Grand Committee

Tuesday 14th July 2026 Grand Committee

Tuesday 14 July 2026

Environmental Permitting (Waste Controlling or Transporting) and Relevant Functions of Primary Authorities (Amendment) (England) Regulations 2026

Tuesday 14th July 2026 Grand Committee

Considered in Grand Committee

11:00

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Environmental Permitting (Waste Controlling or Transporting) and Relevant Functions of Primary Authorities (Amendment) (England) Regulations 2026.

Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, these regulations were laid before the House on 20 May 2026. I would like to acknowledge the work of the Secondary Legislation Scrutiny Committee in its review of this statutory instrument. The committee’s scrutiny is a vital part of our legislative process, ensuring that the policy intentions behind secondary legislation are clear and well-founded.

Waste crime blights our communities—across our streets, fields and woodlands, criminals dump waste illegally. This an eyesore and causes damage to our environment. A light-touch registration system for those who transport and deal in waste has been exploited over the years by waste cowboys who dump waste and leave a huge clean-up bill. This system is not fit for purpose. Today we seek to reform it, introducing stricter checks and requirements, closing the loopholes that allow illegal operators into our waste system.

We will bring those in England who control and transport waste within the scope of the 2016 environmental permitting regulations, while repealing the current carriers, brokers and dealers’ registration system. These regulations will introduce permits for those who control and transport waste, bringing the system in line with site-based waste activities. Permitting will mean that those who apply will need to undergo a stricter range of background checks, including criminal record checks, as well as demonstrating that they are technically competent to do the job.

The new system of permitting will be managed the Environment Agency, which will be responsible for managing applications and ensuring compliance. The Environment Agency will be able to suspend and ultimately revoke permits where conditions are breached. It will be able to prosecute, leading to fines or up to five years’ imprisonment. The fees introduced for permits will mean that the Environment Agency will be effectively resourced for compliance work.

These regulations will make it easier for the public to trust the people they hand their waste to. Alongside permits being able to be checked online, we are requiring that waste controllers and transporters include their permit number on advertising. Whether this is a Facebook ad or a branded van, the public will be able to spot and check on the operators they work with.

This reform is one of a number outlined in the Government’s Waste Crime Action Plan, published in March, which together strengthen the regulatory framework and the Environment Agency’s ability to prevent, detect and act against waste crime. We have taken further legislative action by replacing outdated paper-based methods for monitoring waste movements with digital waste tracking. We will also be tightening the waste permit exemptions system by removing three exemptions and tightening the conditions of seven others that have long been abused by waste criminals.

Alongside the reforms, it is important that we provide those responsible for tackling waste crime with the tools needed to effectively stamp it out. We have committed an additional £45 million for the Environment Agency to spend on waste crime enforcement over the next three financial years to support this. This funding will mean that there are more boots on the ground to expand its enforcement activity and ensure waste criminals face the consequences.

I want to acknowledge the strength of support from the industry and its patience over the years as it has been developed. These regulations represent a significant change for the waste system and will help level the playing field for operators, as well as protecting our communities and the environment from waste criminals.

Alongside the reforms to the carriers, brokers and dealers’ system, the regulations also bring the Environment Act 2021 into the scope of primary authority by adding it to Schedule 3 to the Regulatory Enforcement and Sanction Act. Primary authority is a means for businesses to receive assured and tailored advice on meeting regulations such as environmental health, trading standards and fire safety through a single point of contact. This amendment is particularly necessary to enable primary authorities to play a role in effectively supporting retailers in undertaking their obligations as required in the deposit return scheme. I beg to move.

[Baroness Coffey (Con)]

My Lords, I briefly want to congratulate the Government and to say, well done. I think this was first put forward eight years ago, and it is finally happening. I appreciate it is not happening until next year, but we need to recognise the long amount of time it took to get here. I hope the results will be very rapid.

[Earl Russell (LD)]

I thank the Minister for introducing these regulations, which we on these Benches welcome warmly. As the Minister is all too aware, I have raised the issue of waste crime in the House several times. I am genuinely pleased that these regulations are arriving as a crucial part of the of the long-term solutions we need to get control of our waste system and lock the criminals out.

As the Minister said, this SI does not arrive in isolation; it follows the Waste Crime Action Plan and the instrument beginning the rollout of real-time digital waste tracking. Together with the exemptions reform promised later this year and next April’s instrument completing end-to-end digital tracking ahead of the deposit return scheme, we are finally beginning to see the basic architecture this sector has needed for years, so that we can know who is moving waste and where it is going, and make sure our systems are fit for purpose. This is the first time I have been able to say that I am really hopeful and see a future and a way forward. I really do welcome this.

On the Environment Agency’s own estimates, around 18% of the waste in England passes through criminal hands at some point in its journey. This structural feature of the current system has been allowed to flourish for a number of years. As a result, we have a big historic legacy of waste sites that need to be cleared.

I note that the Environment Agency’s watchlist for high-priority sites has grown to 139 as of 10 July. I welcome this transparency but, again, this legacy still needs further work. I thank the Minister and officials in the Environment Agency for all their work and for the change of culture under this Government over the last 18 months or so. That is genuinely welcomed.

