Northern Ireland (Ministers, Elections, and Petitions of Concern) Bill

Earl Howe Excerpts

Monday 7th February 2022 Lords Chamber

Moved by

[Earl Howe]

That Standing Order 38(1) (Arrangement of the Order Paper) be dispensed with on Wednesday 9 February to enable consideration of the Commons Reason on the Advanced Research and Invention Agency Bill, and Report stage of the Dissolution and Calling of Parliament Bill to take place before oral questions that day.

Motion agreed.

Health and Care Bill

Earl Howe Excerpts

Committee stage
Friday 4th February 2022 Lords Chamber

[Baroness Thornton (Lab)]

I thank my noble friend Lord Blunkett for speaking very briefly and giving us some very wise words. The noble Baroness, Lady Altmann, is absolutely right that the system is inadequate. I am grateful to the noble Baroness, Lady Bennett, for tabling these amendments and opening up this discussion. They address the issue of ownership of the organisations that provide social care. We know that almost all social care provision, residential and domiciliary, is not in the public sector and has not been for some time. We also know that the current system is wholly dysfunctional, as the noble Baronesses, Lady Bennett and Lady Brinton, said. It does not work for the service users, for the staff or even for the providers, which go bust fairly regularly, as the noble Baroness, Lady Altmann, described. Of course, it used to be a money spinner for hedge funds and others that got involved to asset strip and leverage profits and remuneration at the expense of service users, both individual self-funders and taxpayers and ratepayers who were paying for other residents.

I have always taken the view that this sector would benefit from an enormous influx of social enterprises and co-operatives. Where social care, domiciliary care and residential care are provided through social enterprises, community enterprises and co-operatives, they are sustainable, they keep their staff and they invest their surpluses back into their social purpose, so everybody gains. To suggest that the Government will fix social care through this legislation is laughable, because the existing market solution cannot be fixed. So we have sympathy with these amendments and fully understand the intent that the noble Baroness, Lady Bennett, outlined for us.

I am interested to know how the Minister will respond, because it is quite clear that something must happen in this sector because it is so unsatisfactory. I suspect that if the Government are not going to move on this, we may have to return to this later in the Bill.

[Earl Howe (Con)]

My Lords, I appreciate the way that the noble Baroness, Lady Bennett, introduced these three amendments and I am grateful to her for the clear explanations she gave for them. I will take them sequentially, beginning with Amendment 237.

This amendment seeks to place restrictions on the power for the Secretary of State to provide financial assistance to bodies engaged in the provision of social care services. It would prevent use of the power for the purposes of repaying debt, paying interest on debt and making distributions to shareholders.

To begin with a general but important point, it is incumbent on all Ministers and public servants to ensure that public money is used effectively for the greater good, and that purpose is implicit in the power contained in Clause 141. However, I fear that this amendment could make the proposed power unworkable in practice. If we look at the way the amendment is worded, any adult social care provider with a trade creditor of any kind would be caught, as would any organisation with an overdraft facility designed to support day-to-day working capital. A company’s working capital, by its nature, is money that is used to fund day-to-day operations in general, and one cannot associate a particular pound with a particular business activity. Furthermore, any private company would be prevented from paying dividends, as it would be logically impossible to disassociate the long-term effects of the assistance from the ability of the company to pay such dividends.

The pandemic has demonstrated the need for speed and flexibility in providing support to the care sector. We do not intend to use the power in the way the noble Baroness fears, but we have designed it in such a way as to provide the maximum flexibility to respond in times of crisis; each individual case will be considered on its merits. Placing additional restrictions through this amendment would impede our activity to provide emergency support to critical providers.

Any future use of this power, whether for emergency purposes such as those we have seen in the pandemic or to deliver specific policy on a national basis, would be subject to the usual scrutiny and safeguards around use of public funds, as set out in Treasury guidance on Managing Public Money and Accounting Officer Assessments. As with any use of public resources, the power would be exercised with a clearly defined purpose, with strict criteria applied in practice relating to the use of the funding to ensure that it delivers maximum value for money.

I turn now to Amendments 238 and 239. Amendment 238 seeks to undertake a review of the financial regulation of companies providing social care, with a view to ensuring that it supports the effective provision of social care. Amendment 239 aims to increase the financial transparency of offshore corporate groups providing social care.

We are committed to ensuring that we have a sustainable care market. This was made clear in People at the Heart of Care: Adult Social Care Reform White Paper, published in December. It is vital to ensure that people have a wide range of high-quality care and support options to choose from, supported by a workforce that is empowered to deliver high-quality care. With that in view, we have already set out a number of planned actions to support the effective provision of social care services.

As the Committee will be aware, under the Care Act 2014 it is the responsibility of local authorities to shape their local markets to ensure that a diverse range of high-quality, sustainable care and support services is provided. We consider that they are the ones best placed to understand the needs of their local populations.

Maintaining quality and high standards is vital, and that means regulation. The Bill introduces a new duty on the CQC to assess local authorities’ delivery of their adult social care responsibilities. Alongside existing duties on the CQC to monitor, inspect and regulate health and care services, this will drive up quality so that everyone can access the care they need, wherever they live.

We are also committing £1.4 billion of funding over three years to support local authorities in moving towards paying providers a fair cost of care. This funding will strengthen the capacity of local authorities to plan for and execute greater market oversight and improved market management to ensure that markets are well positioned to deliver on our reform ambitions, to address underinvestment and poor workforce practices and to provide a stable base for reform of adult social care.

In addition, we are investing at least £500 million over the next three years to begin to transform the way we support the social care workforce. This funding will go towards continuous professional development, so that people can experience a rewarding career with opportunities to develop and progress, now and in the future.

The noble Baroness stressed the importance of transparency in the market and I understand the points she made, particularly about overseas-registered companies. The Department for Business, Energy and Industrial Strategy is continuing to finalise the draft registration of overseas entities Bill, which underwent pre-legislative scrutiny in 2019, to align with the broader reform of Companies House and our plans to verify the data it holds. The Joint Committee concluded that

“this draft legislation is timely, worthwhile, and, in large part, well drafted.”

In their July 2019 response, the Government accepted many of the committee’s recommendations, such as ensuring that Companies House is given adequate resources and introducing a reporting facility. The Government have been exploring how best to implement these recommendations and others, such as civil sanctions. We are also considering how verification will work with this register. The Department for Business, Energy and Industrial Strategy is amending the draft Bill in line with the committee’s recommendations and will introduce it when parliamentary time allows.

As the noble Baroness, Lady Tyler, said, adult social care is a mixed economy. The majority of adult social care providers are private companies. Like other sectors, many private businesses employ debt as an ordinary part of their capital structures or funding arrangements.

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[Baroness Merron (Lab)]

My Lords, it is a pleasure to follow the noble and right reverend Lord, who reminds us of our obligations to assist with alcohol-related ill health. I thank the noble Baroness, Lady Finlay, and the noble Lord, Lord Shipley, for putting these amendments before your Lordships’ House today. The first is a probing amendment about the need to report on the consultation on alcohol labelling. It is absolutely right to raise this: consumers have a right to know what is in their drinks, to make informed choices about what and how much they drink. Currently there are no legal requirements for alcohol products to include health warnings, drinking guidelines, calorie information or even ingredients. Research by the Alcohol Health Alliance found that over 70% of products did not include the low-risk drinking guidelines, and only 7% displayed full nutritional information including calories. I certainly add my voice to welcoming the forthcoming consultation on alcohol calorie labelling. When can we expect to see this, and what is the reason for the amount of time that it has taken to bring it forward?

Amendment 296 requires the Secretary of State to make a five-yearly statement on the cost efficacy of alcohol services. As we know, rigorous impact evaluation is absolutely key to good policy-making and improving the lives of those who use alcohol services. At present, the Government cannot say that they are meeting their responsibility to tackle alcohol harm with the requisite financial commitment and in the right places. Perhaps the Minister will tell your Lordships’ House what evaluation measures are already in place.

Of course, the background to all this is that, since 2012, there have been real-terms funding cuts to alcohol services of over £100 million. Pre pandemic, only one in five dependent drinkers was believed to be in treatment, leaving a shocking four out of five without help. The pandemic has only worsened the situation. I hope that the Minister will agree that there is a need to do better to ensure that we know how policies and services help or hinder the treatment of problem drinking, in order that efforts and resources can be targeted to where they work best.

[Earl Howe (Con)]

My Lords, I pay tribute to the noble Baroness, Lady Finlay, for her work as chair of the Commission on Alcohol Harm. I thank her for this opportunity to set out the current state of play on the Government’s alcohol policy. I am the first to acknowledge the seriousness of the harms caused by the consumption of alcohol, which she pointed out.

Effective alcohol labelling is an important part of the Government’s overall work on reducing alcohol harm. I am pleased to tell the noble Baroness that the legal powers available to the Government are already sufficient to enable us to consult and report on alcohol labelling. The kind of power proposed in her probing amendment is highly prescriptive, and, from a purely practical point of view, would not allow for sufficient flexibility in the consultation process, which could make the process less effective.

As she knows, as part of the Government’s Tackling Obesity strategy, published in July 2020, the Government committed to consult on whether mandatory calorie labelling should be introduced on all pre-packed alcohol as well as alcoholic drinks sold in the out-of-home sector. I repeat that commitment today, and, as part of our public consultation, we will also seek views on whether provision of the UK Chief Medical Officers’ Low Risk Drinking Guidelines, which includes a warning on drinking during pregnancy, should be mandatory or continue on a voluntary basis. The noble Baroness, Lady Merron, asked when we might expect that consultation to be forthcoming. I am afraid I can say no more than “in due course” at this stage, which I realise is not wholly enlightening, but it is as far as I can go at the moment.

Turning to Amendment 296, which proposes additional reporting and government statements, we do not think a new reporting requirement is necessary. The Office for Health Improvement and Disparities already publishes annual data on estimated numbers of alcohol-dependent adults within local authorities in England. Health commissioners can use this data to estimate local need and appropriately plan their alcohol treatment services. Outcomes for local authority-funded alcohol treatment services are already published at local and national level via the national drug treatment monitoring system. The Office for Health Improvement and Disparities also provides a number of data tools to enable local areas to compare their performance against other areas and nationally, including the public health outcomes framework, local alcohol profiles for England and the spend and outcomes tool.

On funding, local authorities are currently required to report on their spend on alcohol services annually to the Department for Levelling Up, Housing and Communities. Through the “why invest?” online guidance, the Office for Health Improvement and Disparities already produces data and information on the return on investment for alcohol and drug treatment. The guidance includes cost savings data on treatment interventions in primary and secondary care and on specialist and young people’s treatment services. There is a strong programme under way to address alcohol-related health harms and their impact on life chances, and to reduce the associated inequalities which the noble Baroness emphasised, including an ambitious programme to establish specialist alcohol care teams in hospitals and to support children of alcohol-dependent parents.

Throughout the Covid-19 outbreak, drug and alcohol treatment providers continued to support and treat people misusing drugs and alcohol. OHID supports local authorities in this work by providing advice, guidance and data. OHID is developing comprehensive UK guidelines for the clinical management of harmful drinking and alcohol dependence. These aim to develop a clear consensus on good practice and to improve the quality of service provision. The work is expected to be completed later this year.

Finally, we are currently developing a new commissioning standard for drug and alcohol treatment which aims to increase the transparency and accountability of local authorities on how funding is spent. It will include requirements to commission services—

[Lord Sentamu (CB)]

I am sorry to disturb the Minister in mid-flow. He described this amendment as prescriptive. Seat belts became prescriptive, and most people now wear their seatbelt. There was no question of an in-between. Smoking was another, and the effect has been to improve our public life. Without clarity—and we still will not have options—how will the Government achieve what wearing seatbelts and not smoking have achieved in terms of health? Alcohol needs to have similar treatment.

[Earl Howe (Con)]

The noble and right reverend Lord makes an extremely cogent set of points. I criticised Amendment 259 only on the grounds that it was overprescriptive. Surely, what we want in any consultation is a broad enough question to put to the public and those who have expertise in this area. If we make it too narrow—I said “overprescriptive” rather than “prescriptive”—we are in danger of introducing a lack of flexibility. That was my only point there.

I was just mentioning the development of a new commissioning standard. It will include requirements to commission services to meet a wide range of individual needs, and services will be monitored against these. I hope that information provides the noble Baroness and the Committee with a useful update on where we are with this important agenda and will enable her to feel reasonably comfortable in withdrawing her amendment.

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[Lord Cormack (Con)]

My Lords, I apologise for missing the first minute—but it was only the first minute—of the splendid speech of the noble Lord, Lord Hunt. I am delighted to add my support to his initiative, most splendidly supported by my noble friend Lord Ribeiro. We entered this House on the very same day and it was very good to hear what he had to say. Of course, the noble Baronesses, Lady Northover and Lady Finlay, and the noble Lord, Lord Alton, all have an impeccable record on these matters.

[Earl Howe (Con)]

I hope that my noble friend will forgive me but, as he was not here at the beginning of the debate, strictly speaking it is not permitted for him to speak. If he could make his remarks brief, I am sure that would be appropriate; I do not want to stop him mid-flow.

[Lord Cormack (Con)]

Well, I certainly was going to make my remarks brief, and I am sorry that I was detained for one minute. I just want to give my wholehearted support to these amendments. There is no more despicable trade than the trade in human organs and no more despicable practices than those that are going on in China at the moment, simultaneously with the opening of the shameful Games. I very much hope that my noble friend, who so politely interrupted me, will be able to give us a very supportive statement when he comes to wind up this debate.

[Baroness Thornton (Lab)]

My Lords, can I say how much I agree with my noble friend Lord Hunt, the noble Baroness, Lady Northover, and the noble Lords, Lord Ribeiro and Lord Alton? They know I have been with them on this journey throughout. I probably would go a bit further than my noble friend Lord Hunt’s Amendment 265, because I believe that this country should follow the example of France and ban the exhibition of plasticised cadavers and human body parts.

In 2019, we had an OQ on this, which many noble Lords here today took part in. I said at that time that there is an

“ethical issue at play here”

and that it seemed that the businesses that had

“the exhibitions which use plasticised cadavers and foetuses for supposedly educational purposes could use modern materials and production to create the same exhibits. That begs the question: why use cadavers and human body parts at all? If the answer is that people want to see such things and will pay to do so, I remind noble Lords that people used to flock … to see public executions until 1868.”

It is an ethical issue. I am afraid that the noble Baroness answering that debate at the time said that

“the ethical position is not one for government.”—[Official Report, 27/2/21; cols. 228-29.]

Well, I would say that this debate shows that the ethical position is absolutely one for government.

[Earl Howe (Con)]

My Lords, I begin by thanking the noble Lord, Lord Hunt of Kings Heath, and many other noble Lords for bringing these amendments relating to these important and sensitive issues to the Committee today.

