(11 months, 3 weeks ago)
Lords ChamberTo ask His Majesty’s Government what assessment they have made of the authorised push payment (APP) fraud performance report published by the Payment Systems Regulator in October 2023.
My Lords, the Government are committed to tackling authorised push payment fraud and stopping customers falling victim to scams. The Government welcome the publication on 31 October by the Payment Systems Regulator of data on the levels of APP fraud and of reimbursement among payment service providers. This will ensure that firms are properly incentivised to combat fraud and explore all avenues to do so.
My Lords, this excellent report allows us at long last to see which banks are behaving best and worst in preventing and reimbursing fraud. One of the best ways to reduce fraud would be to stop fraudsters using UK bank accounts to receive the stolen money. We can now see from this report that Metro Bank, TSB, Starling and Monzo are the banks that receive and process the most stolen money. Smaller payment providers are even worse. For every £1 million received by Clear Junction, for example, more than £10,000 was stolen money, and almost 20% of Dzing Finance’s receipts by number were fraudulent. Now that we have this information, what are the Government doing to ensure that banks take real action to stop their accounts being used by fraudsters? Secondly, I congratulate Anthony Browne on his promotion yesterday, but what does that mean for his essential role as the Prime Minister’s Anti-Fraud Champion?
I congratulate the noble Lord, because he was a strong advocate for the publication of this data. As he says, it has indeed been revealing, and I assure noble Lords that action has already been taken on the back of it. On 27 October, the Financial Conduct Authority imposed restrictions on Dzing Finance Ltd, which was the worst-performing payment service provider for fraud volumes received. It now cannot on-board any new retail customers or allow any new incoming funds from retail customers for the purposes of issuances of electronic money or providing payment services without the written agreement of the FCA. In March this year, the FCA wrote to all payment firms, highlighting fraud risks and instructing them to take action to address this. Where issues are identified, the FCA will continue to take action. I also congratulate my friend in the other place on his appointment, but I assure noble Lords that his excellent work will continue under the work of the Home Office.
My Lords, the Payment Systems Regulator aims to provide consumers with better information about fraud and the risks associated with each bank and payment services firm. If the volume and value of frauds and scams enabled by particular tech sectors and social media platforms were also published, that publicity would drive those institutions to improve standards and protect users. Will the PSR be asked to direct all payment service providers to include in their APP fraud data submissions for the next publication the value and volume of fraud enabled by the largest social media and tech platforms?
My Lords, it would be interesting to look at that and at how that data might be collected. The point at the heart of my noble friend’s question is absolutely right. Banks have a responsibility in this area, and that is why the reimbursement obligation is coming forward, but others have an obligation in this area too. The recent Online Safety Act imposes new obligations on the largest social media companies and platforms to prevent their users being exposed to harmful content, including fraudulent content. I am sure those measures will make a real difference too.
My Lords, APP fraud rose by 20% in the first half of this year alone and, according to the Payment Systems Regulator, customers of banks and building societies have wildly different and divergent experiences of receiving compensation and restitution. While I welcome the mandatory reimbursement requirement that will come into force next year, in the meantime, what consideration is being given to mandate appropriate resourcing of out-of-hours fraud and complaints teams within banks to ensure that where an APP fraud has occurred it can be reported and acted on with appropriate speed?
As the noble Lord has noted, a significant step towards ensuring greater consistency and user experience will be the mandating of reimbursement; we already have 10 signatories to the voluntary reimbursement code. Of course banks need to have proper processes in place to deal with suspected fraud, and I think publications such as the data we had at the end of last month shine a light on how banks are performing and allow consumers to make informed choices about where they bank.
My Lords, UK Finance has published analysis that shows that 78% of APP fraud originates online and another 18%—especially high value —via telecoms. These companies face no reimbursement liability at all. Will the Government act to change that and make the telecoms and online companies liable?
As I have said to noble Lords, through the Online Safety Act, platforms and services in scope will be required to take action to tackle fraud where it is facilitated through user-generated content or via search results. They must take preventive measures to prevent fraudulent content appearing on their platforms and swiftly remove it if it does. Additionally, there will be a duty on the largest social media companies and search engines to prevent fraudulent adverts on their services. Ofcom has the power to fine companies failing their duty of care up to £18 million or 10% of annual global turnover, so there will be accountability in the system for online companies too.
My Lords, only 59% of the stolen money has been returned to customers, according to the PSR report. Can the Minister explain what pressures there are on bank directors to, as it were, take care of the customers’ interest? The regulators seem to be incredibly complacent that over 40% of the money still has not been returned. Is it not really a case of restructuring the FCA and the PSR, to ensure that customer representatives have the majority of the seats on the boards of those regulatory bodies so that they can get the protection they need?
My Lords, I believe that an alternative route forward is already in train: the mandatory reimbursement requirement, which will apply across all payment service providers. As I said, there is currently a voluntary approach in place; a mandatory approach will ensure a much more consistent response for consumers when it is introduced next year.
My Lords, the latest data from the Payment Systems Regulator shows that instances of payment card and remote banking fraud have fallen by 9% and 29% respectively, driven by greater use of much stronger customer authentication interventions. However, use of such initiatives varies markedly across the financial services sector. Does the Minister believe there is a case for stronger guidance on how digital banking platforms should make use of such technology?
The noble Lord is absolutely right that we need to use a range of tools to respond to fraud taking place through banking. The regulator does have the powers in place to ensure that payment services firms are taking the appropriate action, not just on reimbursement but to prevent the fraud in the first place.
