Professional Qualifications Bill [HL]

Baroness Bloomfield of Hinton Waldrist Excerpts

Committee stage
Monday 14th June 2021 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank all noble Lords for participating in this short debate, and I thank the noble Baroness, Lady Hayter, for the amendment and the noble Baroness, Lady Blake, for presenting it so ably. I welcome the opportunity to consider the important issue of mutual recognition of statutory audit qualifications in the UK and the audit qualifications in other jurisdictions.

The Companies Act 2006 provides that these may be agreed on a reciprocal basis by the Financial Reporting Council—FRC—on behalf of the UK Secretary of State, with the competent authority of an overseas jurisdiction. Amendment 34 would give the FRC the discretion to relax the standards of compliance that overseas qualifications must meet before they can be recognised in the UK. It would not compel the FRC to relax those standards but would enable it to do so where it considers this appropriate as part of a reciprocal agreement.

The UK’s audit sector is highly respected and valued both domestically and across the world. The Government are currently consulting on the White Paper Restoring Trust in Audit and Corporate Governance. These reforms are needed because there have been a number of examples of poor practice and poor standards in UK corporate audit that have risked the UK’s reputation as a safe and trusted place to do business—a number of noble Lords, including the noble Lord, Lord Palmer, have just mentioned this. We therefore need to be careful when considering the framework to allow individuals to undertake statutory audit in the UK to ensure that it is robust and maintains the UK’s high standards and reputation.

While this amendment would only provide the ability for the regulator to apply looser requirements to recognising other nations’ qualifications, it would open the door to concerns of loosening standards and reduced oversight. It would also expose the regulator to pressures to use the flexibilities provided in cases where this might not be in the best interest of the UK profession or its clients. The statutory audit profession in the UK has a comparatively strong reputation internationally for the standards that it maintains. The Government are working hard to maintain this reputation, and we would not wish either the UK’s standards or its reputation to be devalued.

The Government acknowledge that an essential part of maintaining our standards and reputation internationally is to seek to influence developments in corporate reporting and audit by building links to other regulators that are prepared to uphold comparable standards. The ability for UK auditors and those with comparable qualifications overseas to exchange and transfer experience is an important part of this.

The noble Baroness, Lady Blake, asked why the audit reform was not included in the Queen’s Speech. The reform of audit and corporate governance is a priority for Ministers. We have promised to legislate on an appropriate timetable, and the Government do not intend to add new requirements at a time when they would hold back businesses’ recovery from the pandemic. By the time of presenting proposals to Parliament, the Government want to be confident that they are effective and command broad support. Consultation on the Government’s White Paper is open until 8 July, and Ministers look forward to contributing to the BEIS Select Committee’s inquiry into the delivery of audit reform.

I believe that the regulator can already make agreements with international counterparts to this end, so I ask the noble Baroness to withdraw her amendment.

[The Deputy Chairman of Committees (Baroness Barker) (LD)]

I have received a message from the noble Baroness, Lady Noakes, who wishes to speak.

[Baroness Noakes (Con)]

Could my noble friend the Minister explain why, in Clause 1, which we know will be applied largely to the medical professions—we are therefore dealing with patient safety—it is adequate for medical professions if

“a specified regulator of the specified regulated profession has made a determination that the overseas qualifications … demonstrate substantially the same knowledge and skills”,

but, somehow, a different standard is implied when the much more mundane activity of auditing is involved? I do not quite understand how the Minister can have one view of the medical professions and another of what happens in the accounting profession. Can she explain that contradiction?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I do not agree that that is a contradiction. This would have the effect of weakening the standards in audit reform, which we are keen to prevent—so I do not agree with the premise of my noble friend’s question.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for her full response. I particularly thank the noble Baroness, Lady Noakes, for reminding me of the many hours of excitement that I have ahead of me in this place and thank her for her suggested wording. I also welcome the reminder from the noble Lord, Lord Palmer, of the shortcomings in this particular area.

We keep mentioning the word “assuage”, which I do not think I have ever come across quite so much in my life before. I looked up “assuage” and it referred to the easing of grief. I am not sure that my particular grief in this area has been eased by this. There is a great deal in the answers that we will look at. I am sure we will revisit this very important, if technical, area in the meetings ahead, and I beg leave to withdraw the amendment.