Amendment 265 seeks to prohibit the use of imported bodies or parts of bodies for the purpose of public display without the specific consent of the donor. The Government share the concern motivating Amendment 265 that bodies may in the past have been displayed in public exhibitions without the donors’ consent. We therefore committed in this House, during the passage of the Medicines and Medical Devices Act, to address this concern, and have since worked closely with the Human Tissue Authority to strengthen its code of practice on public display, which was laid before Parliament last July. The code now guarantees that robust assurances on consent for all donor bodies, including imported bodies, are fully received, assessed and recorded, before the authority issues any licence for public display. The Government therefore do not believe that this amendment is necessary.

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[Lord Ribeiro (Con)]

My Lords, would it be possible to collect data to substantiate what my noble friend has said about the reduction in people going overseas to get organs for transplantation? Can we get some figures to be absolutely clear that the numbers are reducing and not continuing, as some of us fear?

[Earl Howe (Con)]

I expect it is possible to capture some data but, of course, there will always be cases of people going overseas who are invisible to those who collect data, and we can never guard against that.

[Lord Alton of Liverpool (CB)]

I will follow the noble Lord’s point. Even though it may be impossible to collect credible data on people leaving who are not going to say they are going overseas to collect organs, when they return—as the noble Lord, Lord Hunt, pointed out—many of them will receive treatment and care inside the National Health Service as a result of having an organ that has not come from within the United Kingdom. That is data that could surely be collected.

[Earl Howe (Con)]

The noble Lord makes a very good point and, if I may, I will investigate the feasibility of doing that and what systems are in place to capture that kind of data.

I am grateful to the noble Baroness, Lady Finlay, for her Amendment 297H, which covers the retention and use of tissues after coroner post-mortem examinations. I of course share the commitment to promoting education and research. However, I am afraid I do not believe that this amendment represents the right approach to supporting this aim. I appreciate that the noble Baroness emphasised that she was referring to blocks, slides and urine samples; the amendment refers to tissue samples. The advice I have received is that it is important that we remain committed to the principle that consent is fundamental to how we treat the remains of the deceased. I remember the passage of the Human Tissue Act; the noble Lord, Lord Alton, was absolutely right in what he said earlier about that. All of us should have a choice about what happens to our bodies after we die, and if we cannot exercise that choice, those close to us should be able to.

Post-mortems can already be distressing to the families of the deceased. Denying them a say as to what happens to the remains of their loved ones will compound that distress—often unnecessarily, as many of the retained tissues will never be put to use.

There are three other defects, as I see them, in the amendment; I am concerned that it would allow tissues to be stored indefinitely; it would allow for an overly broad interpretation of what constitutes a tissue sample —that is, in fact, my main concern; and it does not address the considerable challenge of how to effectively catalogue, audit or access the large amount of new material that would have to be retained.

Having said that, I believe that under the current consent-based model we can and should do more to encourage the active identification of tissues that could serve an important purpose, and to communicate the significance of retaining this tissue to the deceased’s family when seeking their consent. I understand the force of what the noble Baroness is trying to achieve and there may be different ways of doing that.

While I am grateful to noble Lords for their amendments in this area, I respectfully ask them to withdraw or not press them at this stage.

[Baroness Finlay of Llandaff (CB)]

Will the Minister undertake that the Government ask the Scottish Government about their experience of retaining tissue blocks and slides? Only tissue blocks and slides—not, I stress, organs—are being retained as part of the clinical record, so that we have some information about problems that have arisen. Also, given that the Government accepted the McCracken review, how do they then intend to implement that acceptance? If you accept the need to have consent, there has to be a process by which consent is obtained. You cannot ask for consent prior to the post-mortem because the post-mortem is a judicial process.

[Earl Howe (Con)]

I noted that the amendment tabled by the noble Baroness is closely modelled on the current law in Scotland. Because of that, it fails to account for the significant differences between how Scotland, and England, Wales and Northern Ireland, regulate the storage and use of human tissue. In England, Wales and Northern Ireland, that storage and use is regulated by the Human Tissue Authority. In Scotland, there is no equivalent body and the amendment is silent as to what impact it would have on the authority, especially given the challenges involved in managing the great quantity of tissue that would be retained.

I am aware that many Scots share my concerns about consent for retaining tissue. A recent petition to the Scottish Government highlighted the anguish faced by a grieving mother on learning that she did not have the choice to have some of her child’s remains returned to her. She was upset at how long it took for those remains even to be located, so although this amendment would apply only to adults the same kind of issues would apply.

[Lord Hunt of Kings Heath (Lab)]

My Lords, it has been a very good debate. First, I say to the noble Baroness, Lady Finlay, that I sympathise with her Amendment 297H, but clearly it is a sensitive area. The noble Lord, Lord Alton, mentioned Alder Hey; I had ministerial responsibility at the time, and it was very traumatic meeting the parents of children who, in the end, had body parts buried up to three times or more because of the dreadful way in which both the hospital and university managed the situation, as well as the pathologist himself. On the other hand, the reasons put forward by the noble Baroness seem very persuasive, and I hope there will be a continuing debate on this with the Government.

As far as my two amendments are concerned, I am very grateful to the noble Lord, Lord Cormack, the noble and right reverend Lord, Lord Sentamu, the noble Baroness, Lady Finlay, and my noble friend Lady Thornton for their support. As the noble Lord, Lord Ribeiro, said, the concession given by the noble Baroness, Lady Penn, on behalf of the Government during discussions on the then Medicines and Medical Devices Bill was highly significant both for this country and for the message it gave globally. The debate today, and the amendments, are as much about global messages as UK legislation.

As the noble Baroness, Lady Northover, said, we cannot say that we do not know; we do know. The noble Lord, Lord Alton, sat through many of the harrowing sessions of the Uyghur Tribunal and the evidence—before a hard-headed panel—is absolutely convincing. There can be no doubt that this is an abhorrent practice and, as my noble friend Lady Thornton said, it may not be on the same scale but these wretched exhibitions that take place are a product of those abhorrent practices. She has persuaded me that my amendment is rather soft and needs to be hardened up. I look forward to her helping me to get the wording right.

The noble Earl, Lord Howe, referred to the HTA code of practice; I think we need to go further than that. On organ tourism, I will obviously study very carefully the issues that he raised about my amendments, but we have the figures from NHS Blood and Transplant: I think 29 people have come to the NHS for help following a transplant abroad, which gives us some clue as to the numbers but clearly it is not the whole picture. At the end of the day, you come back to the issue of ourselves and China. Clearly, there is huge ambiguity in our policy, whether that is to do with security, trade or human rights. Some of that ambiguity is understandable, given the scale and size of the Chinese economy—we understand that—but I do not think there is any room at all for ambiguity about this country making a strong response to these appalling practices. Having said that, I beg leave to withdraw my amendment.

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Key to this is looking closely at the work of NHS Resolution, as the amendment stresses. Underlining everything is the importance of the system being able to learn from common failures—medical, procedural, training, managerial, policy or technology. The priority of better safe care must be paramount. That is why the messages of the report of the noble Baroness, Lady Cumberlege, as we have again heard today, are so crucial to today’s deliberations. We strongly supported her determination to establish the post of patient safety commissioner. We also support her Amendment 288, which calls for schemes to be established for the care and support of victims who suffered avoidable harm from hormone pregnancy tests, sodium valproate and pelvic meshes. Her work on the rapid redress system provides a way forward in dealing with some of the issues raised by noble Lords. I look forward to the Minister’s response.

[Earl Howe (Con)]

My Lords, this has been an important and moving debate. We should recognise that, behind the technical aspects of the topic, there are stories of real harm and life-changing events for people and families.

Amendment 267 would establish an independent judge-led review into the operation of the Vaccine Damage Payments Act 1979. I appreciate the spirit behind this amendment and agree that we need to ensure the vaccine damage payment scheme works as effectively as possible. We recognise that the scope and scale of the scheme has significantly changed since 1979; it has expanded from the original eight diseases to cover 18 and the payment value has increased from the original value of £10,000 in 1979 to the current level of £120,000.

Most recently, responsibility for the operation of the scheme transferred from the Department for Work and Pensions to the Department of Health and Social Care on 1 November last year. The NHS Business Services Authority has now taken over the operation of the scheme. It is looking to improve the claimant journey on the scheme in three main ways: increasing personalised engagement; reducing response times; and making more general support available to claimants. It has also allocated additional resource to the operation of the scheme. I can tell the noble Lord, Lord Hunt, that the department will further engage with the NHS Business Services Authority to progress service improvements and, in particular, greater digitalisation.

Our focus now must be on completing the transfer of the scheme, getting support to those who are eligible as quickly as possible and improving the claimant experience. Against that background, I am not convinced that an independent review at this stage would support these goals. Indeed, it might risk delaying progress.

I shall just comment on a couple of detailed points made by the noble Lord. The first is on the disablement threshold. The 60% disablement threshold is aligned with the definition of “severe disablement”, as per the DWP’s industrial injuries disablement benefit. It is not clear that this is a significant barrier to claimants. In 2019 and 2020, just one claim out of 151 was rejected due to the 60% disability threshold not being met. Of course, there is also the option for claimants to appeal the decision.

The noble Lord also expressed concern about the length of time that it was taking to settle claims. NHS Resolution aims to get to the right answer as quickly as possible in every case but, equally, each case has to be considered on its own merits, and it is important that a proper investigation is undertaken. The department keeps NHS Resolution’s performance under regular review and is satisfied that its approach to settling claims strikes the right balance in delivering timely resolution. Recent performance on time to resolution has been influenced by the pandemic—that is not meant to be an excuse; it is just a statement of fact—and the need to relieve pressure on front-line NHS staff. To mitigate this, NHS Resolution worked with a range of industry stakeholders to introduce a specific Covid-19 clinical negligence protocol to support the management of claims during this time. This collaborative approach has been widely welcomed in the written evidence to the HSCC inquiry on NHS litigation reform.

On Covid-19 vaccines in particular, clearly, they are new, and establishing a causal relationship between the vaccines and their purported side effects is not a straightforward matter and takes time. So, while we would like to have an accelerated process, it was vital that we did not make assessments before the scientific evidence reached a settled position, to avoid payments being made in error, or those who qualify potentially missing out on payments. The NHSBSA will be writing to claimants when there is an update on their claim, and we appreciate the continued patience of claimants at this difficult time.

I turn now to Amendment 268, also tabled by the noble Lord, Lord Hunt, and supported by my noble friend Lady Hodgson of Abinger. The Government already have robust arrangements for reviewing public bodies such as NHS Resolution. Our assessment is that NHS Resolution is a well-run organisation. The National Audit Office noted in its 2017 report the efficiency gains it has achieved, including significant progress in reducing unnecessary litigation through the use of mediation and alternative dispute resolution. In 2020-21, 74% of claims handled by NHS Resolution were resolved without formal court proceedings. In fact, very few cases—0.3% of litigated claims—actually go to trial. Of the 56 cases that went to trial in 2020-21, NHS Resolution achieved a judgment in favour of the NHS in 38 cases: roughly two-thirds.

I also draw the Committee’s attention to the work under way to manage rising clinical negligence costs—a topic very appropriately raised by the noble Lord, Lord Hunt. The department is working intensively with the Ministry of Justice, other government departments and NHS Resolution, and we will publish a consultation to address this issue. An independent review would duplicate this work and, in any case, legislation would not be necessary to establish such a review.

In 2017, the NAO identified the main drivers of the cost rise as, first, compensation payments; secondly, claim volume increases; and, thirdly, legal costs. Since then, the picture has changed: payments for compensation now drive the increase and are growing at rates above inflation. We share the noble Lord’s concern that existing legislation may mean that the state pays twice for care. While from our analysis we do not think it is likely to be a significant driver of increasing costs, we remain open to evidence. Furthermore, the Government recently submitted evidence to the Health and Social Care Committee inquiry on NHS litigation reform. We welcome the inquiry and look forward to its recommendations.

Turning to Amendment 288, I thank my noble friend for her and her team’s diligence and dedication and the brave testimonies of those who contributed to the Independent Medicines and Medical Devices Safety Review. Anyone who has read that review cannot fail to be moved by the evidence submitted to my noble friend’s team. I assure your Lordships that the review has been a powerful call to action. The Government have accepted the majority of the report’s nine strategic recommendations and 50 actions for improvement.

I understand my noble friend’s point about redress, but, at the same time, I believe it is important that we focus government funds on initiatives that directly improve future safety. For this reason, the Government have already announced that redress schemes will not be established for people affected by hormone pregnancy tests, sodium valproate or pelvic mesh. However, as my noble friend knows, in order to put patient safety at the heart of the system, we have established— thanks to her recommendation—the new patient safety commissioner. The appointment of the commissioner will put the patient voice at the centre of patient safety and deliver improvements in how the system listens to and responds to concerns raised by patients.

We are also improving the safety of medicines and devices and embracing the new opportunities to reform regulatory frameworks following the UK’s departure from the European Union. The Medicines and Medical Devices Act delivers further on our commitments to patient safety, embedding reform and delivering an ambitious programme of improvements for medicines and medical devices.

I hope I have provided at least some assurance and that noble Lords will feel able not to press their amendments.

[Baroness Cumberlege (Con)]

My Lords, I very much welcome my noble friend’s response. Of course he is right: we must always look to the future safety of our services. I am really grateful to Ministers and the department for what they have done in response to our report. It is not 100% yet, but we are nearly there, and I thank them for that.

But I am not talking about the future. I am talking about the people who are suffering now as a consequence of the treatment they received, not knowing that it would do them harm. So I ask my noble friend to take this away and think further on it. As I tried to explain, we have devised in the amendment a system that is not, as we said, an open cheque. It is not huge amounts of money; it is not huge numbers of people. It is to help those who are struggling with their lives as a consequence of the harm that has been caused to them. I just ask my noble friend to take this away and think further.

[Earl Howe (Con)]

I appreciate of course my noble friend’s remarks, and I undertake to bring them to the attention of my right honourable friend the Secretary of State.

[Lord Hunt of Kings Heath (Lab)]

My Lords, this has been a very good debate, again, and I am grateful to the noble Earl, Lord Howe, for his sympathy. I really support the plea from the noble Baroness, Lady Cumberlege, for more thought to be given to the specific area of redress for the three groups of patients she mentioned. Any of us who have met some of the women involved—I think in particular of the women I have met who have been affected by surgical mesh issues—will be taken with the huge damage that has been done to their lives and well-being. I think they deserve listening to.

I will also say that I was very grateful to the noble Baroness, Lady Hodgson, for her support and for the information she brought to your Lordships, and to the noble Baroness, Lady Walmsley, and my noble friend Lady Wheeler, who pinpointed the need for action in this area.

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However, having said that, I was hoping I could just tempt the noble Earl to say a little something about how those affected by vaccines—particularly by the Covid vaccine—might be brought into the system of discussing it.

[Earl Howe (Con)]

My Lords, I rather wish it were my noble friend Lord Kamall handling this group because he is the Minister, and I am not. However, what I can do is undertake to bring the request of the noble Lord to his attention—I am sure I do not have to—and I am sure he, in turn, will wish to respond as soon as possible to that request.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I know how generous the noble Lord, Lord Kamall, has been with his time. I can but hope for a sympathetic response and beg leave to withdraw my amendment.