(11 months, 3 weeks ago)
Lords ChamberTo ask His Majesty’s Government what assessment they have made of the impact of disclosure obligations under the Alternative Investment Fund Managers Regulations 2013 on UK-listed investment companies, in terms of competition, consumer duty, exclusion from investor platforms, and funding crisis for such companies investing in UK small growth businesses, renewable energy and infrastructure.
My Lords, the Government and the Financial Conduct Authority understand industry concerns regarding investment company cost disclosure requirements. The issue sits across multiple areas of legislation and we are working at pace to repeal retained EU law under the smarter regulatory framework, enabling the FCA to deliver UK-tailored rules. On the alternative investment fund managers directive specifically, work has already started on plans for reform, with a discussion paper issued by the FCA in February.
I thank my noble friend. However, does she recognise that an important UK financial sector is being undermined by selling pressure based on exaggerated reported charges figures? These listed, closed-ended investment companies and their institutional investors support British companies in areas including battery storage and wind and solar farms, and offer particularly suitable vehicles for pension funds and other investors in sustainable growth. However, they are deterred by misleading aggregated costs, including by retail investor platforms. Has the Minister’s department urged emergency action following FCA failure to protect the market stability, international competitiveness, fair competition and the consumer duty?
My Lords, I agree with my noble friend in recognising that investment trusts play a vital role in raising capital for infrastructure projects across the UK. The FCA is of course independent, but I understand that it is taking forward work to look at what can be done in this area while we take forward the wider programme of measures to repeal retained EU law and replace it with UK rules that will help to address the issue that she raises.
Does the Minister recognise that the debate around aggregated cost disclosure and associated errors arising from misapplied legislation has highlighted difficulties of amending retained EU law rapidly and the absence of FCA powers to amend legislation or issue useful forbearance notices when needed, given concerns about FiSMA Section 138D on right of action? Can the Minister explain whether His Majesty’s Government are considering how emergency action or forbearance can safely be introduced to avoid being in a tighter static regulatory bind than when we were in the EU, where ESMA had more flexibility and power?
I reassure the noble Baroness that the FCA has the appropriate powers to implement regulatory forbearance where it considers it appropriate, but it must operate within the legal framework and it does not have the powers to amend legislation—that is for this House to do. It is right that forbearance can only be a temporary, short-term fix. That is why the Government are committed to repealing and replacing retained EU law, including legislation related to cost disclosure, under our smarter regulatory framework.
My Lords, does my noble friend recognise that there really is a win-win situation here—a proven method of investment, offering individuals an opportunity to invest in new technologies relatively safely and new sources of funding for those technologies? The only thing standing in the way is the FCA. Where there is a will, there is a way, so could my noble friend please ask the FCA to engage in some digital extraction?
I reassure my noble friend that the FCA is indeed engaged in this issue, as are the Government. There are many problems with inherited EU financial services rules and we have set out a programme of work to look at how we can repeal them and replace them with UK-appropriate measures. These include the PRIIPs rules, which affect this issue, and the Government have set out our plans to repeal these measures and replace them with FCA rules, as soon as possible.
My Lords, the primary duty of the FCA is to deliver stability, but the noble Baroness, Lady Altmann, raising this issue today is not the first time that concerns have been raised about apparent instability in certain markets. Does the Minister remain satisfied that the FCA has the tools and expertise it needs to uphold its duties, and is she confident that it has the capacity to meet its growing workload?
My Lords, I do remain satisfied and I believe that the Financial Services and Markets Act, which passed through this House earlier this year, updates the tools and framework for the FCA to do its job, now that we have left the EU.
My Lords, the noble Baroness, Lady Altmann, has a Private Member’s Bill before this House, which would create the proper framework for the important investments that she has been discussing. I hope the Government will support her Bill, but would the Minister also introduce a statutory instrument to the House, as proposed by my good noble friend Lady Bowles on many occasions, which would rectify the immediate and emergency situation that is discouraging investment in critical activity in this country?
My Lords, I have not yet seen the details of my noble friend’s Private Member’s Bill, but I will look at it closely. The noble Baroness, Lady Kramer, is right that the noble Baroness, Lady Bowles, has raised this in the past and I thank her for her work in this area, including her detailed suggestions to reform MiFID, which the Government are considering. As I have said, FSMA 2023 gives us the powers to repeal and replace retained EU law in a more agile way. We intend to use those powers to solve the issue before us.
Will the Minister tell us what consultation has taken place with the Financial Services Consumer Panel and other consumer groups on this?
My Lords, the operation of the consumer panel and other panels of the FCA is a matter for the FCA. I am sure that it draws on all its different panels, as appropriate, when taking forward its work programme.
My Lords, one recognises the important issue being raised, but the context has to be understood of a financial services industry that does not have an unblemished record, in terms of the personal pensions and endowment insurance scandals. The FCA has to recognise that it cannot take the good will of the industry towards the client as given.
My Lords, some of the issues that the noble Lord sets out are why it is important to take forward the programme of reform in a measured way that takes into account the interests of all involved in the sector, whether industry or consumers, and makes sure that we have proper consultation in everything that we do.
My Lords, I think the bottom line of this Question is how to get trillions invested in our pension industries back into British enterprise and investment again. At one stage this was considerable, at about 60%, and it is now down to 40%. Is this not a matter of prime urgency in getting the economy really moving again? Can my noble friend outline the key steps she thinks should be taken, or are being taken, to get our pensions trillions back into British industry in a massive way?
My noble friend is absolutely right about ensuring that pension funds are invested in the future of British industry. In fact, this was the theme of my right honourable friend the Chancellor’s Mansion House speech this year. He set out a number of reforms that the Government are taking forward to support this. There was rapid consultation on a number of those areas, and we expect further updates at the Autumn Statement.
