House of Lords
Non-Consensual Sexually Explicit Images and Videos (Offences) Bill [HL]
(1 day, 16 hours ago)
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Baroness Owen of Alderley Edge (Con)
My Lords, I would like to say a few words of thanks. First, and most importantly, I thank Jodie and Sophie who bravely spoke out about their abuse and have shared their stories with noble Lords. I thank the charities and campaigners who have been with me every step of the way and have been, quite simply, amazing: Sophie from Revenge Porn Helpline; Elena from Not Your Porn; Sophie from My Image, My Choice; Rebecca from EVAW; Emma from Refuge; Lucy from Glamour and Professor Clare McGlynn KC.
I am very grateful to noble Lords across this House who have done incredible work pushing the Government into the right place on this legislation, even if it has changed its packaging along its journey. I am thankful for the way noble Lords across this House have encouraged and guided me through the maze of legislating. Thank you to the Bill Office for the endless hours shaping this Bill. Importantly, I am very grateful to the Minister for his patience and time spent working on this matter. I know it cannot have always been easy for him, and he has always been incredibly kind and thoughtful.
I feel very optimistic that the content of this Bill has been addressed and accepted by the Government in a different format. However, there is still the issue of semen images, which this Bill sought to address and which I hope the Government will agree to legislate on rapidly. I hope the Commons will recognise the strength of feeling across this House on deepfake image abuse, and I am hopeful that we are now one step closer to seeing its end.
Lord Davies of Gower (Con)
My Lords, please allow me to express His Majesty’s Official Opposition’s strong support for this crucial Bill and to congratulate the noble Baroness, Lady Owen of Alderley Edge, on her determined leadership on this subject. This Bill represents a vital step forward in safeguarding dignity, decency and the fundamental rights of individuals in our society. This Bill will champion the right to privacy and change the law for the better, safeguarding women from exploitation.
Non-consensual sharing of sexually explicit images and videos is a modern technology-driven disease that has shattered lives and ruined reputations. It represents a grave affront to personal dignity and a betrayal of the trust that is often central to intimate relationships. The speed and reach of digital communication is truly frightening and has only exacerbated this harm, making it more urgent for Parliament to act decisively.
The Bill rightly strengthens our legal framework by ensuring that those who engage in this entirely unacceptable behaviour face the full force of the law. It makes it clear that consent matters and that, without it, the distribution or threat of sharing explicit material is a crime. We must also ensure that the criminal justice system provides meaningful support for victims.
Many individuals who have endured this type of abuse have spoken of the profound psychological and emotional toll that it takes. Please let us ensure that we do more than just criminalise this behaviour. Let us stand by the victims with the resources and support that they must be given to rebuild their lives. His Majesty’s Official Opposition believe in a society where people can live freely, safely and with dignity. The Bill furthers that vision. It ensures that our legal framework evolves, as it must, to meet modern challenges, while reaffirming the timeless principles of justice, accountability and respect for the individual.
Finally, I commend the noble Baroness, Lady Owen, and everyone involved, both inside and outside the Palace of Westminster, in bringing the Bill forward. We urge the House to support it wholeheartedly.
Lord Clement-Jones (LD)
My Lords, it is an absolute pleasure to take part in the Third Reading of this Bill. I give many congratulations to the noble Baroness, Lady Owen, on this rare and much-deserved victory with the contents of a Private Member’s Bill. She made a very generous comment about the Minister, and I failed to do so the other day. The noble Lord, Lord Pannick, paid tribute to the Minister. Even though he could not quite get over the line, at least some of the substance of the offence is there. I very much hope that that will remain in the Bill and that the noble Lord’s Commons colleagues will make sure of that. As we have heard in the debates on the Data (Use and Access) Bill, this is part of a wider battle against misogyny, and the noble Baroness, Lady Owen, has landed a really important blow in that battle.
Lord Mann (Lab)
My Lords, the noble Baroness, Lady Owen, has had to run a gauntlet online of Corbynite malcontents, misfits and misogynists. Her courage in taking this forward with such persistence and skill should be commended additionally in that context. Those people ought to give a public apology to her today; they will not, of course, but that is on them, because the country is with her on this.
When I came into this place, I was a relative youngster. It is appropriate to note that this place does not simply require people of my generation—free bus pass people—bringing great wisdom and experience; it can benefit equally, and sometimes more, from younger voices bringing a different and more modern perspective. Perhaps that points some direction for the future of this place.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, I personally agree with all the speakers so far. I say to the noble Lord, Lord Davies of Gower, that I absolutely agree that the Government should and do stand with the victims; it is the victims who are the main beneficiaries of the changes we plan to put through. I agree with the noble Lord, Lord Clement-Jones, that this is part of a wider battle, which we will continue to fight through other pieces of legislation that will be before us. I also agree with my noble friend Lord Mann that the country, as he said, supports the noble Baroness, Lady Owen. It is worth noting that I joined this House when I was about the same age as she is now. You can make changes, and the House is a welcoming place. The noble Baroness has certainly used her seat in this House for the benefit of victims, and I think there is no higher compliment that I can make.
The Government have set an ambitious target of halving violence against women and girls within a decade. We know that the majority of victims of intimate image abuse are women and girls, and we will do all we can to tackle it. Although we cannot support the Bill, I assure your Lordships that we continue to work tirelessly to tighten our laws to give women and girls the protection they need. As the House knows, we are bringing forward a package of offences to tackle the taking of intimate images without consent in the crime and policing Bill, which will be in the other place very shortly.
Our provisions tackling the creation of purported intimate images without consent, as amended on Wednesday, have now moved to the other place for further consideration. We intend to table further amendments there to strengthen the provisions and ensure that they can be applied effectively. I know that the noble Baroness, Lady Owen, is concerned about further issues, such as the definition of “intimate image” and the inclusion of wider types of images, such as semen images, and I confirm that we are looking closely at these issues as our provisions progress. So I thank the noble Baroness for her work on this matter.
Public Authority Algorithmic and Automated Decision-Making Systems Bill [HL]
Lord Clement-Jones (LD)
My Lords, the Bill is part of a wider debate that, as was the case with the previous Private Member’s Bill today, from the noble Baroness, Lady Owen, we had as part of the Data (Use and Access) Bill. The Government have now published their vision for digital public service and their State of Digital Government Review. For the Government Digital Service, we are now told that a new chapter begins. All this is, apparently, designed to improve productivity and services in the public sector. But how citizen-centred will the new technology be? How transparent and accountable will it be? To improve algorithmic and automated decision-making in the public sector, there needs to be an increase in transparency, fairness, accountability and the implementation of robust safeguards and human oversight mechanisms.
We obviously welcome the promise of an ICO code of conduct for automated decisions in the public and private sectors, as well as the algorithmic transparency recording standard of course. But that in itself lacks a number of elements: a human oversight requirement; impact assessments; a transparency register; and the prohibition of non-scrutinisable systems. There are considerable gaps in that standard. It does not cover local authorities, police forces and other public services. I simply predict that this will become a bigger issue as government starts to implement its plans for the adoption of AI in the public sector. The Government will find themselves well behind the curve of public opinion on this.
The Earl of Effingham (Con)
My Lords, I thank all noble Lords for their contributions on the Bill, particularly the noble Lord, Lord Clement-Jones, who brought it forward. In an era increasingly shaped by the decisions of automated systems, it is the responsibility of all those using algorithmic and automated decision-making systems to safeguard individuals from the potential harm caused by them. We understand the goals of the Bill: namely, to ensure trustworthy artificial intelligence that garners public confidence, fosters innovation and contributes to economic growth. But His Majesty’s Official Opposition also see certain aspects of the Bill that we believe risk its effectiveness.
As the noble Viscount, Lord Camrose, pointed out at Second Reading, we suggest the Bill may be prescriptive. The definition of “algorithmic systems” in Clause 2(1) is broad, encompassing any process, even those unrelated to digital or computational systems. While the exemptions in Clause 2(2) and (4) are noted, we believe that adopting our White Paper definitions to focus on autonomous and adaptive systems would provide clarity and align the scope with the Bill’s purpose.
The Bill may also benefit from an alternative approach to addressing the blistering pace of artificial intelligence development. Requiring ongoing assessments for every update under Clause 3(3) could be challenging, given that systems often change daily. We may also find that unintended administrative burdens are created from the Bill. For example, Clause 2(1) requires a detailed assessment even before a system is purchased, which may be unworkable, particularly for pilot projects that may not yet operate in test environments, as described in Clause 2(2)(b). These requirements could risk dampening exploration and innovation within the public sector.
Finally, we might suggest that in order to avoid potentially large amounts of bureaucracy, a more effective approach would be to require public bodies to have due regard for the five principles of artificial intelligence as evidenced in our White Paper, those five principles being: safety, security and robustness; appropriate transparency and explainability; fairness; accountability and governance; and contestability and redress. His Majesty’s Official Opposition do of course value the importance of automated algorithmic tools in the public sector.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I thank the noble Lord, Lord Clement-Jones, for bringing the important issue of public sector algorithmic transparency for debate, both today and through the Data (Use and Access) Bill, and I thank the noble Earl, Lord Effingham, for his contribution.
The algorithmic transparency recording standard, or ATRS, is now mandatory for government departments. It is focused, first, on the 16 largest departments, including HMRC; some 85 ALBs; and local authorities. It has also now been endorsed by the Welsh Government. While visible progress on enforcing this mandate was slow for some time, new records are now being added to the online repository at pace. The first batch of 14 was added in December and a second batch of 10 was added just last week. I am assured that many more will follow shortly.
The blueprint for modern digital government, as mentioned by the noble Lord, Lord Clement-Jones, was published on 21 January, promising explicitly to commit to transparency and accountability by building on the ATRS. The blueprint also makes it clear that part of the new Government Digital Service role will be to offer specialist assurance support, including a service to rigorously test models and products before release.
The Government share the desire of the noble Lord, Lord Clement-Jones, to see algorithmic tools used in the public sector safely and transparently, and they are taking active steps to ensure that that happens. I hope that reassures the noble Lord, and I look forward to continuing to engage with him on this important issue.
Lord Clement-Jones (LD)
My Lords, I thank the noble Earl for taking the trouble to read my Bill quite carefully. I shall obviously dispute various aspects of it with him in due course; however, I welcome the fact that he has taken the trouble to look at its provisions. I thank the Minister for his careful reply. I do not think that the Government are going far enough, but time will tell.
Crown Estate (Wales) Bill [HL]
(1 day, 16 hours ago)
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Lord Wigley (PC)
My Lords, I was first drawn into politics in Wales by the action of Liverpool Corporation in the late 1950s, when it purloined the Tryweryn valley in Meirionnydd, turfed out the farmers and villagers and, despite huge local and national opposition, built a reservoir, selling water at a profit to Merseyside industrial customers. That event triggered Plaid Cymru’s parliamentary breakthrough in 1966, which itself led to the SNP’s breakthrough in 1967. Britain’s 50 years of devolutionary politics grew out of the drowning of Tryweryn.
Wales has a history of exploitation of our natural resources, whether it is coal or other minerals, or our water resources, on which Birmingham and London now increasingly depend, as we heard even this morning. We likewise see the exploitation of our energy potential—wave, sea currents, estuarial waters and wind on shore and in the seas around our coast. My Plaid Cymru colleagues and I want to see the maximum possible benefit from such projects coming into the Welsh economy; we want to see that happen in a planned manner that recognises the financial benefit that should rightly come to those who invest in such projects, but also to the communities in which they are based. We want to see such potential developed in co-operation with the Welsh Government, local authorities and industrial development agencies. That means working in partnership and avoiding the totally unacceptable and unnecessary tensions and bitterness generated by the Tryweryn issue.
The Bill for which I request a Second Reading today deals with the democratic control of Wales’s natural resources. The Crown Estate assets in Wales include two-thirds of the Welsh foreshore and tidal river beds. It has control over certain ports, including the strategically important Milford Haven; it has rights over tidal streams, such as Ramsey Sound and Swnt Enlli; and it has control of over 50,000 acres of land in Wales. It is a major operator within the Welsh economy and will get even larger with the exploitation of clean energy potential off our coast.
The Bill enables the Treasury to make a scheme transferring all the existing Welsh functions of the Crown Estate commissioners to Welsh Ministers in Senedd Cymru. The Bill is an enabling one, giving the Treasury a mechanism for such a transfer. It gives it an agenda on which to work, and it is our hope that it will pursue it.
The Bill draws on the steps taken by the Conservative Government in transferring to the Scottish Parliament control over the Crown Estate in Scotland via the Scotland Act 2016 and the 2017 Crown Estate statutory transfer scheme. The powers so transferred were over property, rights and interests in land in Scotland and rights relating to the Scottish renewable energy zone. The devolved Crown Estate benefited the Scottish Government by £113 million in 2023-24. The Crown Estate is not devolved to Wales, and Senedd Cymru gets no such benefit.
The Crown Estate Bill is now progressing through the Commons. I remind the House of the words of the noble Lord, Lord Hain, during the passage of that Bill:
“Welsh Labour’s programme for government in the Senedd includes a commitment to pursue the devolution of powers needed to help reach net zero, including management of the Crown Estate in Wales”.—[Official Report, 14/10/24; col. 16.]
The noble Lord subsequently tabled an amendment providing for the appointment of a commissioner responsible for giving the Crown Commissioners advice about Wales. Supporting that move, the noble Lord, Lord Murphy, who I am glad to see in his place today, said that he had a “great deal of sympathy” with the points made in relation to devolving the Crown Estate to Wales.
There have been voices from all four mainstream political parties in Senedd Cymru and the county councils, expressing anger at the way in which the Crown Estate is treating Wales. Gwynedd Council is asked to pay the Crown Estate £160,000 annually, merely to secure access to our own shoreline. Senedd Members voted by 35 votes to 13 in support of a motion to devolve Crown Estate responsibility to Senedd Cymru. Just two weeks ago, Finance Minister Mark Drakeford stated, on the record:
“I think that the Crown Estate should be devolved to Wales, as it is to Scotland, and that would give us a better opportunity in Wales to take advantage of our natural resources”.
The advice that the proposed commissioner will give the Crown Estate will no doubt reflect the opinion of Welsh Government Ministers on the way in which Crown Estate profits arising from its activities in Wales should be used. Profits of the Crown Estate have grown substantially over recent years. Its revenue profit obtained from Wales is estimated to have increased from £9 million per annum in 2021 to £35 million per annum in 2024.
We have to estimate those figures, because the Crown Estate, incredibly, stopped publishing profit figures for Wales in 2021. Plaid MPs have been given the lame excuse that
“it is not possible to disaggregate net revenue profit attributable to Wales”.
If it was possible to disaggregate the figures up to 2021, why not now? So we are left in the position where the proposed commissioner will not be told about the profits made by the Crown Estate in Wales—or will he? Or she, indeed?
It is little wonder that Wales’s Finance Minister, Mark Drakeford, reiterated last week his call for control of the Crown Estate to be devolved to Wales. Mr Drakeford and the First Minister, the noble Baroness, Lady Morgan of Ely, have long called for the Crown Estate to be devolved to Wales, but UK Ministers apparently will not listen.
In an Answer to a Question by Llinos Medi, MP for Ynys Môn, the Treasury Minister, Darren Jones MP, stated:
“The UK Government has had no discussions with the Welsh Government on devolving the Crown Estate”.
It is unacceptable that policy decisions impacting on Wales are made by UK Labour Ministers without discussing them with Welsh Government colleagues.
On Report of the Crown Estate Bill, an amendment proposed by the noble Baroness, Lady Humphreys, would have required the Treasury to transfer responsibility for the management of the Crown Estate in Wales to the Welsh Government. That amendment was supported by Labour, Conservative and Cross-Bench colleagues from Wales as well as Liberal Democrat and Plaid Cymru Peers. It was defeated by 147 votes to 74.
I will briefly outline the content of this Bill, which is a straightforward two-clause, four-page document. Clause 1 provides that there be inserted into the Wales Act 2017, after Section 52, new Section 52A authorising the Treasury to make a scheme transferring all the existing Welsh functions of the Crown Estate to Welsh Ministers or a person nominated by Welsh Ministers. The scheme must provide for the transfer of designated rights and liabilities of the commissioners in connection with the functions transferred. The scheme must include provision to include that any person in Crown employment is not adversely affected by the transfer. The scheme must also safeguard the interests of defence and security and matters relating to telecommunications. It must not conflict with the interest of reserved matters or with the transmission or distribution of electricity. Such a scheme may be made only with the agreement of Welsh Ministers and no statutory instrument can be made unless a draft instrument is approved by Senedd Cymru. Clause 2 deals only with the extent, commencement and Short Title.
I thank the Public Bill Office for its help in drawing up this Bill, but emphasise that any shortcomings in the Bill are mine and mine alone. Such weaknesses can be addressed in Committee if colleagues are so minded. The Bill may then perhaps progress to give Welsh MPs a chance to stand up for their colleagues in Cardiff and enable the Bill to reach the statute book. I beg to move that this Bill be read a second time.
Lord Murphy of Torfaen (Lab)
My Lords, it is a great pleasure, as always, to follow the noble Lord, Lord Wigley. I was trying to work out how long we have been in Parliament together—it is 38 years since we first spoke on Welsh matters in the House of Commons. On and off, we have agreed probably more times than we have disagreed. It is, as I say, a great pleasure to follow him.
