most companies are already producing this equipment to that standard; we are not trying to impose something different on Northern Ireland from what will happen everywhere else. To my mind, that is a bit of a no-brainer, although I understand the concerns of colleagues in Northern Ireland. But we will be catching up with you, rather than the other way around—we will catch up with you very soon, I hope.
The noble Lord, Lord Morrow, asked about commencement dates. For portable electronic equipment the date is December 2024 and, for laptops, it is April 2026, so there is a fairly tight timescale for portable equipment to bring us in line with the EU. But as I say, Northern Ireland is the forerunner of what will happen anyway; it is increasingly standard throughout the world, and I hope that you will have nothing to fear from that. I hope that I have persuaded noble Lords—maybe I have not, but there are huge consumer benefits to this move. I do not think that businesses feel any concern about this measure, as they are increasingly beginning to produce equipment that meets these standards. This will be the new standard and we have to make sure that we grow it in the right way. I hope that I have persuaded noble Lords on this issue, and am therefore pleased to commend the SI to the Committee.
Barnsley and Sheffield (Boundary Change) Order 2024
(2 days, 8 hours ago)
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Baroness Taylor of Stevenage
That the Grand Committee do consider the Barnsley and Sheffield (Boundary Change) Order 2024.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, the order before us today was laid before the House on 7 October. This instrument provides for the boundary between Barnsley and Sheffield to be revised so that the whole of the Oughtibridge Mill housing development will be in the city of Sheffield. It also provides for consequential changes to the corresponding ward and parish boundary. Both the councils concerned support the boundary change, as do both the affected parish councils.
Prior to coming on to the detail of the order, I must, with sincere apologies, draw the Committee’s attention to the correction slip issued to correct minor drafting and formatting errors. The first correction removes “Ministry of” where the order refers to the Secretary of State for Housing, Communities and Local Government. That is in the first and second paragraphs on page 1; in Article 2 on page 2; in the signatory box on page 5; and in paragraphs 2 and 6 of the Explanatory Memorandum.
The second correction provides a clearer map of the boundary change for the Explanatory Memorandum. A formatting issue meant that the map lacked clarity when it was inputted on to the order. With the help of the statutory instrument registrar, the correction slip now enables that same map to be sufficiently clear and to cover a full page. These minor errors in the original draft order are now corrected. The substance of the order, however, is unchanged. I hope that the reformatted map provides greater clarity for all.
Few reviews of the external administrative boundaries of local authority areas in England have been carried out since 1992. As a consequence, from time to time, there are small-scale boundary anomalies between local authorities caused by new developments and population change. Although, in practice, local government will put in place informal arrangements to deal with such situations, the very fact that it needs to do so is not conducive to effective and convenient local government. Such anomalies can also impact on perceptions of community identity: where residents do not feel part of an area, for whatever reason, they are potentially less likely to take an interest in their council.
On 14 April 2022, the Local Government Boundary Commission for England received a formal request for a review of the boundary in this area, made jointly by Barnsley Council and Sheffield City Council. The existing boundary runs along the River Don, but this has resulted in the Oughtibridge Mill development being split between the two councils. Both councils told the Local Government Boundary Commission for England that, due to the geography of the local communities and the existing road layout, the impact on service demand would mostly be felt by Sheffield Council, and that services would be best delivered by that council.
The Local Government Boundary Commission for England undertook a review of the boundary and consulted those affected. Of the 19 responses, there was a majority in support of the boundary change. Following the consultation, the final recommendation of the Local Government Boundary Commission for England was to transfer the area of the Oughtibridge Mill housing development in Barnsley into Sheffield.
This would move a section of the councils’ shared boundary at the River Don to encapsulate the Oughtibridge Mill development of 12 existing and 284 future dwellings. A recommendation to realign the ward boundaries was also made, as well as a suggestion for the realignment of the parish boundaries. After having received the final recommendations, the Secretary of State also allowed four weeks for interested parties to make representations. The department received no such representations.
The instrument I have brought forward provides for the boundary between Barnsley and Sheffield to be revised so that the whole area of the Oughtibridge Mill housing development will be in the city of Sheffield. I beg to move.