My Lords, repeal of the AIFMD should have been straightforward. When it was brought in some 16 years ago, it was opposed by every party. It was opposed by Labour and the Conservatives, the industry and financial services more widely. What we are seeing here is the way in which, once a sector absorbs the administrative costs of doing something, however much it opposed it coming in, it then becomes an opponent of repeal. Is it not the role of Ministers to look beyond producer capture and look at the interests of the companies that do not yet exist and, above all, at the interests of consumers?
My noble friend is absolutely right. The Government consulted extensively when the Alternative Investment Fund Managers Regulations were introduced. That was some time ago but, as part of the smarter regulatory framework, we are working closely with the FCA to explore what changes can be made to AIFMD to make it more streamlined and tailored to UK markets. I assure all noble Lords that that work is being taken forward with urgency.
My Lords, may I press my noble friend? She says the FCA has regulatory powers for forbearance. Given that this is EU-derived legislation that has been misapplied in the UK, no EU country adopts it, no other country in the world adopts it and it is uniquely disadvantaging British companies, is there not a case for emergency action from the FCA once it is aware of this particular problem?
My Lords, the FCA can apply forbearance when it comes to its rules, but it cannot when it comes to the law; it is for this House to amend the law. I set out that the Government intend to look at the various pieces of underlying EU legislation, including PRIIPs and MiFID, to ensure we address the underlying problem as well as applying forbearance while that work is under way.
(11 months, 3 weeks ago)
Lords ChamberMy Lords, I add my words of welcome to the right reverend Prelate the Bishop of Norwich and my noble friend Lord Gascoigne and congratulate them both on their maiden speeches. I am sure that they will prove to be valuable Members of this House. The noble Baroness, Lady Hoey, put it well when she described my noble friend Lord Gascoigne as “discreet and decent”. I have always enjoyed working with him over many years in the past, and I look forward to working with him in the future. I also welcome back my noble friend Lord Wakeham to this House, and also welcome the optimism that he brought in his remarks about the opportunities of the future.
Much of today’s debate has focused on the Government’s record on the economy and our plans to grow it in future, so I thought it worth taking some time to go over the facts. Since 2010 the UK economy has grown by more than 24%, faster than France, Germany, Japan, Italy, Spain, Austria, Finland, Belgium, Portugal, and the Netherlands. At the same time, borrowing is forecast to have fallen by 4.7 percentage points, more than that of any other G7 member. We have halved unemployment and cut inequality, and reduced the number of workless households by 1 million. In fact, since 2010, 4 million more people are now in work, with more than 1 million new businesses created.
Increases in tax thresholds made by successive Chancellors mean that people in our country can earn £1,000 a month without paying a penny of tax or national insurance. At the same time, educational outcomes have consistently improved. All this has been delivered while we have cut our carbon emissions by more than 48% between 1990 and 2021, delivering net zero faster than any other major economy.
We also have a bright future ahead of us. We are ranked number one by the World Bank among major European economies as a place to do business. We are home to Europe’s largest life sciences sector, which helped produce a Covid vaccine that saved 6 million lives and a treatment that saved 1 million more. We are only the third country in the world to have developed a trillion-dollar tech economy. Our film and TV industries are the largest in Europe, and our creative industries are growing at twice the rate of the rest of the economy. We are a world leader in offshore wind, behind only China in the scale of energy production.
But we are not complacent, not least because of the unprecedented shocks our country and economy have faced in recent years. The Covid pandemic forced us to take decisions to shut down large swathes of our economy and made huge demands of our public services, as the NHS went on to a war footing, and teachers and families had to adapt to moving learning for millions of children online and at home. The Government also stepped forward with unprecedented support totalling more than £350 billion during that period. The furlough scheme protected 11.7 million jobs and livelihoods. Our loan support schemes provided lifelines to 1.6 million businesses, as well as cutting VAT for the worst affected, providing a business rates holiday for more than 750,000 businesses, and protecting our arts and cultural sectors through the nearly £2 billion culture recovery fund. We supported our public transport systems with more than £12.8 billion of funding, our NHS with £81 billion of Covid ring-fenced spending, and our schools with nearly £5 billion towards educational recovery since the 2020-21 academic year.
In 2022 we emerged from the pandemic earlier than many other countries thanks to our vaccine rollout, and our economy grew at the fastest rate of any G7 nation. But in March of that year, we faced a further global shock after Russia’s illegal invasion of Ukraine. Energy prices shot up, adding to inflationary pressures caused by global supply chains needing to rebuild after Covid. The noble Lord, Lord Livermore, sought to lay the blame for inflation and therefore higher interest rates at the Government’s door. However, given his emphasis on Labour’s respect for the independent Bank of England, perhaps he will defer to its analysis from the August Monetary Policy Report this year, which explained:
“High inflation has been caused by a series of big shocks. The first shock was the Covid pandemic … The second shock was Russia’s invasion of Ukraine … The third shock was a big fall in the number of people available to work”.
In May the IMF confirmed that we have taken “decisive and responsible” action to bear down on inflation and achieve the right balance of fiscal and monetary response, while also focusing on growing the economy.
The noble Baronesses, Lady Sheehan and Lady Bakewell, asked what the King’s Speech is doing to support households with this higher cost of living, but they neglected to recognise the significant ongoing support already in place. Over the past year, government support paid for about half the average household energy bill and provided one of the largest household support packages in Europe. We extended the temporary 5p fuel duty cut and a freeze to fuel duty representing a saving for the average driver of £200 since the record 5p cut was introduced.