We have of course dealt with this issue some months ago, when the Crown Estate Bill came through this House; it is now in the other place. I think, however, that the argument and discussion are still live. There is some dispute as to the amount of money—or disagreement: perhaps “dispute” is wrong. Is it £8 million, as the Library tells us, or is it much more, £30-odd million, as the noble Lord said? Whatever it is, it is significant in terms of the Welsh budget. One question that I would grateful if my noble friend the Minister could answer in his wind-up is whether the equivalent money in Scotland is regarded as properly additional to the block grant and whether it would be in Wales, if this were devolved to Wales. That is a hugely important issue. I remember spending a year back in 1999, with regard to the European Union Objective 1 money, arguing, discussing and eventually agreeing with Gordon Brown about the way in which European money should be genuinely additional. Quite possibly, he did not agree with his officials at the Treasury—not a bad precedent, from time to time, if I might say so.
Another issue that I want to touch on is that this is of some constitutional importance. My own position with regard to devolution has changed dramatically since 1978 when I was treasurer of the Labour No Assembly campaign. When eventually, many years later, I became Welsh Secretary, my views on devolution gradually changed, so that I ended up supporting the referendum on extra powers for the Welsh Assembly some years ago. That is because the nature of devolution, and the institutions of devolution, are now firmly embodied in the Welsh psyche. There is no question that it is very much part of our political landscape. People understand what it does. If this issue is devolved to Scotland, I still cannot understand why it cannot be devolved to Wales. That is the big question in front of us. I know that the Minister will say that it is settled now and that we have to live with what we have to live with, but I think the constitutional precedent that was set with Scotland getting it causes difficulty.
The compromise that we reached in having a Welsh commissioner for the Crown Estate was a good one. Welsh interests will be partly safeguarded by that, and I hope that we will soon have some progress on who will occupy that position. It was nevertheless a compromise. My fear on this and other issues is that we are not really talking enough to the Welsh Government. Again, I will ask my noble friend the Minister to comment on the view that there have been no discussions with my colleagues in the Welsh Government and Senedd on this matter; I think that is highly unlikely, and I hope that they have indeed been talking on this issue. There is a wider view on this. it was argued at the general election that, if we have a Labour Government in Westminster and a Labour Government in Cardiff, it would—as it did many years ago—make relations much easier. That might not always be the case, which is why the previous Government, rightly in my view, set up the machinery for consultation, discussion and dispute resolution between the devolved Administrations and the United Kingdom Government.
The Minister will, I hope, confirm one way or the other whether there have been discussions, but this issue has not gone away. It will be there for some time to come in relation to the way in which the Government in Westminster deal with the Government in Cardiff. I support the noble Lord, Lord Wigley, in the sense that this is an issue that needs eventually to be discussed and resolved, although perhaps not in the way it is at the moment. We are where we are, though. I very much look forward to the response by my noble friend the Minister, for whom I have the highest regard.
Lord Moynihan (Con)
My Lords, I too congratulate the noble Lord, Lord Wigley, on introducing this Bill and for the many decades that he has eloquently, and with no less a degree of commitment, sought to represent the people of Wales and serve their best interests. It is also a great pleasure to follow the noble Lord, Lord Murphy. I know this as someone who was educated in Wales and was, for the past three years, chair of Haberdashers’ Monmouth School and a long-standing president of Welsh Rowing.
I should also declare my interest in Wales as set out in the register. I chair Amey, which has worked hard to ensure the successful electrification of the Core Valley Lines radiating out of Cardiff. I also chair Acteon, which is a subsea service company that has an active global interest in offshore wind, providing seabed-to-surface sustainable energy solutions for offshore wind.
My view is that, to maximise economic growth in Wales and generate employment in sustainable energy technologies, now would not be the best time to pursue this Bill. I emphasise “at this time”, because I would favour the Government entering into discussions with Wales in due course. I hope they will make it clear that any discussions on devolving the Crown Estate to Wales must not conflict with their priority in the five-year plan to increase the proportion of the UK’s energy generated from renewables to decarbonise the UK’s electricity system by 2030.
Investors look for stability. Growth is generated and new jobs are created only if there are two foundations in place: a stable policy framework and strong financial support with backing from government. The establishment of Great British Energy is under way and understood by investors. The publicly owned clean power company will work with the private sector to encourage greater investment in renewable energy, including offshore wind, which is so important to Wales. Similarly, the Crown Estate Bill underlines the Government’s commitment to support the development of offshore wind projects in seabed areas held by the Crown Estate. Time is of the essence to meet these targets and we need to increase grid capacity now to achieve the rapid expansion of offshore wind energy.
One major hurdle to these ambitious goals would be a minimum of three years of uncertainty; this would happen if we passed the Bill in this Session, for that is how long it took in Scotland. As we know, the process for Scotland was very complex and destabilising for investors. There were significant hurdles to overcome and they all took time: the legal and constitutional challenges; clarifying which functions could be devolved; and ensuring compliance with existing laws, which proved intricate. Assessing how revenues from Crown Estate assets would be managed and distributed in Scotland took a long time. Determining the value of Crown Estate assets and how they would be managed after the transfer was a significant challenge. Engaging with all the stakeholders, including local communities, businesses and environmental groups, was crucial and challenging, as differing interests had to be balanced in the management of assets. The Scottish Government then had to build the capacity to manage the new functions effectively, which involved training new staff and developing new management frameworks. Finally, but self-evident from the debate, the transfer was politically sensitive, with differing views among the political parties on how Crown Estate functions should be managed and by whom. All of that added to the time involved and the complexity of the process.
Further, there is a significant difference in this Bill. It is the wish of the noble Lord, Lord Wigley, that the legislation be subject to scrutiny by both Houses of Parliament and the Senedd. This additional level of approval will take yet more time, and the Delegated Powers Committee brought to our attention in its report that it did not consider scrutiny of the power by the Senedd appropriate.
It is not that I do not favour entering into discussions in due course, but it should not be at a time when it is so important to encourage investors to come into Wales. All this means that there would be less clarity for those investors today. More troublingly, even if the noble Lord, Lord Wigley, put into the Act that it would come into effect three years after it passed, there would be investor uncertainty, which would be damaging. These years of uncertainty would be an inevitable consequence of a move to devolve the Welsh Crown Estate and would need to be factored into investors’ assessments. I fear that they would steer investors away from Welsh waters to other parts of the UK, to the detriment of research and development jobs in Wales, employment opportunities in Wales, which I passionately believe in, and the Welsh ecosystem of business associated with developing wind farms offshore, particularly now when there is so much attention on offshore floating wind opportunities, on which decisions are to be made over the next three years.
I am not arguing that the policy, long advocated by the noble Lord, Lord Wigley, and echoed today by the noble Lord, Lord Murphy, should not be considered in future. It should be, but not at this critical time for the net-zero policy of this Government. I fully understand the political will to devolve the Crown Estate to Wales, but the arguments are currently outweighed by the potential risks to the UK energy market and investor confidence in Wales. Let us grasp the very real opportunities together and work for the success of Wales in the offshore wind energy market. I have never been more optimistic about the potential for Wales. Sadly, if it is introduced now, I see this Bill only damaging that prospect. Its time will come, but not now.
Lord Anderson of Swansea (Lab)
My Lords, there must be some book which gives 1,001 reasons for disagreeing with a particular proposal. The noble Lord, Lord Moynihan, must have read it and reproduced much of its powerful message: “Yes, it is important, but now is not the time”. No doubt, there are many other reasons and excuses as well.
I believe that now is the time. I follow my noble friend Lord Murphy and, dare I say it, my noble friend Lord Wigley, whom I have always considered a friend and a major contributor to debates in this House on a range of issues, not just devolution. I have long been an admirer of his. It is possible that this may be one of his valedictory speeches and I commend him for all he has done in his time here. He and I go back a long way. I think it was about 1966 or 1967 when he first came with a group of colleagues from Plaid Cymru to talk to me about Europe. We have been in touch ever since and I have long admired his contribution.
I will be very brief, because I adopt wholeheartedly what my noble friend Lord Murphy has said. Like him, I have made a progression. In the late 1970s, I was one of the so-called gang of six Labour MPs who opposed devolution. I thought that it had not been thought through adequately and used arguments such as “slippery slope” and so on. Some of them may still be partially true, but it was mainly the policies of Mrs Thatcher, ignoring Welsh interests in the 1980s, that largely convinced me. She was a recruiting sergeant for many of those who changed their views over the 1980s. In 1997, I went around Wales giving a different message from that which I had given in the 1970s. As my noble friend Lord Murphy said, the Senedd is now firmly established in Wales. There will be debates about powers and so on but there is no going back. Although there have been teething problems, it is now accepted and there is much power behind it.
I see no reason in principle why we should not follow the precedent of Scotland, though the problems around timing and adjustment were put forward powerfully by the noble Lord, Lord Moynihan. I commend my noble friend Lord Wigley for his initiative on this and wholeheartedly support him.
Lord Thomas of Cwmgiedd (CB)
My Lords, I too support the noble Lord, Lord Wigley, in his introduction to this Bill and warmly thank him for bringing it again before the House.
As the noble Lord, Lord Murphy, said, the real place to start is the constitutional issue. As forcefully pointed out in our last debate on this, this does not, as it presently stands, deal with a union matter. We are dealing with a matter capable of devolution because power over the estate has been devolved to Scotland. One can see immediately from the Scottish Crown Estate’s report one of the benefits of that: it shows the revenue, as the noble Lord, Lord Wigley, referred to, with a breakdown showing how each community benefits. I will ask the Treasury to think about this hearts and minds issue in a moment.
The real issue is trying to marry what the Minister and the noble Lord, Lord Moynihan, said about the short term and the long term. What is lacking, in my view, is transparency, accountability and a long-term strategy, and distinguishing all that from the technical business of managing the offshore wind industry. They are separate problems; if we disentangled them, we might be able to make some progress.
That progress can be made only by recalling the history of Wales, however the Crown Estate came to the Crown: partly by conquest—it is important to emphasise that word in the history of the United Kingdom—partly by inheritance or partly by an Act of Parliament. Maybe that does not matter, but what does matter from the history of Wales is the perception of the Welsh people. Their natural resources have been exploited, first in coal and the heritage with which we live, and then with water. The Welsh people are not prepared to allow this to happen again. How do we solve this problem?
I am delighted that, as the Minister told us on the last occasion during the passage of the Bill on the Crown Estate proper, the Government are going to discuss issues with the Welsh Government. I very much hope that the Minister can help us with those discussions.
Secondly, I hope that, as soon as the Bill is passed, there will be Welsh commissioner. One must remember, however, that his function is limited to giving advice on the functions in relation to land. What is wrong is that, first, there is no transparency of the position; secondly, there is no showing how the assets are used to the benefit of Wales; and, thirdly, there is no long-term strategy.
The Minister told us two things of great importance on 14 October. He said:
“As the Crown Estate’s operations are not divided into business units for each nation, agreeing the exact net profit figure attributable to Wales is not straightforward, because most of the associated costs cannot easily be disentangled from the Crown Estate’s overall costs and would, in places, require subjective judgment”.
Secondly, he said that,
“if Wales were to benefit only from the income generated in Wales, then it would likely be zero or negligible for several decades to come. Welsh assets are relatively new and will take time to mature, likely in the order of 10 to 15 years”.—[Official Report, 14/10/24; cols. 29-30.]
Both of those things are used as a justification for making no progress.
One looks to the Crown Estate’s annual report. Although these reports are not a joyous read, there is an awful lot of information contained in them. Unlike the position in relation to Scotland, a document called Wales Highlights contains absolutely no financial information of what income is generated. There is nothing of the kind. If one goes back to Wales Highlights for the year ending 31 March 2020, it showed a gross surplus income of £8.4 million on property valued at £96.8 million. I think that most businessmen would not think that this was a bad return for whatever came. Whether that falls into the category of a negligible income, I do not know, but no doubt it would help stop the leaks in the museums of Wales.
The following year shows a similar income, but it also shows the revaluation of the Crown Estate in Wales from £96.8 million to £603 million. Importantly, this appears to result from the offshore wind leasing round four. At the time of the full report for the whole Crown Estate, the revenue—it is broken down in some senses, most importantly for marine—was only £120.8 million. The highlighting stopped, and I simply do not understand why, after that review in Wales, there is no breakdown. I very much hope that the Minister will explain why what was practical in 2021, when round four had taken place and we were able to value the leases in Wales, has stopped. There should be full transparency and accountability.
What is important is to look at how the profits of the Crown Commissioner rose. By the year ending March 2022, the operating profit from marine had risen modestly to £127.5 million. However, by the year ending 2024, it had risen to £1.19 billion. If one looks at the notes to the account, the part of it attributed to the consolidated fund is a huge amount of money, but where did the increase come from? It is clear from page 50 of the annual report that it is attributable to option fees on round four, which produced £1 billion. What I do not understand is why we cannot know what is attributable to Wales. It is critical that there be proper accountability.
I come to my point, which is this: we need to work together to allow what the Minister and the noble Lord, Lord Moynihan—and, I am sure, the people of Wales—rightly want, which is good management of the assets, but we need accountability and transparency. As the Crown Estate Commissioner will not tell the people of Wales what the benefits are, they must be compelled to do so by an Act of Parliament.
I very much hope that this Bill will move to Committee, as time does not permit me to develop these details of accounting any further. I should not have to do this, but what is absolutely clear is that the current step forward is not enough. This Government, in particular HM Treasury, must bear in mind that, in about 15 months’ time, the people of Wales will be able to make a judgment. I hope that, by that stage, the historic legacy of the way in which Wales has been deprived of the benefits from its natural resources will be shown. At the moment, there is money coming to Wales from its resources, and there is a good prospect for the future.
Lord Anderson of Swansea (Lab)
I apologise to the House for speaking prematurely; I should have spoken in the gap. I apologise for that. My only mitigation is that, as a good Welshman, I was led by the spirit.
Baroness Smith of Llanfaes (PC)
My Lords, I rise to speak in unequivocal support of this Private Member’s Bill, introduced by my noble friend Lord Wigley. It is a pleasure to follow the contribution from the noble and learned Lord, Lord Thomas of Cwmgiedd.
The case for devolving powers over the Crown Estate to Wales is not only strong but timely and just. This is not just a question of where decisions should be made; it is about fairness and ending the continued wealth extraction from Wales. The value of Crown Estate assets in Wales has soared in recent years. A financial report for the year 2006-07 indicated that the Crown Estate’s assets in Wales were valued at £21.1 million, generating net revenue of £2.5 million. In the financial year 2023-24, the Crown Estate announced a profit of £1.1 billion—an increase of £658 million on the previous year. As can be seen, and as a number of noble Lords have discussed, there are gaps in these figures. Why?
Given these figures and the number of projects both currently in development and projected to be operational in the years to come, it is entirely conceivable that the asset value of the Crown Estate’s holdings in Wales will exceed several billion pounds, reflecting hundreds of millions in annual revenue. At present, the revenue derived from the Crown Estate’s activities in Wales is paid directly to His Majesty’s Government, with
“no guarantee that Wales receives an equivalent amount back”.
The National Infrastructure Commission for Wales asserts that the
“current system sees a transfer of wealth from fees arising from the Crown Estate’s commercial activity in Wales, to England, an illogical and bizarre outcome”.
Plaid Cymru believes that arrangements should be made to devolve the functions of the Crown Estate to a new body accountable to the Welsh Government and with the sole duty of improving the well-being of the people of Wales. All commercial activity arising from the Crown Estate in Wales would be invested for the benefit of the people of Wales.
There is popular support for this move. The last major poll on devolution of the Crown Estate to Wales showed that 58% of people supported it. Half of all councils in Wales have passed motions calling for this devolution—including Conwy, Gwynedd, Denbighshire, Flintshire, Powys, Monmouthshire, Ceredigion, Carmarthenshire, Swansea, Neath Port Talbot and Caerphilly—with others with motions ready to be debated in the coming weeks. These councils represent a broad political spectrum, too, including Labour in Swansea Council, the Liberal Democrats, the Greens in Powys, and Plaid Cymru.
Through a number of responses to FOIs, we now know that councils in Wales paid over £345,000 in 2023 in lease fees to the Crown Estate. This is simply to lease the land which is in their area, often public footpaths. A devolved Welsh Crown Estate is an opportunity to address this unfairness, so that councils’ public money is not handed over to the Treasury and on to the sovereign grant but directed back into communities for their benefit.
In light of this, I suggest that the Crown Estate urgently reviews these lease fees and either reduces them or abolishes them entirely. Over £300,000 may seem trivial when profits are at £1.1 billion, but for our councils it is a significant amount, particularly as they face making tough decisions to cut local services.
Looking ahead to a new entity post devolution, Plaid Cymru has proposed targeting money generated from a devolved Crown Estate at deprived communities in rural Wales and our deindustrialised valleys. I look forward to visiting the Crown Estate Scotland soon through the Industry and Parliament Trust, to learn from its similar model that targets communities in the Highlands. On a national level, there is an opportunity to use the money to develop a Wales sovereign wealth fund, modelling those of other countries, such as Norway.