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[Baroness Merron (Lab)]

My Lords, this has been an interesting debate, and we have heard various views. I thank my noble friend Lord Faulkner for leading on this group of amendments, and I thank noble Lords for putting forward their amendments and views so that we can explore how we respond to the challenge of smoking.

My first point leads on very neatly from the comments of the noble Lord, Lord Crisp. Smoking remains the leading preventable cause of premature death. As the noble Lord observed, it is a matter where we should consider the scale of the effect and the fact that this is about addiction. It is not about free choice but is something that we must assist people to overcome. While rates are indeed at record low levels, there are still more than 6 million smokers in England, and the need to reduce this number is particularly important now, as smokers are more at risk of serious illness from Covid.

The economic and health benefits of a smoke-free 2030 would be felt most keenly among the most disadvantaged. However, as we heard from the noble Lord, Lord Young, at current rates we will miss this target by seven years on average, and by at least double that amount for the poorest groups in our society. So it is vital that we motivate more smokers to quit while reducing the number of children and young people who start to smoke.

Within this group of amendments, noble Lords have suggested a broad raft of anti-smoking measures, including information inserts and warnings printed on rolling papers, a consultation on raising the age of sale to 21 and a “polluter pays” approach which argues that tobacco companies should pay for smoker treatment programmes. All these measures can be underpinned by broad cross-party support and public support. Certainly, the All-Party Group on Smoking and Health is very supportive of this group of amendments.

The pandemic has posed new challenges to us, and there is a new group of people who started smoking but who otherwise would not have done so. We have been promised a new tobacco control plan, and I hope that the Minister tells your Lordships’ House when we can expect it. The labelling and information interventions contained within this group of amendments have a strong evidence base from other countries, as well as from research in the UK. I hope that the Minister will be amenable to them.

Picking up on a few of the points raised within this group, it is very shocking to note that more than 200,000 11 to 17 year-olds who have never smoked previously have tried vaping this year. It is a very strange situation that e-cigarettes and similar products can be given free to somebody under 18 but they cannot be sold to them. We do not want to see a situation where young people are brought to smoking by smoking substitutes.

In reference to the amendment that proposes a United States-style “polluter pays” model to fund all these interventions, including the restoration of lost smoking-cessation services, the noble Lord, Lord Young, described practical ways in which this could come about. Certainly, the Minister in the other place did not close the door to this idea in Committee. I hope that we will hear from the Minister some agreement towards this.

Amendment 270 promotes a consultation on raising the age of sale, because we know that the older a person gets, the less likely they are to start smoking. If this is to happen, it requires proper consultation with relevant stakeholders, not least young people themselves, including those who are underage. It must be rigorous in checking what will work. Attitudes to the incidence of smoking have changed over the years, but the direction now is firmly one way, and that is to prevent ill health and premature death. This group of amendments contains proposals to keep us moving in this direction, to assist those who smoke and to prevent those who seek to smoke, particularly those at the younger end of the scale. I hope that this group of amendments will find favour with the Minister.

[Earl Howe (Con)]

My Lords, I am grateful to the noble Lord, Lord Faulkner, and other noble Lords for bringing this discussion on tobacco control before the Committee today. In responding to these amendments, I begin by emphasising the Government’s commitment to the smoke-free agenda. Over the past two decades, successive Governments have successfully introduced a strong range of public health interventions and regulatory reforms to help smokers quit and protect future generations from using tobacco. Our reforms have included raising the age of sale of tobacco from 16 to 18, the introduction of a tobacco display ban, standardised packaging for tobacco products and a ban on smoking in cars with children.

The Government are committed to making this country smoke free by 2030, and we will outline our plans in a new tobacco control plan to be published later this year. As part of our Smokefree 2030 programme of work, I am pleased to announce that we have launched an independent review into smoking. The review, led by Javed Khan OBE, will make a set of focused policy and regulatory recommendations to government on the most impactful interventions to reduce the uptake of smoking and support people to stop smoking for good. I am sure he will consider many of the policies raised by noble Lords in today’s debate as part of his review, which is expected to report in late April.

The action I consider vital for the Government is to conduct research and build a robust evidence base before bringing any additional measures forward, such as those outlined in Amendment 276, which would impose a duty on the Secretary of State to make regulations requiring tobacco manufacturers to print health warnings on individual cigarettes and rolling papers. This evidence-base principle also applies before raising a proposal, even through a consultation such as that outlined in the requirement in Amendment 270 to consult on raising the age of sale.

Several amendments that have been put forward by noble Lords are not required, because relevant legislation is already in place. For example, legislation is already in place that prohibits the sale of tobacco and e-cigarettes to under-18s, including proxy sales, as outlined in Amendment 271, and provision to enable this to be extended to all nicotine products. While we support proposals further to protect young people from these products, we do not have the evidence base at present to suggest that free distribution is a widespread problem. We challenged the industry on this, and it claimed that it is targeting only smokers who are over 18 when it gives free samples. Whatever one may say about that, there would undoubtedly be reputational damage to businesses if they did give out samples to minors. I am sure that evidence in this area will be gratefully received by the department.

When looking at further regulation of e-cigarettes, we need to assess which policies provide us with the best opportunities to reach our bold Smokefree 2030 ambition. Once we have fully considered the evidence, the most ambitious policies will be included in a new tobacco control plan. I do not in the least intend to sound complacent, but it is worth noting that in 2018 regular use of e-cigarettes among 11 to 15 year-olds remained very low, at 2%.

The noble Baroness, Lady Finlay, referred to nicotine pouches. There are existing powers in the Children and Families Act 2014 which allow us to extend the age-of-sale restrictions to include any nicotine products, such as nicotine pouches, so the proposed new clause is not strictly needed in relation to sales.

We recognise the need to address disparities in smoking across the country and we are committed to helping people quit smoking and to levelling up outcomes, as referenced in the recent levelling-up White Paper. There is already a lot of good work going on within both the NHS and local authorities in this area, but it is a theme that we will be developing in our tobacco control plan.

Health and Care Bill

Earl Howe Excerpts

Lords Hansard - Part 2 & Committee stage
Wednesday 26th January 2022 Lords Chamber

[Baroness Altmann (Con)]

Can I briefly ask my noble friend whether part of the thinking behind the current wording might be that the remit of the CQC may need extending? For example, when it comes to private operators of social care, the CQC currently does not have the power to look at the financial stability of those operators. Is this provision perhaps based on the thought that the Secretary of State may need to widen the remit and powers of the CQC? If not, we will be returning to this at some point.

[Earl Howe (Con)]

My Lords, I thank my noble friend Lord Lansley for bringing this debate before the Committee. He has made some worthwhile points but I hope to be able to explain why I think his amendments should not be pressed.

My noble friend Lady Altmann is not quite right in what she suggested was the intention of Clause 26. Clause 26 will allow the CQC to look across the integrated care system to review how integrated care boards, local authorities and CQC-registered providers of health, public health and adult social care services are working together to deliver safe, high-quality and integrated care to the public. That will include the role of the integrated care partnership. These reviews serve several functions. They will provide valuable information to the public, help drive improvement, and review progress against our aspirations for delivering better, more joined-up care across the system.

These amendments would remove the requirements on the Secretary of State to set and approve the priorities for these reviews. They would also remove the Secretary of State’s ability to direct the CQC to revise the indicators of quality that it will determine for these reviews. Instead, the amendments would add a requirement on the CQC to consult on those indicators with the Secretary of State, prescribed persons and other persons considered appropriate.

I entirely see where my noble friend is coming from as regards the CQC’s independence, but I must tell him that we have thought about this issue very carefully and we think it is right that the Secretary of State, who is accountable to Parliament, should have the flexibility to set the overall strategic direction of these reviews, with priorities and objectives. That is not an open-ended facility. In the other place, we accepted an amendment to develop this further by making it clear that the priorities set by the Secretary of State must relate to leadership, integration, and quality and safety. The amendment would remove that certainty.

As I have already mentioned in previous debates, there will be quite a range of different forms of accountability and oversight within the system, including NHS England’s role in overseeing ICBs. As a result, we think that the Secretary of State should play a strategic role to ensure that the CQC reviews complement the other oversight and accountability mechanisms. This will be achieved, in part, through the Secretary of State’s approval of the quality indicators. To provide my noble friend with an analogy, we believe, as I am sure he does, that there is a proper role for the Secretary of State in setting the strategic direction of NHS England. He does this, of course, through the mandate.

Finally, the drafting of this clause is not an accident. It is drafted deliberately to protect the independence of the CQC in how it operates, while also encouraging consultation and collaboration. It will allow the CQC to develop its approach in collaboration with NHS England and other partners in the system. The CQC is already intending to develop its approach to these reviews co-operatively and is able to consider a wide range of views in doing so. We do not think it is necessary to require it to consult.

I hope this has given my noble friend some reassurance as to why we have taken the approach we have and, for these reasons, I ask him to withdraw his amendment.

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[Baroness Thornton (Lab)]

I thank my noble friend for tabling these amendments; I have added my name to both of them. They are about transparency and legitimacy, raising very important questions which the Minister needs to answer.

I go back to what the noble Lord, Lord Lansley, said at Second Reading, which I think my noble friend referred to. He said that

“we have new provider collaboratives which, in fairness, is where the power in the NHS will lie. The Bill makes no provision for them in terms of transparency, openness or accountability.”—[Official Report, 7/12/21; col. 1789.]

I do not need to say any more than that. The Minister needs to answer that question, because it needs to be resolved before the Bill completes its passage.

[Earl Howe (Con)]

My Lords, I am grateful to the noble Lord, Lord Hunt, for bringing us back to the subject of place-based structures and taking us into the issues relating to provider networks. I hope it will be taken as a given that the Government have sympathy with the intentions behind his amendments.

On Amendment 165, we absolutely agree on the importance of place, and I hope I can provide the Committee with reassurances on that score. First, the linchpin to the accountability issue is, I suggest, the ICB constitution, which is required to set out how its functions will be discharged. That may include how functions will be carried out by committees and sub-committees, which will include place-level committees. The best size for an ICB area varies according to local circumstances, and some of the smaller ICB areas are coterminous with the local authority. In those systems, place arrangements will quite rightly look very different from the large ICB areas.

ICBs need to be clear about the expectations and roles of place-based structures, including what they are responsible for commissioning, what powers have been delegated to them, and what resources they are responsible for. The current legislation provides for the ability to establish place-based structures and set them out clearly in ICB constitutions. However, Frimley is not Cumbria, and Essex is not Manchester. We want to give ICBs the flexibility to determine structures that work best for them. To help them do that, NHS England has the power to issue guidance to ICBs on the discharge of their functions, and is working with CCGs and the current non-statutory ICSs to develop model constitutions for the future ICBs. Those constitutions will, of course, also have to be approved by NHS England before the ICB is established. This approach should achieve the right balance, because it allows us to support ICBs to develop, without the danger of putting in place further legislation which could act as a barrier to future evolution. Requiring the establishment of a separate place-based board is simply not necessary and would come at a bureaucratic cost.

I turn to Amendment 166. I appreciate the noble Lord’s concern about transparency and accountability for groups of providers working together where they are exercising functions that an ICB has delegated. I shall come on to the concern expressed by my noble friend Lord Lansley, about the purchaser/provider split. Provider collaboratives are intended to deliver the benefits of scale, with providers working together to implement best practice and reduce variation in access, experiences and outcomes for patients and populations. For example, this could involve sharing workforce and managing capacity on a wider scale. Depending on the local circumstances, such arrangements may include a delegation of ICB functions. ICBs and providers should have the flexibility, in line with guidance that will be issued by NHS England.

[Baroness Thornton (Lab)]

Has the Minister actually seen the model constitution that will be imposed by NHS England, and does it do what he is suggesting it does? Maybe the rest of us could see it, too.

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[Earl Howe (Con)]

My understanding is that it is work in progress—so no, I have not seen it.

[Baroness Thornton (Lab)]

Is it not then unsatisfactory that we should complete the passage of the Bill without having sight of the constitution, so that we can be assured that the assurances that the Minister is giving us will in fact work?

[Earl Howe (Con)]

I do not think that is a reasonable ask by the noble Baroness, if I may say so. I am trying to describe a structure that should deliver what I am sure she wants to see—safeguards and good pointers for ICBs to make their own decisions, while also ensuring that some of the pitfalls mentioned in the debate are not fallen into. If I can let her see the work in progress, I shall certainly be glad to do so—I do not have a problem with that—but I suggest that it is not necessary for her to do that to accept the proposition that I am trying to put forward.

As I have mentioned, the Bill requires an ICB to set out in its constitution how its functions will be discharged, including any arrangements to delegate functions to provider collaboratives. Furthermore, as an additional safeguard, the Secretary of State may impose conditions on the exercise of the power through regulations.

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[Baroness Tyler of Enfield (LD)]

Before the Minister sits down, is he in a position to answer the question I asked about the timing of the review regarding the position of GPs within this new set of arrangements?

[Earl Howe (Con)]

I shall need to write to the noble Baroness about that timing because I do not have it. I meant to say that I was grateful to the noble Lord, Lord Stevens, for his intervention on the way in which we hope that primary care will be better built into the commissioning arrangements than it has been up to now.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Earl and to the noble Baroness, Lady Tyler, for her helpful interventions on primary care, which were very important.

In essence, the noble Earl said that we should be reassured because, either through the constitution of the ICB or through the more general guidance given out by NHS England, appropriate accountability and monitoring arrangements will be put in place. I accept that, but there are questions about the guidance and the constitution which mean that we may well want to come back. I think it would be appropriate for Parliament to give some oversight approval to that.

We are a bit jaundiced about NHS England guidance because we still cannot get hold of the guidance put out 10 or so days ago about the make-up of ICBs and the new timetable, which I mentioned on our previous Committee day. It is on something called nhs.net but not even our Library can get hold of it because there is a security wall around it, and I do not understand why it has not been put into the public domain. That is why we are a bit wary of any guidance that is going to be put out. I cannot resist saying that I hope the guidance is not going to say that local authority councillors cannot be on the place-based committees, because that would be a mistake. It could be helpful in some places for them to be so appointed.

On the more general issue of purchaser-provider tension, we have had a really interesting debate. The noble Lord, Lord Lansley, said that every Secretary of State apart from Frank Dobson, of blessed memory—my first ministerial job was serving under Frank before he was persuaded, if that is the word, by Tony Blair’s persuasive skills to go and fight Ken Livingstone for the mayorship of London—believed in it.

The point is that, whatever you call it, there is clearly going to be a relationship between the organisations of the NHS that have the dosh handed out by the department and those organisations that provide the services. There is going to be an unnecessary tension and an issue of accountability and monitoring. The puzzle that some of us have is how that is going to work within the integrated care boards when the big providers are sitting around the table. I think the clue was given in the Health Service Journal, which said:

“In the minds of most acute trust chiefs, it is provider collaboratives and groups, and not integrated care boards that will wield the greatest influence”—


an interesting phrase. I suspect the real dynamic is going to be between those collaboratives and the chair and chief executive of the integrated care board, while the board itself, which looks as though it is going to be very large, will be the legitimiser of those discussions and tensions. Still, it is a bit of a strange beast.