I reassure the right reverend Prelate the Bishop of Durham that we have targeted our support at the most vulnerable, with cost of living payments to more than 8 million households on means-tested benefits and 8 million pensioner households, and to 6 million people on disability benefits, worth respectively £900, £300 and £150 this year on top of payments of £650, £300 and £150 last year. This is in addition to uprating benefits by 10.1% this year in line with inflation and protecting the triple lock for around 12 million pensioners, worth £11 billion.
My right honourable friend the Chancellor confirmed that the UK Government will accept the Low Pay Commission’s forthcoming recommendation on the increase in the national living wage from April 2024, currently forecast to increase to at least £11 an hour. This means that the annual earnings of a full-time worker on the national living wage will increase by more than £1,000 next year.
There is no doubt that we have faced real challenges over the past few years, but this Government have stood by the British people every step of the way. When we look ahead, the Prime Minister has set three clear priorities for the economy to ensure that we recover from the shocks we have faced and once again release the potential of this great nation. First and foremost, we remain steadfast in our commitment to cutting inflation, the most insidious tax on household budgets there is. We are on track to deliver our aim to halve inflation this year as a staging post to returning to the 2% target, and decisions by the Bank of England’s independent Monetary Policy Committee remain the primary tool for controlling inflation.
It is also essential that fiscal policy acts in support of, rather than working against, monetary policy. That is why the measures taken by the Chancellor at this year’s Budget were focused on easing some of the longer-term drivers of inflation. Indeed, the reforms announced at the Budget were the largest supply-side measures ever scored by the OBR.
We have also taken the difficult but necessary decisions needed to control public sector borrowing. Additional borrowing would increase aggregate demand and place further pressure on inflation and interest rates. The noble Lord, Lord Leong, asked about the current level of government debt and the cost of servicing it. Government debt currently stands at £2,702 billion, and the OBR March forecast put debt interest costs at £94 billion this financial year. This figure puts into stark relief the challenge before us, set out so ably by my noble friend Lord Bridges. I say to my noble friend that, while it was absolutely right for the Government to step in in response to Covid and the energy price shock, an ever-growing state cannot be the new norm, particularly in a future where we know there will be growing demands on the state, whether it is to support the energy transition or to harness and respond to the technological revolution—challenges to future global growth so eloquently set out by my noble friend Lady Moyo. As my noble friend Lord Bridges said, the future will demand clear choices from government about what it can and should do and a relentless focus on productivity in the public sector and, as noted by the noble Lord, Lord Londesborough, in the private sector.
I reassure noble Lords that these themes and concerns drive this Government forward. In contrast, despite the valiant attempt by the noble Lord, Lord Livermore, to reassure noble Lords of Labour’s commitment to fiscal responsibility, despite its record in government, he failed to explain how Labour’s plans to spend £28 billion extra every year could be paid for without additional tax hikes or adding to this borrowing burden.
Getting debt falling is essential in ensuring that we do not pass on the burden to future generations who would have to pay it off. It provides space to allow government to respond to future shocks and reduces spending on debt interest that could otherwise support public services—or, in response to my noble friend Lady Noakes, put money back into people’s and businesses’ pockets through cutting their tax burden. As an aside to my noble friend Lord Balfe, I reassure him that we have delivered on George Osborne’s commitment to cut inheritance tax.
In its latest forecast, the OBR confirmed that the Government are on track to deliver their debt target. However, challenges remain: borrowing and debt are high by historical standards, and the headroom to debt falling is historically low. Controlling inflation and getting debt falling provide the foundations for our third priority: long-term, sustainable growth. Growth is the key to building confidence, security and hope for the future. It rewards aspiration and invention, creates freedom and choice, and strengthens our communities and our country. As my noble friend Lord Forsyth put it, it is the prerequisite for any action by government to support vulnerable households and essential public services.
The Spring Budget set out an ambitious programme of measures to drive economic growth across employment, enterprise, education, and everywhere in the UK, without irresponsibly fuelling inflation. We will look to build on this further at the Autumn Statement; I hope the noble Lord, Lord Desai, will forgive me if I do not pre-empt that today. The Budget package included a landmark childcare offer, and key new policies to ensure the UK business tax system is one of the most comprehensive of the world’s major economies.
In today’s debate we have focused on a number of other important areas driving our future growth. One has been the role of technology, in particular AI, as raised by the noble Baroness, Lady O’Grady, my noble friend Lady Moyo and the right reverend Prelate the Bishop of Oxford. The AI Safety Summit was an important step forward to deploying this crucial technology with the launch of the world’s first AI safety institute, which will help spur international collaboration on the safe development of AI.
The noble Baroness, Lady O’Grady, also called for more effective digital competition policy. That is exactly what the Digital Markets, Competition and Consumers Bill is designed to address, providing new powers to the Digital Markets Unit in the CMA and building on the Online Safety Act, creating a modern regulatory framework for online platforms and tech companies.
My noble friends Lord Altrincham and Lord Trenchard raised the potential of our financial services sector, and the noble Baroness, Lady Drake, and the noble Lord, Lord Davies of Brixton, touched on pension reforms. Both these areas have significant potential to unlock further investment in the UK. The Government will continue to pursue reform at pace, with appropriate safeguards.
The Government’s economic priorities have also driven our approach to delivering on net zero. Since March 2021, the Government have committed a total of £30 billion of domestic investment to the green industrial revolution. Since then, the Government have announced an additional £12 billion for energy efficiency and low-carbon heating to support the work we are doing to reduce the UK’s energy consumption from buildings and industry by 15% by 2030 relative to 2021 levels. We have also announced up to £20 billion for early deployment of carbon capture, utilisation and storage in the UK. In response to the noble Baroness, Lady Liddell, we are currently working with industry on the right quantum of spend within a given period. These are commercial negotiations, the outcomes of which we will announce at the next spending review and future spending reviews, to ensure that the UK remains at the forefront of deploying this technology.