I commend my noble friend for crafting a proposal in the Bill that offers flexibility. While I strongly believe that future frameworks for the devolved Crown Estate could include targeted initiatives such as those that I have outlined, the Bill wisely leaves room for adjustment and negotiation between the Welsh and UK Governments. As the Bill’s broad framework acknowledges, this process cannot happen overnight, but it sets a clear path forward. It allows both the Treasury and the Welsh Government to engage in meaningful dialogue and progress the transition in a structured manner.
If, as Ron Davies said:
“Devolution is a process … not an event and neither is it a journey with a fixed end-point”,
then we must remain true to this principle both in word and in deed. Wales must not be relegated to a subordinate position to Westminster; both Governments should be equal partners in that relationship.
I ask noble Lords to consider whether they believe that Wales should be treated fairly and whether Wales should be granted the same powers enjoyed by other nations—in this case, Scotland. The Bill before us is about delivering that fairness and equality. Surely it is not radical to say that every nation deserves the right to benefit from the wealth generated by its own natural resources.
I hope that His Majesty’s Government carefully consider this opportunity before them and support the safe passage of the Bill.
Baroness Bennett of Manor Castle (GP)
My Lords, I am delighted to follow the noble Baroness, Lady Smith of Llanfaes, and congratulate the noble Lord, Lord Wigley, on bringing before us this important and timely Bill. We have a sense of unfinished business here. It is not too late, as we have heard, for the Government to pick this up with their own Crown Estate Bill, and we saw the possibility of that happening demonstrated earlier today in your Lordships’ House.
It is worth noting the point made by the noble and learned Lord, Lord Thomas of Cwmgiedd, that we are talking here about land resources that are the result of conquest. It is interesting that in the current global position, it is a Green principle to believe in self-determination and democracy. I know that the Wales Green Party has been campaigning very strongly in favour of the step that the Bill delivers, and I am sure I will be talking about it with its members when I visit Cardiff next weekend.
I hope that everyone will agree that if we want to discuss British values, self-determination and the right for people to democratically decide their own governance and to have control over their own resources are indeed British values. The Bill is timely because currently these are issues of great concern to the people of Greenland and Panama, as they are to the people of Wales. If we believe in the increasingly battered principle of an international rules-based order and if we are to stand up against powerful forces opposed to that, working at speed to smash them both in their home countries and abroad, this Bill takes us in the right direction.
It is also worth looking at the context of much that is discussed in your Lordships’ House, such as the recent Channel 4 report on Generation Z, identified as those aged 13 to 27. The headline said that a majority of young people want the country to be a dictatorship. When you actually look into the detail of the questions that were asked, it is a little more complex than that. They were asked whether they favoured a strong leader
“who does not have to bother with Parliament and elections”.
I note that these young people are perhaps reflecting what we are hearing from the Government and the governing classes, given that we have just seen the abolition of a large number of elections being delivered by the Government and a great deal of talk about elected mayors being strong leaders. So we might want to look at where these ideas are coming from.
Before we give up on democracy, we should think about trying it. This Bill delivers democracy for the people of Wales. Democracy is not just about voting; it is about deliberating, being in control, being able to collectively make decisions and the people most affected being able to make them, and benefiting from their own resources. As has been commented on by multiple noble Lords, I believe it is the policy of the Labour Party in Wales to support the Bill.
It is worth noting the very relevant context. Report stage of the Great British Energy Bill will be with your Lordships’ House next week and I understand that the Government have finally made a concession on supporting community energy, something that your Lordships’ House has fought for and backed again and again. I reserve the right for final judgment until I have seen the detail; none the less, this is a positive sign. The Bill of the noble Lord, Lord Wigley, would enable much more community control and community energy to be delivered in Wales rather than by giant multinational companies operating with far distant commissioners.
Finally, if this Bill was delivered, it would really highlight the remaining lack of democracy around the whole Crown Estate structure for England.
The noble Lord, Lord Moynihan, said that the Bill might delay. I suggest that it would greatly enhance and speed up the possibility of delivering that community and democratic energy. There is the strongest possible Green support for this and I very much hope that the noble Lord, Lord Wigley, is able to hear from the Minister that this is all going to power ahead.
Baroness Humphreys (LD)
My Lords, I thank the noble Lord, Lord Wigley, for securing this Private Member’s Bill, and also for the vast amount of work which has gone into its production and the clarity with which he has explained the intent of the Bill.
The Bill comprehensively covers all the steps necessary to transfer responsibility for the Crown Estate to the Welsh Government. It gives details of a transfer scheme, together with details of post-transfer management, the transfer of rights and liabilities, and the safeguards and conditions the Treasury considers “necessary or expedient”. Crucially, the Bill would amend the Civil List Act 1952 to ensure that all revenue generated from the Welsh Crown Estate assets would be paid into the Welsh Consolidated Fund.
I make no apology for speaking in favour of the Bill, despite a disappointing response to amendments during the progress of the Crown Estate Bill through this House. When I spoke to my Amendment 26, calling for the devolution of the Crown Estate’s powers to Wales, in Committee on the Crown Estate Bill, I explained that I deliberately did not include a timeframe for the transfer of powers to the Welsh Government. I felt then that this will be potentially a long battle—but it is one we are happy to engage with and to continue.
I quoted from the report of the National Infrastructure Commission for Wales, which asserts:
“By 2030, The Crown Estate’s functions in Wales should be completely devolved to a new body that has as its principal aim the reinvestment of all funds in Wales for the long-term benefits of the people of Wales”.
I said that “by 2030” is a timeframe I am more comfortable with. However, the danger is that, by then, most of the wealth might have been extracted from the Welsh Crown Estate.
Why are some of us so keen on the devolution of these powers? In Wales, the Crown Estate is expected to generate at least £1 billion from offshore wind energy leases in our waters in the coming years. Keeping this money in Wales could add an estimated £50 million per year to the Welsh Government’s budget—money that could directly benefit our public services and communities. Devolving the powers of the Crown Estate to the Welsh Government and the Welsh Parliament would bring us into line with Scotland, recognising Wales’s place as an equal nation, and would bring substantial benefits to Wales. The current system sees profits flow to the UK Government, with Wales missing out on vital funds, especially given successive UK Governments’ historic underfunding of Wales, particularly in infrastructure.
I was pleased to see that, yesterday, in the other place, my party announced during the Commons debate on the Crown Estate Bill that it would work with Plaid Cymru to push for the devolution of the Crown Estate. The Lib Dems submitted their own amendment but committed to supporting Plaid’s amendment if it were selected to proceed to the next parliamentary stage.
As the noble Lord, Lord Wigley, referred to, the devolution of the Crown Estate has widespread support in Wales from the Liberal Democrats and Plaid Cymru and a majority of local authorities. As the noble Baroness, Lady Smith of Llanfaes, said, my own council in Conwy County recently voted in favour of a Plaid Cymru motion, and in November Carmarthenshire councillors voted unanimously in favour of the devolution of these powers. I suspect that even the Welsh Labour Government have been a supporter—but we do not know; there has been very little consultation with them, so their voice is very rarely heard. Opinion polling in Wales continues to show that a clear majority of Welsh people want to see the estate devolved.
Noble Lords across the House have made strong cases for the objects of this Bill. I will now turn my attention to the Government’s position and to one of the reasons the Minister gave in dismissing our amendments during the debates on the Crown Estate Bill in this House last year—perhaps he will give it again today. His main reason was that it would
“delay UK-wide grid connectivity reform”.—[Official Report, 5/11/24; col. 1442.]
We can safely say that we know all about delays to grid connectivity in Wales; it has been the focus of the attention of the Welsh Affairs Committee in the other place for a number of years. Its 2021-22 report concluded that
“developers of renewable energy were encountering problems with grid capacity and connecting to the electricity grid in Wales”.
The committee also said:
“We recognise the strengths of an electricity grid that serves the whole of Great Britain but consider that there are distinct challenges and opportunities relating to grid infrastructure in Wales that require specific focus from the UK Government”.
The report contains many references to the UK Government’s responsibility in this area. The then Conservative Government, in their 2023 response to the report, admitted that a “step change” was needed to boost capacity in Wales. Can the Minister say what assessment he has made of the steps, if any, taken by the previous Government to initiate this step change? What further steps have his Government taken since taking office?
I am sure that your Lordships understand that the reference to delaying UK-wide grid connectivity reform as a reason for not devolving the Crown Estate to Wales is rather ironic and particularly galling for those who have been calling for UK investment in this area of infrastructure in Wales for many years. We on these Benches are in full support of the Bill of the noble Lord, Lord Wigley, and we wish it every success.
Baroness Bloomfield of Hinton Waldrist (Con)
Hoffwn ddiolch i Arglwydd Wigley am ddod a’r Bil Aelod Preifat hwn i’r Tŷ ar gyfer y ddadl heddiw. I congratulate the noble Lord, Lord Wigley, on his Crown Estate (Wales) Bill and thank him for bringing it to the House for debate.
We on these Benches have thought long and hard about the Bill, and my noble friend Lady Vere of Norbiton debated these issues with the noble Lord in Committee on the Crown Estate Bill, which is making its way through the other place presently. I understand the arguments made by several noble Lords and I appreciate the strength of feeling, as well as the clear differences between Scotland and Wales when it comes to the Crown Estate. We support devolution and agree that local people make better decisions for their area. However, I am afraid that we have some important concerns about the Bill, given the current context of policy-making for the Crown Estate.
The Crown Estate in Wales is extensive, covering significant areas of foreshore, seabed and land, and its value has grown considerably, particularly with the rise of offshore renewable energy projects. I agree that, in time, we need to create a climate of co-operation to maximise the benefit that we can all gain from developing our national resources. The legacy of Tryweryn, which was mentioned by the noble Lord, Lord Wigley, still looms large; no one wishes to create another source of resentment.
While the present level of resources that could accrue to the Welsh Government is relatively small, it may well, and probably will, grow in time, particularly as the offshore floating wind industry takes off in south-west Wales. The noble Lord, Lord Wigley, was right to call for greater transparency in the Crown Estate accounts; a point further underlined by the noble and learned Lord, Lord Thomas of Cwmgiedd, who gamely tried to navigate through the fog of those accounts.
When this was discussed last year, the House was considering a sea-change in the Crown Estate’s future. When that Bill passes, Parliament will have set the Crown Estate on a new path, playing an important role in the development of offshore wind. Given that context, we do not feel that devolving the Crown Estate in Wales is the right step at this time. Instituting a whole new system of governance for this part of the Crown Estate would open questions about the future of the Crown Estate, and we feel that that reassessment of the future of the estate could be a setback in the ambitions we are setting for it with the Government’s Bill. For that reason, I am afraid that we cannot support this Bill today.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, is a pleasure to speak in this debate today. I congratulate the noble Lord, Lord Wigley, on this Bill and on his opening speech. While we may disagree on the substance of this issue, I enjoyed our debates on this topic during the passage of the Crown Estate Bill, and it was a pleasure to hear him put the case so powerfully again today.
I will begin by setting out how the Crown Estate currently operates and the case for retaining the current model, which the Government believe provides the best deal for Wales and for the wider United Kingdom. As noble Lords will be aware, the Crown Estate was established with the aim of creating lasting and shared prosperity for the whole of the United Kingdom. Governed by the Crown Estate Act 1961, it holds a diverse portfolio of buildings, shoreline, seabed, forestry, agriculture and common land. It has shown itself to be a trusted and successful independent commercial business, with a proven track record of effective manage-ment. Each year, the Crown Estate is required to pay its profits into the UK Consolidated Fund, which has totalled more than £4 billion over the past decade. This money is used to fund vital public services across the UK, including in Wales in reserved areas. When the UK Consolidated Fund is spent in England—in areas which are devolved to Wales—the Welsh Government also receive funding through the operation of the Barnett formula.
The proposed powers in the Crown Estate Bill, which is currently progressing through the other place, combined with the Crown Estate’s existing scale, expertise and track record, mean that it is uniquely placed to drive forward important growth-generating projects in Wales. This is particularly true in relation to offshore renewable energy and other emerging offshore technologies.
Over the last 20 years, the Crown Estate has helped to deliver a number of important renewable energy projects and to position Wales at the vanguard of clean energy technology and growth. The benefits of these projects are being felt in communities and supply chains right across Wales. For example, the Crown Estate has invested £1.2 million in Welsh tidal stream energy through the Morlais demonstration zone in Anglesey. Last year, the Crown Estate launched offshore wind leasing round 5 for floating offshore wind in the Celtic Sea, which is expected to deliver significant jobs and supply chain benefits locally. The Crown Estate works closely with the Welsh Government and Natural Resources Wales to develop these projects and ensure that resources are sustainably managed for the long term.
As noble Lords will remember, the Government were pleased to support the successful amendment of the noble Lord, Lord Hain, moved by my noble friend Lord Murphy, to the Crown Estate Bill, which will see the appointment of two Crown Estate board commissioners for Wales and Northern Ireland respectively. This is a positive step that will ensure the Crown Estate’s board continues to work in the best interests of the whole of the UK. Importantly, the devolved Governments will reserve the right to be consulted over these appointments. I am grateful to all noble Lords across the House, including some who have spoken in today’s debate, for their work to make this change possible.
Let me turn to the concerns the Government have with the Bill we are discussing today. Devolving the Crown Estate to Wales at this time risks significant fragmentation of the energy market and jeopardising the existing pipeline of offshore wind development in the Celtic Sea planned into the 2030s. This in turn would undermine international investor confidence and significantly delay progress towards net zero, to the detriment of the whole of the UK.
Devolution would likely require the creation of a new entity to take on the management of the Crown Estate in Wales. This entity would not benefit from the Crown Estate’s substantial capability and capital and systems abilities, nor from the fact that the Crown Estate’s marine investments are currently made on a portfolio-wide basis across England and Wales. Devolving the Crown Estate to Wales at this time would disrupt these existing investments, as they would need to be restructured to accommodate a Welsh-specific entity.
As the noble Baroness, Lady Humphreys, quoted from our debates on the Crown Estate Bill, devolution would likely delay UK-wide grid connectivity reform, which is crucial for meeting our growth targets, because it would make it harder to co-ordinate energy generation and infrastructure across England and Wales. The Government are driving forward grid connectivity reform. 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 multimillion-pound commercial tendering process for a pipeline of Welsh projects, at a time when the Crown Estate is undertaking critical investment in the UK’s path towards net zero.
Some noble Lords have argued today that Wales would benefit financially from devolution of the Crown Estate. Let me set out why the Government believe this not to be the case. As I have already noted, Wales benefits from the UK Government’s spending derived from the Crown Estate. It receives Barnett funding when Crown Estate funding is spent in England in areas which are devolved in Wales. As the noble and learned Lord, Lord Thomas, quoted from our debates on the recent Crown Estate Bill, if Wales were to benefit only from the income from the Crown Estate generated in Wales, it would likely be zero or negligible for several decades to come. This is because Welsh assets are relatively new and will take time to mature, likely to be in the order of 10 to 15 years. Previous reports did not include costs and, as I understand it, many of the figures quoted today are reports of profits from activities without taking into account costs. As I have said before during debates on the Crown Estate Bill, disaggregating activities requires a high degree of subjective judgment.
My noble friend Lord Murphy asked about funding for the Wales Government in the event of devolution of the Crown Estate. Even if devolution could be achieved without risking the revenues for Wales that the Crown Estate generates, this would not automatically lead to an increase in the funding available to the Wales Government. As agreed in the Scottish Government’s fiscal framework review, which concluded in August 2023, the Scottish Government receive a block grant reduction to reflect the profits they retain from Crown Estate Scotland following its devolution.
The noble Lord, Lord Wigley, and my noble friend Lord Murphy raised the Treasury Ministers’ discussions with the Welsh Government about the Crown Estate. In November, I met the Welsh Government’s Cabinet Secretary for Finance and Welsh Language. Our discussion covered a range of issues, including the Crown Estate. I reiterated the UK Government’s position that we do not believe devolution of the Crown Estate is in the best interests of Wales or the wider UK. More widely, the UK Government maintain regular ministerial and official-level engagement with the Welsh Government across a range of different policy areas.
The Crown Estate’s existing scale, expertise and track record mean it is uniquely placed to drive forward growth and investment in Wales. Wales continues to benefit from the funding generated by the Crown Estate, both through the UK Government’s spending in reserved areas in Wales and through funding for the Welsh Government via the Barnett formula. Devolving the Crown Estate at this time would significantly fragment the UK’s energy market, jeopardise the existing pipeline of offshore wind development in the Celtic Sea, undermine international investor confidence in the UK and significantly delay our progress towards net zero. It is for these reasons that the Government cannot support the Bill before your Lordships’ House. The Government will of course continue to discuss these issues—
Lord Thomas of Cwmgiedd (CB)
Before the Minister sits down, I want to press him on one point: the proportion of income classified in the accounts as derived in the marine sector from option fee and other income, some of which is straight-lined into the Consolidated Fund. Can he give the figure for Wales? As we have discussed, he was able to give it at an earlier point; it must be possible, and I would be grateful if he would write to the House and give us that figure. It is of huge symbolic importance to the people of Wales, and I do not want this Government to suffer 15 months hence.