Turning to the instrument itself, as the Minister said, it replaces the older carriers, brokers and dealers’ registration system with a proper environmental permit split sensibly into three categories: waste controlling, waste transporting and combined activities, so that oversight can match risk rather than applying as a single blunt instrument. Gone, hopefully, are the days when it was possible to register your dog as a waste carrier. Permits will run for three years, and the Environment Agency gains real power to check before granting a permit, rather than acting only after the damage is done. It also gains powers to suspend and revoke. This is a genuine structural improvement.

I want to be fair to the Minister on timing—she has already spoken about this—but obviously, this instrument has been a long time coming. Consultations closed in 2022, but the delay is not down entirely to this Government, but to past Governments. It is great that this instrument is here.

I have several questions. On exemptions, how will the department ensure that charities and other low-risk categories are not quietly colonised by operators or organised criminal networks seeking to avoid scrutiny? Will monitoring be ongoing, not one-off assessments at the drafting stage? On interrogation, how will permitted regimes interact with the digital waste tracking that has already been rolled out? Obviously, a permit is only as good as the data behind it. On exports, illegal and misdescribed waste exports remain a major route for criminal activity. What assessment has been made of this instrument’s bearing on waste that should not be leaving our shores or that is doing so mis-permitted?

On funding and delivery, with £45 million in new money for the Environment Agency—we obviously welcome that—and several reform strands running in parallel, how will the Government monitor and review the programme as a whole, not just instrument by instrument, so that we know how the money is working and that it is delivering the results we expected? Does the Minister agree that we need overall benchmarks and reporting across this piece, as we are undertaking these various strands of structural reform?

On industry awareness, reform closes a loophole only if waste producers know that carriers need a permit and that there are checks that one is in place. What steps will ensure that businesses understand this, that they are encouraged to apply for the right permits and that they know what they need to do? I slightly worry that the resources for this information part of working with industry may not be sufficient for that structural change across the whole industry.

This instrument is to be renewed in three years’ time, so can the Minister confirm that at that point, proper checks will be in place to review what happened over the first three years, on an individual carrier and broker basis? A permit granted once and never revisited would simply not resolve the problem and could allow illegal activity to continue.

On transition, criminals and the organised criminal networks adapt quickly—sometimes much more quickly than Governments can. We have this 12-month window during which the old registration remains valid. In this transition period, what work is being done to make sure that that is not an additional opportunity for the organised networks to exploit the change of system?

None of this works without an Environment Agency properly funded and staffed to issue permits, monitor compliance and take enforcement action against those who ignore them. So what continuous review are the Government undertaking to make sure that the Environment Agency has the staffing, the computer systems and the ability to conduct all the tasks that it needs to do?

We absolutely welcome this instrument and are really pleased to see it. It is about time that we turned the tables on these organised criminals. The noble Baroness, Lady Sheehan, has a Private Member’s Bill coming up, and I encourage the Minister to work with her on trying to offer whatever support the Government can for it.

[Lord Blencathra (Con)]

My Lords, I thank the Minister for bringing these regulations before the Committee. I can be commendably brief—or briefer than I normally am—because we give a very warm welcome to these excellent regulations. We on these Benches have repeatedly raised waste crime and called for tougher measures against the perpetrators. During consideration of the Crime and Policing Bill, the Government did not support our amendments to give police the powers to seize the vehicles of perpetrators of these crimes. I am sure that, if the Minister were to draw this to the attention of the excellent, caring and meticulous Lords Minister for Crime and Policing, he might wish to reflect on this again.

Nevertheless, we welcome this step to better monitor the transportation of waste, taking into account which activities are low risk and which are high. These regulations are at least intended to ensure compliance and better identify criminal activity. I understand that the consultation demonstrated that a majority of respondents supported replacing the carriers, brokers and dealers’ registration system with this permitting regime under the Environmental Permitting (England and Wales) Regulations 2016. That said, can the Minister outline how the Government will ensure that businesses are made aware of the changes, as well as their ability to afford the costs involved, because there will be permit fees, registration fees, time costs, technical competence costs, tax, et cetera?

These regulations give more power to the Environment Agency, as well as responsibilities to issue permits. The increased enforcement costs are estimated to be £22.1 million, but the Explanatory Memorandum also states:

“The Environment Agency may benefit from efficiency savings”.


So can the Minister provide an exact figure for how these savings will be made?

More broadly, I come back to the one major quibble we on the Opposition Benches have had—making the National Crime Agency the lead in the joint unit on tackling waste crime. We are dealing with massive, organised crime here. I perfectly well accept and believe that if a farmer’s slurry tank leaks, the Environment Agency is the perfect body to investigate it, as with a leak from a factory.

11:15

When I served until recently on the Food Standards Agency, I was the lead for the national food crime unit. The briefing we would get was that the people who were moving hundreds of tonnes of condemned food were in the business of transporting anything illegal. They would be moving condemned food one day, rubble the next, and stolen high-value vehicles the next. It is part of a big, organised crime syndicate. Quite frankly, we on these Benches believe that the Environment Agency is not capable of dealing with the massive £1 billion cross-county border fraud.