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[Baroness Hayter of Kentish Town (Lab)]

My Lords, while I absolutely agree with my noble friend Lord Foulkes that any advice would be better if it was comprehensive and included all the things that everyone would want to know if they were applying either to move here or to go away, the more fundamental question, which I and the noble Baroness, Lady Noakes, asked, is whether we need Clause 7 at all. As she and others have said, it is not clear why it is necessary to establish a statutory advice centre simply to handle information and provide advice and assistance. It will not make any decisions. It will not have the authority to chide regulators for not doing something; it does not have any authority over them. The statutory requirement is actually on regulators to provide advice to the centre—there is no statutory requirement on the centre to fine them if they do not do it or anything else like that—although, as has been said, there are already other ways of getting that information. In addition, only the UK Government, not the other Governments in the Bill, interestingly enough, are able to enforce this requirement. I do not know whether that is an oversight but, given that there is more than one national authority in the Bill, it would be interesting to know why the requirement on regulators is laid down only by the UK Government.

This is all very strange. It is a very clunky and convoluted way of simply asking statutory regulators to tell a Minister such information as is needed to provide advice to potential applicants on how they go about getting their qualifications recognised here. They have been doing that for years. We heard earlier about a number of regulators, particularly in the health service, veterinary science and other areas, that have been doing this for years without any statutory requirement to provide the advice, so it is unclear why the new law is needed. As has already been said, we know that the assistance centre is already in operation. But I think none of us knows why we need a specific underpinning now, and what it is that could not be done by a couple of civil servants within BEIS.

The Minister said last Wednesday that “new legislative cover” is required, but he did not spell out what it was required to do—why this could not be done on a voluntary basis. We have lots of other advice centres which do not have to have statutory underpinning, so why is legislation needed? He said, as the noble Lord, Lord Fox, just quoted, that the centre

“is basically a focal point—a signposting mechanism that tells people where to go to get more information about professions”

and that

“it employs either two or three people.”

It must be tiny; I was going to say that it received 1,600 queries in a year, but it has now received 1,601—I think our little website here gets far more hits than that. As the Minister had the honesty to confess:

“These queries can be as simple as saying, ‘What is the address of the place I have to write to, to find out how I become a nurse in Great Britain?’”—[Official Report, 9/6/21; col. 1501.]


If you google “nurse vacancies”, you might just find it. The idea that we are employing anybody and paying them money to tell people about the address they need to write to to find out how to become a nurse in Great Britain makes me worried, and why on earth does it have to be a statutory body if it is just signposting?

The impact assessment says that

“the Secretary of State can (through contractual arrangements) require the national assistance centre to support professionals”—

it is unclear what “support” means—

“in getting their UK qualifications recognised overseas by providing reasonable information to their overseas counterparts.”

Again, surely the regulator can do that. If a doctor wants to apply to be a doctor in New Zealand, for example, surely their regulator can supply that information. If it is to be done by the advice centre and by contract, it is really hard to think why, again, it needs two bodies or persons to be statutory if they are simply setting up contracts to be able to exchange information—because it is not a decision-making body.

It is unclear what the relationship will be between the centre and overseas regulators. If it is by contracts, how much will they be bound by data protection to ensure that the overseas regulators will look after people’s data according to normal laws? That is easier in a regulator-to-regulator agreement—we have talked about these elsewhere, so why not here?

I am completely mystified as to why Clause 7 is in the Bill. Perhaps we can just take it out, and then we can all go home.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I have to confess that I am still surprised that this is proving such a contentious part of the Bill. For the record, the centre has had 1,602 inquiries—I rang it this morning and it was very helpful, answering the phone within minutes and telling me exactly what to do about what I was asking.

I thank the noble Lords, Lord Foulkes and Lord Fox, and the noble Baroness, Lady Garden of Frognal, for their amendments, which address wide-ranging issues around the operation of the assistance centre, in particular extending the scope of advice provided, readjusting how information-sharing interacts with data protection, and the definition of “corresponding profession”.

Amendment 39 from the noble Lord, Lord Foulkes, seeks to place an additional duty on the Secretary of State to make arrangements for the assistance centre to publish advice and information about immigration requirements for entry to the UK for the purposes of practising a regulated profession. I clarify that, under the current arrangements, the assistance centre is part of the UK ENIC, which I had not realised until the noble Lord brought that up. The UK ENIC focuses more broadly on academic qualifications, whereas the assistance centre focuses on professional qualifications.

Placing an additional duty on the assistance centre to publish advice and information about immigration requirements would go beyond the scope of the Bill. Furthermore, under the provisions of the Immigration and Asylum Act 1999, immigration advice and services can be provided only by qualified persons. To include these additional requirements would increase the asks on the remit of the assistance centre and the qualifications of the staff required to deliver it. It would also increase the costs associated with doing so. I know that others in the Committee, including my noble friend Lady Noakes, wish any service to be as economical and targeted as possible.

The Home Office already provides guides and tools to the public to help them understand immigration requirements and eligibility, including a dedicated visa-checking tool. Adding this to the assistance centre contract would therefore duplicate Home Office services.