Lord Livermore (Lab)
I am very grateful to the noble and learned Lord for his concern for the Government. I am told it is impossible to disaggregate the figures in the way that he has asked. I will double check that and write to him if I can, but I am told it is not possible to do that disaggregation.
Lord Thomas of Cwmgiedd (CB)
Forgive me for a moment, but I am quite used to arguing with accountants and I would be delighted to meet the Crown Estate to try to understand what the problem is. I believe it is accountancy gobbledygook that we cannot do it. Of course there will be an element of subjective judgment, but it can be done. If it cannot be done, please can I meet the accountants at the Crown Estate?
Lord Livermore (Lab)
I will happily suggest that to the accountants at the Crown Estate.
The Government will continue to discuss these issues with the First Minister and the Welsh Government, to ensure that Wales sees the full benefits of the Crown Estate.
Lord Wigley (PC)
My Lords, I am grateful to the Minister for his response and even more grateful to colleagues from all parties who have spoken in this debate. I am grateful for the support that has come from the noble Lords, Lord Murphy and Lord Anderson—albeit that he spoke earlier than he had intended, it was very welcome—the noble and learned Lord, Lord Thomas of Cwmgiedd, my colleague and noble friend Lady Smith, the noble Baronesses, Lady Bennett and Lady Humphreys, who has done so much work on this matter. I regret very much that my friend from Monmouth was unable to support the Bill, but he left a glimmer of hope that, if not now, there might be a time. Perhaps we can come back to that. With regard to the response of the noble Baroness, Lady Bloomfield, from the Front Bench, she recognised the case but said that the Government cannot at this stage move forward with it.
With regard to getting the maximum possible benefit from the elements that Wales has—wind, water and all the rest—around its coast, there needs to be cross-government co-operation between the Government of Wales in Cardiff and the UK Government. In order to facilitate that, the Crown Estate must surely see the benefit of the positive energy that comes from maximising the output from our own resources and arrange things in a way that encourages that to happen.
I hope we will get a Second Reading today and that we can go into a meaningful Committee stage. I noted the points the noble and learned Lord, Lord Thomas, made about that and look forward to it. These arguments will not go away. The Minister had discussions with his colleagues in Cardiff in November, I think, and I hope that he will keep in touch with them. I had a meeting a fortnight ago with our erstwhile colleague here, the First Minister of Wales. These are matters that are of concern to them, and they will arise in the election, on a new format, to the Senedd in Cardiff in less than 18 months’ time.
There is a need to get some co-ordination on this. Even if this Bill is not the vehicle, there must be some way of maximising the co-ordination and benefit that comes to Wales from the resources around our coasts. If it can be done for Scotland, surely it can be done for Wales too.
Mortgage Prisoners Inquiry Bill [HL]
(1 day, 16 hours ago)
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Lord Sharkey (LD)
My Lords, mortgage prisoners are people who are stuck with their existing lenders and cannot access a better deal such as a fixed rate. As a result, mortgage prisoners continue to pay interest rates on their mortgages at around four percentage points over normal market rates, costing them hundreds of thousands of pounds extra per year. According to the mortgage prisoners action group, there are around 195,000 mortgage prisoners; by narrowing significantly the definition of a mortgage prisoner, the FCA, completely implausibly, comes up with a much smaller number.
This Bill proposes an independent inquiry into the 17 years of harm that has been caused to mortgage prisoners. For the past 25 years, the UK mortgage market has been dominated by short-term deals. Customers access a preferential rate for two years or five years and then move on to a higher standard variable rate. Those with active lenders can quickly and easily move to another short-term deal with their existing lender or switch to a different lender.
After the financial crisis, the FCA tightened the mortgage affordability rules. This was the correct response, but it created thousands of mortgage prisoners. If they tried to switch to a lower rate with a different lender, even if they were up to date with their payments, they would be told that they did not pass the new test and could not afford to pay a lower monthly rate. I emphasise that they were told that they could not now afford to pay a monthly amount that was significantly smaller than the one they were in fact paying.
Mortgage prisoners ended up stuck on a high standard variable rate, which is now between 8% and 9%, around four percentage points above what customers who could access fixed rates from active lenders were paying. This created two problems for mortgage prisoners. They are paying high rates, and so are more likely to struggle to make their payments, and they have no way of gaining certainty over their mortgage payments for the next two or five years.
The largest group of mortgage prisoners are former Northern Rock customers. After nationalisation in 2007, they were placed in a government-owned company run by UK Asset Resolution. When returning these mortgages to the private sector, the Conservative Government could have sold these mortgages to active lenders who would offer them a fair deal. However, the Conservative Government did not do that. They sold the mortgages on to non-active lenders and vulture funds, with the consequences which we now see. It is not as though the Government had not been warned about the problem. The risk to the customers was clearly identified.
In January 2016, the noble Lord, Lord McFall, wrote to the Treasury, UKAR and the FCA, highlighting that:
“Many of … those affected by these sales, will be mortgage prisoners and will be unable to switch lenders”.
He told the Government that the customers affected by these sales should be protected, offered a fair deal and given access to fixed rates. He warned that:
“Given the prospect of rising interest rates it is important that all mortgage customers are given the opportunity to achieve certainty over their payments by accessing a fixed rate”.
He told the Government that he was
“concerned that some customers affected by these mortgages sales … will not be offered reasonable fixed mortgage rates”.
UKAR responded that returning these mortgages to the private sector will mean that there will be
“the option to be offered new deals, extra lending and fixed rates should become available”.
However, this requirement was not written into the contract when mortgages were sold to vulture fund Cerberus. The BBC has reported that UKAR now claims to have been misled by Cerberus. A UKAR spokesman told the BBC’s “Panorama” that Cerberus had the ability to lend to the former Northern Rock customers and that UKAR believed that Cerberus intended to do so. It said:
“The reply to Lord McFall sent on behalf of the UKAR board of directors was based on information presented to UKAR and the board had no reason to disbelieve this at that time”.
However, the UKAR board did not put these terms into the contract of sale. The mortgage customers were left unprotected by UKAR’s incompetence, naivety and neglect.
Consumer champion Martin Lewis lays responsibility for the treatment of mortgage prisoners with the Government. He said that the Government
“have sold these loans to professional debt buyers who do not offer mortgages and left these people in these types of mortgages, which have been too expensive, crippled their finances and destroyed their wellbeing”.
It was at best very naive of the Government and UK Asset Resolution to think that a vague aspiration from a vulture fund such as Cerberus was sufficient.
Everyone must now acknowledge that the Conservative Government failed to protect these mortgage prisoners. They could have sold them to active lenders, but they chose instead to sell them to unregulated vulture funds. We need to understand why the Conservative Government made these decisions and why they ignored the risks, and we need to understand the ultimate impact on mortgage prisoners. The inquiry proposed by this Bill would examine the circumstances around the sale and the role of the Treasury and UKAR.
FCA supervision and policy also contributed to the harm caused to mortgage prisoners by trapping them within their existing lender but failing to intervene to ensure that they were treated fairly. In 2019, after years of inaction, the FCA finally introduced a modified affordability test, which enabled lenders to use a more proportionate affordability assessment when offering new mortgages to mortgage prisoners, but this did not work. The FCA found that
“Lenders have had a limited appetite”
for helping mortgage prisoners to switch, using the modified affordability test. In fact, only 200 mortgage prisoners were able to use this escape route.
There is also no evidence that the introduction of the consumer duty has had any benefits for mortgage prisoners. The FCA says that it has done all that it can with its existing powers, but it has not helped. For example, it allowed TSB to penalise the mortgage prisoners in its Whistletree brand by offering them higher rates than those offered to other TSB customers. I have contacted the Serious Fraud Office asking for an investigation into the actions of part of the Co-operative Banking Group: when it increased the SVR, it appears to have misled customers about an increase in the funding costs of their mortgage.
I now turn to the question of the regulatory perimeter. In 2009, the previous Labour Government proposed expanding the regulatory perimeter to include the new activity of managing a mortgage. They had identified the risk of mortgages being sold to unregulated firms such as hedge funds and private equity firms, and that this had the potential to cause detriment to borrowers. Andrew Bailey, now Governor of the Bank of England, told the Treasury Committee in 2020 that there was a population of mortgage prisoners who would not benefit from the FCA’s proposals and that expanding the FCA’s regulatory perimeter was the only way that the regulator could conclusively address the question of mortgage prisoners. He was right. However, after Mr Bailey left the FCA, the regulator had a change of heart and claimed that there was no need to expand the perimeter. The Conservative Government also rejected the proposal of the APPG on Mortgage Prisoners to expand the perimeter.
An inquiry is urgently needed, as the situation of mortgage prisoners gets worse every month. After the failed mini-Budget and the rise of interest rates, mortgage prisoners are now paying rates of between 8% and 9%. The campaign group UK Mortgage Prisoners has told me that firms such as Landmark, Rooftop and Heliodor have been quick to seek repossession orders.
Data from the FCA suggests that you are around 10 times more likely to be repossessed if you are a mortgage prisoner. This campaign group has dealt with many harrowing cases of suicide, or attempted suicide, mortgage prisoners struggling to eat or heat their homes, the children of mortgage prisoners suffering and mortgage prisoners with cancer enduring miserable final years while they wait for help. The inquiry will review and assess the level of harm caused to mortgage prisoners. No fault should be attached to mortgage prisoners themselves. They took out a mortgage with a fully regulated high street bank and found their mortgages transferred to inactive lenders and unregulated entities, which did not have to treat them fairly.
The LSE report on the situation is perfectly clear when it says:
“The borrowers themselves were not to blame”.
Martin Lewis has said:
“Mortgage prisoners have been left paying obscene interest rates for over a decade, through no fault of their own”
The inquiry will have the power to propose solutions to help current mortgage prisoners and prevent future generations of them being created. The LSE report, which was funded generously by Martin Lewis, put forward a number of solutions, including greater access to advice and government loans and guarantees along the lines of the Help to Buy scheme. The APPG on Mortgage Prisoners also put forward solutions, such as capping SVRs and an entitlement for all mortgage prisoners to access fixed rates, as well as changes to the FCA guidance concerning interest-only mortgages.
The Labour Party voted for this cap in your Lordships’ House and the Bill was amended accordingly. The amendment was removed by the Tories in the Commons. Despite having numerous meetings with several Ministers and Economic Secretaries over the 16 months leading up to the election, the Conservative Government did not provide Martin Lewis with a full response to his LSE report or the other solutions put forward by the APPG.
The excellent Library briefing for this debate notes that Martin Lewis wrote to the Chancellor in July
“asking for the new government to respond to the LSE reports”.
It quotes him as saying that
“the ‘financial, mental and physical toll on those trapped’ as mortgage prisoners had led to ‘repossessions, hardship and, terribly, suicide’. At the time of writing”—
six months on—
“the government has not publicly responded to the letter”.
I hope the Minister will tell us when the Government will respond substantively to the LSE report.
We need an inquiry so we can allocate responsibility and examine mistakes within government and regulators that caused the very bad situation for thousands of mortgage prisoners. We need an inquiry to identify and correct the failures of the regulators and correct any miscarriages of justice which have occurred. Most of all, we need an inquiry to develop and implement solutions to help the current generation of mortgage prisoners stay in their homes and stop them being exploited by vulture funds. I beg to move.
The Earl of Lytton (CB)
My Lords, I apologise to the noble Lord, Lord Sharkey, and to the House for being a few seconds late, due to a power failure on the rail network. I welcome the opportunity to participate on his Bill and I thank the noble Lord for his persistence.
Seemingly, the FCA’s response to him does not recognise his definition of mortgage prisoner. In my view, that is mere semantics, serving only to avoid addressing the problem. The key issue is whether the Government’s policies lead to circumstances that prejudice home owners as mortgagors. I support the noble Lord because it is clear that the interrelated nature of our financial and property sector is not being considered in the round. Whatever the reasons—out of scope, not a priority or too difficult—I share his view that this simply is not good enough.
The largest number of people trapped by the mortgage situation are leaseholders caught up in the building safety crisis, about which I have spoken a number of times before. Hundreds of thousands of them cannot sell or move on. Seemingly, the FCA does not recognise their existence as mortgage prisoner category. At its root, this is a combination of deregulation without effective oversight, lax enforcement without any meaningful sanctions and a propensity among developers and constructors to take the least onerous approach in a race to the bottom on quality and cost cutting, using untested construction techniques and inappropriate materials and failing to meet even the construction standards of 60 years ago.
I refer to the cases of two correspondents who have come to me recently with their accounts. The first narrowly avoided becoming a mortgage prisoner only because he was able to find an additional £10,000 to cover the tougher valuation terms of a new mortgage lender. The existing lender had proposed 70% higher monthly interest payments and a £10,000 higher arrangement fee simply for a renewal. The building is constructed using Panablok, a system for buildings up to 10 metres high, using a structural panel with a thin cementitious outer layer over a combustible inner core—a material described by some experts as “solid petroleum” such is the fuel load it presents in the event of fire. Fire risk assessments identified significant damage to parts of these panels, meaning that portions of the protective skin are missing. The system of dry lining finishes internally, which is integral to its basic fire compliance in the first place and poses an almost inevitable risk of damaging the brittle encasement layer of the panel. Accordingly, the rating of the building is significantly and adversely affected.
Under PAS 9980, I am told that it is deemed disproportionately expensive to replace the panels with a non-combustible alternative, even though a building of that height should never have been constructed with that system in the first place, because it is much higher than the 10 metres for approved use. Even worse is that the panels have a service life of about 60 years. Latent hazards and inappropriate use apart, this is a remarkably limited lifespan for a structural element in a modern residential building. Yet, this underpinned the sale of flats on 250-year leases—four times the likely economic building life. He asks me if this amounts to mis-selling. I ask the Minister the same question. High ongoing insurance costs, and the virtual impossibility of changing a mortgagee or averting any future and potentially catastrophic change in mortgagee approach to risk, seem permanent features. For other less well-funded leaseholders, it is much more serious. This is a trap which makes their home their prison.
I am afraid the second case is a sadder tale altogether. It concerns a Mr Crawford Wilson—who has allowed me to refer to him by name—who came to see me last year. He told me that in 2008, he bought an investment flat in Chelmsford built by Barratt, with a mortgage for 10 years via Mortgage Express. That provider failed in the wake of the financial crisis and was scooped up by UKAR. At the end of the mortgage term in 2018, the mortgage could not be renewed with any provider, despite his ability to make repayments, mainly because the building was found to have cladding and compartmentation issues and was thus caught up in the post-Grenfell building safety crisis. Pleas to the Levelling Up Secretary went unheeded. Repossession proceedings ensued and were effected in 2021. Hyalite, the firm to which UKAR transferred the relevant loans, eventually sold the flat in 2024 without an EWS1 certificate—which would normally be necessary for such a sale to proceed—for a forced-sale sum 43% lower than the price originally paid in 2008. Mr Wilson is now being pursued for bankruptcy for a large shortfall, a sum substantially enhanced by the generous costs of administering the debt.
I am indebted—as the noble Lord, Lord Sharkey, is—to the Library of your Lordships’ House, not only for the briefing on this Bill but for digging out the 2010 Budget Statement that included the following:
“The Government today announces its intention to integrate two of its wholly owned companies, NRAM and Bradford & Bingley plc, under a single holding company. The integrated business will be committed to providing excellent customer service”—
please note—
“leading arrears management and efficient operations. Both companies will remain as separate legal entities under the new holding company, each with its own balance sheet liabilities and government support arrangements. The Government believes this is the optimal solution to maximise value for the taxpayer and to create a solid platform for the orderly management of both companies’ mortgage books”.
There is absolutely nothing here about protecting innocent borrowers from foreseeable financial ruin. There seems to have been little understanding of the spreading contagion or assessed predictable outcomes for borrowers following the financial shock. Subsequently, the way government responded to the risks from the building safety crisis following the Grenfell fire arguably made things worse for far too many of them.
I put it to your Lordships that the case made by the noble Lord, Lord Sharkey, for a public inquiry to delve into the thinking and policies behind this whole area of mortgage lending is incontestable. Why is it that great departments of state appear to be unconcerned with the financial welfare of the citizen and apparently ignorant of the effects that their policies visit on society at large—and, for that matter, of the wider economic consequences for whole market sectors? In addition, what on any normal measure of their failure to understand, in terms of cross-departmental thinking, the consequences of other departments’ poor oversight? This does not meet the most basic functions of governance in mature and democratic nations, particularly in respect of protecting consumers and avoiding hazards. I am glad to note that this Government are committed to change from the past. Let us do this before the next disaster again leaves Ministers uselessly wringing their hands.
The Lord Bishop of Chelmsford
My Lords, I want to begin with a confession: I did not know much about the scandal of mortgage prisoners until just a few weeks ago. It surprised me how long this has been left unresolved. I felt compelled to speak to the plight of mortgage prisoners because, when a group of people are marginalised and suffer due to institutional failures, it is important that they are not forgotten and that the injustice is put right. So I thank the noble Lord, Lord Sharkey, for bringing this legislation forward, and I am grateful to everyone who is contributing today. We may well be a small group in this debate but it is no less significant because of that.