We all want to see a crackdown on waste crime. All I am asking of the Government is, will Defra and the Minister please consider carefully, with the extra money they are giving to the joint unit on waste crime, putting the National Crime Agency in the lead in this regard in tackling waste crime, keeping the Environment Agency working there as second-in-command? The National Crime Agency is the only one capable, in our opinion, of handling a £1 billion criminal enterprise. With these few little quibbles, I look forward to the Minister’s response.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank noble Lords who have taken part in the discussion and all noble Lords for their strong support for the measures being brought forward. As noble Lords have said, this has been a long time coming, so it is really good to see that we have finally got this in front of us today. One thing that has come across really clearly, not just today but in a number of questions and parliamentary debates, is the huge problem of criminal waste activity that now blights so much of our countryside. There were a number of questions asked. I will do my best to cover them off, and if there is anything else I have missed, I will make sure I get back to noble Lords in writing.

First, on evaluation and monitoring, we recognise that tackling waste crime requires sustained effort and a willingness to adapt as circumstances evolve. Delivery of the waste crime action plan will be accompanied by a process of continuous review and improvement. We will also regularly assess the effectiveness of the measures that are introduced. We will consider any new evidence as it emerges and, importantly, identify opportunities to go further where existing interventions are not achieving the desired outcomes. This is designed to ensure that our approach to tackling waste crime remains agile, responsive and focused on achieving lasting change.

The Environment Agency is also developing improved indicators for 2026-27, including measures on larger-scale offending, response times and deterrence. The current Environment Agency scorecard metric covers only a narrow proportion of illegal waste activity. Waste crime is hard to measure as it is deliberately hidden: only around 27% of incidents are actually reported. Defra is working closely with EA to deliver new indicators, improving visibility of the problem and getting a better grip on it.

Defra is leading the delivery of the waste crime action plan, working closely with the Environment Agency as the national lead for waste crime. That is being done alongside HMRC, the Home Office, police forces and local authorities, because if we are going to successfully tackle this, we need co-ordinated cross-government action. As I mentioned in my speech, we have committed an extra £45 million over three years, and an extra £5.6 million uplift in 2025-26, designed to increase front-line enforcement, intelligence and operational capacity, so we have more officers, specialised units and multi-agency activity.

We are also bringing in structural reforms, including CBD reform, digital waste tracking and exemption reforms. They are being implemented to design crime out of the system so that prevention and compliance are integral, rather than relying on reactive enforcement alone. We are also driving through other concrete operations measures: earlier interventions, permit action, restriction notices, prosecutions, use of advanced technology including drones and satellite imagery, and strengthened intelligence via the Joint Unit for Waste Crime, which I will come on to shortly. On monitoring effectiveness, we will deliver improved metrics but also review the multi-agency waste crime response and adapt its delivery so that the action plan remains live and responsive.

The noble Earl asked about digital waste tracking. It will work by requiring information to be submitted to a central system of all movements of hazardous and non-hazardous waste, with a few pragmatic exemptions, from the point the waste is produced to the point it arrives at the waste receiving facility. It will replace paper processes with consistent, near real-time data, improving traceability and highlighting any unusual movements linked to misdescription, diversion or illegal export. That is one of the ways in which we will tackle the illegal export issue that the noble Earl asked about. The first phase started in April, and it will be mandatory from October. The second phase will cover the whole waste movement chain. It is planned that that will be available for all relevant operators to use voluntarily from spring next year, with a mandatory rollout from the following October.

The noble Earl raised the exemptions. We need to reform the waste exemption regime because we need to stop criminals having the opportunities they currently have to hide illegal activity behind permit exemptions. That is why we are removing the three most abused exemptions and tightening up conditions on the others. Exemptions allow low-risk waste activities to operate without a permit, but we know that some have been widely abused by criminals. We will also bring in limits on quantities, tougher operating conditions and stronger record-keeping. We need to remove the weak points and protect the permitting regime. We are currently working on what the necessary legislative amendments would look like for that. Again, when doing that, we will take into account some of the issues that the noble Earl raised, as we do not want to cause problems for people who are legitimately doing their work.

The noble Earl also asked about businesses and people working in the system. Clearly, when designing regulations such as this, we have to work with those who will use them, to ensure that they work in the most effective way and we do not end up realising that they are not practical when we start monitoring. It is all about how things will practically make a difference.

On the Explanatory Memorandum, the noble Lord, Lord Blencathra, asked about the Environment Agency and efficiency savings. The new controllers and transporters system will mean that operators are required to submit more detailed information as part of their permit applications. This information will be used by the Environment Agency to more efficiently identify high-risk operators and conduct monitoring and compliance work.

The noble Lord referred to the £1 billion cost of cross-county organised crime. The way that we will try to work with the National Crime Agency, which is the point the noble Lord was speaking to, is that the Joint Unit for Waste Crime will provide the crucial collective operational capability. To ensure that the wider system for tackling waste crime remains effective in the face of an evolving threat, Defra is working closely with the National Police Chiefs’ Council and the Home Office to undertake a review of the end-to-end multi-agency response to waste crime. That will cover areas such as information sharing, local-to-national co-ordination and prosecution capabilities. The review will also identify opportunities to strengthen how agencies work together and ensure that the overall system remains effective, resilient and equipped to meet future challenges. The existing capabilities, including the JUWC, will continue to play a key role within this strengthened framework.