Baroness Pinnock (LD)
My Lords, I thank the Minister for her introduction to this statutory instrument and for highlighting the changes made. I know she has the misfortune of being from the south of England but, in Yorkshire, we call it “Orterbridge”, rather than “Outerbridge” as the Minister pronounced it. I know we have a lot of strange pronunciations in Yorkshire, but I think people there would appreciate it being pronounced as they do.
This is a sensible proposal. Populations move and expand; in response, political and administrative boundaries should move to make them fit local perceptions of place. While local government can and do respond informally to boundaries that do not make practical sense, such as by making arrangements about bin collections, local government boundary changes per se are less frequent. I wonder whether this is because the process is quite long. In this case, as the Minister said, the relevant local authorities made a formal request in April 2022, and despite broad agreement—the two local authorities in fact proposing the change—it has taken over two years to reach this final stage. Does the Local Government Boundary Commission encourage proposals for boundary changes that are supported by the relevant local authorities, especially where there is a clear anomaly?
One situation that is not raised in the Explanatory Memorandum is what happens if a councillor of either the existing parish or the existing council lives in the area to be moved to another council. If the councillor qualifies only by residency, I presume that that would result in their being unable to continue once their term of office ends. It would be helpful if the Minister could confirm that that is the case. I assume that, in this instance, that will not arise, because otherwise—I hope—it would be within the explanation. It would be useful to understand what will happen if somebody wants to continue serving their population but is then moved. From Barnsley to Sheffield, that is a big move. I jest not.
I have spoken to colleagues in Barnsley who agree that residents in Oughtibridge will feel that they belong to Stocksbridge in Sheffield, which is where they are moving, so they support the proposal in this statutory instrument.
Baroness Scott of Bybrook (Con)
My Lords, as the Minister said, this order provides for the boundary between Barnsley and Sheffield to be revised so that the whole of the area of Oughtibridge Mill housing development will be in the City of Sheffield, as well as providing for consequential changes to corresponding wards and parish boundaries. I am pleased that the councils concerned both support boundary change, as do the affected parish councils. I also note that the LGBCE published a draft of this and asked for responses locally. There were 19 responses, I understand, including six from residents, five of whom were in favour and only one opposed. Therefore, one can say that the proposal is accepted locally.
His Majesty’s loyal Opposition do not oppose these sensible boundary changes, as they suit not only local residents but the relevant public authorities and bodies. I also accept the late minor changes in the draft SI.
Baroness Taylor of Stevenage (Lab)
I am grateful to the two noble Baronesses who have made excellent and important contributions to this debate. I thank the noble Baroness, Lady Pinnock, for her correction to my southern pronunciation of Oughtibridge. I am very grateful. I will not get that wrong again, will I? Thank you very much for that.
A number of points were made, which I will respond to. First, the noble Baroness, Lady Pinnock, raised the issue of the process for review. I have to say that the measure probably was slightly held up by the election, but it has still taken quite a long time. I will take that back, because all of us who have been councillors—I think that everybody taking part in this debate has been—will know that such anomalies often occur. If the process needs to be made more straightforward, we should look at that, because all the reasons given for this SI would apply similarly to other areas where there are revisions to boundaries.
As for councillor qualification, I understand that that is set out in Article 7 of the order, which allows for a change of councillor. I am not aware that there is an issue there in this case, but I understand the residency qualification issue. Of course, councillors can qualify if they have a business or for other reasons but, if it is a residency qualification, that would need to be taken into account. However, as both participants were supportive of this proposal, it is probably the case that there was no issue, but we will bear that in mind if any future SIs like this come forward. We have to be very clear about what is happening in relation to councillor representation, because if a residency qualification is at issue, there may be implications, but that is all set out in Article 7.
The Local Government Boundary Commission for England recommendation meets the statutory obligation to secure effective and convenient local government while reflecting the interests and identities of local communities. That sits right at the heart of this SI. In short, the order makes a small boundary change, supported by both local councils and recommended by the Local Government Boundary Commission, and I beg to move.