The policies set out in the Net Zero Strategy 2021 and the Net Zero Growth Plan 2023 are expected to mobilise an additional £100 billion of private investment and support 480,000 jobs across the UK. But we know there is more to be done, so we are doubling down on tackling the most significant constraints to our transition —accelerating grid connections, addressing issues with planning and improving auction rounds for renewable power, as well as investing in UK green R&D.
At the same time we are investing in our energy security and making sure that we smooth the transition for households in a pragmatic way. The impacts of Putin’s war in Ukraine have made clear the need for greater energy security in the UK and Europe, which can be secured only by boosting the range of domestic energy supplies that we have available.
Renewable power reached a record share of 48.2% of total generation in the first quarter of 2023. When you include nuclear, low-carbon sources provided over 60% of total generation. In future the UK will be powered by renewables including wind, solar and hydrogen power with carbon capture, usage and storage and new nuclear plants.
The noble Baroness, Lady Whitaker, asked about tidal and wave energy. The Government have invested over £175 million in wave and tidal stream innovation over the last two decades. The Government announced on 8 September that a record 11 tidal-stream contracts have been secured in the latest contract for difference, thanks in large part to a ring-fenced tidal budget. On wave energy, we continue to engage with domestic and European industry, academia and the devolved Governments, including collaborating with Wave Energy Scotland.
I am sorry to hold up the Minister in her magnificent tour de force but I asked her a specific question about the consent process consultation. If she does not have the answer to hand on wave energy, would she please write to me?
I will be happy to write to the noble Baroness.
We have launched a nuclear revival. The Government invested to become a shareholder in Sizewell C in November 2022 and launched a capital raise process in September this year to bring in new project finance. We have launched Great British Nuclear to drive the delivery of new nuclear technologies beyond Sizewell and to develop the latest small modular reactor technologies, and last month we announced the shortlist of companies to build the new generation of small modular reactors. Beyond the initial focus on delivery, Great British Nuclear will be available to support further nuclear ambitions. It has the statutory backing and resources behind it to deliver against its long-term operational mandate.
Through the nuclear fuel fund we will invest over £35 million, match funded by industry, to develop new domestic fuel production capabilities and to supply gigawatt reactors, SMRs and AMRs. On siting, we are developing a nuclear national policy statement that will cover the policy framework for deploying new nuclear power stations beyond 2025. As an initial step, we plan to consult on our proposed approach for determining new nuclear sites by the end of this year, with our aim to finalise a consultation on the NPS next year and complete parliamentary scrutiny to enable its designation in 2025. We will launch our consultation on alternative routes to market next month and, following our review of responses, deliver a report in 2024. I hope that responds to the questions from both the noble Lord, Lord Ravensdale, and my noble friend Lady Bloomfield, who are both great advocates for the nuclear industry. Perhaps I can write to the noble Lord, Lord Jones, to respond to his specific questions about the two sites that he focused on in his contribution.
However, we also need to recognise that data published by the Climate Change Committee shows that the UK will continue to rely on oil and gas to meet its energy needs even after the UK reaches net zero in 2050. That will include the use of gas for power generation and carbon capture usage and storage. That is why we are investing in the range of domestic energy supplies that we have available, including taking steps to slow the decline in the domestic production of oil and gas, which will reduce our reliance on hostile states and back a thriving industry in the UK that supports 200,000 jobs. It is important to recognise that the UK is a rapidly declining producer of oil and gas, and new oil and gas licences will reduce the fall in UK supply to ensure vital energy security, rather than increasing it above current levels, so that the UK remains on track to meet its net-zero 2050 commitments.
I say to the noble Baroness, Lady Blake of Leeds, that we recognise the unprecedented profits made by oil and gas producers after Russia’s invasion of Ukraine. These profits represent not a return on investment but a windfall as a result of unprovoked war. It is therefore right that we introduced the energy profits levy on those windfall profits, bringing the tax rate on the profits of North Sea oil and gas producers to 75%. By 2027 the levy is expected to raise almost £26 billion, having already generated around £5.9 billion, helping us—as I said earlier—to pay half the typical household’s energy bill between October and June.
We also want to take a fair approach to decarbonising how we heat our homes, which is why we are giving people more time to make the necessary transition to heat pumps. We have increased the boiler upgrade scheme cash grants by 50%, to £7,500, to support consumers who want to make the transition now. It is one of the most generous grants in Europe.
I reassure noble Lords that, in taking into account the changes to the boiler and electric vehicles mandate and the ongoing licensing of domestic oil and gas reserves, we are confident that we can deliver our carbon budgets and capitalise on the opportunities for green growth. So I say to the many noble Lords who raised concerns in this area that we remain completely committed to our existing targets and to meeting net zero by 2050, compatible with the Paris Agreement ambition to limit global warming to 1.5 degrees.
We will continue to listen to and engage with the expertise in this House on climate and nature. I say to my noble friend Lord Lilley that our approach will be informed by evidence, pragmatism and rational debate. Our package of proposals and policies will continue to evolve to adapt to changing circumstances, to utilise technological developments and to address emerging challenges.
But we are in no doubt about the real and present threat that climate change and biodiversity loss represent to our economy and society, and there is no change in our commitment to tackling this challenge. The UK overachieved against its first and second carbon budgets, and the latest projections show that we are on track to meet the third. We are able to quantify the vast majority of carbon savings in the late 2030s, more than a decade away.