[Lord Blencathra (Con)]

I take that to mean that, although the National Crime Agency will not be put into the lead, it will have an enhanced role. Is that what the Minister said?

[Baroness Hayman of Ullock (Lab)]

Defra and the Environment Agency will be the lead, but we will work absolutely hand in glove with those other agencies to make sure that they effectively tackle the problem we have. As I say, we will monitor anyway so, if we find that it needs changing in any way to strengthen that, we will be able to do that once we have continued to review and monitor. We are bringing all these changes in because we want to make a difference and we want to stop what has been happening.

I have mentioned to the noble Baroness, Lady Sheehan, that I would be very happy to meet her to discuss her Private Member’s Bill, and I hope we can do that in the not-too-distant future.

I appreciate the noble Baroness, Lady Coffey, coming in to offer her support for this SI. As she said, this has taken a long time, and I am sure she did quite a bit of work on it, so it is important to see that work started by one Government has been completed by another. With that, I commend the regulations to the Committee.

Motion agreed.

Industrial Training Levy (Engineering Construction Industry Training Board) Order 2026

Tuesday 14th July 2026 Grand Committee

Considered in Grand Committee

11:27

Moved by

[Baroness Smith of Malvern]

That the Grand Committee do consider the Industrial Training Levy (Engineering Construction Industry Training Board) Order 2026.

[The Minister of State, Department for Education and Department for Work and Pensions (Baroness Smith of Malvern) (Lab)]

My Lords, I am grateful for the opportunity to debate this instrument today. In my view, the provisions in the instrument are compatible with the European Convention on Human Rights. The statutory purpose of the Engineering Construction Industry Training Board—ECITB—is to make better provision for training across the engineering construction industry in England, Scotland and Wales.

The engineering construction industry is critical to the delivery of the Government’s wider ambitions for economic growth, clean energy and energy security. It provides the skilled workforce needed to build, maintain and operate major energy, manufacturing and industrial infrastructure across Great Britain. The ECITB’s and the Construction Industry Training Board’s continued value was confirmed by a 2023 independent review. It found that a statutory levy remains the most effective model for industry-wide investment in training and is needed to address persistent and structural workforce challenges within the ITBs’ industries.

This statutory instrument gives effect to the ECITB’s levy proposals for 2026, 2027 and 2028. The levy remains the ECITB’s primary source of funding, and this order is required for the board to raise mandatory assessments on in-scope employers. The ECITB continues to receive strong support from employers. Over 85% of levy-paying employers supported the levy proposals, representing almost 98% of total levy value, exceeding the “more than 50%” statutory threshold for support required from industry.

Before we consider the levy proposals in further detail, I want to point out that a 12-week government consultation has just closed on a proposal to bring together both ITBs—the ECITB and the Construction Industry Training Board—into a single unified body to support the combined skills needs of the engineering construction and construction sectors. The Government are now carefully considering the views raised before making any decisions on reforms that may be needed to ensure the system delivers the support employers need. We cannot prejudge the outcome, but it is vital to the continuity of the ECITB’s support for employers that the levy order we are debating today continues. If the Government choose to proceed with this proposed reform, the earliest that a single body would be in place is spring 2028. Should the direction of reform require a new ITB levy order, this would come to the House through the proper parliamentary process.

11:30

Returning to this levy order, I give my thanks to the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments for their scrutiny of the regulations laid on 1 June 2026. It would be fair to say they have a clean bill of health from those committees. This order retains levy assessment rates from the 2023 levy order and retains the exemption threshold to protect small and microbusinesses, which are nevertheless still eligible for ECITB grants and support. An estimated £137.9 million will be raised in levy over 2026-28, which will be invested in supporting the skills needs of the engineering construction industry. That investment will fund vital programmes to widen participation, raise skill levels, increase opportunity and maintain occupational standards for the industry. This includes targeted grant support to employers to develop the skills pipeline in the engineering construction industry.

Since 2023, over 5,000 apprenticeship starts have been supported through ECITB employer funding, across vital disciplines including electrical, mechanical and nuclear-specific roles. This could include direct grants to employers, travel and accommodation costs, or costs for any additional qualifications required. The funding raised by the ECITB levy directly underpins the country’s broader economic priorities. Over 90,000 people are employed in the leviable workforce, with an estimated contribution to our economy of £33 billion in gross value added, rising to £100 billion when including the wider sectors serviced by the engineering construction industry.

The industry faces significant long-standing and future challenges in recruiting and retaining a skilled workforce, which makes voluntary investment in training less likely to occur. Without a statutory levy, we cannot guarantee that the skills that industry urgently needs will materialise at the scale required. If this order is not approved, the ECITB would be unable to collect levy in 2026, with potential impacts on apprenticeships and vital industry qualifications, employer support programmes, training standards and the future capability of one of the UK’s most economically significant sectors.

According to the ECITB, the UK faces an estimated requirement for an additional 40,000 engineering construction workers, and agreeing this order will play a critical role in supporting major infrastructure projects across Great Britain. In addition to industry support, the proposals before the House today have received the full support of the devolved Governments of Scotland and Wales. They recognise, as do we, that maintaining the ECITB’s ability to raise and invest levy income is vital to ensuring that employers across all three nations can access the engineering construction skills they need. I commend this order to the Committee.