Judicial Pensions (Amendment) Regulations 2024
(2 days, 8 hours ago)
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Lord Ponsonby of Shulbrede
That the Grand Committee do consider the Judicial Pensions (Amendment) Regulations 2024.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, the statutory instrument before us today amends a number of the judicial pensions regulations, specifically: the Judicial Pensions (Fee-Paid Judges) Regulations 2017, referred to as the FPJPS regulations; the Judicial Pensions (Fee-Paid Judges) (Amendment) Regulations 2023, referred to as the 2023 FPJPS amendments; the Judicial Pensions Regulations 2022, referred to as the JPS 2022 regulations; the Judicial Pensions Regulations 2015, referred to as the JPS 2015 regulations; and the Public Service Pensions Act 2013 (Judicial Offices) Order 2015, referred to as the judicial offices order.
The judicial pension scheme is made up of a number of historical pension schemes. Since April 2022, the only scheme open for pension benefit accruals is the judicial pension scheme 2022. All preceding judicial pension schemes closed to further accruals on 31 March 2022, but these older schemes are still relevant as the majority of judges have service extending across multiple schemes.
The FPJPS regulations established the fee-paid judicial pension scheme. The JPS 2015 and JPS 2022 regulations established, respectively, the judicial pension scheme 2015 and the judicial pension scheme 2022. These schemes regulate the pensions of the fee-paid and salaried judiciary. These amendments will make a range of changes to improve and, where necessary, correct the running of these schemes in line with statutory requirements and actuarial advice. The last time we debated the judicial pension scheme, which was when I was in opposition, I said that I suspected it would not be the last time we would have such amendments; it appears I was right. There may be more amendments to come.
By their nature, these regulations are highly technical. In essence, these amendments to the existing schemes do the following. First, they provide for an employer cost cap in the judicial pension scheme 2022, following the completion of the scheme valuation in February 2024. Secondly, they add further eligible judicial offices to their appropriate pension scheme, where that eligibility has now been determined. Thirdly, they extend a number of deadlines for member elections under the fee-paid judicial scheme. Fourthly, they extend powers to reconcile amounts that were paid to judges whose pre-2000 service must now be taken into account as a result of the O’Brien 2 litigation, in respect of those new, pre-2000 entitlements, with their formal entitlements for that period.
A number of technical changes are required to facilitate the smooth running of the pension schemes, which I shall take in turn. The first is the employer cost cap. The inclusion of a cost control mechanism, or CCM, in the JPS 2022 regulations is a statutory requirement under the Public Sector Pensions Act 2013 for all public sector pension schemes. These amendments add the CCM to the JPS 2022 regulations. This must be included by 6 February 2025, one year on from the first actuarial valuation of the scheme by the Government Actuary’s Department.
The CCM is designed to ensure a fair balance of risk with regard to the cost of providing public service defined benefit schemes between members of those schemes and the Exchequer. This is partly achieved through the setting of an employer cost cap. If, when the overall CCM is tested, costs have increased or decreased by more than a specified percentage of the pensionable pay compared with the employer cost cap, members’ benefits and/or contributions in the relevant scheme are adjusted to bring costs back to target. This could mean, for example, that a member’s contribution rate could go up or down. However, the mechanism is designed with the intention that benefit rectification would be triggered only by “extraordinary, unpredictable events”.
Moving on to additional offices, JPS 2015 came into effect on 1 April 2015 and was open to eligible fee-paid and salaried judges with service between 1 April 2015 and 31 March 2022. JPS 2022 came into effect on 1 April 2022, when all eligible judges moved into this scheme in respect of accruals for future service. JPS 2022 covers eligible service in fee-paid and salaried offices from 1 April 2022. These amendments add a number of judicial offices into FPJPS, JPS 2015 and JPS 2022 where their eligibility for a judicial pension has been determined. This will allow these members to accrue pensions in the correct scheme for their office and, where applicable, to have access to retrospective entitlements in JPS 2015 and JPS 2022. This will allow members with service in these offices to access the benefits they are entitled to and make the correct contributions to the scheme.
Lord Marks of Henley-on-Thames (LD)
My Lords, first, I congratulate the noble Lord on his concise and detailed opening on a complicated set of regulations. I note that the regulations were introduced by the last Government and have hardly undergone any significant change since their introduction, so it is unsurprising that they are likely to be relatively uncontroversial. There will certainly be no opposition from the Liberal Democrats to these proposals.