The noble Lord, Lord Stevens, raised the issue of CCGs and the fact that, because they were essentially membership organisations of GPs, they could not do the nitty-gritty of managing the contracts, which in the end was kind of half-devolved down to them but with accountability held at the NHS England level. That illustrates the problem of having providers and commissioners around the same table. For very good reasons people want to encourage them to integrate, but that poses its own challenges.

I think it is inevitable that we are going to come back to this issue. This has been a very good debate and I am most grateful. I beg leave to withdraw the amendment.

Coronavirus Grants: Fraud

Earl Howe Excerpts

Tuesday 25th January 2022 Lords Chamber

[Lord Sikka (Lab)]

My Lords—

[Earl Howe (Con)]

My Lords, it is the turn of the Cross Benches.

[Lord Patel (CB)]

My Lords, I listened to the debate yesterday, in which the noble Lord, Lord Agnew, indicated that some lenders were failing on fraud. Can the Minister say which lenders are failing on fraud?

Health and Care Bill

Earl Howe Excerpts

Lords Hansard - Part 2 & Committee stage
Tuesday 18th January 2022 Lords Chamber

Debate on Amendment 25 resumed.

[Earl Howe (Con)]

My Lords, the group of amendments to which noble Lords spoke before the break deals in various ways with the appointments processes for integrated care boards. I will deal first with Amendment 32 in the name of the noble Lord, Lord Hunt of Kings Heath, which is designed to ensure that the chair of an integrated care board can be removed only by the integrated care board and not by NHS England. This is a worthwhile issue for debate, and while I recognise the spirit in which the amendment is offered, the noble Lord, Lord Hunt, and I are coming at this from rather different perspectives.

It is worth reminding ourselves that ICBs are accountable to NHS England and thereby to Ministers and ultimately to Parliament. That link is fundamental, given the amounts of public money involved. It is therefore right that the appointments and removals process should involve these bodies. In contrast, the noble Lord’s amendment would effectively break that accountability link, because under this amendment, neither NHS England nor the Secretary of State would be able to remove a chair who was acting inappropriately. We cannot have that.

I understand the concern that there should be a safe and robust process for the appointment and removal of the chair of an ICB. I can assure noble Lords that there will be. The chairs of ICBs will be public appointments and therefore managed in line with the Governance Code on Public Appointments and regulated by the Commissioner for Public Appointments. I regret that the Government cannot support this amendment, but I hope I have explained sufficiently why.

Amendment 33 would ensure that the chief executive is appointed by the integrated care board rather than the chair and not subject to the approval of NHS England. I am afraid that, once again, this amendment is not one we can accept. As your Lordships are aware, the chief executive is the accountable officer for the ICB and a crucial person for ensuring that the board is operating effectively. It is therefore right that the appointment should be ultimately made by the chair and approved by NHS England. This approach ensures that we bring together local knowledge and a commitment to ensuring the board is appropriately constituted, while also ensuring that golden thread of accountability from ICBs to NHS England and then ultimately to Parliament. Making the ICB the sole appointing body would break that chain of accountability.

I also remind the Committee that in order to ensure that ICBs can be established and formed in time, NHS England has carried out a selection process for intended designate chief executives which, subject to the passage of the Bill and commencement of the relevant appointment provisions, it expects to be appointed by the chairs of ICBs. All provisional ICB chief executive designates have been agreed by the NHS England appointments and approvals committee, and all candidates were subject to a fair and open recruitment process.

While the current process for appointing designate ICB chairs has primarily been managed and agreed by the NHS England appointments and approvals committee, chiefly in the interests of ensuring that ICBs will be ready to begin work, I reassure your Lordships that we would expect future appointments of chief executives to involve significant engagement from the ICB as a whole to ensure that all chief executives command the confidence of both the ICB and NHS England.

I would also like to address two other significant points the noble Lord raised in his speech: first, the question of conflicts of interest. I can assure the noble Lord that ICBs will have robust duties in relation to conflicts of interest and will be required to maintain and publish a register of members’ interests and make arrangements for the management of conflicts or potential conflicts of interest. Furthermore, part of the purpose of the chair’s veto is to ensure that candidates for the board who are unsuitable or have unreconcilable conflicts of interest are not appointed to the board.

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[Baroness Thornton (Lab)]

The appointments commission worked extremely well for many years. Why is it not good enough now?

[Earl Howe (Con)]

As I understand it, the noble Lord, Lord Hunt, is proposing a separate NHS appointments commission. I am suggesting that it would be unnecessary to add that arms-length body to the existing landscape.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am very grateful to the Minister for his response, which he has clearly put a great deal of thought into. At the end of the day, what is being proposed is a very top-down, hierarchical approach to running the health service. ICBs may be accountable to NHS England and, through NHS England, to the Secretary of State, because the Government are taking power of direction through this legislation. However, it becomes abundantly clear that ICBs do not look outward to their local communities; they look upward to the hierarchies above them.

This is the problem with giving NHS England such power over the chief executive and the chair. Anyone who has worked in the NHS knows that, in the target-laden, panic-ridden approach from the centre to local management, the ICBs will be under the cosh right from the start. For all the wonderful words that have been used about what they will do, the reality is that they will be beaten up by the centre in the traditional “target” approach to running the service. Of course, it did not have to be this way. While it is perfectly proper to have boards making their own decisions and appointments, and being held to account for interventions where necessary, this is such a top-down approach that I do not think it will work. I believe and hope that the House will seek to amend it in some of the ways suggested in these amendments. That said, I beg leave to withdraw my amendment.

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[Baroness Thornton (Lab)]

I thought noble Lords would have more to say about digital matters. I shall respond to this group very briefly, because my noble friend Lord Hunt, the noble Lord, Lord Clement-Jones, and others have very adequately covered the issues: the potential for digital transformation, the need to use patient data, the need for resources and, as the noble Lord, Lord Bethell, just said, enthusiasm and leadership.

The noble Baroness, Lady Cumberlege, as she always does, brought us practical applications of the reasons why the amendments are necessary, and it brought to my mind that my digital interface with the NHS is a good example of someone who is absolutely at the coalface. I am part of UCLH’s digital patient management system. It does not talk to my GP and it does not talk to the Royal Free, which is where one has one’s tests in the part of London I live in, and I think, “For goodness’ sake, we really ought to be able to do better than this”.

[Earl Howe (Con)]

My Lords, I am very grateful to the noble Lords, Lord Hunt of Kings Heath and Lord Clement-Jones, the noble Baroness, Lady Thornton, and my noble friend Lady Cumberlege for bringing these amendments for debate before the Committee today.

Once again, we are dealing here with an important set of issues. First, Amendments 26 and 35 would ensure that integrated care boards appointed a director of digital transformation. The Government fully agree with the spirit behind the amendments, ensuring a strong local focus on digital transformation. However, looking at the pros and cons, we must balance the desire to go further—which we all want—with the important principle that I have articulated before: that the provisions in the Bill should not be too prescriptive when it comes to membership requirements. As we have discussed, it is an essential principle of the Bill that there must be local flexibility to design the board in a way most suitable to each area’s unique needs.

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[Lord Mackay of Clashfern (Con)]

My Lords, the Minister is much in agreement with others that the leadership being enthusiastic for progress is important. I understand that nominations have already been made for the various positions that are likely to come up. To what extent has enthusiasm for digital transformation been a criterion in nominating those people? It is vital that the leader really believes in what is to happen if it is to happen at all. Therefore, it would be useful to know to what extent that consideration has applied in the prospective nominations of people for the local positions.

[Earl Howe (Con)]

Noble Lords will remember that, even 10 years ago, when I was appointed as a Health Minister, there was an acronym, QIPP, which stood for “quality, innovation, productivity and prevention”. While I think the acronym has largely fallen out of use, those four principles remain alive and kicking in the strategic thinking that happens at the top of the health service, and indeed in the department.

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[Baroness Thornton (Lab)]

I thank noble Lords for what has been a very interesting and important debate. I thank the noble Lord, Lord Mawson, for his amendment, and I look forward to further development of the thought process that he has put before the Committee. Of course, it is not new. I started my working life working for Michael Young, the great sociologist in Bethnal Green, and we talked about ethnographic research in our neighbourhoods and places. It was about giving people who lived in those places power and developing their own leadership of what they wanted to happen. Of course, in those days, when he started doing his work, it was about regenerating inner London—the bomb-strewn East End. I had the great privilege of running the Young Foundation: a few years ago, I took a couple of years off from this job here to go and run it, and we were doing exactly the place-based work that the noble Lord, Lord Mawson, talked about.

The noble Baroness, Lady Harding, is completely right: there are many Bromley by Bow-type programmes across the country—and thank goodness for that. If the Minister decides to go on trips to places, Bromley by Bow is of course important. I went there when it started out, when I was the founding chair of Social Enterprise UK, and the noble Lord, Lord Lansley, is quite right: it is brilliant, it is wonderful, it does great work —but why has it not been replicated? That is a question I have discussed with the noble Lord, Lord Mawson, on and off over many years. But there are many other types, and I suggest that the Minister might go to Manchester, Bradford or Nottingham, where there are some brilliant programmes where this place-based delivery of healthcare and other care is thriving.

The consensus breaking out between myself and the noble Lord, Lord Lansley, is of course that this Bill is an opportunity: how and where in the Bill can that place-based initiative be expressed? Where is it and how can it be encouraged? The King’s Fund did a piece of work developing place-based partnerships as part of the process leading up to the Bill, which was published last year. It has some interesting and useful things which express the sorts of sentiments—but in NHS-speak—that the noble Lord, Lord Mawson, talked about today: the importance of connecting communities, jointly planning and co-ordinating services, making the best of financial resources, supporting the local workforce, and driving improvements through local oversight and quality provision. There are certain elements of this which need to be there and need somehow to be built into the Bill, possibly in enabling form, because they mean building multiagency partnerships which involve local government, NHS organisations, voluntary service organisations, social enterprises and the communities themselves.

The noble Lord, Lord Mawson, rightly asks in his amendment for one voting ICB board member to be nominated by place-based partnerships. That may or may not be a good way forward, but we are trying to do systems change and, whether or not putting one person on a board is the way to do that, it is a very good place to start. So we on these Benches are very interested in how this develops and want to be part of the discussions across the House about how we do that.

[Earl Howe (Con)]

My Lords, no one is better placed, whether inside or outside your Lordships’ House, to advocate place-based partnerships than the noble Lord, Lord Mawson. I know he will remember that one of my first visits as a Health Minister in 2010, at his invitation, was to Bromley by Bow. What I learned that day made a deep impression on me, so I, like many noble Lords, need no convincing of the case that he and other speakers have made today.

I am aware that the noble Lord, Lord Hunt of Kings Heath, has tabled Amendment 165 on place-based arrangements, to be debated by this Committee later in our proceedings, so no doubt we will cover the issues in more detail then. For now, I say that the Government absolutely agree with the importance of having strong place-based elements in ICBs. Place-based structures will play an important role in delivering healthcare services for their population groups and we expect there to be open and clear lines of communication between the board of the ICB and place-based structures.

How is a sense of place given—as it were—tangible substance and meaning? I would argue that we do not necessarily need the Bill to articulate the reality. At a very basic level, an ICB will cover a geographic area. We would expect ICBs to be closely linked to their places via bodies such as health and well-being boards, where they will sit as the successor bodies to CCGs, and local authorities. ICBs will sit on the integrated care partnership as well as the health and well-being boards. Both bodies are vital in bringing together health, social care, public health and, potentially, wider views as well. That will be part and parcel of delivering their duty to involve patients, carers and the public when discharging their functions.

We expect ICBs to have place-based structures in place, but we do not want to prescribe what those structures are. As the noble Lord, Lord Mawson, said himself, we do not want ICBs to think that place-based partnerships are achievable via a central blueprint, or that a set of instructions from above is likely to be a substitute for learning by doing and local relationships. What we shall insist on is that an ICB sets out the arrangements for the exercise of its functions clearly in its constitution. Different areas have different needs, and I hope it is a point of agreement across the Committee that a one-size-fits-all model would not be appropriate.

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[Baroness Wheeler (Lab)]

My Lords, I strongly support my noble friend Lord Hunt and other noble Lords in their quest in this suite of amendments to underline the important and crucial role played by Healthwatch, particularly at local level, and to ensure that the new NHS structures and processes in the Bill fully recognise this.

Under the 2012 Bill, the noble Lord and others who have put their names to the amendment and who have spoken in today’s debate were all strong advocates of Healthwatch, and clearly remain so today. The concerns deeply expressed then of the Government’s decision to make national Healthwatch a sub-committee of the CQC, and not the independent organisation that it needed to be, have again come to the fore. Amendment 220 would add a new clause after Clause 80, seeking to establish Healthwatch England as a body corporate that provides an annual report of its activities to Parliament; it has the full support of these Benches. As the noble Lord, Lord Patel, has strongly emphasised, failing to provide for the independence of Healthwatch was a fundamental error that needs to be put right. He set out a particularly strong case, as have other noble Lords this time around.

Amendment 42 to Schedule 2 seeks to ensure that Healthwatch is a non-voting member of the ICB, so that there can be a genuine championing of patients’ voices and views, which many noble Lords have spoken so strongly about today. These are views fed back from evidence and surveys conducted by both national and local Healthwatch organisations. At the very least, it is crucial to seek to ensure—as set out in Amendment 103 to Clause 20—that the ICB is obliged to fully consider Healthwatch reports and that that body leads any local consultations proposed in the ICB forward plans.

Amendment 149 to Clause 21, seeking to ensure that ICPs have a Healthwatch nominee in membership, is also important, given the local Healthwatch links to both the NHS and local authority bodies, patients and clients.

Key questions on how Healthwatch, both at national and system level, is to be funded were raised by my noble friends Lord Hunt and Lord Harris, particularly about the whole process of allocating funds. This is important in view of the increased role of Healthwatch in the additional 42 ICSs. I look forward to the Minister’s response.

Finally, I also endorse noble Lords’ comments on the excellence of the reports produced by national and local Healthwatch organisations. Their guidance on access to social care, mentioned by several noble Lords, and comments on the detailed proposals later in the Bill on the care cap and the recent White Paper, are clear and accessible to service users, and closely examine the impact for them, and for the thousands of people currently waiting for assessment and access to key services. However, those are issues for another day. I hope that the Minister has listened to the debate.

[Earl Howe (Con)]

My Lords, these amendments deal, in their several ways, with the role of Healthwatch both locally and nationally. I begin with Amendment 42, in the names of the noble Lords, Lord Hunt of Kings Heath and Lord Patel, and the noble Baroness, Lady Thornton. This amendment would require ICBs to make provision in their constitutions for a non-voting member to be appointed from local Healthwatch branches.

I lay great importance, as do other noble Lords, on Healthwatch’s work on patient advocacy. However, as I said in relation to other amendments on the membership of ICBs—I know this is turning into something of a mantra—we want to avoid the Bill’s provisions being too prescriptive. It is essential that we provide local leaders the flexibility to design the board in a way that best suits each area’s unique needs. Even a non-voting member risks making the boards less nimble, undermining their ability to make important decisions efficiently. As I am sure the Committee is already aware, the ICB can appoint more members, including a Healthwatch representative, if it wishes, and I am sure many of them will. What is key is that local boards should be able to decide for themselves to appoint individuals with the necessary expertise to address local needs, and we want to allow them as much scope as possible to do so by not prescribing who all those members should be.