[Baroness Coffey (Con)]

My Lords, I do not seek to oppose this order today, but I have a number of questions. I again start by praising the Government, and I strongly support the move to the DWP and the CITB, as well as, more broadly, the changes that the Government have made to the apprenticeship approach. I fully support the merger of the two bodies, which is under consultation, and I hope that that consultation review will be concluded quickly.

One thing that the Minister mentioned was that 85% of the levy payers, who contribute 98% of the levy, are supportive. I was interested in paragraph 33 of the impact assessment, which said that the independent

“customer satisfaction survey in 2024 … found that 65% of employers agreed or strongly agreed that without the levy and grant system the training would not take place”.

As it says elsewhere in the impact assessment, we have a situation where, in order to generate more income, the ECITB has started increasing its training of overseas learners. I do not really understand where this is going.

I am sure the Minister has been diligent more broadly in thinking about what is happening with the amount of people going on to training who do not complete the training or do not continue into work. That is very worrying, given the amounts of money being invested and what is happening with the follow-up. The Government are using powers, as this is an executive non-departmental public body, so is there an element here of thinking about how this could get a bit more refocused, working independently but also in partnership with the department, given that 47% of young people are dropping out? The figures of people who just do the course and, within so many years, drop out of this industry entirely are even higher.

I know that there is work on how to help employers onboard people into apprenticeships, traineeships and the like, but I suggest that some more focus could perhaps help with that. I suggest thinking about how the objectives and key performance indicators for this board could perhaps be published more regularly. On that, 9 July 2025 is when we last saw the annual report and accounts for 2024, so when does the Minister expect the report and accounts to be laid for 2025? As I say, there is a lot of value in this body and its sister body.

I do not expect the Minister to have an answer to this today, but this body is also a charity, and I am unclear about why that is still needed. Is that limiting what can happen in trying to make this more effective? As I say, a good number—65%—of businesses interviewed said that all this training stuff probably would not happen without this board. But, again, on some of the link-up with the other organisations involved in this, including the Government and particularly the Department for Work and Pensions, I think this is a better home for it than where it was, the DfE.

I would be interested in getting some further understanding on the need for this to be a charity. According to the Charity Commission accounts, it is not eligible for gift aid. There is a lot of complexity in why someone is a trustee, when actually they are all appointed by the Secretary of State. The Minister may not have the answer today, but I would be grateful for a follow-up more broadly.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for producing this order and giving us such welcome information. It is a key job of any Government to grow the economy, and productivity is central to that. This levy is a proven way to fund skills in the construction sector, because the market alone has not invested enough in training. The 2023 review confirmed that this problem still exists, so the case for keeping the levy is strong. Turning to the detail, the order keeps the current rates in place: 0.35% on directors’ pay and 1.25% on payments to subcontractors. These rates have not changed since the pandemic-era reductions ended.

I welcome the extra help for small firms. The exemption threshold is rising from £135,000 to £150,000, which means that 69% of employers will now pay nothing at all. There is also a 50% reduction for firms with wage bills of between £150,000 and £500,000, helping around 10,000 small businesses, I believe. This strikes a reasonable balance: it protects small firms while larger employers continue to pay their fair share, with no cap on their contributions. The Minister has given lots of statistics. There are so many statistics going around, some of which are contradictory.

As Liberal Democrats, we believe in partnership between employers and educators, and that is exactly how this proposal was developed. As we have been told, the CITB ran a formal consultation last year, called “Consensus”, and over 67% of levy payers backed the plans. Those firms represent almost 72% of the total levy value. This is a genuine mandate from the industry itself, not something imposed from above, and it is the right way to build support for a levy like this.

The sums involved are substantial. I believe the levy is expected to raise around £243 million a year between 2026 and 2028. Last year, the CITB raised £228.1 million and used it to fund £129.8 million in grants and £53.4 million in other schemes. This supported around 30,000 apprentices and, I believe, nearly 20,000 people in gaining a qualification. This is a serious investment in skills, and it costs the taxpayer nothing, since the CITB receives no grant from the Government.

The noble Baroness, Lady Coffey, mentioned charities. I should say that charities are exempt from the levy, but I would welcome hearing anything that the Minister can say in answer to the questions raised about them.

I have one question for the Minister: how will the Government check that this money is working? We need to see real gains in skills and productivity, especially given the scale of the construction skills gap across England, Scotland and Wales. I would welcome the Minister’s thoughts on that. As a nation—or, as the Minister said, nations—we need to up our game in providing training and reduce our reliance on imports to address skills shortages.

On the whole, we on these Benches support this order. It keeps a levy system that the industry itself backs, protects small businesses through a fairer approach and funds real training for a skilled workforce.

[Baroness Spielman (Con)]

My Lords, I thank the Minister for introducing this order. We support the continuation of the Engineering Construction Industry Training Board levy for the 2026, 2027 and 2028 levy periods. This provides continuity for the industry without imposing additional costs. As others have said, the levy system clearly commands the support of the vast majority of those who pay for it. It works precisely because it is driven by industry need. Companies understand their workforce requirements far better than Whitehall ever can. The role of government should be to create the conditions in which businesses can invest, recruit and train, rather than to control industries with centrally designed employment schemes.