Environment and nature are the other side of the coin when it comes to tackling climate change. I reassure the right reverend Prelate the Bishop of Norwich, who spoke so eloquently of his own work on ecology, that not only have this Government done more than any other on the environment and nature—including through the landmark Environment Act—but we remain committed to going further, through our commitment to end the net loss of biodiversity in the UK by 2030. I agree with the noble Baroness, Lady Hoey, that we need to put people and rural communities at the heart of this approach. We will not achieve this transition without the support and action of farmers and land managers.
My noble friend Lady McIntosh asked about the live animal export Bill and whether there is a means to restrict live animal imports from the EU. I say to her that there has never been a significant import trade for slaughter or fattening. For example, since 2019, only 91 cattle, 14 sheep and 20 pigs have been imported for slaughter from mainland Europe—so we do not see a pressing case to take action in this area. On my noble friend’s question about border control points, I reassure her that our new border control point at Sevington, covering the short straits, opens in April. Other border control points will open around the UK, securing our biosecurity with our new border targeting operating model.
A number of noble Lords, including the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, raised concerns about the impact of recent flooding on farmers. The flood recovery framework provides funding for households and businesses affected by severe flooding, and it includes several grants and business rates relief.
I say to the noble Baroness, Lady Ritchie of Downpatrick, that I know that my noble friend Lord Caine spent several hours with her in communities affected by the recent floods. In the absence of the Executive, who could have acted swiftly, the UK Government are making money available to support those affected by floods, through the reallocation of existing funding.
I say to the noble Lord, Lord Whitty, and the noble Duke, the Duke of Wellington, who, among others, raised the reform of water regulation, that we are driving the largest infrastructure investment in water company history—an estimated £60 billion of water company capital investment by 2050—to meet storm overflow discharge reduction plan targets, which were recently expanded to cover all storm overflows in England, including those discharging to coastal and estuarine waters. But I will of course pass on to Defra the proposal from the noble Duke for the future of regulation in this area.
This brings us on to the theme of what is not in the King’s Speech, and to speak to the concerns raised by the noble Baronesses, Lady Sheehan and Lady Bakewell, around the ending of peat in horticulture. It remains our policy that we intend to legislate to restrict and ultimately ban the sale of peat and peat-containing products. We appreciate that there is good support for this from the public and from within Parliament.
I turn to the noble Baroness, Lady Sheehan, and the right reverend Prelate the Bishop of St Albans, who raised the subject of disposable vapes. The Government launched a consultation on smoking and the use of vaping earlier this month. As part of it, the UK Government and the devolved Administrations are considering restrictions on the sale and supply of disposable vapes, including prohibiting the sale of these products due to the environmental impacts that they have.
The noble Lords, Lord Whitty and Lord Livermore, and many others raised the question of employment rights. I say to noble Lords that, over the past year, we have proven our commitment to supporting workers by introducing a number of new employment rights via government hand-out Bills, including a new day one right to request flexible working; a new legal right to request predictable working patterns; additional protections for pregnant women against redundancy; a right to paid leave for employees whose child is receiving neonatal care; and a right for unpaid carers to one week of additional unpaid leave. Action is being taken in that area.
Perhaps related is the question of unpaid Ministers in this House, as raised by my noble friend Lord Forsyth. I and my noble friend the Lord Privy Seal have heard my noble friend Lord Forsyth’s plea and impressed the point at the highest levels. However, as he is well aware, the number of Ministers who are paid is set out in legislation, and to improve the lot of our Ministers who are unpaid we would need to legislate. Unfortunately, there is not currently the appetite to do that.
I turn to the remarks by the noble Lord, Lord Snape, who questioned the inclusion of the Pedicabs (London) Bill in the King’s Speech—
I am most grateful to my noble friend. I appreciate her courtesy in referring to what I said. As David Cameron is joining the House on a salary of £106,000, can we take it that his Minister of State will be paid?
My Lords, I could not possibly comment on that, but I join my noble friend in welcoming David Cameron to his new post. I think we will be very pleased to have someone of such talent and experience join your Lordships’ House.
To return to pedicabs, they are the only form of unregulated public transport on London’s roads. If we could deal with it through by-laws, that would be fantastic, but in fact it takes primary legislation to deal with that issue.
Many noble Lords, including the noble Lords, Lord Birt, Lord Grocott, and others, regretted the cancellation of High Speed 2 beyond Birmingham. We absolutely recognise the need better to support critical links between and within our cities and towns, but the reality is that High Speed 2 is crowding out investment to further these priorities elsewhere across the country. We have made the difficult decision not to extend High Speed 2 and, instead, to deliver the £36 billion of savings that we have allocated to Network North, an ambitious pipeline of alternative projects. The new plan will provide direct benefits to more people and more places and will do so more quickly than the previous plan for High Speed 2.
The noble Lord, Lord Birt, raised the need to upgrade the trans-Pennine rail route, which is absolutely a priority for this Government. The upgrade programme is expected to provide an extra two trains per hour and aims to reduce journey times between Manchester Victoria and Leeds from 55 to 41 minutes. The Government have committed £3 billion to date, and an announcement on future funding will be made later this year.
To the noble Lord, Lord Jones, I say that we are delivering a £1 billion upgrade to the north Wales main line, including electrification and improving journey times to better connect Wales with London and the north-west. We will now proceed with the steps necessary to implement this, including reflecting on the existing package of legislation before Parliament, necessary consultative steps, business case development, and our parliamentary and legal and fiscal duties.
Finally, the noble Baroness, Lady Bennett of Manor Castle, asked whether I stand behind the briefing that the first models of self-drive vehicles could be offered to market by 2026 if they are proved safe. The short answer, which at this time of the night will be appreciated by noble Lords, is yes.