Mortgage prisoners are trapped in a set of circumstances that afflicts their lives. Excessive interest payments on their mortgage, financial stress for their families, powerlessness to change their circumstances and their lack of choice compared to most borrowers—all in the context of the cost of living crisis—leave many struggling to afford their homes. This is also a crisis not of their own making. It is reasonable to believe that home ownership would lead to further stability, yet many mortgage prisoners face a perilous fate, with their hopes shattered and lives turned upside down.
There is no legal definition of a mortgage prisoner. The FCA defines them as closed book borrowers who are unable to change to a new mortgage deal despite being in a position where they would benefit from switching if they met lenders’ risk appetite. This definition captures around 47,000 mortgage prisoners but thousands more are excluded because they are either in arrears, near the end of their mortgage term or already paying close to market rates. If we take this broader definition, there are possibly more than 200,000 mortgage prisoners still left in the UK, although the precise number cannot be estimated without the Treasury releasing the data.
The mortgage prisoner problem emerged from the financial crisis. For some, their misery has never ended, starting with the collapse and eventual bailout of Northern Rock and Bradford & Bingley. It was not meant to be this way. Northern Rock was an AAA lender and regarded as one of the largest and safest banks, with a fast-growing national presence that had roots firmly tied in the north-east. Once Northern Rock collapsed, the Government took over and later resold those mortgages back into the private sector, but without written assurances that customers would be able to access the remortgage market. A small proportion were bought by active mortgage lenders but most were sold to closed book lenders, such as Heliodor Mortgages—an entity that none of us could borrow from but which exists solely to serve former Northern Rock customers. To give a sense of how dissatisfied these customers are, every one of the 134 Trustpilot reviews of Heliodor is one star, the lowest possible rating.
This situation has been exacerbated by the increase in interest rates over the past few years. As the Bank of England raised the base rate 15 times in two years, the standard variable interest rates paid by mortgage prisoners shot up. Other borrowers can avoid paying SVRs by switching to a fixed-rate mortgage or a tracker mortgage. The problem for prisoners is that they cannot switch and are at the mercy of the lender.
I was for obvious reasons particularly sorry to hear about the terrible case of the gentleman in Chelmsford to whom the noble Earl, Lord Lytton, referred—I think it was a Mr Wilson. I want additionally to read briefly some testimonies of mortgage prisoners, which Martin Lewis, who has already been mentioned, has gathered on his Money Saving Expert website. One said:
“Being a mortgage prisoner has been hell to me, you worry about losing your home, you can’t plan on starting a family and moving forward with your life”.
Another said:
“It cannot be fair or reasonable to transfer a mortgage to an inactive lender, hike up the”
standard variable rate
“and make it impossible ... to find another deal”.
Although the market is meant to deliver choice, it is broken if consumers are unable to switch because their mortgages have been sold to investment firms that are not authorised to make new contracts.
Mortgage prisoners deserve our attention. Many have suffered enormously already. Some are trapped in paying interest-only mortgages and with little equity left in their homes. In most cases, families cannot easily move elsewhere when they have young children or strong ties to their localities. Many are unable to cope with the high interest payments and are now in arrears, which narrows their options even further. This situation is a consequence of the way in which government sold the mortgages of collapsed lenders back into the private sector, as well as the failure to take proper responsibility since then; that is why I support the proposal in this Bill to set up a public inquiry to investigate the issue.
The LSE has advised that all closed book borrowers should be offered comprehensive advice. Other suggestions include equity loans on the model of Help to Buy and a government guarantee for active lenders to offer prisoners new mortgages. Clearly, this is a complex issue, but, if a public inquiry can lead to decisive action to set these mortgage prisoners free, it would draw a line under the scandal, which has been going on for far too long and amounts to a deep injustice.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Chelmsford, who really cut to the nub of this issue and the reason for this Bill. This is a case of extreme, long-term injustice in which people suffer through absolutely no fault of their own. The fault lies with the failure of the financial sector, the regulators and the Government to take action.
The speech from the noble Earl, Earl Lytton, was particularly powerful in illustrating the way in which failures in the financial sector interact with gross failures of regulation in the building sector. Some people are almost literally being crunched in the middle between those two situations.
I commend the noble Lord, Lord Sharkey, on bringing this Bill before us and being a dedicated, long-term campaigner on behalf of mortgage prisoners; he gave us a clear explanation of the issue, which I will not repeat. I acknowledge that I have acted as a modest supporter of the noble Lord since the passages of the Financial Services Act 2021 and the Financial Services and Markets Act 2023. In that modest supporting role, I went with him to the Treasury with some of the victims affected—the mortgage prisoners themselves. I have to note that, as we heard from the noble Lord, at that meeting, we heard the testimony of just how much this has destroyed some people’s lives; indeed, we have seen some tragic cases of suicide.
However, I am afraid that what also came through from that meeting was the sense that the Treasury really did not grasp the issue. That makes a powerful case for the Bill before us today and for a public inquiry in order to get the full understanding. We have the excellent LSE/Martin Lewis report but relying on academics or on someone who is, after all, just an ordinary member of the public to explain things is really not the right place to be in this great systems failure case.
The timing of this debate is interesting. We are talking about an extreme case of abuse of consumers in the all-too-often predatory financial sector. We are seeing scandals strike again and again, and innocent consumers are the victims. It is concerning that, just yesterday, we saw the unexpected resignation of the head of the UK Financial Ombudsman Service amid what has been described as a
“major review of the consumer redress system in the financial services sector”.
The Financial Times reports that she was
“under pressure to take a less consumer-friendly approach”.
We are told that industry executives complained that she was too much on the side of consumers. The head of the consumer group Fairer Finance is quoted in the Financial Times as saying:
“It may well be that she is quitting in protest at the direction of travel … perhaps the strongest signal yet that the Treasury is serious about watering down consumer protections”.
The context of the Bill provides a real opportunity for the Minister and the Government to signal that that is indeed not the case. Accepting the Bill would be one way of sending that signal. We are, of course, in
“the fraud capital of the world”.
as the head of UK Finance said. Surely, the Government should be more concerned about the fate of consumers, given what we have heard today.
I have one final thought. An article in the Express newspaper on 22 January cited the FCA’s figure of 47,000 mortgage prisoners. The story reported that:
“The Economic Secretary to the Treasury has promised to look into these latest proposals”,
those proposals being those of the LSE and Martin Lewis. The signal here to mortgage prisoners from at least one media source is that are going to see progress; they will see genuine reaction from the Government. I can only offer my hope that we will hear something positive today for all the people who read that story and had, after so many years of suffering, a little dash of hope.
Lord Altrincham (Con)
My Lords, I begin by recognising the work of the noble Lord, Lord Sharkey, in bringing forward the Bill, and bringing this issue to this House on multiple occasions on behalf of thousands of families who are affected by this issue. I also commend his efforts in his role as co-chair of the APPG on Mortgage Prisoners.
I declare my recent interest as a director of the Co-operative Bank, which has been mentioned, and indirect involvement in the events of 2008 and 2009 that saw the creation of UK Asset Resolution, which in turn sold on the mortgage books that concern the Bill. The Government were able to sell on the mortgage books because UK domestic mortgages were, for the most part, very secure. So many issues flowed from the financial crisis that there can be confusion as to the source of the solvency and liquidity problems, but for the large part, domestic mortgages were well managed, with low defaults, and that includes Northern Rock, which we just heard about.
Mortgage prisoners are individuals and families unable to secure better mortgage deals due to various factors, often through no fault of their own. Indeed, many endure financial hardship and live in fear of rising interest rates. This problem arose from a mixture of poor credit quality, pricing and inertia. Typically, mortgage prisoners are unable to switch mortgages to a better deal even if they are up to date with their payments. Most mortgage prisoners have a mortgage in a closed book of an inactive firm.
These mortgage borrowers were much more likely to have got a mortgage without proof of income or with an impaired credit history. They still, even today, have relatively high loan-to-value ratios after many years of house price inflation. They often have unsecured debt as well. Many have interest-only mortgages with no repayment plan. Ultimately, they tend to have to have higher risk characteristics than borrowers with active lenders.
The problem of mortgage prisoners is well documented. Mortgage prisoners are primarily a legacy issue stemming from the 2008 financial crisis and subsequent regulatory changes. Some lenders were forced to deleverage and they sold mortgages to third parties. They were under regulatory obligation to do so. Additionally, a significant number of mortgage prisoners are tied to inactive or unregulated lenders. These lenders do not offer new mortgage products, thereby leaving borrowers with few options to escape high rates even if they have a strong payment history.
The FCA implemented stricter affordability rules under the mortgage market review of 2014. Those changes were designed to prevent reckless lending and ensure that borrowers could afford their mortgages. Although the reforms were necessary to stabilise the market and were widely thought to be an appropriate regulatory response, it is understood that they may have may have inadvertently trapped some home owners into high interest deals.
I fully acknowledge the challenges these families face and share their frustration at this very long-running situation but I do not believe that an inquiry into the events surrounding the creation of mortgage prisoners, their consequences and any other relevant matters is necessary. That does not mean that inquiries are not important in exceptional circumstances. However, in this instance, an inquiry risks delaying meaningful progress, misallocating resources and offering little in the way of new insights.
Some progress has been made. The FCA has relaxed affordability checks for mortgage prisoners, allowing lenders to assess applicants based on their payment history rather than rigid affordability criteria. Under the previous Government, in 2019, the FCA introduced modified mortgage assessment criteria in an effort to allow certain groups of mortgage holders to switch to better deals. Inactive lenders and unregulated firms had to inform their mortgage holders of the possibility of moving elsewhere.
We have emphasised the role of the FCA in resolving this issue and have publicly acknowledged the challenges faced by mortgage prisoners. There were ongoing discussions about how to how to support borrowers trapped with inactive or unregulated lenders. We explored options to transfer these mortgages to active lenders or create mechanisms that allowed borrowers to access competitive rates. While there is more work to be done, the mechanisms for addressing the problem are already in place. Launching an inquiry risks diverting attention and resources away from those practical efforts.
The noble Lord, Lord Sharkey, has in the past proposed a price cap, and that could still be a way forward, perhaps by asking the banks to agree a price for a higher rate borrower and then allow the price to be a cap on any transfer—ideally, of course, at a competitive lower price. The FCA could, again, ask companies to write to mortgage holders with good credit history to jog them into applying for a standard mortgage, because there is inertia in this problem as well.
To conclude, an inquiry may seem constructive, yet it is a lengthy process and can often take months, if not longer, to complete, and requires significant resources. We do not want to risk delaying progress. Targeted interventions can provide relief to those affected without requiring an inquiry. By focusing on practical measures, we can ensure that resources are used efficiently and effectively. The previous Government understood the difficulties faced by borrowers who are not able to switch to a new mortgage deal. We continue to work with the FCA and the sector on this issue and carefully consider practical and proportionate solutions put forward. We hope that the present Government will do the same.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, it is a pleasure to speak in this debate. I begin by congratulating the noble Lord, Lord Sharkey, on his Bill and on his opening speech today. I thank him for bringing this issue to the attention of your Lordships’ House, not only through this Bill but through his campaigning over recent years.
The Government recognise the seriousness of the issue raised by this Bill—the challenge facing borrowers who have been unable to switch to a new mortgage deal despite keeping up to date with their repayments. While they constitute a small proportion of mortgage borrowers, for those affected the impact has been all too real, and I commend the noble Lord, Lord Sharkey, for his work to highlight their situation.
The Bill has one central provision; to establish a public inquiry into the events surrounding the creation of the group of borrowers commonly referred to as “mortgage prisoners”. The Bill also contains terms of reference for that inquiry. I will seek to address three key points. First, the origins of this issue, and why the Government’s assessment is that the right processes were followed in relation to this group following the financial crisis. Secondly, the case for a public inquiry and why the Government do not believe that it represents the right approach. Thirdly, support to those affected and the action the Government are now taking.
The vast majority of the borrowers we are discussing today took out mortgages under less stringent lending conditions prior to the financial crisis. Many of these mortgages were held with either Northern Rock or Bradford & Bingley, which were subsequently nationalised by the Government to protect financial stability. In 2010, they were transferred to a public body known as UK Asset Resolution, which was unable to offer new deals to borrowers because of state aid rules. Between 2014 and 2021, UK Asset Resolution sold these mortgages back to the private sector. Many were sold to so-called inactive lenders that did not offer new mortgage deals, leaving some borrowers paying costlier standard variable rate tariffs. Those borrowers were, and in some cases still are, unable to switch to another lender because they do not meet modern lending criteria. The terms of reference for the inquiry proposed by the Bill seek to investigate the process by which these mortgages were sold back to the private sector.
The Government recognise the challenges faced by these borrowers and the very real impact this process has had on them. However, our assessment is that the correct protections were put in place at the time and that all relevant Financial Conduct Authority rules were followed.
Specifically, bidders were prevented from changing a customer’s existing terms and conditions. Rules ensured that all mortgages were either administered by a Financial Conduct Authority regulated entity or made in accordance with Financial Conduct Authority regulations. Further protections were included with each subsequent sale, some of which followed recommendations from Parliament.
All types of lenders, including “active” lenders who offered new loans, were invited to take part in this process, but interest from active lenders was very limited and no viable bids were put forward in any of the sales. This likely reflects the fact that most of the loans involved were outside of most active lenders’ risk appetite following the financial crisis. The Government have studied this issue carefully but we remain of the view that no further action should have been taken at the time to encourage only active lenders to take part, particularly given the importance of delivering value for money to the taxpayer.
The Bill before your Lordships’ House proposes a statutory public inquiry to explore these issues in greater depth. The noble Lord, Lord Sharkey, has spoken powerfully about the situation faced by affected borrowers and his desire to fully understand the process which resulted in their inability to obtain a new mortgage deal. The Government understand and respect this argument. However, we believe the scrutiny provided to date has produced the necessary information in relation to these events. This includes the two reports published by the National Audit Office covering various aspects of the sales process and, separately, a Public Accounts Committee report into one of the biggest asset sales. The previous Government also provided relevant disclosures to Parliament on the completion of each sale.
The Government agree with all those who wish to see these issues fully and transparently investigated. We will continue to work with regulators and industry to ensure that the issues and specific proposals raised by the report mentioned by the noble Lord, Lord Sharkey, are properly considered. However, given the volume of information already in the public domain, we do not believe a further inquiry would provide any significantly new information or additional support to those affected.
Finally, on the support currently available to borrowers, there are protections in place for vulnerable mortgage borrowers. Financial Conduct Authority rules require firms to engage individually with their customers to provide tailored support. Lenders have been allowed to waive certain regulatory requirements when assessing whether a new mortgage deal is affordable for borrowers who are up to date with their repayments. This applies to the cohort of borrowers we have been focusing on. Mortgage lenders, including inactive firms, are also now subject to the consumer duty, which ensures that firms prioritise fair treatment and good outcomes for their customers.
I fully understand that some noble Lords wish us to go further. I assure them that we will continue to consider this issue closely by listening to those borrowers affected and engaging with regulators, the industry and other key stakeholders, including the noble Lord, Lord Sharkey, about the processes currently in place.
The Government recognise the impact felt by this group of mortgage borrowers. Their concerns have been ably highlighted by the noble Lord in this debate, as well as by other noble Lords from across the House. The Government will continue to listen carefully to their concerns and consult with others who have an interest in this issue, not least those households directly affected.
However, we are unable to support the Bill before your Lordships’ House today. Our assessment is that the correct process was followed when these mortgages were sold back to the private sector in the years after the financial crisis. We believe that the necessary information has now been put in the public domain, both as evidence submitted to Parliament by the previous Government and through other external analyses, including from the National Audit Office. Most importantly for the households affected, we are confident that significant protections are in place to protect vulnerable mortgage borrowers.
Although I appreciate this will not satisfy the noble Lord’s demands, I hope he will continue to work with the Government, as he has done throughout his campaign on this issue.
Baroness Bennett of Manor Castle (GP)
The noble Lord did not refer to my questions about the UK Financial Ombudsman Service. I understand that this is a new situation. Perhaps he could write to me about that.
Lord Sharkey (LD)
My Lords, I thank everybody who has spoken so very powerfully about the plight of the mortgage prisoners. It is important to make one point about the mortgage prisoners: they are like everybody else in every other respect. They are not a delinquent or feckless part of society. They are not reckless. What befell them could have happened to a holder of a mortgage from any company that suffered the kind of damage that Northern Rock did during the crisis. No special characteristics of the mortgage prisoners somehow make them worthy of less attention or of getting worse deals.
I also note that the noble Lord, Lord Altrincham, did not entirely rule out a cap on SVRs. That is encouraging and perhaps the precursor to a longer situation.
I also acknowledge the Minister’s invitation to remain involved with discussions about the plight of mortgage prisoners. This is an ongoing, terrible situation, and I do not think anybody disagrees with that. Before I get to the real question that arises from this, I should ask again when we can expect a reply to Martin Lewis’s letter to the Chancellor. I am prepared to give way if the noble Lord will tell me immediately.
Lord Livermore (Lab)
As I tried to indicate in my remarks, we will continue to engage and look at that report, but I cannot guarantee a reply on any particular timescale.