Amendment 43 tabled by the noble Lord, Lord Fox, would remove Clause 7(4), which clarifies that the disclosure of the information required under Clause 7 does not breach disclosure restrictions, such as any obligations of confidence. The subsection as drafted is both consistent with existing legislation and required to give clarity about the intersection of this clause with data protection legislation. Without it, no direction would be given on which takes precedence.

The noble Lord, Lord Fox, also asked about the information that the Government are asking regulators to provide to the assistance centre. This is very limited in nature and not onerous: it is to ensure that the assistance centre has the necessary information to support the delivery of its functions. It also facilitates transparency on the recognition of professional qualifications in the UK. Regulators are already required to provide this information to the current assistance centre, and, in our engagement, no regulators have raised concerns about continuing to do so. The objective of the service provided by the assistance centre is and always has been to complement and support regulators, not to replace them.

Amendments 44 and 50 tabled by the noble Lord, Lord Foulkes, relate to data protection in Clauses 7 and 10. Similarly to another tabled by him last week, they seek to create a defence if a disclosure made under the duties in either clause contravenes data protection legislation. As my noble friend Lord Lansley reflected on the first day of Committee, the approach in the Bill is consistent with existing legislation such as the Trade (Disclosure of Information) Act 2020 and the European Union (Future Relationship) Act 2020. I return to my earlier point that Clauses 7 and 10 require disclosure only when it does not contravene data protection legislation. Therefore, a defence is not needed.

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[Lord Fox (LD)]

I thank the Minister for her response. I am having trouble matching the words that she is using with the thing that she is describing. That is my problem. The words “a website run by two people” and “assistance centre” are not really the same, so are we talking about an assistance centre or a landing page? When I talked about a landing page the other Minister kind of nodded. It would help if the Government would clear up what this thing actually is and, in so doing, tell us how much they think it will cost.

The specific question I have is about data. The Minister seemed to suggest that in order for this centre/website to conform to existing data protection regulation it needed guidance in primary legislation. Is that because it will be asked to do more data protection, less data protection or the same amount? If it is the same amount of data protection, why does it need primary legislation to tell it what to do?

[Baroness Bloomfield of Hinton Waldrist (Con)]

Providing a statutory basis for the continued existence of an assistance centre places a duty on competent authorities to co-operate with it. This is to ensure that the assistance centre has the necessary information to help support the delivery of its functions, rather than relying on voluntary information-sharing arrangements. In a practical sense, it provides a signposting system through its website. It also has a telephone answering service, which dealt with my question this morning about the need for English language skills for particular professions. It answered the question very carefully and properly by saying that that was not part of its remit and I needed to talk to the visa requirements section. The centre is at least directing you to where you need to go for your questions to be answered.

The legislation also requires that the assistance centre provides information to the Secretary of State when requested. As I said, this is not onerous information, but it is an important requirement, as the Secretary of State has a responsibility for the wider recognition of professional qualifications principles. Lastly, its existence in legislation helps validate the credibility of the assistance centre for engagement with its overseas counterparts.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, a lot of interesting things have emerged during this debate. The noble Baroness, Lady Noakes, my noble friend Lady Hayter and the noble Baroness, Lady Randerson, seem to have set up a new all-party group—friends of Google. I warn them to be careful and alert them to the fact that if you Google something you will find at the very top of the list people who have paid to come top of that list. If you look, for example, at getting a Covid test, you will find that the ones that you pay for are right at the top and the free ones are down at the bottom. Beware of Google—and other equivalents—because they do not necessarily give you the best advice.

The Minister has been very helpful in her response. However, some things still need teasing out as far as the assistance centre is concerned. I would argue still that the visa and admission regulations that I am suggesting would enhance its role. It was suggested by the noble Baroness, Lady Randerson, that the functions it is dealing with now might be better dealt with at a devolved level. As she knows, I am a very strong devolutionist. Immigration, visa regulations and other regulations are not devolved. Therefore, that would give the assistance centre a little more credibility.

However, my noble friend Lady Hayter has a good point: does it need to be statutory? I think you can have an assistance centre working very effectively without it having to be on the face of the Bill. Often, we argue strongly that things should be on the face of a Bill, and we get rebuffed, but I am not sure the case has yet been made for it to be statutory.

When I was a Minister, I used to tell officials and civil servants to go back and think again from time to time. I ask that both Ministers—the noble Lord, Lord Grimstone, and the noble Baroness, who has replied so eloquently to this debate—perhaps have another look afterwards, in the cold light of tomorrow morning, and go back to the department and say, “Wait a minute. Some valid points have been raised”. That is what these sessions of Committee and Report are about—going back to the department. Perhaps it could be arranged for some of us to be given more information and some direct contact with the centre. There are things that can be done between now and Report that would make the Bill much better and make it more likely for us to get consensus when we get to Report. I hope the Minister will be able to do that. She is nodding nicely to me as always. With that, I will withdraw the amendment.