That said, I recognise that the growing complexity of health and care demands that we listen to the voice of patients, carers and the public. We want to ensure that they are heard throughout the system. I contend that there is adequate provision in the Bill to ensure that patients and the public are appropriately consulted and involved in decisions made by the ICB. I draw noble Lords’ attention to new Section 14Z36, regarding the duty to promote the involvement of each patient, and new Section 14Z44, regarding public involvement and consultation by ICBs.

I listened carefully to the noble Lord, Lord Harris of Haringey, as I always do, about the particular need for adequate and appropriate funding of local Healthwatch. If I may, I shall take away the points he made on that issue and others and write to him about them. We would expect Healthwatch to be closely involved with ICBs in carrying out their engagement and involvement duties. On what do we base that expectation? Many systems already have some system-level arrangements in place with Healthwatch. Indeed, NHS England has published guidance, which would apply to ICBs, on working with people and communities that encourages working closely with Healthwatch. Therefore, given that ICBs will already be required to engage patients closely in their decision-making process, and that we expect Healthwatch will be closely involved in that, we consider it unnecessary to require in legislation a member drawn from Healthwatch.

Amendment 103 would alter ICBs’ duties in relation to public involvement to require them to make adequate arrangements for the receipt and consideration of any relevant Healthwatch reports. As I said, the existing ICBs’ duties in relation to patient involvement are already comprehensive, and the amendment could unintentionally limit ICBs’ ability to form relationships with Healthwatch and other organisations appropriate for their area. As was the case for CCGs, ICBs will be required to make arrangements to involve patients in the planning of commissioning arrangements in areas that may impact the manner in which services are delivered, or the range of services available. This will ensure that patients receive appropriate representation where decisions are being made that could affect them.

I previously mentioned that NHS England, in its guidance to ICBs, has encouraged close working with Healthwatch. This guidance comes with the acknowledgement that what an appropriate relationship with Healthwatch looks like will vary from system to system. For this reason, we are seeking to establish comprehensive duties and requirements in the legislation while leaving the specifics of local relationships with organisations such as Healthwatch for ICBs to determine for themselves.

--- Later in debate ---

[Earl Howe (Con)]

My Lords, I too am grateful to the noble Baroness, Lady Bennett of Manor Castle, for bringing forward this group of amendments. As many of the Committee will remember vividly, and as the noble Baroness, Lady Wheeler, has reminded us, accountability for the health service was a topic of considerable debate at the time of the Health and Social Care Act 2012 as it went through Parliament. The constitutional position of the Secretary of State was closely scrutinised and the current wording in the Act is very much the product of those discussions. I remind the Committee especially of the hard work done by the noble Baroness, Lady Jay of Paddington, who was at that time chair of the Constitution Committee, her colleagues on the committee and many others, including my noble and learned friend Lord Mackay of Clashfern, who did so much to develop the current wording of the clause. The coalition Government accepted the Constitution Committee’s recommendations in full.

I am afraid that I do not agree with the noble Baroness’s characterisation of the reasons why it was thought appropriate to modify the wording that described the Secretary of State’s responsibility for the health service. As noble Lords will be aware, the idea that the Secretary of State himself provides services has not for many years reflected the real world. As the noble Baroness, Lady Wheeler, rightly said, and as the Committee will remember, it was decided in 2012 that it was better that the law reflected the reality of the modern NHS rather than retaining outdated language. I do not think that the last 10 years have proved that proposition wrong. The current legislative framework allows some of the health services in England to be provided by entities, such as NHS foundation trusts, that are legally distinct from the Secretary of State. That will continue to be the case and should be recognised in the law.

I understand the concerns that Ministers might somehow avoid being responsible for ensuring the continuation of a comprehensive health service. However, there have been many vigorous debates in Parliament about the NHS in the years since those changes in 2012, and they have demonstrated that there has, quite rightly, been no loss in the strong sense of governmental accountability for the NHS felt by both government and Parliament. Indeed, the House amended the Act in 2012 to put beyond doubt that:

“The Secretary of State retains ministerial responsibility to Parliament for the provision of the health service in England.”


That has not changed in this Bill; the wording will remain set in statute.

I would gently caution against recreating the fiction that the Secretary of State provides services directly. It is much better to be clear that the role of the Secretary of State is to set strategic direction, oversee and hold to account NHS England and the other national bodies of the NHS and, occasionally, to intervene—as the noble Lord is doing.

[Lord Hunt of Kings Heath (Lab)]

I thank the noble Earl for giving way. Given what he has said—and I know that we will debate this later—I point out that it is curious that the Government wish to take on a power of direction over NHS England, if that is so. I guarantee that that power will never be used because the Secretary of State’s power of direction never has to be used. Once this is passed, that changes the relationship; NHS England will know that the Secretary of State has that power of direction. Although I have tabled some amendments to try to modify it, I have no objections to the general principle, since I do not think that a quango such as NHS England should be freely floating. But we need to recognise that it is a fundamental change in the relationship to impose that power of direction again.

[Earl Howe (Con)]

My Lords, as I was about to say, the 2012 Act does provide for the ability of the Secretary of State to intervene when that is necessary for the smooth and effective running of the system. Furthermore, we should not exaggerate the extent to which this Bill modifies the 2012 provisions. As the noble Lord said, we will debate the powers of direction on a future occasion but, when we come to do so, my colleagues and I on the Government Benches will contend that the powers of direction, such as they are, are very narrow and specific in their scope. They have been deliberately framed in that way to reflect experience over recent years. I would not be in favour of reopening this piece of drafting, given its history and the effort that noble Lords from all sides of the House made to build an effective consensus in respect of the 2012 Act.

The noble Baroness, Lady Brinton, asked about dental access. The department is working closely with NHS England to increase levels of service as quickly as possible. Practices are continuing to prioritise patients based on clinical need. Dental practices are now being asked by NHS England and NHS Improvement to deliver at least 85% of contracted units of dental activity—UDAs—between January and March 2022 to provide improved access for patients. These updated figures are based on what many practices have been able to deliver to date. They take into account adherence to the latest infection prevention and control guidance. I hope that this is helpful to the noble Baroness.

I hope also that I have explained to the noble Baroness, Lady Bennett, why I cannot entertain her amendments, but also that I have reassured her that the accountability chain between health services, Ministers and Parliament, which lies at the centre of her concerns, remains intact.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for his response and thank all noble Lords who have taken part in this debate. I particularly thank the noble Baroness, Lady Brinton, for her support. She stressed how this is very much about restoring a public health system with full public accountability.

I was a little surprised, not so much by the direction as by the emphatic nature of the comments from the noble Baroness, Lady Wheeler, given that it was members of her party who moved the amendments in the other place. To address the Minister’s comments—this also picks up the point raised by the noble Lord, Lord Hunt—we are talking about a significant change in relation to power of direction; a power that we will be discussing further, at great length, and about which we have seen considerable expressions of concern. I come back to the way I framed my speech: if you have more powers, you have more responsibility. If you say, “We covered all this in the 2012 Act—it’s all fine”, once could argue that the 2012 Act did not work out fine, but we are in a new situation, creating very new structures.

Thinking about the success or otherwise of accountability, some issues where we have failed in terms of accountability—and we will see amendments on these later—are workforce planning and, as the noble Baroness, Lady Brinton, highlighted, dental provision.

This is about ensuring that people have faith, know who to look to and cannot be fobbed off, as the noble Baroness, Lady Brinton, said, by this terrible, complex diversity of funding and arrangement structures. Like other Members of your Lordships’ House, I took part in the public debate in 2012, not in this place but in the public domain, and I have given many speeches on this issue. The complexity must not be allowed to cover over the fact that what people want to know is that the healthcare is there when they need it, and if it is not that they know who to point to.

I will of course withdraw the amendment at this point, but I reserve the right to consider this and come back to it at a future point.

Health and Care Bill

Earl Howe Excerpts

Lords Hansard - Part 2 & Committee stage
Tuesday 11th January 2022 Lords Chamber

I would say that the profit motive should have no place in healthcare. Think about the cost of the profit motive. It has an influence on decisions because, after all, the private companies’ job is to make profits; there is also the fact that money going into profits is not going to healthcare.

[Earl Howe (Con)]

My Lords, these are important amendments and I am grateful to all the noble Lords who tabled them. Perhaps I could start with the amendments relating to waiting times, before going on to those about ICB functions.

Beginning at the end, as it were, Amendment 215 would legislate for an additional duty for the Secretary of State to publish a report annually on waiting times for treatment in England, disparities in waiting times for treatment and the steps being taken to ensure that patients can access services within maximum waiting times, in accordance with their rights in the NHS constitution.

I entirely understand the intention behind the proposed new clause. It is important that patients can access healthcare within reasonable waiting times and it is important for all of us to have visibility of the waiting list size, as well as waiting times, in England. Your Lordships will understand that the Covid-19 pandemic has caused an unprecedented strain on the NHS, bring about significant disruption. It has shone a light on disparities and led to the largest NHS waiting list on record. It is a priority of this Government to reduce waiting times, tackle disparities and provide access to healthcare as quickly as possible to patients.

Although the situation is difficult, I think I can give reassurance on three grounds. First, the NHS already has waiting time standards. Some are enshrined in legislation and some are operational standards, but all are described in the NHS constitution and the accompanying handbook. Since March 2007 the NHS has published monthly official statistics on waiting times. This includes consultant-led referral-to-treatment waiting times, which monitor the length of time from referral through to elective treatment. It also includes the number of patients who began cancer treatment and waited longer than 62 days for cancer treatment. NHS England also publishes monthly management data on the number of people currently waiting longer than 62 days for diagnosis or treatment.

Secondly, the department already submits information on waiting times to Parliament as part of its annual report. Much of this data is very similar to that asked for in this amendment.

Thirdly, as I speak, extensive work is already being undertaken by the NHS so that patients can access services within maximum waiting times. The funding we have announced for elective recovery, including cancer services—with £2 billion this year through the elective recovery fund and £8 billion over the next three years through the health and social care levy—will increase activity, reduce waiting times and deliver millions more checks, scans, procedures and treatments. We also announced £5.9 billion of capital funding at the October 2021 spending review to support elective recovery, diagnostics and technology over the next three years, which will further reduce patient waiting times.

Fourthly and finally, we will set out in the elective recovery delivery plan how the NHS will deliver increased elective capacity and reduced patient waiting times for elective services, including for cancer patients. I hope that provides a degree of reassurance that we approach reducing waiting times seriously and that the data is available to hold us and the NHS to account for progress.

I now turn to Amendment 6 tabled by the noble Baroness, Lady Wheeler, and the noble Lord, Lord Sharkey, which would require the mandate to specify maximum waiting times that NHS England should ensure the NHS meets. This would include the current 18-week referral-to-treatment waiting time standard as well as waiting times for diagnosis of rare and less common diseases.

The Government should always consider whether the mandate to NHS England should set expectations on waiting times. I do not think the mandate has ever been silent on waiting time standards, and nor would I expect it to be. I firmly believe, though, in the principle that the Government of the day should be free to set a mandate based on the priorities that they have been democratically elected to deliver. These will inevitably change over time in light of improvements in services and technology, as well as evolving patient need.

However, requiring the mandate to continuously include waiting time standards is unnecessary because important waiting times set out in legislation or NHS operating standards are reflected in the NHS constitution, as I mentioned. NHS England and other organisations that commission or provide NHS services have a long-standing duty to have regard to the constitution, in addition to NHS England’s duties in respect of the mandate.

I now turn to the amendments relating to ICB functions. I again thank noble Lords for bringing these matters to the Committee today. Amendment 19, tabled by the noble Baroness, Lady Wheeler, and the noble Lord, Lord Sharkey, seeks to amend Clause 8, which ensures that NHS England is able to direct integrated care boards to take on responsibility for the commissioning of specialised services on its behalf. The noble Lord, Lord Sharkey, asked me a series of detailed questions on that theme. If he will allow, I will write to him on those that I am unable to deal with in the remarks that follow.

The first thing to say here is that NHS England does not propose to use Clause 8 initially. The intention is that any delegation is agreed with ICBs. Delegating some direct and specialised commissioning to ICBs makes sense, because it is likely to be an enabler for integrating care and improving population health. It gives the flexibility to join up key pathways of care, leading to better outcomes and experiences for patients and less bureaucracy and duplication for clinicians and other staff.

My concern about the amendment is that it would add to the bureaucratic burden rather than reduce it. It would create an unnecessary set of regulations as well as duplicative reporting mechanisms, as regulations made under Section 13YB(3) can already be used to impose conditions, which could include creating national standards. Furthermore, Section 14Z50(7) already puts a duty on NHS England to undertake yearly performance assessments of each ICB. These are focused on how each ICB has performed its function through the year, including the commissioning of specialised services that may have been delegated.

I say to the noble Lord, Lord Sharkey, that we fully recognise that Covid has significantly impacted on waiting lists, including for specialised services. The investment that we have announced to reduce waiting times should also impact on waiting times for specialised services. NHS England is keen to see progress in that area as much as in any other. We will hold it to account for that progress.

My noble friend Lord Lansley and the noble Lord, Lord Warner, expressed concerns about the risk of growing disparities and inconsistency in the quality of specialised healthcare around the country. The key point that I would emphasise is that NHS England will retain responsibility for setting national standards as well as service specifications and access policies. These will apply to all prescribed specialised services, whether they are retained for commissioning by NHS England or become the responsibility of ICBs to commission. It may be a single ICB, but it may be a group of ICBs commissioning; it will depend on the type of service and the size of the ICB.

NHS England will therefore remain the accountable commissioner for all specialised services and will ensure that the appropriate safeguards are put in place for those services that may be delegated to ICBs or groups of ICBs. Only services that are considered appropriate for more integrated commissioning would be delegated; that is, those services that are suitable and ready. There will be services that are not appropriate, and these will be retained for commissioning by NHS England. As I am sure the noble Lord, Lord Warner, well knows, we need to remember that the list of prescribed specialised services contains very highly specialised services such as hand transplants and much more routine services such as dialysis. Whereas those on the upper end of the scale will always need to be commissioned nationally —I cannot see any alternative there—it is right that those more common services can be commissioned more locally.

I turn next to Amendment 21, which I am grateful to the noble Lord, Lord Davies, for bringing forward. I do not in the least dismiss the issues that he has raised. I understand the spirit in which the amendment was brought and hope that I can give some reassurance on two counts: first, that it is not our intention for ICB functions to be delegated to private entities, and, secondly, that safeguards are already in place.

It is perhaps also worth drawing the Committee’s attention to the narrowness that this amendment would impose on the delegation of functions. It would prevent delegation of functions to other statutory public bodies such as local authorities. As the noble Lord will appreciate, this would run counter to our desire to support further integration and to allow the pooling of budgets and functions between the NHS and local authorities. This has been a fairly long established practice and has worked well to support joint commissioning, service improvements and more seamless services for patients.