Lord Sharkey (LD)
I close by reminding everybody that this is a current situation. Lots of people are suffering very badly indeed because of it, and it is not getting any better. So I close with Lenin’s favourite question: what is to be done? I beg to move.
Education (Assemblies) Bill [HL]
(1 day, 16 hours ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Burt of Solihull (LD)
My Lords, I am humbled to introduce this Bill in your Lordships’ House. I am grateful to all noble Lords who have joined us today. I declare my interest as vice-chair of the All-Party Parliamentary Humanist Group and put on record my thanks to Humanists UK as the secretariat that helped me bring forward the Bill, and to the National Secular Society.
More than three years ago, I first stood in this Chamber to put forward the same Bill. Back then, it passed through the Lords but fell in the other place due to lack of time. I am also grateful to the noble Baroness, Lady Meacher, who put forward an amendment to introduce inclusive assemblies to the Schools Bill in 2022. So this is a Bill whose time has come.
The UK is the only western democracy that legally imposes worship in publicly funded schools. Sections 70 and 71 of the Schools Standards and Framework Act require all state schools that are not of a religious nature already to hold daily acts of collective worship that must be of a “wholly or mainly” Christian character. The Bill seeks to reform assemblies in schools without a religious character to make sure they include all children and contribute to their spiritual, moral, social and cultural development.
In my opinion, school assemblies can be a good thing. They should foster a sense of community and promote the moral and social development of pupils. But that is not what is happening in many schools today, because the required religious aspect means that many children are withdrawn from assemblies, often to be left in corridors or classrooms, excluded from their peers and without any meaningful equivalent activity, which can make a child feel excluded and different. Some non-Christian children will feel pressurised to attend just to fit in.
This is not a radical Bill, and it would not impact on the teaching of religion or belief in schools. It would not affect the ability of the one-third of schools that are religious schools to conduct collective worship, although it does mandate that children withdrawn from collective worship in these schools should be awarded equally meaningful school assemblies instead of being left in corridors. It would allow pupils and teachers at schools of no religious character to organise voluntary acts of worship for children who want to attend, so long as their parents permit them to do so.
The Bill would not end assemblies in schools. Rather, it would require schools to hold assemblies focused on the spiritual, moral, social and cultural development of all children. The British Social Attitudes survey consistently shows that around half of British adults say they belong to no religion and that more than 60% do not identify as Christian. Of those aged 18 to 24, 68% say they are non-religious versus 18% saying they are Christian.
Parents welcome the Bill. A 2019 YouGov poll asked parents to rank a list of 13 possible activities that could take place in a school assembly, and they ranked collective worship last. In fact, more than half said that religious worship was not an appropriate activity. Instead, in front of religious worship they ranked the environment and nature, physical and mental health, the celebration of achievements, equality and non-discrimination, charity and volunteering, relationships and self-esteem, exploration of moral and ethical issues, humanitarian issues, historical events, art and culture, education about religions and beliefs, and politics and government. In my opinion, and in that of these children’s parents, those are the topics we should be covering in assemblies.
Parents are right that worship is not appropriate. It does not uphold children’s rights under the Human Rights Act 1998 and the United Nations Convention on the Rights of the Child. Younger children also have the right to freedom of religion or belief, and this right is not respected if religious worship is imposed on them. Accordingly, the UN children’s rights committee has for years called for the repeal of the UK’s compulsory worship laws and did so again in 2023. Moreover, a recent poll of school leaders found that 70% opposed collective worship and only 12% supported the current law.
Finally, I thank all Peers for joining us today. The former Bishop of Oxford, the noble and right reverend Lord, Lord Harries of Pentregarth, wrote to give his apologies and asked me to say a few words on his behalf in support of the Bill. He said that just because he believes in the Christian faith and to him it is of supreme importance, he sees no reason why non-religious teachers should have to conduct collective worship for pupils, many of whom would be of other religions or beliefs. The Bill presents an opportunity to uphold children’s rights to freedom of religion or belief and to enable them to be present and included in their school life. I beg to move.
Lord Watson of Invergowrie (Lab)
My Lords, I congratulate the noble Baroness, Lady Burt, on her success in bringing the Bill forward to Second Reading. In doing so, I commend her tenacity because I well remember her first attempt at this legislation just over three years ago. I can only wish her more success on this occasion. In preparation for this debate, I dug out the Hansard for that debate, which was in September 2021, and I noted that the noble Baronesses, Lady Bennett and Lady Meacher, also spoke on that day, so there is an element of déjà vu for some of us in your Lordships’ House this afternoon.
I say to the noble Baroness, Lady Bennett, before she departs, that I salute her indefatigability in that she is speaking in three of today’s debates. That is quite remarkable, and I only hope that she had an energy drink with her breakfast. I look forward to hearing the speech of the noble Lord, Lord Weir of Ballyholme. As a former Education Minister in the Northern Ireland Executive, he will speak with some authority.
The noble Baroness, Lady Burt, again introduced her Bill with conviction, and in doing so highlighted the many issues that surround the requirement for collective worship in England. As she said, the UK is the only western democracy with legal requirements for religious worship in schools, and that must be broadly Christian in those without a religious character. I think that is clearly inappropriate in a country where the 2021 census showed for the first time that Christians are now a minority, and where the population are less religious and more diverse than ever before. I see that as a strength of our democracy and a development that should be embraced, and I believe the legislation should be modernised accordingly.
The United Nations Committee on the Rights of the Child has repeatedly called for the repeal of legislation concerning collective worship in schools, describing it as incompatible with children’s freedom of religion or belief. With the Children’s Wellbeing and Schools Bill due in your Lordships’ House shortly, perhaps there might be an opportunity to use it as a vehicle that brings about change.
The law as it stands is, I have to say, widely ignored. A 2022 survey of more than 7,500 teachers recorded 66% as saying that their school did not hold collective worship. This included not just 79% of teachers at schools without a religious character but, remarkably in some respects, 11% of those teaching in faith schools. An investigation by Schools Week last year revealed that in place of an act of Christian worship, some schools now teach pupils about looking after the planet and mindfulness instead. Other schools are replacing Christian worship with multifaith assemblies. There was a time when Ofsted was required to note non-compliance, but it ceased inspecting collective worship some 20 years ago after three-quarters of schools were found to be non-compliant, so the law certainly needs updating to reflect current social trends. The existing guidance on collective worship dates from 1994, in spite of several changes to primary legislation since then, consolidation in the Education Act 1996 and reconsolidation in the School Standards and Framework Act 1998. So even if, as I suspect, my noble friend the Minister will say that the new Government have no plans to amend the current requirement for collective worship in schools, at least the guidance relating to the legislation is surely due an update after more than a quarter of a century.
My research for this debate uncovered a Question on collective worship in schools submitted by a Conservative. He asked HMG
“what action they intend to take in respect of the 70 per cent of secondary schools that do not comply fully with the requirement to have a specific daily act of worship”.
The reply he received was:
“The department relies on the OFSTED inspection cycle to identify where failure to fully meet statutory requirements is a key issue, and arrangements are in place within that inspection cycle to revisit those key issues on post inspection plans. Schools which have difficulty in meeting their statutory requirements should seek advice from their local Standing Advisory Committee on Religious Education”.—[Official Report, 11/10/1999; col. WA 70.]
That question was asked in October 1999 by the former Secretary of State for Education, now the noble Lord, Lord Patten. It was answered by the then Education Minister, my noble friend Lady Blackstone. Not much has changed in 25 years, but I believe it should. Assemblies are important, as the noble Baroness, Lady Burt, said, to strengthen the school community and teach children morals. That is a good reason to make school assemblies inclusive for all, with no religious worship. Replacing collective worship will reform and revitalise school assemblies. This, I believe, will enhance pupils’ freedom of religion or belief while enabling schools to foster a shared sense of belonging.
As the noble Baroness, Lady Burt, said, this is a Bill whose time has come. I agree, and I wish it well.
Baroness Meacher (CB)
My Lords, I will speak extremely briefly, but I endorse everything that the noble Baroness, Lady Burt, said. It seems to me that morality is incredibly important in our society; we are losing a huge opportunity by having Christian assemblies in schools, which of course exclude the majority of children. Children need to be taught early the importance of generosity, kindness, neighbourliness, community support and so on. All of these values are hugely important; it is vital that children get hold of and endorse them early on in their lives, then put them into practice through their school careers.
I regard it as very important that we replace religious Christian assemblies with morality-based assemblies that are completely inclusive. Every child must understand why they are there and the importance of what is being said. This is a hugely important issue, as far as I am concerned. I endorse very much what the noble Baroness, Lady Burt, said.
The Lord Bishop of Chelmsford
My Lords, I warmly welcome this debate. I thank the noble Baroness, Lady Burt, for her introduction, as well as the other noble Lords who have spoken. I look forward to the Minister’s response.
Although I understand the intention of the Bill, it may not surprise your Lordships to hear that I will express some reservations about the proposals and say that I believe the current legislation already affords sufficient flexibility. I suspect that I may well be a lone voice in the Chamber today. I was interested to hear the noble Baroness quote my esteemed friend, the noble and right reverend Lord, Lord Harries, formerly the Bishop of Oxford. Perhaps it is good to know that there are differences of opinion among Bishops in this House.
Collective worship is a vital part of school life. It is key to fostering a sense of fellowship and cohesion; to celebrating festivals, and not just Christian ones; and to strengthening religious literacy. Importantly, the current legislation already allows schools to tailor their provision to suit their pupils’ spiritual needs, and allows schools and academies to develop their ethos and values.
Among the many benefits of collective worship is the chance to explore and understand values such as forgiveness, humility, gratitude and justice. Collective worship allows for time away from the target-driven culture of education, creating a space for the possibility of an encounter with the divine or for reflection on the larger questions of life: the meaning and purpose of life. Children need space to ponder these things, which are the province of spirituality. We are spiritual beings, and spirituality finds an anchor in collective worship. Research shows that spirituality has a very strong impact on well-being and mental health, whether religious or not.
Some may say that the removal of collective worship would allow schools to allocate extra time to cover themes such as the environment, health, relationships, self-esteem and so on, but it is likely that schools may well end up using this time for extra lessons such as maths and English instead. I worry that the Bill will simply remove the protection around valuable space for reflection as part of the school day. Whether in times of crisis or celebration, collective worship brings the entire community together for reflection.
There is no doubt that Britain has become less overtly religious over the past decades, yet, although fewer of us call ourselves practising Christians, the country remains steeped in echoes of our collective faith and many would still describe themselves as spiritual. Worship and spirituality underpin the ceremonies that shape our lives. Often, still, it is the responsibility of the Church of England to capture and make space for expression of the national mood, and many turn to faith institutions in times of life and death. The death of Queen Elizabeth II confronted us all with our own mortality, our losses and the realisation of how little control we have over our futures. The late Queen’s death conjured up a latent spirituality, which brought the nation together in mourning and thanksgiving.
The Church of England has always sought to bring to life the rituals that define us. It has long played an integral part in educating our children, from the first monastic schools and the inception of universities to the founding of the National Society and the thousands of faith schools that are dotted around the country today. The Church takes these commitments seriously. Alongside high-quality education, it offers high-quality collective worship that is inspiring, invitational and inclusive, and which exemplifies the principles of Christian generosity. Worship is collective in that it involves meeting, exploring, questioning and responding to others—and, for some, responding to God. It provides a safe space for children to ask questions and learn to sit with difference.
Schools across the country used NSE resources created in response to the Southport riots on the themes of “I weep when you are weeping” and “When there is hatred, let me sow peace”. These support pupils to explore issues arising from the news through a lens of community and cohesion, as well as a theology of peace-making. In schools without a religious character, the law is flexible and allows the tailoring of provision to suit their pupils’ needs, considering their ages, aptitudes and family backgrounds.
I am concerned that, if the Bill is passed in its current form, one consequence may be to make anything more than a wholly secular assembly illegal and contested in our schools. Most children would not know about the Christmas or Easter stories, nor have the opportunity to learn about other faiths, if it were not for collective worship. The effect of the Bill might be to deprive young people of the chance to experience spiritual, moral, social and cultural development through collective worship.
There is already provision for parents to withdraw their children from collective worship if they wish to do so, but, when there is no space for reflection on faith, people of all faiths feel diminished, not just Christians. Although it is right and I am glad that we are having this debate, I very much hope that the Bill will not be progressed—or, at least, that it will be amended in Committee.
Lord Weir of Ballyholme (DUP) [V]
My Lords, I am delighted to be able to speak in this debate. In following the right reverend Prelate the Bishop of Chelmsford, I assure her that she is not a lone voice in expressing concern over this Bill. I respectfully submit that the Bill in front of us is unnecessary, is overreaching in terms of its provisions and is potentially counterproductive.
I say “unnecessary” because, as the right reverend Prelate highlighted, there is already a high level of flexibility in our system. Indeed, there is a complete and sacrosanct opportunity for any pupil, via their parents or as sixth formers, to withdraw from any assembly. If a religious assembly goes against the religious views of a family, or if they wish to express a more secular point of view, there is that complete freedom to withdraw. This Bill does not remove compulsion from anyone; therefore, it is solving a problem that does not necessarily exist.
On the contrary, although there is at present the opportunity to withdraw if someone has a fundamental objection, I see no provision in this Bill that allows any parent to object to what they may believe to be a humanist assembly. It makes those assemblies completely compulsory, and reduces rights rather than enhancing them.
It is the case that this is a form of overreaching. It does not simply remove the requirement for an assembly with a religious character to it; it actually bans the school from holding any
“acts of worship or … religious observance”.
How do we interpret religious observance or acts of worship? Clearly, that would constitute a prayer or a hymn, for example, or telling a story from the Bible. In a practical sense, what will this mean in interpretation? It could mean that, if a school were holding its annual act of remembrance, there would be a ban on saying a prayer of thanks for the service of those who paid the supreme sacrifice. That would be outside the law under the Bill. If a school wanted to hold a service of remembrance for a pupil who had sadly died, again, there could be no religious overtones to that. Does it mean that an annual nativity play—which is clearly telling a biblical story—would constitute an act of worship? If there were a desire for the pupils to sing “Away in a Manger” or some such like, that would be banned.
Those may seem extreme examples, but let us remember that this is not simply an absolute ban; there is a provision within the Bill that makes it a legal duty on the principal to enforce it. What will happen throughout the country is that many principals will err on the side of excluding absolutely everything, and so religion and Christianity will be something that dare not speak its name.
I believe the Bill is counterproductive for a number of reasons. However much it may be unfashionable to acknowledge it now, we have a country that is based, as is western democracy, on Judeo-Christian values. We owe a great deal to those values and they are equally relevant today, perhaps more so than in the past; such values, as has been highlighted, include teaching the sanctity of human life, and love and compassion—and not simply love for your family and friends, or even community, but the Christian ethos of loving your enemy. It strikes me that a system that moves away from those values into something more nebulous is a retrograde step. There is a danger that that leads to greater segregation within our society. If we are to have entirely humanist assemblies, in which no religious element is allowed at all, we will move to a situation that will push a number of parents into a straight choice between a state school and one that is much more religiously based, and that will effectively segregate people even more.
There are many conflicts within our society, sadly, and at times our answer is to treat the symptoms of those problems within our community; worse still, there are some who will try to scapegoat communities for the problems that we face, which brings the difficulties of looking to pass blame on to outsiders within our society. It strikes me that we need much more inclusive, ethical values that we can all share. I believe those are provided by way of collective worship. We need a level of inclusion, and this measure would disaggregate people into different camps.
The proposer of the Bill has rightly indicated that a situation in which collective worship is abolished leaves a vacuum, and so has sought to provide provision for assemblies that would be spiritual, moral, social and cultural. However, as has been highlighted, we have seen unfortunately within this country over the last number of years a number of culture wars, where there are differences of opinion over issues around gender identification, the environment and socioeconomic matters. This is a recipe for further controversy, because there will be divergences of differences within schools and between parents and schools about the contents of those assemblies. This has a danger of dragging us into a level of controversy.
In conclusion, we need to see more cohesion rather than the division that would be brought about by this Bill. We need to ensure freedom of choice, rather than the compulsory attendance and intolerance that would be inadvertently produced by the Bill. We need to have greater shared values as a wider country, rather than controversy and conflict over the content of such assemblies. Whatever the intentions behind the Bill, I think it is ill-judged and that we would be taking a retrograde step if as a Parliament we ultimately endorsed this legislation, certainly in its current form.
Lord Davies of Brixton (Lab)
As “Monty Python’s Flying Circus” had it, do you have that strange feeling of déjà vu? We have been here before; it is becoming a regular event—but that is quite right. It is an issue upon which I have strong views, and I always welcome the opportunity to express them.
I speak as a corridor child, although that was more to do with train timetables than any point of principle. However, I can testify to the pointlessness of being excluded from the life of a school, which is an inevitable result of the current approach. The Education (Assemblies) Bill is a necessary and overdue reform that seeks to replace the requirement for daily acts of Christian worship in non-faith schools with inclusive assemblies that cater for all students, regardless of their religious belief. In my view, the Bill represents a significant step towards ensuring that the education system in England reflects the diversity and inclusivity of modern British society. There is clearly a need for that.