So, this Government have a comprehensive plan to deliver a strong economy, secure energy supplies, a state-of-the-art transport sector and a safeguarded environment. From bringing down inflation and the national debt to growing the economy and tackling climate change, we are committed to making long-term decisions for the benefit of everyone across this United Kingdom. That is what the first King’s Speech in many a generation delivers, and I commend it to the House.
(1 year, 1 month ago)
Lords ChamberTo ask His Majesty’s Government what assessment they have made of the impact of inflation on local authorities’ budgets; and how many local authorities they estimate will issue Section 114 notices in this financial year.
The Government recognise the pressures that councils are facing. The 2023-24 local government finance settlement provided councils with a 9% increase in core spending power in total, demonstrating how the Government stand behind councils. Councils are responsible for managing their budgets. Any decision to issue a Section 114 notice is taken locally by the chief finance officer. The Government stand ready to speak to any council that has concerns about its ability to manage its finances.
My Lords, I thank the noble Baroness for her Answer. The Institute for Fiscal Studies report last month concluded that the current funding system is not fit for purpose. It pointed out stark geographical differences in spending for local government, with the most deprived 20% of areas receiving 9% less than their estimated needs, while the least deprived 20% received 15% more. If the Government are serious about levelling up and the 700-page Bill we have just completed on Report is not ministerial flim-flam, when will the Government set out the timeframe for funding reforms that align local government funding with levelling-up goals?
My Lords, the existing system for local government funding directs increased resource to those councils with greater need. We understand the desire for clarity on distributional reform. We have confirmed that we will not be proceeding with the review of relative needs and resources, or a business rate reset, in the current spending review period, but we remain committed to improving local government finance in the next Parliament, and we will work closely with local partners and take stock of the challenges and opportunities they face before consulting on any further potential funding reform.
My Lords, the Minister will understand that, due to the cuts that have taken place in local government, some authorities are in real terms said to be not yet back to where they were in 2010. That being so, will the Government consider a major review of the fundamental funding of local government services?
My Lords, I just set out the position on broader reform to the funding system for local government. The Government recognise the pressures that local authorities are facing. At the spending review 2021, the Government confirmed that councils in England would receive £4.8 billion of new grant funding between 2022-23 and 2024-25 to meet pressures in social care and other services. We also recognised in the Autumn Statement last year that the position on inflation had changed the position for councils, and set out additional funding to respond to that.
My Lords, is it not tragic that Birmingham—once the jewel of local government, thanks to Joseph Chamberlain and his son Neville, the reforming lord mayor in the early 20th century—should have been reduced to its present pass? What is to be done about this great council? Should it be split up? Its present position is truly tragic.
My Lords, as we speak, my right honourable friend the Secretary of State for Levelling Up is giving a Statement to the House of Commons on action to be taken on Birmingham City Council. It is the Government’s intention to appoint commissioners in that instance, but there will be a period of consultation, I believe, before that is brought forth.
My Lords, the Minister said that the Government have finally recognised that councils are facing financial difficulties. However, the Government have been defunding councils over a number of years, so even with the relatively small increase this year, they are still 25% down on the levels they had in 2010. How does that fit with the levelling-up agenda?
My Lords, I do not recognise the figures that the noble Baroness has put forward. She will know, having been part of the coalition Government in 2010, that the situation this Government inherited from the Benches opposite required difficult decisions to be taken at the time.
The Benches opposite may not like being reminded of their record, but it remains a fact. The reality is that in the recent spending review we have committed more money to local government services, and that was increased further last year at the Autumn Statement in light of the inflationary pressures that councils are facing.
My Lords, this Government can promise what they like for the next election, but the fact is that they are not going to be in power, so all those promises come to nothing. What this Government have done is to reduce council budgets and make severe cuts. I heard only today from councillors from East Hertfordshire Council that the Government have cancelled four big infrastructure projects. How can councils carry on if this Government do not support them, which they are not doing?
My Lords, the Government are supporting councils. This is not about what is happening after the next election. In this spending review period, councils will receive £4.8 billion of new grant funding—the largest annual increase in core funding in over a decade—and that was further topped up at the Autumn Statement last year, recognising the pressures that councils face. Councils are doing an excellent job up and down the country, and we support them.
My Lords, does the Minister agree that one of the reasons so many local authorities are in such financial trouble these days is because there is a lack of external scrutiny and transparency since the scrapping of the Audit Commission in 2015?
No, I do not agree. In recent years, a small number of local authorities took on excessive debt through their commercial strategies and investments. The Government have taken action both to bring this practice to an end and to revise the framework by which local authorities can borrow and invest. The levelling-up Bill expands statutory powers to directly tackle excessive risk within the local government capital system.
My Lords, the scrapping of the Audit Commission was one of the best functions of the previous coalition Government. The Audit Commission wasted billions of pounds of public money.
My noble friend sets out the rationale for the decision that was taken, and the Government have made sure that, in the commission’s place, we have strong controls so that local government spending is done in the best possible way.
My Lords, arts facilities will be among the first to go when local authorities have no money. The wonderful Lightbox gallery in Woking, not far from me, is now under threat, as indeed is funding elsewhere for symphony orchestras and much else. I repeat what others have asked: will the Government properly fund our local authorities, which have been underfunded for years, so that all our cultural and leisure amenities are allowed to survive and thrive?
My Lords, I repeat what I said about the recent spending review being the largest increase to core spending powers for local government in over a decade. Additionally, we have put significant support into the arts and culture sector through not only the culture recovery fund during the pandemic but, for example, support to swimming pools— they face high energy costs during the current period of inflation—in the last Autumn Statement. We continue to provide that specific support.
My Lords, have the Government not been fiddling with the local government finance system for years? Do we not now need an academic study to come forward with a plan for local government funding that takes into account deprivation and the need to spend?