But it is important to look at the levy in the context of both current and likely future pressures. The scale of the challenge is considerable. The Minister cited estimates of a need for another 40,000 workers by 2030. Demand is rising in nuclear construction and decommissioning, offshore wind, hydrogen, carbon capture and storage, industrial decarbonisation, and the maintenance of existing energy infrastructure. The industry is competing for workers with other infrastructure sectors that need the same skilled trades and technical professionals. The central challenge is how to make sure that the country has the capacity and skills to deliver projects that are already planned.

Employers are facing considerable difficulties in recruiting and training. The workforce is ageing and few new entrants are coming through to replace retiring workers in key occupations. We need more and better technical education. Undervaluing technical and vocational education is a perennial British problem that stretches back for well over a century, and good technical education is not cheap. Successive Governments have wrestled with this for decades, and I can say with confidence that the problem will not be solved by a few soundbites about parity of esteem or by an education policy that is driven by social justice ambitions and that treats educational excellence, national prosperity and growth as afterthoughts. The Government should be taking a hard look at their equivalence and performance tables policy which, over 20 years, has done so much to push young people at school away from technical subjects at GCSE and into non-technical classroom BTECs.

11:45

Engineering construction is also project based and cyclical. A business may have a substantial future pipeline but be justifiably reluctant to take on permanent workers or apprentices when projects are repeatedly delayed, paused or rephased. Businesses are just less able to make long-term workforce investments when they have little certainty about their order books.

The sector is contending with tight margins, high borrowing costs, wage pressures and material inflation. Many specialist contractors and subcontractors simply do not have the financial headroom to recruit and train workers significantly in advance of confirmed work.

The pressures have of course been made worse by the Government’s increase in employer national insurance contributions and the substantial additional burdens imposed by the Employment Rights Act. It is disingenuous for Ministers to express concerns about skills shortages while simultaneously making it riskier and more expensive to employ workers.

I would be grateful if the Minister could address several questions in addition to those already put by my noble friend Lady Coffey. First, what assessment have the Government made of the effect of the policies that they have implemented so far on recruitment, apprenticeships and permanent employment in the engineering construction industry?

Secondly, how are they working with the ECITB and employers to align skills provision with the actual timetable for major nuclear, energy, carbon capture, hydrogen and infrastructure projects? In particular, how will Ministers ensure that delays and uncertainty in government-backed projects do not discourage employers from investing in training and recruitment?

Thirdly, what outcomes will the Government use to judge whether the levy is delivering value for money? Can the Minister provide figures showing how many apprenticeships, qualifications and training places have been supported by the levy and grant system, and how successfully these interventions have addressed shortages in the occupations where demand is greatest?

Finally, what steps are being taken to ensure that the levy system remains responsive to employers, administratively proportionate and focused on training that leads to genuine employment opportunities?

As I have explained, we support the levy order, but the levy cannot succeed in isolation. Its effectiveness will depend upon a stable infrastructure pipeline, a strong vocational education system and a wider economic environment in which businesses are encouraged to hire and retain rather than penalised for it. The Government must now ensure that their wider policies properly support employers to recruit, train and retain their workforces.

[Baroness Smith of Malvern (Lab)]

I thank the Committee for its contributions to the debate, and I welcome the noble Baroness, Lady Spielman, as this is the first time we have faced each other in her new role. I congratulate her on that.

The debate has underlined not only the importance of the ECITB’s work but the scale of the challenge facing one of our most economically vital industries, with a core workforce of 90,000 people and responsibility for £33 billion of output. As noble Lords have recognised, the industry plays a vital role in supporting our energy security, manufacturing capability and critical infrastructure.

As has come through clearly today, the engineering construction industry cannot meet the skills demands of the coming decade without a stable collective system of investment in training, alongside government support. I will return to this in a moment. The evidence is consistent that market forces alone will not deliver the pipeline of skilled workers that the industry urgently needs to meet the demand for new major infrastructure projects.

The ECITB’s levy is the mechanism that enables the collective benefits of a focused skills strategy for the engineering construction industry. It ensures that employers can access support for training and share the benefits of a skilled, competent and resilient workforce. It also opens opportunity, helping apprentices and other new entrants to complete high-quality training and helping existing workers to reskill or upskill to progress their careers.

I will respond to some of the specific points raised. The noble Baroness, Lady Coffey, rightly emphasised the need for success in the spending of the levy and the successful completion of training courses and apprenticeships. The ECITB has confirmed that it currently tracks apprentices and graduates while they are on programmes and receiving grant support. The data that the ECITB collects indicates a positive impact of its grant support on, for example, apprenticeship completion rates. Based on the ECITB’s latest available data for England, Scotland and Wales, of the apprentices who started an apprenticeship in 2020 and were supported by ECITB, 78% have successfully completed their apprenticeship as of December 2025. While we have seen improvements in the completion rates of apprenticeships over recent years, I think that is above the average rate.

The noble Baroness also raised the question of when the annual reports and accounts will be published for 2025. They will be laid in the autumn.

On the point about charitable status, it is not determined by the Government; it is determined by whether an organisation’s purposes are exclusively charitable and legally deemed to provide a clear public benefit. It was therefore a decision for the training bodies themselves—CITB, equally, is a charity—to take on that charitable status.