United Kingdom–European Union Parliamentary Partnership Assembly

Earl Howe Excerpts

Monday 12th July 2021 Lords Chamber

[Earl Howe (Con)]

My Lords, it is a matter for Parliament to consider the potential shape of the parliamentary partnership assembly, within the framework set out in the UK-EU trade and co-operation agreement. I understand that informal discussions involving Members of both Houses are ongoing.

[Baroness Hayter of Kentish Town (Lab)]

The partnership assembly is an important organisation: it will be able to get information from and make recommendations to the Partnership Council, which is where the EU and our Government will take decisions—so it is clearly of importance to this House. Could the Minister assure us that he will do everything possible to make sure that it is set up before the Recess so that we can choose our representatives to it and it can get going? Will he also do everything that he can to facilitate a report back to this Chamber from the parliamentary assembly, once it is set up?

[Earl Howe (Con)]

My Lords, the Government are wholeheartedly in favour of dialogue between Parliament and the European Parliament, but, as the noble Baroness knows, the primary impetus from the UK side for establishing a parliamentary partnership assembly needs to come from both Houses of Parliament, which is why Members of both Houses are working on a proposal. Reporting back to the House by the PPA, once it is established, is something that the PPA itself will need to decide upon in due course.

[Lord Whitty (Lab) [V]]

My Lords, the treaty itself specifies that these arrangements should be set up—this is a responsibility for Government and not to be offloaded on to Parliament. Are the Government not encouraging the Leader of this House and the Leader of the House of Commons, for example, to immediately engage with the European Parliament so that we have a proper operation up and running by the time we return in the autumn? The Government cannot entirely dodge responsibility and shove it on to parliamentary procedures; it is in a treaty signed by the Prime Minister.

[Earl Howe (Con)]

My Lords, as the noble Lord has said, the UK-EU trade and co-operation agreement—the TCA—makes explicit provision for a parliamentary partnership assembly, but on a permissive basis. It is implicit in the wording that this must be for the two Parliaments to establish. However, I can tell the noble Lord that, at the very first Partnership Council meeting, both the UK Government and the EU encouraged the establishment of the parliamentary partnership assembly. At a government level, we look forward to seeing the final proposals from both Parliaments and to providing support to the process where we can.

[Baroness Ludford (LD)]

My Lords, in its April resolution on the trade and co-operation agreement, the European Parliament said that it wanted the parliamentary partnership assembly not only to monitor the full implementation of the agreement but also to make recommendations for improved co-operation. This Parliament currently has a serious scrutiny deficit with regard to the Government’s Brexit activities under the TCA and the withdrawal agreement. Why is the European Parliament often condemned in some quarters as somehow undemocratic, when it would have much greater democratic powers and aspirations than our own?

[Earl Howe (Con)]

My Lords, I do not accept what the noble Baroness has said about the transparency that we seek to bring about. We are enthusiastic about the setting up of the parliamentary partnership assembly, as I have said. We hope that the plans progress quickly. In this House, we have my noble friend Lord Frost, who regularly answers questions about the discussions and negotiations that are currently proceeding. It is not in any way our desire to have a process that lacks transparency.

[Baroness Hooper (Con) [V]]

My Lords, until the parliamentary partnership assembly is established, what other channel of communication exists to inform our Parliaments, in the UK and the European Parliament, of the decisions and recommendations of the Partnership Council? Are there any means by which recommendations can be made to the Partnership Council—because we all know how long transitional periods can last?

[Earl Howe (Con)]

My Lords, it is open to my noble friend and indeed any Member of this House to table a Parliamentary Question or a debate on a related subject, so I hope that my noble friend will feel able to elicit information that she needs from Ministers in that way.

[The Earl of Kinnoull (CB) [V]]

I know first-hand of the warmth that the European Parliament feels towards the parliamentary partnership assembly. In his capacity both as Deputy Leader of the House and deputy leader of his party, could the Minister return that warmth? Does he agree that there should be a strong interparliamentary dimension as part of a successful mix in our new relationship with the European Union?

[Earl Howe (Con)]

My Lords, I thank the noble Earl for his work on behalf of the House in his capacity as chair of your Lordships’ European Affairs Select Committee. He makes a very good point, and one thinks of other parliamentary assemblies that are perhaps analogous in some respects, such as the Parliamentary Assembly of the Council of Europe, the NATO Parliamentary Assembly and that of the OSCE, although their respective functions are of course different and distinct.

[Lord Dubs (Lab) [V]]

My Lords, I hope that I am mistaken in detecting a lack of enthusiasm on the Minister’s part, uncharacteristic of him as that is. Does he agree that, in addition to the bodies that he mentioned, the British-Irish Parliamentary Assembly might represent a good working model for the proposal of an EU parliamentary partnership assembly? Does he agree that it has the following characteristics: it has both Houses, it has all nations and regions and it is resourced by the UK Parliament? Could we make some progress on this, please?

[Earl Howe (Con)]

My Lords, the noble Lord may be aware that, in the intercameral discussions, the interests of your Lordships’ House are being represented by the noble Earl, Lord Kinnoull. I feel sure that he will have heard the recommendations of the noble Lord, Lord Dubs, in this debate.

[Lord Wallace of Saltaire (LD)]

My Lords, when I was an extremely junior Lords Minister in the Foreign and Commonwealth Office during the coalition, I was struck by the number of my Conservative colleagues who had no personal contacts, even with conservative Members of other Parliaments across the European Union. On a number of occasions, I was also struck by requests from Conservative Ministers asking me to make informal contact with Ministers in other Governments because I knew them through the European liberal network. Do the Government recognise that informal cross-Parliament and cross-party contact in the very intricate relationship that we will have with the European Union as an outside country would be extremely useful for us as a Parliament and for his Government as a Government?

[Earl Howe (Con)]

My Lords, yes, indeed, and that is why there is explicit provision in the trade and co-operation agreement for the setting up of a PPA. We were and remain enthusiastic for the kind of dialogue that the noble Lord is so keen on.

[Baroness Altmann (Con)]

My Lords, I am delighted to hear that my noble friend is keen to set up this body, and I understand that the EU Parliament itself is ready. Surely, it is very important that this Parliament get on with building mutually beneficial relationships in order to discuss important programmes such as Horizon, Euratom and others, and issues that are relevant to both EU and UK citizens. Does he agree that important ideas can be killed off by inaction?

[Earl Howe (Con)]

I agree with my noble friend’s last remark, but I can assure her that there is no inaction in this instance. I understand that a letter addressed jointly to the Speaker of the House of Commons and the Lord Speaker was received last month from the President of the European Parliament, David Maria Sassoli, confirming the recent decision of the Conference of Presidents to establish the standing inter-parliamentary delegation of the European Parliament, so the process is moving forwards at the European end as well.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the time allowed for this Question has elapsed.

Official Development Assistance

Earl Howe Excerpts

Thursday 24th June 2021 Grand Committee

[Earl Howe (Con)]

My Lords, I begin by thanking the noble Lord, Lord Campbell, for tabling this Question and for the long experience that he has brought to bear on the subject before us. I add my thanks to all other speakers for delivering so many insightful contributions in such a restricted speaking time.

I say first to the noble Lord, Lord Campbell, that the move to spend 0.5% of our gross national income on official development assistance was a far from easy decision. It was taken in response to an extreme economic and fiscal situation, which last year saw the highest peacetime levels of borrowing on record—£300 billion—following the seismic impact of the pandemic. This year we are forecast to borrow a further £234 billion with another £109 billion the following year, and these unprecedented circumstances have forced the Government to take unprecedented action. Noble Lords will be aware from previous debates of the extraordinary support that we have provided to the UK economy, to jobs and business, on top of the need to balance multiple departmental priorities.

Nevertheless, in spite of the reduction to the ODA budget, it remains the case that the UK will spend £10 billion on overseas development assistance in 2021 and, in looking at how best to deploy that large sum, Ministers have been clear on two counts: first, that we should allocate our aid budget in accordance with our key strategic priorities and, secondly, that we ensure—as we always endeavour to do—that every penny of our aid brings with it maximum strategic coherence, maximum impact and maximum value for taxpayers’ money.

The FCDO is now working through what that means for individual programmes, in line with the priorities that we have identified. Those priorities are seven in number: climate and biodiversity; Covid and global health security; girls’ education; science and research; open societies and conflict; humanitarian assistances; and trade. Inevitably, for the period when we spend 0.5%, there will be reductions across all regions and sectors, compared to what we would have spent under 0.7%—but because of our priority setting, not all sectors will see the same percentage reduction.

In working through the allocations, Ministers have been mindful of the impact on four groups in particular: women and girls; the most marginalised and vulnerable; people with disabilities; and people from other protected groups. In that context—and this answers my noble friend Lady Sugg—the FCDO has carried out a central equalities impact assessment across our bilateral country spend, looking at risks and impacts, and this has been considered by Ministers as they reviewed plans. The Foreign Secretary is considering carefully whether to put the central overarching assessment into the public domain. As she said, the central assessment showed no evidence that programmes targeting those with protected characteristics were more likely to be reduced or discontinued than other programmes.

I cannot yet specify in any granular detail what our planned spend will be this year, either by project or by country. Given that we are in a one-year spending settlement, the FCDO’s planned country allocations will be published in our annual report later this year in the usual way; in addition, and as always, we will continue to give monthly updates of our spend by project on the development tracker.

Contrary to the impression gained by the noble Lord, Lord Campbell, none of these decisions on country and project allocations is being taken in a vacuum. The FCDO has engaged with NGOs and others and listened to feedback on the impact of the reduction in spend. FCDO Ministers engage with more than 80 NGOs, partners and parliamentarians, including through a round-table discussion with civil society. In the allocations process, we engage partners on the underpinning evidence, on priorities for delivery and to gather essential information. Now that the process is complete, we are working with our host countries, international partners and supply chains to deliver the budget changes set out in the Written Ministerial Statement published on 21 April.

Here it is worth my making the point that the creation of the Foreign, Commonwealth and Development Office has moved the coherence, efficiency and effectiveness of our decision-making in a very positive direction. The departmental merger has aligned our development work with our diplomatic clout and in so doing has improved development outcomes.

While I cannot yet give precise figures for the year ahead, I should like to provide the Committee with what figures I can. First, despite the budget reduction, we will be investing £400 million in girls’ education in over 25 countries this year. That is in addition to our pledge of £430 million to the Global Partnership for Education over five years. This is our largest ever pledge to GPE and an uplift of 15% from our current position as top bilateral donor.

On global health, we will donate at least 100 million surplus coronavirus vaccine doses within the next year, including 5 million beginning in the coming weeks. This donation is in addition to the Government’s work to support Oxford/AstraZeneca’s contribution to fighting Covid. I can say to the noble Baroness, Lady Hayman, that the £548 million that we have already committed to COVAX as one of the scheme’s largest donors will help it to deliver more than 1 billion vaccines to up to 92 lower-income countries this year. We also have a long-standing commitment to Gavi, as she knows, which will continue.

On climate change, we will deliver more than £1 billion of international climate finance activities this year as part of our flagship five-year £11.6 billion target. Our themes in this area include promoting clean energy, halting deforestation, preventing biodiversity loss and supporting countries damaged by the effects of climate change.

All of that means that this year, 2021, the UK will be the third largest overseas development assistance donor in the G7 as a percentage of GNI, based on data in 2020 from the Organisation for Economic Co-operation and Development. In 2021 we will also be the third highest bilateral humanitarian donor country, based on OECD 2020 data. Even at 0.5% of GNI, the UK’s 2021 spend is above the preliminary 2020 average of OECD development assistance committee member states, which was just 0.41% of GNI.

The noble Baroness, Lady Sheehan, took the Government to task for a lack of transparency, as alleged in the report from the Independent Commission for Aid Impact. The Government have provided relevant documents and information as part of the follow-up review where those have been available. The FCDO remains committed to full transparency in our aid spending; for example, throughout the pandemic we have continued to publish our spend information by project through DevTracker. However, the impact of the pandemic has been seismic around the world and we have therefore pivoted our resources to our Covid-19 response to help the most vulnerable. That resulted in some information not being available during the period in which ICAI carried out its follow-up review.

The noble Lord, Lord Campbell, referred to his connection with HALO and to its remarkable work in demining. Although there will be a reduction in financial support compared with the previous financial year, we remain a leading donor in the sector and our work will continue on the same lines affecting livelihoods across the world, supporting those most in need. We have assessed that over a four-year period we will be spending over £146 million in this area, including £21 million this year.

My noble friend Lord Sarfraz asked about consultancy. In 2020, DfID and the FCO contracted over £1.5 billion in development assistance with businesses, universities and NGOs. These contractors provide programme management, technical assistance and specialist advice to partner Governments, complementing our in-house expertise to deliver the UK’s world-beating development programmes. As the FCDO, we explore allocations to make the best use of both our in-house expertise and the services that we procure to deliver world-beating programmes.

The noble Baroness, Lady Bennett, referred to the UNFPA. The UK is fully committed to the mandate of the UNFPA, including its work on sexual and reproductive health. We remain committed to ensuring that women and girls have access to life-saving reproductive health supplies, and we highly value our partnership with the UNFPA on this important agenda.

The noble Baroness, Lady D’Souza, spoke of the situation in Afghanistan. On 14 April, as she knows, NATO announced that its forces would leave Afghanistan within a few months. Since 2002, the UK has supported the country with £3.3 billion worth of aid in various forms. We remain committed to supporting Afghanistan, including its efforts to counter terrorism, through our diplomatic and development work and support to the security sector. It is interesting to note that, alongside our NATO allies, the UK has built and equipped security institutions and has trained 5,000 cadets, including over 300 women.

The noble Baronesses, Lady Sheehan and Lady Greengross, touched on the important issue of water sanitation and hygiene. I can tell them that our support for global health, which embraces many aspects of WASH, remains a top priority for the UK aid budget. The FCDO plans to spend over £1.3 billion on global health this financial year and we will rightly focus on the international response to Covid-19. The FCDO is planning a strategic shift of our water and sanitation programmes, from supporting the direct delivery of WASH facilities at a household and community level, to instead strengthening national WASH systems that are able to deliver inclusive, sustainable and resilient WASH services at scale.

The noble Baroness, Lady Sheehan, also questioned our commitment to global health. That commitment should not be in doubt. Our aim is to help end the pandemic, strengthen global health security and end the preventable deaths of mothers, newborn babies and children. We are committed to those causes.

Regarding malaria, I say to the noble Baroness, Lady Hayman, that the UK is a long-standing donor on malaria. We remain committed to stamping out this deadly disease. We are a leading investor in malaria research. The Global Fund, as she knows, allocates 32% of its budget to malaria and we have committed £1.4 billion to the Global Fund.

The noble Baroness, Lady Bennett, referred to our aid to Yemen—I am being told I have only one minute left, so I must undertake to write to her on that. Suffice to say that we are deeply concerned at the moment by the crisis in Yemen and we are working with international partners and the UN special envoy to find a peaceful resolution to it.