The most significant of what are largely tidying-up amendments are those that bring into line with other fee-paid judges a number of tribunal judges and chairs. That is completely in line with the view that we all take—that tribunal judges and chairs are a very important part of the working judiciary and that the tribunal system does the whole work extremely well. It is right that the pension arrangements for paid judges should be aligned.
The other significant point is that the pension arrangements for part-time service in the light of the O’Brien judgment are now going to be tidied up so that some of the anomalies that arose from that judgment have been eliminated, so far as they can be, although it is a difficult area—and I appreciate that the regulations have to reflect that difficulty.
I noted from the Explanatory Memorandum and the Minister’s opening that there was a consultation, which attracted no fewer than six responses, none of them critical—and, I take it, all of them raising questions that have been satisfactorily answered. In view of that, I have no further questions for the Minister on this SI.
Lord Wolfson of Tredegar (Con)
I am not sure whether I need to declare a formal interest, as my wife sits as a fee-paid tribunal judge but, for the avoidance of any doubt, I do. I suspect that the impact of this regulation on her will be de minimis and no doubt happen in many years’ time.
That said, I can be brief because the Minister has been so comprehensive. As we heard from the noble Lord, Lord Marks of Henley-on-Thames, these regulations emanate from the previous Government; this is not an area where, historically, there has been political controversy. Indeed, as the Minister said, we debated similar regulations when our roles were reversed. I echo his comment to me that this is probably not the last time we will come back to debate and discuss these pension regulations, because they are complex. Part of the reason for that is the history and the litigation that has arisen, but the one thing we share around the Committee is the importance of having an attractive pension scheme so that we attract the finest candidates to our judiciary—and retain them. Indeed, one of the things we did in the previous Government was to increase the retirement age to 75. The Minister referred to our outstanding and independent judiciary, and we absolutely endorse those two adjectives; it is outstanding, and it is totally independent.
I also endorse the point made by the noble Lord, Lord Marks of Henley-on-Thames: the fact that we are widening some of these pension schemes to include more tribunal judges is testament to the fact that so much of the important work of our judiciary is done by tribunal judges, both full-time and part-time—I think fee-paid is the proper term. Day in, day out, tribunals up and down the country deal with really important issues for people on the ground, so to speak. They are often unsung, and far from the legal journals and law reports, but they deal with important legal issues on a daily basis.
I have only one question for the Minister, which I ask as a matter of interest rather than in any controversial way. I note that, by these regulations, we are extending the time to enable judges to make choices between the pre-1995 and post-1995 schemes. I am interested in why we are extending time for that and why this particular period of extension has been chosen.
Other than that, I am tempted—as I think they are still debating the Budget in the Chamber—to point out that, although it is important to have attractive and gold-plated pensions in the public sector, that does not mean that we should raid private pensions in the private sector. If I say any more on that I will take this debate to places where it ought not to go, so I will stop there and make it unequivocally clear that we on these Benches are also firmly in favour of these regulations. I thank the Minister for introducing and explaining them so clearly.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank both noble Lords for their support for these regulations. I will first address the question that the noble Lord, Lord Wolfson, asked about why the deadlines for member elections are being extended. The answer is that, for members to be able to make an informed decision on their member elections, we need to provide detailed, illustrative information to affected members, which requires significant data inputs from our suppliers. The extension to 31 March 2027 will ensure that we can get this information to members with enough time for them to make a decision. I think that answers the noble Lord’s question.
I wish to say how much I agree with the noble Lord, Lord Marks, about the wider judicial family, and the importance of tribunal chairs and judges feeling part of that family and of their pensions recognising that fact. Of course, the part-timers—or fee-paid judges—fall into that category as well. That point was well worth reinforcing.
I also reinforce the point that the noble Lord, Lord Wolfson, made in his conclusion, about how our judiciary is a huge asset and resource for our country. It is indeed outstanding and independent—those are appropriate adjectives. There is never any question about its independence or ability. I have never, in either my business life or my political life, heard anyone seriously question judges’ independence or capability, if I may put it like that. We need to value that fact, and do so by making good but fair pension schemes. I hope these regulations are a small step in the road to maintaining that.