The noble Lord, Lord Palmer, raised the success of the levy consultation. It would be fair to say to the noble Lord that there are a lot of statistics around. Some of the statistics the noble Lord quoted related to the Construction Industry Training Board rather than the Engineering Construction Industry Training Board; perhaps it would be easier were the Government to decide to go ahead with the merger of the two. Nevertheless, they are different sizes and they do different jobs. The point he made is right: for the ECITB there is, if anything, an even greater level of approval as a result of the levy consultation than the figures he quoted.

Several noble Lords rightly cut to the chase of what the ECITB is responsible for. In other words: what does it actually do, and how, in the broader context, are the Government supporting the need for skills in the engineering and construction industry? On the former, the ECITB continues to invest in skills hubs, training standards and competence assurance across key sectors, including energy, nuclear and renewables. It has supported more than 6,900 new entrants since 2022 and invested £32.6 million in 2025 in training grants and new entrant programmes. During 2024, the ECITB funding supported over 2,000 new entrant starts, including over 1,000 apprentices and 500 graduates. Almost 64,000 learners were trained or assessed using ECITB-approved products, including more than 31,000 learners achieving industry-recognised safety passports and 2,763 learners supported through competence-related programmes. Of course, while the ECITB and the levy we are discussing are important for addressing some of the market failure in delivering skills in the engineering construction industry, it is just part of the broader work the Government are doing to support the engineering construction industry and wider skills. This relates to the points made by the noble Baroness, Lady Spielman.

The Government are delivering significant investment to strengthen engineering construction skills, as part of wider reforms, helping employers to respond to current and future workforce needs. This includes an additional £1 billion of investment to help deliver around 50,000 more apprenticeship opportunities for young people over the coming years—that is particularly important given the 40% fall in young people’s apprenticeships over the last years of the last Government—alongside increased flexibility through the new growth and skills levy and specific sector skills packages in engineering and construction that are worth over £800 million.

Additionally, we are providing targeted incentives for employers, including payments of up to £2,000 for taking on foundation apprentices. We have developed a new foundation apprenticeship in engineering, helping more young people to enter skilled careers, as well as other incentives, particularly for taking young people who may have been out of work on to these apprenticeships. We have continued and in fact increased investment in skills bootcamps and increased devolved approaches through mayoral strategic authorities, enabling local areas to respond to local employer demand and skills shortages.

The noble Baroness specifically raised technical and vocational education. I reassure her that this Government’s action, even in the two years that we have been in government, goes far beyond the soundbites that she characterised. A major reform of post-16 education is in progress, and stronger vocational routes are being developed through the new V-levels, an expansion of the possibility for young people to gain an in-depth technical education through T-levels, improved level 2 qualifications to get young people on to those vocational routes, and the investment I have already outlined in turning around the fall in the numbers of young people who have been able to start apprenticeships, ensuring that those opportunities are available for young people in the future.

Together with the ECITB support, these measures will strengthen the pipeline of skills available to the engineering construction workforce and support the delivery of major infrastructure projects across Great Britain. I hope that, in responding, I have reassured noble Lords about the role of this levy order, its importance in supporting the needs of small and larger businesses, ensuring maximum impact and value for money from employers’ levy contributions, and the important role the ECITB plays in ensuring that this key industry for growth, the development of infrastructure, energy security and manufacturing capability is supported both by the ECITB and the wider policies of this Government.

[Baroness Spielman (Con)]

Can the noble Baroness address my question about the impact of government policies enacted over the last two years on the engineering construction sector, particularly increased national insurance and employment rights?

[Baroness Smith of Malvern (Lab)]

I spelled out some of the impacts of the Government’s policy on the numbers of apprenticeships, the shift to vocational and technical education, the support this Government are providing to turn around the decline we have seen, and the £800 million of sector skills support we are providing for the industry. Is the noble Baroness genuinely arguing that this Government should now reverse the national insurance increases, which is where the investment in the National Health Service, which is also of considerable importance to employers, will come from? If she got her way and we reversed that, I think engineering employers, along with others, would not want their employees to be sitting on the waiting lists we inherited from the last Government.

Motion agreed.

Misuse of Drugs Act 1971 (Temporary Class Drug) Order 2026

Tuesday 14th July 2026 Grand Committee

Considered in Grand Committee

12:00

Moved by

[Lord Hanson of Flint]

That the Grand Committee do consider the Misuse of Drugs Act 1971 (Temporary Class Drug) Order 2026.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State, Home Office (Lord Hanson of Flint) (Lab)]

This instrument, laid before Parliament on 10 June, takes urgent action to control a new and very dangerous class of synthetic opioid. In the space of little over a year, orphines have been involved in at least 22 deaths in the United Kingdom, and 14 of those deaths were sadly between December and March. The UK is not alone in this respect: between 2024 and April this year, the United Nations Office on Drugs and Crime received 206 reports from numerous countries of drug samples that contained orphine compounds.

I am particularly grateful to the Advisory Council on the Misuse of Drugs for prioritising an assessment of these deeply harmful substances. Its report was published on 30 April, and the dangers we face here are encapsulated in the following line from that report:

“the risk to the population from these recently emerging compounds is sufficiently great that urgent steps are required to protect public health”.