The noble Baroness, Lady Suttie, referred to the importance of R&D funding and I fully agree with her. She may like to know that we will spend 4% of the whole UK ODA budget on science and technology and the FCDO will spend £253 million on R&D.

I will write to other noble Lords whose questions I have not had time to answer, particularly the noble Lord, Lord Purvis, on his question about the potential destruction of tablets and the noble Lord, Lord Collins, on the question of vaccines and additionality.

The seismic impact of the pandemic and the current unprecedented economic and financial circumstances have forced the Government, as I have said, to take difficult spending decisions. But, as my right honourable friend the Prime Minister has emphasised, this is a temporary departure. He, the Chancellor and the Foreign Secretary are as one in wanting to return to spending 0.7% of GNI on overseas development assistance as soon as fiscal circumstances allow. I wish that I could help the noble Lord, Lord Collins, with his question on when that will be, but no one can yet predict with certainty when the current financial circumstances will have sufficiently improved. We are monitoring the situation all the time and, clearly, we will make plans accordingly. However, I can assure him and the Committee that the UK remains and will remain indissolubly committed to poverty reduction and international development around the world. To that end, we shall ensure that the £10 billion allocated to our overseas aid programmes this year delivers a transformational impact consistent with our interests and values, of which all of us in this country can be proud.

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

My Lords, the Grand Committee stands adjourned until 5.45 pm. I remind Members to sanitise their desks and chairs before leaving the Room.

House of Lords: Remote Participation and Hybrid Sittings

Earl Howe Excerpts

Thursday 20th May 2021 Lords Chamber

Moved by

[Earl Howe]

That this House takes note of remote participation and the hybrid sittings of the House of Lords.

Relevant document: 1st Report from the Constitution Committee

[Earl Howe (Con)]

My Lords, I beg to move the Motion standing on the Order Paper in the name of my noble friend the Lord Privy Seal. As we meet today, we are still in the grip of a global pandemic that has significantly impacted all our lives and the working of our Parliament. The first national lockdown began on 23 March 2020. Two days later, when our House adjourned early for the Easter Recess, it was far from clear to anybody how or when we would return. That we were able to return after Easter, as scheduled, on 21 April was thanks to the extraordinary efforts of the staff of the House.

[Noble Lords]

Hear, hear!

[Earl Howe (Con)]

However, it was clear from the outset that those early virtual sittings would need to serve as a stepping-stone to a more sophisticated system.

A little over a month later our hybrid House, as we now know it, was up and running, and shortly after that we started voting remotely. These changes were developed and implemented in a matter of weeks. While they have worked well in their own terms, we all knew they were never going to be perfect or a proper substitute for our normal arrangements. There have been unintended consequences and opportunity costs as well as frustrations. Nevertheless, we have continued to meet and to scrutinise, revise and pass legislation, which is our primary duty, and—albeit not in an ideal fashion—your Lordships have continued to hold the Government to account.

The hybrid House arrangements have seen us through this unprecedented time, which has included two further nationwide lockdowns and all the social distancing and shielding measures in between. Notwithstanding that, we have always perceived these measures to be a temporary fix to a temporary problem; and that is the basis on which we proposed the changes to the commission and to the Procedure and Privileges Committee.

Before we get into the debate, I want to clarify what we mean when referring to the “hybrid House”. I suggest that there should be three separate and very distinct elements to it, which are often wrongly conflated. The first element is remote participation in business that would previously have required all participating Members to be present in person. The second element is remote voting. The third element, which can be separated from the other two, consists of all the procedural changes which have been made independently of, or are not dependent on, remote participation in the Chamber or Grand Committee or remote voting. This includes things like the increased time allocated for Oral Questions each day, the taking of evidence from witnesses remotely in Select Committee meetings, and the selection of Oral Questions by ballot rather than first come, first served.

The Leader, the Chief Whip and I have always been consistent in our position on remote participation and remote voting. We believe that, once the social distancing guidance allows it, the House should return to its full physical capacity, and remote participation in the Chamber and Grand Committee should cease, as should remote voting. A parliamentarian’s place is in Parliament. This is not just a sentimental view; it is a practical view of how the innumerable interactions between Ministers, Peers, officials and staff all contribute to the way that Parliament should work. That is what Zoom, for all its technical wizardry, cannot provide.

I do not intend to go into full detail about all the practical implications of retaining remote participation or remote voting, but certain considerations are important to mention to set the context of this debate. First, keeping any remote participation in the Chamber or Grand Committee, even if only in exceptional circumstances, would have significant implications for our ability to return to the House as we knew it before and would entail continued costs of just over £90,000 a month for the extensive broadcasting team. Even if we enabled only a small number of Members to contribute in this way, the bulk of this monthly cost would still be incurred.

Secondly, we are a House of Peers. An important element of the hybrid system has been the principle of maintaining general parity of treatment between physical and remote speakers. Unless in some way or to some degree we take steps to remove that parity and introduce procedural limitations for those noble Lords who are not physically present when speaking, the consequences would be an inability to return to interaction and interventions in the Chamber for all participants equally.

Remote participation, to however limited a degree, necessarily brings with it procedural millstones: advance notice and pre-planning of speakers’ lists; allowing time for Members to sign up; allowing further time for broadcasters to organise the necessary connectivity; and retaining time limits for items of business that did not have them before. Even if no virtual speakers sign up for a particular piece of business, we would still be left with wasted time because of the need to plan the order of business in advance, just in case. Let none of us think that just having a few people taking part in our debates remotely would allow us to return to the flexibility that this House once enjoyed and took for granted.

While the matter of remote voting may be more a matter of principle than practicality, it is significant to note that since we introduced remote voting more Members are voting and Divisions are more frequent. During the 2017-19 Session, there was an average of one Division every three days. Since remote voting, we have had an average of one Division every day—a threefold increase. This has had practical implications for the timing, scheduling and progress of business.

I make a plea for the Government. With no in-built government majority in the Lords, Ministers work hard to make their case and try to win the argument to win Divisions. Is it not right that Members are here to listen and give them a fair hearing before casting their votes? That aside, with the rest of the country coming back to work physically, how could we credibly defend parliamentarians doing something different?

Our present arrangements have allowed us to carry on to the best of our abilities within unprecedented limitations. However, they have added little or no value to our pre-existing procedures. From a ministerial viewpoint, we fully appreciate that the technical constraints have made the Opposition and Back-Benchers feel that their ability to scrutinise the Government effectively has been restricted. At the same time, the Government have found their ability to progress legislation more difficult and this House’s unique self-regulating nature has been curtailed. Indeed, at times it has felt as if the House has had one hand tied behind its back.

I have heard it said that, with remote participation, our debates are a shadow of what they once were. “Sensing the mood of the House” is a phrase that is now almost devoid of meaning. There is simply no way of determining who the House wants to hear from or for how long and, without the interaction that comes with a physical House, speeches are increasingly disconnected from one another and can often be tiresomely repetitive.

It is interesting that our hybrid arrangements have not increased average daily attendance. The difference that noble Lords may have noticed is that a great many more Members than before are speaking in our main items of business. As we are all painfully aware, the result of that has been to restrict speaking times to one or two minutes. I am the first to acknowledge that that renders any attempt at healthy debate and scrutiny almost impossible. Members with genuine expertise and experience, whom the House would benefit hearing from at greater length, are crowded out. There is frustration all round.

I do not believe that I am alone in holding the view that there is immeasurable value to be gained from noble Lords participating physically in Parliament. Virtual proceedings cannot replace or adequately substitute for the interactive dynamic of the Chamber, conversations in the corridors or face-to-face engagement on important legislation and matters of the day. When voting on legislation, Members benefit immensely from being in the House to follow the debate, listening to the responses and voting among colleagues in the Division Lobbies. This communication between Back-Benchers and Ministers, Government and Opposition, friends and colleagues, is, I believe, our bread and butter and vital to the proper functioning of this House. This building is our Parliament. It is where we all belong and it does not work as it should without us being here, in person, together.

As I said at the start, at the outset of the pandemic we viewed remote participation and voting as a temporary solution to a temporary problem. This House has evolved its procedures and practices over many years and it is not in our nature to permanently alter or curtail them as a result of decisions made very rapidly out of temporary necessity. Having said all that, where smaller changes do not impact on the practicalities or principles of our traditional ways of working or our ability to participate and vote physically, we perhaps need to be more open-minded. These are the procedural changes I mentioned a moment ago as the third element of our hybrid House. I am thinking of things such as the time allocated for Oral Questions, the elimination of reading out Statements and the way in which Select Committees decide to hear from witnesses. There may well be good arguments for holding on to these changes on a long-term basis.

These should perhaps be viewed as second-order issues because we think it important for the House to return to normality before considering whether any of these sorts of procedural changes should be retained in the long term. However, if there is a genuine and thought-through demand for one or more of them, the Leader, Chief Whip and I stand ready to take forward discussions, as appropriate.

My task today has been to make the Government’s position on remote participation and the Hybrid Sittings of the House clear, which I hope I have done. However, I do need to emphasise that this is not a matter for the Government to decide upon; it is a matter for the House. The Leader, the Chief Whip and I felt it was right to facilitate the debate today, so that all noble Lords would have the opportunity to air their views. While I am sure that my noble friend Lord Cormack will speak persuasively to his amending Motion, we also believe that the main aim of this debate should be for views to be expressed, and not for binding decisions to be made. Our intention was, and is, for the views of noble Lords as expressed today to be synthesised in a careful and nuanced way to enable your Lordships’ commission to make appropriate recommendations to the House. My noble friend the Leader, alongside other members of the commission, are here to listen. I beg to move.

Financial Services Bill

Earl Howe Excerpts

Consideration of Commons amendments
Wednesday 28th April 2021 Lords Chamber

Moved by

[Earl Howe]

That this House do not insist on its Amendment 1 and do agree with the Commons in their Amendment 1A in lieu.

1A: Page 36, line 13, at end insert the following new Clause—
“FCA rules about level of care provided to consumers by authorised persons
(1) The Financial Conduct Authority must carry out a public consultation about whether it should make general rules providing that authorised persons owe a duty of care to consumers.
(2) The consultation must include consultation about—
(a) whether the Financial Conduct Authority should make other provision in general rules about the level of care that must be provided to consumers by authorised persons, either instead of or in addition to a duty of care,
(b) whether a duty of care should be owed, or other provision should apply, to all consumers or to particular classes of consumer, and
(c) the extent to which a duty of care, or other provision, would advance the Financial Conduct Authority’s consumer protection objective (see section 1C of the Financial Services and Markets Act 2000).
(3) The Financial Conduct Authority—
(a) must carry out the consultation, and publish its analysis of the responses, before 1 January 2022, and
(b) must, before 1 August 2022, make such general rules about the level of care that must be provided to consumers, or particular classes of consumer, by authorised persons as it considers appropriate, having regard to that analysis.
(4) The duties to consult under this section may be satisfied by consultation carried out after 1 January 2021 but before this section comes into force (as well as by consultation carried out after this section comes into force).
(5) In this section—
“authorised person” has the same meaning as in the Financial Services and Markets Act 2000 (see section 31 of that Act);
“consumer” has the meaning given in section 1G of that Act; “general rules” means rules made under section 137A of that Act.”

[Earl Howe (Con)]

My Lords, this Financial Services Bill will enhance the UK’s world-leading prudential standards, promote financial stability, promote openness between the UK and international markets, and maintain an effective financial services regulatory framework and sound capital markets. I acknowledge the work of your Lordships in scrutinising this important Bill. The issue of parliamentary scrutiny has been prominent in our debates and noble Lords have more than demonstrated the positive role that they can play in this regard.

During the passage of the Bill, Members of both Houses debated how best to address issues of consumer harm in the financial sector. Amendment 1, which this House approved on Report, proposes that this should be addressed through a requirement for the FCA to bring forward rules on a duty of care. Let me underline that the Government are committed to ensuring that financial services consumers are protected and that steps are taken quickly to address issues, when they are identified. However, as the Economic Secretary set out in the other place, the Government believe that the FCA already has the necessary powers and is acting to ensure that sufficient protections are in place for consumers, so I cannot accept this amendment.

It is important to remember that financial services firms’ treatment of their customers is already governed by the FCA’s Principles for Businesses and specific requirements in its handbook. These fundamental principles set out specific requirements for firms, including that

“A firm must pay due regard to the interests of its customers and treat them fairly.”


The FCA’s enforcement powers allow it to ensure that these standards are met, but it recognises that the level of harm in markets is still too high. It is committed to taking further actions.

The Government accept, as the noble Lord, Lord Tunnicliffe, has rightly suggested, that this harm may stem from asymmetry of information between financial services firms and their customers. The risk is that some firms may seek to exploit this asymmetry. The FCA is well aware of how informational asymmetries and behavioural biases can influence consumer behaviour, and it works every day to address these issues where it considers that they may result in harm. The Government therefore support the FCA’s ongoing programme of work in this area and believe that it will deliver meaningful change for the benefit of consumers.

The FCA has considered its existing framework of principles and whether the way in which firms has responded to them is sufficient to ensure that consumers have the right protections and get the right outcomes. Building on this, in May, the FCA will consult on clear proposals to raise and clarify its expectations of firms’ actions and behaviours and on any necessary changes to its principles to deliver them. These proposals will consider how to raise the level of care that firms must provide to consumers, through a duty of care or other provisions. Ultimately, the proposals in this consultation seek to ensure that consumers benefit from a better level of care from financial services firms.

Amendment 1A puts this work on a statutory footing. It requires the FCA to consult on whether it should make rules providing that authorised persons owe a duty of care to consumers. It ensures that the FCA will publish its analysis of the responses to this consultation by the end of the year. It also ensures that the FCA will make final rules, following that consultation, before 1 August 2022. I hope that this provides reassurance of both the FCA’s and the Government’s commitment to this important agenda. I urge the House to accept this proportionate and, I believe, well-judged amendment.

The FCA will bring its consultation to the attention of the relevant parliamentary committees. This will give them an opportunity to consider the proposals and, if they choose, to express a view or raise any issues. The FCA will respond to any issues raised by parliamentary committees, in line with commitments made during the passage of this Bill.

Let me end there. I hope that noble Lords will accept Motion A and this amendment in lieu.

[Baroness Kramer (LD)]

My Lords, we will not challenge this Motion. I cannot say that it goes as far as reassurance, but I think we are in a much better place to have the consultation and its characteristics in statute on the face of the Bill. I particularly thank the Minister and his team. I suspect they have been instrumental in making sure that the concerns, from all sides of the House, were communicated back to the Treasury and the Treasury team.

The Minister today repeated a number of the statements that the Economic Secretary made in the other place when he addressed this issue. I will highlight a few that were of particular importance to me. The FCA recognises that,

“the level of harm in markets is still too high and is committed to—”—[Official Report, 24/4/21; col. 867]

taking further actions. That is an important statement to have on the record. I am slightly concerned, however, that the focus of the FCA should not exclusively be on asymmetry of information. Asymmetry of information is fundamental and important, but it is far from everything. The Economic Secretary said that

“the FCA will consult in May on clear proposals to raise and clarify its expectations of firms’ actions and behaviours, and on any necessary changes to its principles to deliver this.”—[Official Report, Commons, 26/4/21; col. 84]

I hope that will not be confined simply to asymmetry of information, but as the Economic Secretary said, and the Minister today said, Parliament wants to be assured that the FCA’s ongoing work will lead to meaningful change. I think that reflects some of the frustrations expressed in this House of having had eight consultations to date and relatively little action. I hope this will lead to a great change.