I welcome that there has been a genuine debate at Second Reading. I note in particular that the right reverend Prelate the Bishop of Chelmsford referred to the flexibility of the current system. We need to be clear that that flexibility is available essentially because of an element of hypocrisy: enforcement of the terms of the law is not always followed through, which is clearly an unsatisfactory situation.
The requirement enshrined in the 1944 Act, reinforced in subsequent legislation, does not reflect the reality of today’s multicultural and multifaith society. The UK is home to people of many different religions and to many, including me, with no religion at all. According to the 2001 census, almost 40% of people in England and Wales identify as having no religion, and a growing proportion of the rest do not identify as Christian. Forcing students to participate in Christian worship—because that is effectively what happens—is not only out of step with societal changes but contradicts the principles of freedom of belief.
While parents have the right to withdraw their children from these acts of worship, that places an unfair burden on families and can isolate children from their peers. Despite my strong views, I never sought to withdraw my children from collective acts of Christian worship, because they were part of the life of the school. In a sense, you were coerced into participating in what is, essentially, a charade.
The Bill proposes a simple but powerful change: replacing mandated Christian worship with inclusive assemblies that promote the spiritual, moral, social and cultural development of all pupils. I note that the right reverend Prelate, in setting the terms for what she wanted to see take place in schools, introduced the word “worship” into what should be regarded as an acceptable school assembly. I do not know how widely held that view is, but it is the worship that is the problem; it needs to be excluded from activities that are part of the collective life of the school.
Under this Bill there would still be opportunities for reflection, moral education and community building, but in a way that does not privilege a religious perspective over others. Such an approach would ensure that all students feel equally valued and respected, regardless of their personal beliefs. Schools would have the flexibility to design assemblies that encourage critical thinking, ethical discussions and a sense of community, without requiring participation in religious practices. I very much support this Bill and hope it will progress and, at long last, even possibly change the law.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton. I think the word he used, “charade”, is a description of our current situation. It is worth looking at how, in other debates in your Lordships’ House, we see some very intense discussion about the nature of our schools. We are seeing a lot of debate on mental ill-health among our young people. Having a charade, which is what it very clearly is, at the foundation of this is not good.
I thank the noble Lord, Lord Watson of Invergowrie, for his kind words and apologise to the noble Lord for leaving the Chamber during his speech. If you do three Bills in a row, you have to time the comfort breaks quite carefully; I apologise for that.
As with many people in the debate today, I feel a sense of déjà vu in thanking the noble Baroness, Lady Burt of Solihull, for bringing this Bill, as I thanked her three years ago. The arguments for it now are clearer than ever.
Lord Davies of Brixton (Lab)
I apologise; I omitted from my speech my thanks to the noble Baroness. I want to take the opportunity to say thanks again to the noble Baroness, Lady Burt, for bringing this Bill back.
Baroness Bennett of Manor Castle (GP)
I am very happy to give way on that basis.
I want to pick up points made by the noble Lord, Lord Weir of Ballyholme. The Bill the noble Lord described does not reflect the Bill I see in front of me. Arguments were made on the question of representing society. But this is not our society any more. Looking at history, I thought it was interesting that the noble Lord spoke about Judaeo-Christianism as a foundation of democracy. I am not sure if the noble Lord knows that some of the earliest democracy that we know of in the world was the old Assyrian empire, well before even the ancient Greeks. To make a claim of exclusivity to democracy does not stack up.
There are three main points I want to make. First, we often hear about how much pressure there is on schools and how much difficulty they have fitting in time for important lessons and activities. Here is a space and time for moral, spiritual and cultural development that we could be using far more creatively and better. As the noble Baroness, Lady Burt, said, the time that is currently theoretically allocated for worship could be used creatively to learn about nature, and for the consideration of ourselves as human animals in a more than human world.
Secondly, we have not made a great deal of this argument today, but it is worth pointing out that the UN Committee on the Rights of the Child has said that the imposition of worship undermines children’s rights under Article 9 of the Human Rights Convention and Article 14 of the UN Convention on the Rights of the Child. As I said in the context of the first Bill I spoke on today, we are seeing the rule of law, human rights and UN traditions under such pressure around the world. That really does help to build the case for this Bill.
A 2024 poll showed that a large majority—70%—of school leaders oppose this collective worship. We have this provision, but we know that it is not being delivered. As the noble Lord, Lord Davies, said, this is a charade. The UK is the only sovereign state where Christian worship is compulsory in state schools, including those without a religious character. We are talking about a law dating back to 1944. It really is time that we moved on and provided care and support for our children.
During this time, a local theatre group could come in and put on a little play that poses a moral conundrum, which could then be discussed. As I said, the time could be used to discuss nature, or there could be lessons in first aid and how to react in situations where it is needed. This time could be well spent on these really useful things—education for life, not exams—and that is what the noble Baroness’s Bill moves towards.
I finish by offering the Green group’s strongest possible support for the Bill, and I very much hope that it progresses.
Baroness Falkner of Margravine (CB)
My Lords, I declare an interest as chair of the Equality and Human Rights Commission, but I emphasise that I am speaking in a personal capacity today. I was not listed for this debate because I could not get my name on the list in time, but I have listened with great interest.
I will make only three points. One is that the widening of what is covered in assemblies is attractive on the face of it, but it should be seen alongside the consequential narrowing of the other attributes of the current system, reducing the space to share values within the majority Judeo-Christian tradition and the ability to hold vibrant discussions about minority relations. I speak as a secular Muslim, and I know that those discussions are undertaken very well in the current curriculum, as well as those of other religious values.
My second point is on contested arguments, not least on social media, and disinformation in news, where young people are easily directed to misinformation. The current curriculum offers a safe space for some of these discussions. It is a rare opportunity for people to have some direction on what can be covered, but it still allows for the important value-driven conversations that are not available elsewhere to be imparted for young people to think about. So it is not clear to me how the widening of this space will not increase the ability for greater contestation. The noble Baroness, Lady Bennett of Manor Castle, has just given several examples that I agree are important, but that are easily covered in other curricula. For example, she mentioned the environment, which is well covered in geography.
So, on balance, as a supporter of both Humanists UK and the National Secular Society, I say to the House that two things possibly flow here. One is the danger of making these quite long-term changes in a Private Member’s Bill. The other is that we are well served. Let us have the analysis of which schools are not currently sufficiently wide in their teachings in these assemblies, and come back with more deliberate and considered legislation to see how we may improve that situation.
Baroness Barran (Con)
My Lords, I too congratulate the noble Baroness, Lady Burt of Solihull, on securing a Second Reading for her Bill, and I thank all noble Lords who have contributed to the debate. As we have heard this morning, when the Bill was considered in 2021, it did not pass through the Commons due to lack of time. But, at that time, the Conservative Government were unable to support it, and I am afraid—I guess this will not surprise the noble Baroness—our position has not changed. I will briefly outline my concerns, some of which were much more eloquently represented by the right reverend Prelate the Bishop of Chelmsford and the noble Lord, Lord Weir of Ballyholme.
The first point, which other noble Lords have made, is that collective worship is important and gives children in school a time to learn and to reflect but to do that with a sense of community, and religion allows children to learn some of the essential values of life. Many of the topics that the noble Baroness, Lady Burt, cited as possible topics for secular collective worship are part of Christianity and often already form part of the collective worship that happens in our schools every day. As the House is aware, there are already curriculum requirements for the spiritual, moral, social and cultural education of pupils through the PSHE curriculum. As we know, the Government have asked Professor Becky Francis to lead a review of the curriculum and make an assessment, and I am sure that if any changes are required she will bring them to the Government’s attention.
As the right reverend Prelate and the noble Lord, Lord Weir, both pointed out, the existing legislation is flexible, and I feel that it is unjust to describe it as an imposition or a coercion of children or their parents. As noble Lords know, it is already possible for children or indeed whole schools to be exempted from this practice. Therefore, we believe that this legislation is unnecessary. That of course includes schools where the principal religion is not Christianity.
I was interested to hear the thoughts of the noble Lord, Lord Weir, about removing parents’ right to remove their children if they were unhappy with a new collective worship or reflection—I am not sure what we would call it, but collective assembly—and the risk that it would exclude important commemorations. Obviously, we accept that social attitudes are changing, but one can also then make the argument that it is more important than ever that we have some common core that children understand and learn from, because they are unlikely to learn it elsewhere in modern society, other than possibly at home. The Judeo-Christian principles, which I am sure we could have many good debates about, underpin our culture and have withstood the test of time. We unravel at our peril that understanding and shared sense of who we are as a community, and the commonality across religions of some of those principles.
I was struck by the noble Lord, Lord Watson, very cunningly—in a good way—finding a Question from 25 years ago. I wonder whether he agrees with me that the question might be the same, but I do not think what we would see in the classroom or school hall would be the same. That is an important point in all this. Our teachers are absolutely aware of how our society is changing; they are aware of the diversity in their communities, and they have the skill and sensitivity to make sure that it is translated every morning to the collective worship—
Lord Watson of Invergowrie (Lab)
Just in response to the noble Baroness, I understand what she is saying about teachers reflecting the current situation in classroom. That is why I support the Bill—because things have moved on from the time of that 1999 Question to which I referred. To some extent, that is the whole point of the Bill; that was then and this is now.
Baroness Barran (Con)
I think that equally plays into the argument that the Bill is not needed. If our system is naturally evolving with a strong core, the argument is made for the Bill being unnecessary. As I listened to some of the moral questions that the noble Baroness, Lady Burt, and the right reverend Prelate posed, I thought that in some way many of those moral questions are exactly the same. We are achieving that in a gradual and evolutionary way in responding to those issues in our schools. Therefore, while I thank the noble Baroness for bringing the Bill to the House, I am afraid I cannot support it.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, I congratulate, as others have, the noble Baroness, Lady Burt of Solihull, on bringing her Bill to a Second Reading. Of course, as we have discussed during this debate, she introduced a similar Bill in 2021. We all love a tryer and there is real benefit in political life in persistence in the areas that you believe in. We all recognise her commitment to making changes to policy on collective worship in schools. Of course, other noble Lords have also had an encore today in their support for the Bill, including my noble friend Lord Watson and the noble Baronesses, Lady Meacher and Lady Bennett—whom I also commend for her commitment this morning to Private Members’ Bills. We have had a good debate today, with others making different points. My noble friend Lord Davies made a strong case on what is, I think, his first appearance in support of such a Bill.
Having said that, and despite the noble Baroness’s persistence, I am afraid that, although I have sympathy with many of the arguments made, I express reservations on behalf of the Government about the Bill. First, on collective worship, which many noble Lords have focused on, I believe that it fosters reflection on belief and societal values. As several noble Lords have said, existing legislation allows schools considerable flexibility to meet their pupils’ spiritual needs while promoting the school’s ethos and values. Despite Britain’s increasingly diverse religious landscape, Christianity remains the principal religion.
Like the noble Lord, Lord Watson, I also went back to the Hansard report of the debate in 2021. I was struck by the arguments made by my noble friend Lady Morris, who saw both sides of the argument but made a strong argument at that point about the social significance of the festivities and worship that often brings people together across the country and at particular times of both celebration and difficulty. This was also the point that the right reverend Prelate the Bishop of Chelmsford made. As others noted, it was proven that she was not alone in the arguments that she was making about collective worship.
I accept the right reverend Prelate’s observation that fewer people would describe themselves as practising Christians—I think she said that “fewer of us” are practising Christians; I presume she was not referring to the Bishops at that point—but there nevertheless remains, as other noble Lords have said, some benefit in the idea of acts of collective worship.
However, it is completely right that there is flexibility for exemptions within the legislation. As has already been stated, non-religious schools may seek exemptions if their community predominantly follows another faith. Although current law does not provide for non-religious alternatives, students over 16 and parents of younger pupils retain the right of unconditional withdrawal from collective worship, which gives them an element of choice.
The noble Baroness, Lady Bennett, and another noble Lord—I am sorry, I have forgotten who—also raised a point about the age at which pupils may exercise a right of withdrawal and referenced the United Nations Convention on the Rights of the Child. It is our view that 16 is an appropriate age to have the right to withdraw from collective worship. This is in line with English case law and the European Convention on Human Rights, and we believe it balances the rights of parents and of children. It is consistent with the age at which they can make other decisions on matters affecting their lives, such as consenting to medical treatment, consenting to sexual activity or consenting to get married or register a civil partnership.
There was a strong consensus in the debate on the need to ensure that our schools are teaching the spiritual, moral, social, cultural and other inclusive values that various noble Lords identified. The Bill itself proposes replacing daily collective worship in non-religious schools with assemblies focused on that spiritual, moral, social and cultural education. I recognise the concern to ensure that that is being provided for children in all schools. There is a consensus across the House today on the benefit of that.
However, as others have also said, under the Education Act 2002, schools must already promote SMSC development through various means, including the basic and national curricula. Collective worship is one avenue, but there are many others—such as religious education, history, citizenship and the arts—that also develop spiritual, moral, social and cultural education, and provide opportunities for pupils to reflect on their beliefs and the world around them.
Furthermore, schools can already hold assemblies focused on that development alongside collective worship if they choose, and many already do. I suspect some of the examples used by the noble Baroness, Lady Bennett, are already happening in many schools where, when students are brought together for assemblies, there is a wide range of activities, sometimes alongside collective worship but certainly not involving only collective worship. Therefore, the flexibility to enhance pupils’ spiritual and moral growth already exists.
On fundamental values, state-funded schools are also required to promote fundamental British values. We had a very good discussion about this in a recent debate on a Private Member’s Bill. Schools, whether through citizenship or in other places, are promoting democracy, the rule of law, individual liberty and mutual respect for diverse faiths and beliefs—which is important here, as some have suggested that the current law would alienate or make more difficult respect for the diversity of faiths and beliefs in our schools. Once again, these values tend to be taught across the breadth of the curriculum as well, and are reflected in behaviour policies, reinforced in assemblies and deepened through carefully planned opportunities. All of us would hope that our schools are places where there is respect for the diversity of faiths and for those who have no faith. I have confidence that that is the case in our schools.
Other noble Lords mentioned the need for reinforcing shared values of respect, understanding and kindness. That is of course also done in relationships, sex and health education, which equips students with the tools to challenge stereotypes, understand diverse perspectives and form healthy, respectful relationships. Together, these approaches foster an environment of greater tolerance, where differences are embraced and mutual respect flourishes. So, regardless of what noble Lords feel about collective worship, I do not think it would be fair to say that the current legislative situation with respect to collective worship prevents the development of all the other very important learning that noble Lords have rightly identified, and nor does it mean that our schools are not inclusive or not respectful of those with a whole range of faiths or in fact none.
The Bill proposes replacing collective worship in non-religious schools with mandatory daily assemblies promoting spiritual, moral and social values. It is probably worth noting that the Bill requires that to be delivered through daily assemblies. The definition of collective worship does not strictly require an assembly, as such. It could be carried out in classes, or through hymns, prayers or other forms of reflection. In this legislation, there is at least the risk of a greater burden or responsibility on schools. This may be what the noble Baroness intends, but would certainly potentially be the case. If collective worship is already infrequent in schools, requiring daily assemblies may impose an unwanted and unnecessary burden. Additionally, requiring religious schools to provide meaningful alternatives to withdrawn students introduces questions of implementation. What constitutes equal educational worth and how long should these assemblies last? The diversity of collective worship practices makes a requirement to organise an alternative potentially complex and onerous for schools.
In summary, I have listened carefully to the debate, which reflected a wide range of views both in support of the Bill and not. The Government are not persuaded at this time that there is a need to amend the current legislation on collective worship but very much accept the arguments made about the need for our schools to be inclusive and adaptable, supporting the spiritual, moral, social and cultural development of pupils. I am very grateful to noble Lords today and for the opportunity brought forward by this legislation to be able to debate this, and to be absolutely clear about that for all.
Baroness Burt of Solihull (LD)
I am very grateful to everyone who has expressed their views today. The variety of different views that noble Lords have expressed has quite surprised me and I am quite delighted that we have at least had the opportunity to make these points. I do think it is a subject we need to address, because the situation we have at the moment is that some schools are doing one thing and some schools are doing another. That does not mean to say that everybody has to do exactly the same thing—I totally disagree with that—but it does mean that we have to be much more open to different pupils’ needs in schools.
To my mind, it all boils down to inclusivity. You cannot share values with your colleagues and with your fellow students if you are not there—that is the point. It is all very well saying that you can definitely exclude some children, but I do not want children to be excluded; I want them to be included. That is hugely important, and it is a point that one or two of the speakers today have missed.
I will not go into all the details of today’s contributions, but I feel a great sense of empathy with the noble Lord, Lord Davies of Brixton, being a corridor child. It is he and his descendants that I am trying to include and involve in what is going on in schools today. I also bring to the attention of those who have spoken in less than resounding terms that parents do not want it—this is the point. I ask them to think about how we can bring everyone together. That is all I want to do, because the system we are working on at the moment not only is anachronistic but does not work, because different children are having all kinds of different experiences.
I echo a couple of things that the noble Lord, Lord Watson, said. If we will not get a change of law, how about a change of guidance? That was an excellent idea. He also held out the leaf of hope that we might be able to fit an appropriate amendment to the Children’s Wellbeing and Schools Bill to bring everyone together there. With that, I hope that we may still go forward to the next stage.