The Government have heard that message loud and clear, and we are acting at pace. We enacted a temporary class drug order, TCDO, to control these drugs, less than six weeks after the council produced its report. The TCDO covers seven orphines: three that have tragically been involved in those deaths here in the UK, and four that the EU Drugs Agency has notified as being present in EU drug markets.

This is the first TCDO in 10 years, so I will take a moment to remind noble Lords about what these orders do. A temporary class drug order makes it a specific offence to produce, supply or offer to supply these seven orphines; to export or import them; or to possess them when there is also an intention to supply. Doing any of these things can result in up to 14 years in prison, the same as for a class B drug.

The TCDO also provides that the substances should be treated as if they were in Schedule 1 to the Misuse of Drugs Regulations 2001. Scheduling here covers the circumstances in which a controlled substance can be used legitimately, and the procedures that must be followed in doing so. Schedule 1 covers substances with no known medical uses, which is the case with these seven drugs. Anyone who needs to make legitimate use of them, for example in research, would need to apply to the Home Office to obtain a licence.

This instrument uses the made affirmative procedure. This reflects a balance between the requirement to put in place urgent measures to safeguard public health and the need for proper parliamentary scrutiny of measures, which expand the scope of criminal law. Under the provisions of the Misuse of Drugs Act, the TCDO must be approved by both Houses of Parliament within 40 days of it being made. I know noble Lords will be pleased to note that the other place, the House of Commons, approved it last night, and I hope this House will do so by Friday’s deadline.

My colleague Sarah Jones MP, the Minister for Policing and Crime, also accepted the further recommendation from the advisory council that the TCDO be followed by a permanent control, which would make orphines class A drugs. This would cover not only these seven substances but also two “generic definitions” of orphines. The purpose of those is to make it harder for criminals to circumvent the controls by making slight tweaks to the chemical composition of what they sell. Noble Lords will doubtless agree with colleagues on the Secondary Legislation Scrutiny Committee that the class A control should come into force swiftly. So, although I am not able to give a precise timetable today, I can confirm that we will act as soon as possible.

Self-evidently, the devastation that harmful drugs inflict on our society is intolerable, and it demands a response commensurate with the scale of the threat. The order before the Committee today stands as further evidence of the Government’s commitment to mounting such a response. I beg to move.

[Lord Cameron of Lochiel (Con)]

My Lords, I thank the Minister for bringing the order before the Committee. It is a simple and uncontroversial order, and I am pleased to support it. As the Minister established, the purpose of this legislation is to make a temporary class drug order under Section 2A of the 1971 Act in respect of seven substances that fall under the category of orphines, which are a class of synthetic opioids that have been recommended for control by the Advisory Council on the Misuse of Drugs. Given the reports that the UN Office on Drugs and Crime have received regarding the presence of orphine compounds in drug samples and their links to deaths, the Government are absolutely right to seek to control these substances.

However, I seek a couple of clarifications. As its title suggests, this order makes a temporary class drug order for the listed substances. I note that Section 2A of the 1971 Act states that TCDOs expire within one year of the order being made, which means that the Government will need to come forward within one year with a new Order in Council under Section 2 of the Act that lists these substances as controlled drugs. If the Government do not do that, these substances will cease to be controlled, so will the Minister confirm that the Government will bring forward a new order within that timeframe?

As a linked query, it is interesting that the Government have sought to make a TCDO now rather than simply to bring in an Order in Council. Why make a temporary order and then a permanent order later? There is an argument for the Government to have added these substances straight away to Schedule 2 to the 1971 Act. If we accept that they cause enough harm to justify a temporary order, surely they should be controlled permanently in the first place. I would be grateful if the Minister could explain the rationale for their approach.

Other than that, as I said at the start, I am more than happy to support the Government in their endeavours on this order.

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Lord, Lord Cameron of Lochiel, for his broad support for the order. As he said, it is quite sensible that we do this, but he asked two legitimate questions. In answer to his first question, we are mindful that the TCDO lasts for just one year and we will lay a permanent control before Parliament as soon as possible, as the Secondary Legislation Scrutiny Committee has urged us to do. I cannot give the noble Lord a timescale for that but, self-evidently, with the expiry of the order, we want to get that done and make sure that it is covered as a whole.

As the noble Lord said, we could have brought in an urgent, permanent class A control, which the advisory council has suggested is preferable. However, controlling new substances as class A, B or C drugs takes some time, and rightly so. Such controls expand the scope of the criminal law and amend primary legislation, and it is right that Parliament has the opportunity to scrutinise them. That is precisely why the legislation also allows for these temporary class drug orders. They do everything that class A, B or C controls do, except that the maximum sentences are not as long as for class A drugs.

I say with due respect to my colleagues in the Privy Council, of which I am a member, that the need for the relevant order to be made at the Privy Council adds some weeks to the process, and there is no real need for that at the moment. In the previous Session of Parliament, the Government supported a Bill sponsored by the honourable Member for Gloucester which would have removed this requirement. For the moment, we think that we can put the controls in place, mindful of the expiry, and revisit that in due course. We will look at the longer-term procedure more slowly, but the purpose of this order is to make sure that we put some definitive controls in place on the seven new opioids that have, sadly, caused deaths in the past year. I hope that that answers the noble Lord’s questions.

Motion agreed.

Committee adjourned at 12.10 pm.