In the amendment in lieu—this is perhaps something the noble Lord, Lord Eatwell will address more extensively than I—the fact that all consumers are part of the consideration is an important one. I want to use this opportunity to underscore to the Minister how urgent and significant this issue is.

When the Government’s amendment in lieu was passed, I got an email from one of the leading financial services lawyers in the country, and two things are pertinent. It said that it looks like this one is headed for the long grass again. I think that is partly because we are looking at action in 2022 and not immediately. The reason for that level of concern was, apparently, that audit firms are now saying that any credit risk between the client and the authorised firm should be counted as client money within the meaning of CASS—the protection of client assets and money. This is storing up some big problems when one of these babies—we are talking about firms that collectively have well over £10 trillion in assets under management—goes down and a judge finds that the trust is bust because they comingled client money with money that is not. Lehman Brothers, here we go again. I went immediately to the FCA site, and it is an excellent but sad example of the very limited powers that the FCA has to deal with such situations, because of the regulatory perimeter that limits a great deal of their potential for action to their definition of consumers. The issue has always been that that is a very narrow definition of consumer.

Every day we wait for a duty of care to become embedded in the system, we run significant risk. It is a risk that none of us wants—it has the potential to be limited to a small pool of clients, but also to knock the economy off its paces once again. It is important that there is an element of urgency built into all of this, that the issue is taken seriously and that there is not an attempt to narrow examination by and the focus of the FCA to simply something like asymmetry of information, but to consider the much wider picture before we end up with another crisis none of us wants.

--- Later in debate ---

A most welcome element in the Government’s amendment is the timetable for action—not the immediate legislative action that we on these Benches sought, but a timetable none the less. I assure the Minister that we will be ticking off the dates by which the FCA is required to act, and of course we will scrutinise the new general rules with great care. In doing so, I look forward to working with the noble Earl, Lord Howe, to achieve what is now a clearly shared objective: a well-defined regulatory principle of duty of care.

[Earl Howe (Con)]

My Lords, I express my thanks to the noble Baroness, Lady Kramer, and the noble Lord, Lord Eatwell, for what they have said. I am pleased that they have both taken the trouble to read the words of my right honourable friend the Economic Secretary when responding to the debate in the other place on Monday. I was careful to frame my remarks in a way intended to ensure that there is not a hair’s breadth of difference between his words and mine.

The noble Lord made some very well-observed remarks on the risks arising from asymmetric information. However, I am happy to confirm to the noble Baroness that the FCA’s consultation will not be solely focused on asymmetry of information, important though that is; it will look more broadly at raising the level of care that firms provide to consumers—not particular classes of consumers, but all consumers.

Some hesitation—I think that is the best word—was expressed as to why there is yet another consultation. In response to that, I say that it is important that consumer groups and firms have the opportunity to comment on clear proposals and subsequent draft rule changes before final rules are set in stone. So I argue that it is a necessary step, even though I fully understand the noble Baroness’s wish for action this day. I remind her that we are talking about a consultation to be launched very shortly, and I hope that indicates that the sense of urgency which both noble Lords have indicated is right is shared by the FCA.

The FCA will and must act in accordance with its statutory objectives, which include the consumer protection objective. I come back to that point: this is not an issue that is ever lost on the FCA. With those comments, I am grateful to both noble Lords for their acceptance of the amendment in lieu, and I beg to move.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, we have a request to speak after the Minister from the noble Baroness, Lady Neville-Rolfe.

[Baroness Neville-Rolfe (Con)]

My Lords, I join others in congratulating my noble friend the Deputy Leader of the House and other Members of the Front Bench on the way they have dealt with the Bill and got us to this final stage. I just have a question about the consultation on the duty of care, and it stems from my experience in other areas of regulation—that is, health and safety and food safety. I have found that, where a duty of care is introduced, it is sometimes possible to change adjacent rules and regulations in a regulatory area and reduce the bureaucracy that can be a problem for both consumers and operators in the field. I would be interested to know whether that sort of work is likely to be envisaged by the Economic Secretary.

[Earl Howe (Con)]

My Lords, I do not have an answer for my noble friend, but her point is extremely helpful and I shall ensure that it is fed into the thinking that will be wrapped around the consultation process as it goes forward.

Motion A agreed.

Moved by

[Earl Howe]

That this House do not insist on its Amendment 8, to which the Commons have disagreed for their Reason 8A.

8A: Because the Commons consider that it is not a proportionate or practical means of tackling the issues around consumers who have mortgages with inactive firms.

[Earl Howe (Con)]

My Lords, Amendment 8 concerns mortgage prisoners, an issue that the Government take extremely seriously. We are committed to finding practical and proportionate solutions to help this group but, as Motion B in my name makes clear, the amendment is not one that the Government can accept. As explained in Reason 8A, the amendment is neither a proportionate nor a practical response to this complex issue, and this is why the Government cannot support Motion B1, tabled by the noble Lord, Lord Sharkey.

In our previous debates, my noble friend Lord True set out the FCA’s analysis of this complex issue. To recap briefly, according to FCA data, there are 250,000 borrowers with inactive lenders. Of these, analysis suggests that 125,000 borrowers could switch mortgage providers if they chose to, even prior to the introduction of the FCA’s new rules. Of the 125,000 who cannot switch, the FCA estimates that 70,000 are in arrears and so would struggle to access a new deal even in the active market. The FCA therefore estimates that there are 55,000 borrowers who may struggle to switch but are up to date with their payments. Its data show that, on average, the 55,000 borrowers with inactive firms who have characteristics that would make it difficult for them to switch but are up to date with payments are paying around 0.4 percentage points more than similar borrowers with active firms who are now on a reversion rate.

As the Economic Secretary set out on Monday, the reason these borrowers are unable to switch is not that their mortgage is with an inactive firm; it is that they do not meet the risk appetite of lenders. For example, they may have a combination of high loan-to-value, be on interest-only mortgages with no plan for repayment, or have higher levels of unsecured debts, non-standard sources of income or a poor credit history. Similar borrowers in the active market are also very unlikely to be offered deals with new lenders.

My noble friend Lord True has previously set out the significant work undertaken by the Government and the FCA in this area, which has created additional options to make it easier for some of these borrowers to switch into the active market. If we look at Amendment 8, we see that what it proposes would be a very significant intervention in the private mortgage markets and in private contracts. It would bring with it a risk to financial stability as it would restrict the ability of lenders to vary rates in line with market conditions. The ability to vary standard variable rates allows lenders to reprice products to reflect changes to the cost of doing business and could therefore create risks with significant implications for financial stability. On top of that, the amendment is not fair to borrowers with active lenders in similar circumstances as it targets only borrowers with inactive lenders. Indeed, this cap would be deeply unfair to borrowers in the active market who are in arrears or unable to secure a new fixed-rate deal because it would not include them.

So, at the most basic level, I just do not think it is right to introduce such a significant intervention for those with inactive lenders which could cut their mortgage payments far below the level of someone in a similar financial situation who happens to be with an active lender. Nevertheless, while the Government are opposing this amendment today, I want to reiterate our commitment to finding any further practical and proportionate options for affected borrowers, supported by facts and evidence.

On Monday, the Economic Secretary set out what further steps the Government and the FCA are taking and I want to repeat those commitments today: namely, that

“the Treasury will work with the FCA … on a review to its existing data on mortgage prisoners”.

This will ensure that we have the right data

“on the characteristics of those borrowers who have mortgages with inactive firms and are unable to switch despite being up to date with their mortgage payments. The FCA will also review the effect of its recent interventions to remove regulatory barriers to switching for mortgage prisoners and will report on this by the end of November, and … a copy of that review”

will be laid before Parliament.

“The Treasury will use the results of the review … to establish whether further solutions can be found for such borrowers that are practical and proportionate.”—[Official Report, Commons, 26/4/21; col. 87.]


Within the significant constraints that I have noted, I want to reassure the House that the Economic Secretary, as the Minister responsible for this area, will continue to search for any further solutions that may provide support for borrowers with inactive lenders who are unable to switch. But, again, they must be practical and proportionate. The Economic Secretary has also confirmed that he will write to active lenders and encourage them and the wider industry to go even further and look at what more they can do to ensure that as many borrowers as possible benefit from these options.

I hope I have convinced the House that the Government are taking the appropriate next steps and have demonstrated our commitment to continuing to work tirelessly on this. Therefore, I ask the House not to insist on this amendment and I beg to move.

Motion B1 (as an amendment to Motion B)

[Lord Sharkey]

Moved by

Leave out “not”.

--- Later in debate ---

[Lord Tunnicliffe (Lab) [V]]

My Lords, we have not made as much progress on this issue as many people, including thousands across the country, would have hoped. That is not through any lack of effort. The noble Lord, Lord Sharkey, and my noble friend Lord Stevenson have been tenacious in their pursuit of change. However, for that to be possible, both sides must want to work towards a favourable outcome.

I said on Report that we were not convinced that this amendment provided the answer to the long-running problems experienced by mortgage prisoners. It certainly provides an answer, but I accept the argument that there would be consequences for the mortgage market as a whole. With this in mind, colleagues offered an alternative option in what was then Amendment 37B. Your Lordships’ House has a reputation for being constructive and, in that spirit, the noble Lord, Lord Sharkey, and my noble friend made further offers to look at any text that the Treasury would be prepared to bring forward. Unfortunately, Ministers chose not to put an amendment on the table.

The Economic Secretary has, to his credit, demonstrated knowledge of the challenges in this area. Every time he has spoken, I have believed his wish to identify workable solutions. The noble Earl, Lord Howe, and the noble Lord, Lord True, have said similar things in our meetings; again, I have viewed their comments as earnest. The problem is that warm words do not pay bills—nor do they generally lead to lenders taking the kind of steps that are required. The initiatives launched to date have helped only a tiny fraction of mortgage prisoners, so one would have thought that the case for further action was overwhelming.

We wanted—and continue to need—the Government to take proper ownership of this issue. We welcome the fact that the FCA will conduct a further review of the options available to mortgage prisoners and that the Treasury will revisit its data on the different cohorts of affected customers. As well as following these processes closely, we will of course continue to press the Economic Secretary to do what is needed.

It is regrettable that we have not been able to achieve a satisfactory outcome on this legislation, which should have been more than another false dawn. However, Conservative MPs have rejected the case for action, and it is hard to imagine meaningful progress being made unless Ministers revise their red lines. Accordingly, we do not believe we should press this matter any further today and look to the noble Lord, Lord Sharkey, to withdraw his amendment. However, I can assure the Minister that we will return to this issue at the next legislative opportunity.

[Earl Howe (Con)]

My Lords, I am grateful to noble Lords who have spoken in this short debate, both for their constructive comments and for re-emphasising the genuine concerns they clearly have for this unfortunate group of people who find themselves trapped in mortgages that cause them great difficulty. I do not doubt for a second the distress that many such people are experiencing, but my noble friend Lady Noakes brought us back to some very important realities on this vexed subject. I agree with the noble Lord, Lord Tunnicliffe, that it is regrettable that we have not been able to reach full agreement on the way forward. Nevertheless, I hope my earlier remarks indicated that we take this subject extremely seriously. I am confident that noble Lords who have listened to my honourable friend the Economic Secretary speak on the subject will be in no doubt whatever of his intention to keep on top of it in the weeks ahead.

Part of the problem we face relates to the data that underpin the case that the noble Baroness, Lady Kramer, and the noble Lord, Lord Sharkey, have made. The report of the UK Mortgage Prisoners group makes accusations about the data held by the FCA, essentially saying that the data analysis is wrong. However, I put it on record that the FCA data analysis was conducted using information on the 250,000 borrowers with inactive lenders alongside a credit referencing agency dataset which includes data on 23,000 borrowers with inactive lenders. The FCA data has shown that, on average, the 55,000 borrowers with inactive firms who have characteristics that would make it difficult for them to switch but are up to date with payments are paying around 0.4 percentage points more than similar borrowers with active lenders who are now on a reversion rate. Its analysis also shows that the majority of borrowers with inactive firms are on relatively low interest rates of 3.5% or less.

It is important that, as part of the review that the Government have announced, the existing data is analysed to provide further details on the characteristics of the borrowers of most concern. That is definitely a core part of getting to grips with what more can be done in this area.

It was suggested that in the first instance the Government failed these consumers. I repudiate that suggestion very strongly. The customer protections that we set were best practice for transactions of this type—or went beyond best practice: the Government strengthened the consumer protections for the last two sales of new car loans in response to concerns raised by parliamentary colleagues.

I do not accept the points made by the noble Baroness, Lady Kramer, about the difference between those whose mortgages were refinanced with active lenders and those who found themselves with inactive lenders. The sales of those mortgages did not impact customers’ ability to remortgage elsewhere: customers with inactive lenders can remortgage with another provider as long as they meet the lender’s risk appetite. The customer protections that we insisted on for new car sales also included prohibitions on placing barriers in the way of customers remortgaging with another provider; for example, all early repayment charges are waived. These lenders are charging interest rates in line with SVRs set by active lenders.

The noble Lord, Lord Sharkey, asked about Cerberus. The customer protections in these sales were best practice in the market at the time. For the last two sales, restrictions on setting the SVR last for the lifetime of the mortgage. I add that Cerberus indicated that it was offering new products to customers but this was not part of its bid, so UKAR did not seek a binding commitment on this point. Cerberus was selected because it agreed to the consumer protections that were sought and provided the best value for money for taxpayers. I underline, therefore, that inactive lenders can, and often do, allow borrowers in arrears to make use of a variety of tools to get themselves back on track. Such tools include capitalisation of arrears, term extensions and payment holidays.

It is simply not true that the FCA has done nothing for this group of people. For example, to reflect the current Covid-19 situation, the FCA has brought forward guidance to allow borrowers who are up to date with their payments on a recently matured or soon-to-mature interest-only, or part-and-part, mortgage to delay repaying the capital on their mortgage while continuing to make interest payments. This guidance has enabled borrowers to stay in their own homes for a significant period. The FCA also confirmed that it was making intra-group switching easier for borrowers with an inactive firm that is in the same lending group as an active lender. On 14 September, the Money and Pensions Service launched online information and a dedicated phone service as a key source of information and advice for borrowers with inactive firms.

The point was made that the modified affordability assessment has helped only 40 households. The modified affordability assessment, I contend, provides an additional and important option for some borrowers who may not otherwise have been able to switch. We must just give it time to take effect. It will not be a silver bullet for all borrowers with inactive firms, many of whom have other characteristics that affect their ability to remortgage.

I will leave it there. I say again that I regret there has been no meeting of minds on this, but I also say that the Government place a great deal of emphasis on the work that is now in train. We will do our utmost to see what more can be done for mortgage prisoners as a result of the further analysis I have referred to. I hope noble Lords will see fit to agree with the Government’s Motion.