Permitted Development Rights (Extension) Bill [HL]
(1 day, 16 hours ago)
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Lord Lucas (Con)
My Lords, the Government are bringing forward some excellent proposals to get us more housing, which we really need. I am in favour of a focus on new estates, new towns and building out near railway stations, and I very much hope that we will see those ambitions realised soon. However, today I will focus on the promotion of gentle density, connectivity and community within existing towns as a way of contributing to dealing with the housing shortage.
A good deal of housing in existing settlements is low density and in developments that were put together in the belief that everyone would go everywhere by car, because the car was the future. There is a lot to gain in our current world from allowing such settlements to become denser.
Shops, schools, doctor’s surgeries, pubs and community centres all require a minimum number of users to flourish. If those users are within a small enough range, those facilities can be accessed on foot or by public transport. If they are more spread out, you get a community which is entirely dependent on the car, which is quite isolating: you go from one place to another without interacting in between; it is not a great builder of communities. Also, if we are densifying a town, we are generally talking about employing small builders who get cut out of the bigger developments by the well-organised big housebuilders. However, if you are working within a town in complicated little ways, that space is ideally suited to helping our smaller building firms flourish.
It is natural for people living in a house to want to enlarge it. People want to stay in an area for the jobs, schools, family and community to which they are connected. They could move, but then they would have stamp duty and moving costs—always things to want to avoid—and, anyway, there may not be a house available to which they would like to move. Extending is good for us all, because if we all extend our houses, we will need to build fewer houses. Adding a bedroom so an adult child can stay at home rather than sharing a two-bedroom flat, reduces the need for new housing by half a house. Extending can also help young people to get on the housing ladder, because they can live at home for longer and save for a deposit. That is especially important in London and the south-east, but increasingly important everywhere. If people can afford to make their house larger and would find that a desirable thing to do, why would we prefer them to go on an expensive, long-haul holiday abroad, rather than employing people here and creating an asset for themselves and for the nation as a whole?
How do we do this? This Bill takes a shy at that. Given that we are expecting a government planning Bill, I will not try to focus on perfection or on improving what is already in my Bill. The Delegated Powers and Regulatory Reform Committee has raised some very cogent objections to it, but since I shall not push to take my Bill any further, I hope rather that these points will help inform the Government’s own deliberations as to what to put in their Bill.
The Bill seeks to make best and optimal use of land, and to minimise the circumstances in which a capricious or arbitrary refusal of densification can be made. It builds on existing planning arrangements, expanding the presumption in favour. However, it intends to have safeguards to prevent the destruction of the street scene where there are design codes or where change would create visual disharmony; to avoid overdevelopment; and to respect conservation imperatives. There will be rules to be obeyed under this Bill, but not rules that are silly or hard to comply with; I want to see us build quality and beauty, but to get on and build.
The Bill allows for the preservation of private rights, but also provides help in navigating them. If we are to rely on people doing more of their own development, we must help them navigate this tortuous area of competing private rights and property, and it would be an easy thing for a well set-up planning authority to be helpful with.
I have also suggested that we should put our foot forward more in building in flood zones. A lot of our existing communities are flood liable, but if we are to allow people to expand their houses, we can reasonably say that they must make them flood-proof, so that we get some of our flood prevention done as a result of allowing people to extend.
Beyond that, I would like to see it made much easier for people to make use of roof spaces; to have full-height extensions to the side and rear to make a house larger; to be able to put a single-storey extension in the garden; to put extra floors on bungalows; and, within the centres of towns, to go up to four storeys without question.
Good communities on the continent, in places such as Holland and Belgium, are dense, but it is a very comfortable, community-orientated, good-to-live-in density. That is where I would like to see us being allowed to head. In addition, I propose that we should make it easier for householders to make their own contributions towards net zero. It should be easier to put in heat pumps and solar heating or electricity. We know that we want to do it. It is an efficient process when it is done at the individual house level, because you connect the source of power and its user intimately, without needing a lot of infrastructure beyond that.
This is not an easy area to get right. There are many contending issues. I very much look forward to the Government’s planning Bill and hope that they will prove more adventurous and better at drafting than I have been. I hope to see a system that will give real impetus to the process of densification. I would like to see planning authorities with clarity of rules, speed of action and maybe some cumulative economic test. Yes, there are lots of conditions that planning authorities may impose but if, together, their costs make a change uneconomic, it has gone too far. The planning authority must choose what it wants to add as a requirement. It cannot just go overboard and throw everything in. I beg to move.
Baroness Coffey (Con)
My Lords, my attention was attracted to this Bill on the basis of a friend who bought a home and has been doing it up with his wife. They were planning a loft conversion, and to have sufficient height to be able to stand up properly in the loft, they wanted to put a few extra layers of bricks—possibly less than the height of the Woolsack. Yet it seemed that extensive planning permission was needed, a number of surveys, and so on and so forth—such that a lot of the associated costs would have ended up being more than doing the construction to enable a greater use of their home.
Therefore, I was intrigued by the Bill from my noble friend Lord Lucas, especially when I saw the schedule to which he refers. It seems very sensible, in particular in recognising that Clause 3 gives sufficient protection to neighbours from perhaps undesirable impacts that can happen with permitted development rights, such as the blocking of light.
However, I was somewhat concerned when I started reading Clause 2. What seemed to be quite a permissive Bill suddenly started giving powers to councils to be able to add lots of conditions to what were supposed to be permitted development rights. I understand that the sentiment is to see how we can improve the quality of our housing stock in terms of energy and other environmental aspects. However, it seemed to somewhat counter the proposal of having permitted development rights. I declare an interest as the owner of a house that is grade 2 listed. I was concerned that Clause 1 would not apply to listed homes. There has been a significant increase in the number of homes declared as listed. Also, 38% of our home stock was built pre 1945 and 20% pre 1919. That is over 5 million homes in England alone.
One of the things that concern me, although I completely understand that we cannot change the basis of a house that has been listed, is aspects that cannot be seen, where we might want to make it easier to add a bit of utility space in one way or another. Indeed, as my noble friend points out in paragraph 1(h)(i) and (iii) of the Schedule, given that we need to try to make it as easy as possible to convert to things such as air source heat pumps or electric vehicle charging, we should try to make these permitted development rights for listed buildings as well, rather than put a barrier in the way.
I know that the Government have just put out a consultation on EPC C for all homes for rent. When I was Secretary State for Defra I was successful in limiting some of the proposals put out in our Government’s time. Although of course I support improvement in energy performance for all our homes, which will lead to cheaper energy bills and the like, my concern is that the cost of changing EPC ratings in so many rural areas would mean a reduction in the amount of housing stock available right around the country. I could see that where I live in Suffolk and in other parts of the country, where this came up as a big concern. I hope it is something of which the Government will be mindful when they consider these different rights or restrictions.
Clause 4 is on floods. Building greater flood resilience into houses is a good thing. I gently point out to noble Lords that zones 2 and 3 apply only to fluvial flooding. Actually, the major risk nowadays to most houses, particularly in towns, is from surface water flooding, which is not connected to the flood zones referred to in the Bill. Again, there already are conditions to stop things such as the hard pavementing of drives and similar to stop the run-off. That would need some greater focus.
I thank my noble friend Lord Lucas for explaining the inclusion of public transport in Clause 4. I was somewhat curious about that, but I think he was, in effect, advocating the development of 15-minute cities, and this is a way to try to achieve that. He is right that we need to stimulate economic activity.
If my noble friend were to take his Bill forward, I would go even further and consider seeing what we could do to have a permitted development right for any building—it does not matter whether it is listed—to make it much easier for houses to be adapted for the benefit of people with disability, or for older people, so that they could stay in their home. My mother passed away a few months ago and, when we were considering some potential changes to her house, I was quite struck by the number of extraordinary planning applications that we would have to go through. In the end, it did not seem worth the hassle. I am mindful that, when we look at permitted development rights, we need to make sure we have things that really open up opportunities for people to live in their homes for as long as possible.
In terms of other consideration of permitted development rights, I encourage my noble friend to go further—although his speech focused particularly on urban development—to explore what could be done to help rural communities and our farmers. There is such a ripe opportunity to develop things such as small reservoirs, which would enhance not only food production but our natural environment.
It sounds as if my noble friend will not take this Bill forward, but I hope that when we get the opportunity to look at planning and infrastructure we think strategically and holistically. Too often, building regulations end up getting into minutiae that seem counterproductive once they are put into effect. I would have supported the Bill going through its Second Reading, but I look forward to future debates on this important matter.
Lord Jamieson (Con)
I thank my noble friend Lord Lucas for bringing the Bill to the House today. I declare my interests in the register, particularly that I am a councillor in Central Bedfordshire.
There is a housing crisis in this country, particularly in London and the south-east. For example, we see huge numbers of homelessness, particularly in London, with nearly 70,000 families in temporary accommodation, of whom nearly half are placed out of borough. Although the last Government successfully built some 2.5 million homes between 2010 and 2024 and a million in the last Parliament, it is noticeable that London has consistently failed to deliver on its housing targets over recent years. Depending on which housing target is looked at, since 2016 London’s delivery shortfall is between 100,000 and 400,000 homes. Had these homes been delivered, we would most likely have seen a material improvement in the housing crisis in London and the south-east, with fewer families in temporary accommodation and lower rents and improved economic growth.
Getting more housing built will come not from a single silver-bullet solution but rather a series of incremental steps. Increasing densification and enabling householders to expand existing properties, particularly in urban areas, could make a meaningful contribution to this, with the added benefits of densification, which my noble friend Lord Lucas mentioned, and the 15-minute city, which my noble friend Lady Coffey mentioned. Building in urban areas will avoid the use of greenfield and the loss of farmland. It has the benefit of using existing infrastructure—particularly, again, in London, where there is capacity in both the school and transport systems—and home owners needing extra space could do so without the disruption and difficulty of moving, enabling growing families to remain in their homes and communities.
I believe that there is a role for making modest extensions that do not interfere unduly with neighbouring properties and that are easier to get through the planning system. Also, as we seek to improve the energy efficiency of our homes, we could simplify the process for solar, heat pumps and charging points. Like my noble friend Lady Coffey, I raise the conflict between the requirement for energy efficiency for housing from housing associations, and potentially for rental homes, and the planning restrictions on listed properties and those in conservation zones, for instance.
However, we must also consider the potential serious impact on neighbours. It is easy to imagine how a six-metre extension to a terraced home could materially impact its neighbours. I also need to be consistent with my previous work in this area. As a councillor, I worked with colleagues in local government, when householder permitted development was previously extended, to ensure that a light-touch prior approval regime was set up so that this did not unduly impact neighbours. I continue to support this for some of the larger householder permitted developments.
We also need to look at the building control regime. If we are to make the planning process easier, we become more reliant on building control to enforce quality development. Building control does not cover all aspects —the classic cases being spaces for bins and parking—so there will need to be a review of building control.
I believe that there is scope to look at householder permitted development, particularly in urban areas, as a step to addressing the UK’s housing crisis, but this must be balanced with the impact on neighbours and the wider community. The Bill makes some helpful proposals to deliver more accommodation in our much-pressed housing market, but it will need further work on the details to avoid unintended consequences.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
I thank the noble Lord, Lord Lucas, for bringing this very important issue before the House again, and for his work on his Bill. I give my personal welcome to the noble Baroness, Lady Coffey; it is great to be working with her.
We absolutely support the right of householders to adapt their homes to meet their needs, and we understand the wish to continue to speed up the process. The points on the density of our urban areas made by the noble Lord, Lords Lucas and Lord Jamieson, are well made. Noble Lords will be aware of both the Government’s intention to promote brownfield sites, through the use of brownfield passports, and our support for SME builders; it is my intention that we will do as much as we can in that regard. But we believe that there are other routes to achieve the aims set out in the Bill, so the Government have some reservations, which I will endeavour to set out.
Permitted development rights are a national grant of planning permission granted by the Secretary of State. They play an important role in the planning system by taking certain development out of the standard planning application process and freeing up local planning authority resources. This is an important step in the freeing up and speeding up of the planning process for those major applications that we all want to see.
In England, under the existing householder permitted development rights, as set out in the general permitted development order, home owners are able to extend, alter and make certain improvements to their homes. Those rights strike a balance between protecting local amenity and allowing individuals the freedom to carry out development. They ensure that there is flexibility for householders and growing families so that they can alter and extend their homes.
The rights are therefore subject to certain conditions and limitations to minimise their impacts and are designed to safeguard against the kind of inappropriate development mentioned by the noble Lord, Lord Lucas. In addition, for larger rear extensions there is a neighbourhood notification scheme, referred to by the noble Lord, Lord Jamieson, which means that consideration can be given by the local authority as to whether or not the impact on amenity of any adjoining premises is acceptable before giving approval to proceed. In a similar way, proposals to add additional storeys to homes under the rights are subject to prior approval.
These long-standing rights are well established, with home owners, developers and local authorities clear about what types of development are covered by the rights. We want to ensure that the permitted development rights are flexible enough to accommodate different living styles and maximise the number of households that can make use of those rights. When changes are made to permitted development rights, they are done so through amendments to the relevant secondary legislation, in this case the Town and Country Planning (General Permitted Development) (England) Order 2015, as amended. This means that primary legislation is not required for changes to householder permitted development rights.
Prior to any secondary legislative amendments there is normally a period of public consultation on the proposals. That ensures that the views of people who will be most affected by any of the changes can be taken into account and that suitable mitigations can be put in place.
The Bill appears to seek to replicate some of the existing householder permitted development rights as set out in the general permitted development order in England. It would introduce a free-standing and separate regime for householder permitted development rights without reference to, or connection with, current permitted development rights in the general permitted development order. Whether or not the new rights proposed are meant to sit alongside or replace existing permitted development rights is unclear. However, the Bill’s proposed permitted development rights, as provided by primary legislation, would prevail over the current rights, under secondary legislation, resulting in inconsistency. That would create uncertainty and confusion for users of the system, directly impacting both home owners and local authorities.
The Bill appears to seek to introduce new national permitted development rights in primary legislation that could otherwise be delivered in secondary legislation. We feel that would be a disproportionate use of primary powers. It would mean that there would not be a period of public consultation on the measures, which is a valuable step in the design of new permitted development rights, risking adverse impacts on amenity of neighbours without the in-depth assessment that consultation provides.
I will respond to the comments made by the noble Baroness, Lady Coffey, on the issue of roof heights. The National Planning Policy Framework has recently been updated to make it clear that planning policies and decisions should support opportunities to use the air space above existing residential and commercial premises for new homes. In particular, they should allow upward extensions, including mansard roofs—I know that that is a lovely topic of conversation in your Lordships’ House—where the development would be consistent with the prevailing form of neighbouring properties and the overall street scene, as long as they are well designed, including complying with local design policies and standards, and can maintain safe access and egress for occupiers. I hope that that is helpful.
In February 2024, the previous Government issued a consultation on changes to certain permitted development rights, including householder rights. The consultation sought views on allowing householders to erect larger extensions and loft extensions, and on providing flexibilities to permit bin and bike stores in front gardens.
Issues around building in flood-sensitive areas, on net zero, those raised by the noble Lord, Lord Lucas, and those related to listed buildings and flood-sensitive areas, as referred to by the noble Baroness, Lady Coffey, will be considered as we go forward. Following the analysis of consultation, we will consider whether to bring forward any amendments to the rights.
In relation EPC listings, which the noble Baroness raised, we have issued a consultation on this matter and are taking views on it but it is vital, in particular to those in private rented accommodation, that we are able to tackle fuel poverty and make sure that they have an assurance of fuel efficiency. On rural development, we have coming forward in the spring a housing strategy and a new planning and infrastructure Bill, both of which are likely to contain issues around development in rural areas.
Any future changes to the permitted development regime would be introduced through amendments to the general permitted development order made by secondary legislation. We will, therefore, continue to keep permitted development rights under review. Although I thank the noble Lord, Lord Lucas, for highlighting this important issue, I hope that I have explained the Government’s reservations about this way of approaching householder permitted development rights.
I realise that I have not commented on the points made by the noble Lord, Lord Jamieson, about housebuilding in London. I have responded to him in writing. The Government have set fairly challenging targets for London housing in the new housing targets that we have set. I once again thank the noble Lord, Lord Lucas, for raising this very important issue and for his contribution to the discussion on permitted development rights.
Lord Lucas (Con)
My Lords, I am very grateful to all who have spoken, in particular my noble friend Lady Coffey. It is nice to have some support from somewhere other than the Front Benches. She raised some important matters around what kind of flooding we have to deal with, adaptation for disability and, indeed, the importance of small reservoirs. Letting people do individual things, to make individual benefits to contribute to the whole, is really the substance of this Bill.
Let us not have to do everything in big lumps. Let us solve the problem by everyone doing their bit. Allowing more people to do their bit is the burden of what I have put forward in this Bill. I accept the criticism from the Government that it would be better done through secondary legislation and through being consulted on. I very much hope that this is a direction that the Government will feel inclined to take in due course, and I very much look forward to the Government’s Bills when they come through.
Bill read a second time and committed to a Committee of the Whole House.