I do not agree with the noble Lord’s analysis but, as I said to the noble Baroness in my Answer, our approach takes councils’ relative needs into account. We recognise that this may need to be looked at again but, to provide councils with certainty, that will not be done during this spending review period; it will be looked at after the next Parliament.
My Lords, we currently give three-quarters of local councils their grants from the centre. It is a higher figure than for anywhere in Europe, except tiny Malta, hence the assumption on all sides is that the solvency of local authorities is ultimately for central government. Does the Minister not agree that it would be healthier for democracy if local councils raised a higher proportion of their own budgets, so that there was a proper link between taxation, representation and expenditure?
My Lords, the Government are moving towards such steps—for example, through mayoral combined authorities and other areas where we are devolving both greater control of funding and powers to those areas to act. With that comes greater accountability.
Can my noble friend say whether the Government have received any proposals from His Majesty’s loyal Opposition on where additional funding for local government is to be provided from?
I have not received any such representations, but they have perhaps gone to the department for levelling up; I will ask it if it has ever received such representations from the Opposition Front Bench.
(1 year, 2 months ago)
Lords ChamberMy Lords, in begging leave to ask the Question standing in my name on the Order Paper, I draw attention to my entry in the register of Members’ interests.
ODA-eligible costs of supporting refugees and asylum seekers in the UK have increased significantly, including to reflect support offered to Ukrainian and Afghan citizens. The Government have provided £2.5 billion of additional ODA to mitigate impacts on wider aid budgets and will continue to strike an appropriate balance between fiscal responsibility and our development objectives.
My Lords, had the Government not broken the pledge to deliver 0.7%, the overseas aid budget would now be £17.5 billion, which is £4.75 billion more than is currently proposed. Worse, domestic support for refugees going on hotels, barges and Rwanda is taken from that reduced ODA budget. Will the Minister acknowledge that giving the Home Office a blank cheque to raid the aid budget gives no incentive for restraint, value for money or processing the backlog of asylum claims and allows it to waste even more money on unsuitable accommodation? Can the Minister be proud of that? Should what is left of the budget not be protected instead of being used to balance the books on the backs of the world’s poorest and most vulnerable people?
I do not accept the points that the noble Lord has made. It is right that we provided the responses that we did to crises such as that in Ukraine but it is also important that we deliver value for money in our spending in this area. We continue to look to drive down the costs of asylum accommodation in particular. The Home Office has doubled the number of caseworkers in the last two years and continues to recruit more. It is streamlining and modernising its end-to-end process, with improved guidance and use of digital technology. We are also looking very carefully at where we accommodate people and how we can drive better value for money there too.
On where the Government choose to accommodate people, the Minister will recall that, in July, the High Court found that the Home Office’s use of hotels for unaccompanied child refugees was “systematic and unlawful”. Have the Government decided on a response to that judgment?
My Lords, the Government will update the House when we respond to that judgment.
Does the Minister agree that the Government would be able to be much fairer to genuine refugees if they got a grip of the shortage of manpower dealing with the vast of cohort of people who are applying for asylum but will never get it, and brought to the places where those applicants live tribunals and officials who could deal with them in what might loosely be called “real time”?
My Lords, as I said in response to an earlier question, the Home Office is increasing the number of caseworkers to deal with asylum claims; it has more than doubled that over the last two years. Of course, the Illegal Migration Act will be an important part of our strategy here as it will end illegal entry as a route to asylum in the UK.
My Lords, does my noble friend the Minister acknowledge the difficulties that this uncertainty around ODA allocation and budgeting causes for those who are trying to deliver our programmes around the world? Not only does such uncertainty risk the success of our programmes but it can damage our international relations and, of course, it delivers bad value for money for the UK taxpayer. How are the Government working to provide more certainty here?
I acknowledge some of the points that my noble friend has made. There has been disruption to the FCDO’s ODA budget. In addition to the additional £2.5 billion that was allocated to help to manage those, the publication of the FCDO’s provisional ODA allocations for 2024-25 demonstrates our commitment to openness and transparency, and enables FCDO teams and their partners across the world to forward-plan.
The Minister referred to the Illegal Migration Act. The Home Office assumed that it would be able to score on ODA all the costs of the that Act, but it cannot. I asked for clarification of the consequences for the taxpayer of having to fill that gap for the cost of the Act from the noble and learned Lord, Lord Stewart of Dirleton, on 12 July. He did not reply on that day, so I wrote to him through the noble Lord, Lord Murray, on 14 July. I confirmed with his office just this afternoon that the letter had been received but I have not received a reply. I am glad that the Leader is in his place because he speaks passionately and sincerely about this House being able to do our constitutional duty and ask questions of the Government and hold them to account. The Home Office simply does not wish to reply to letters when it does not like the questions that are in them.
I will happily take the noble Lord’s point and make it to my noble friend and the government department. In addressing the point that maybe he was making, as I said, the Illegal Migration Act represents a vital step forward in the Government’s plans to tackle illegal migration. I reassure noble Lords that we will continue to report all ODA, consistent with OECD and DAC rules, and we will continue in our commitment to spending 0.5% until we can return to 0.7% when fiscal circumstances align. We keep all our ODA spending forecasts under review to deliver that, and will be closely looking at the evolution of eligible asylum spending as the Illegal Migration Act is implemented.
My Lords, we are all familiar with the Government’s decision to purchase the “Bibby Stockholm” barge and to move asylum seekers on to it even though it was not fit for habitation. Can the Minister confirm whether that purchase was made, in whole or in part, using any ODA funds? Does she consider that purchase to represent good value for money, and are any other such purchases planned?
I reassure the noble Lord that all spending is done in line with DAC rules, and I can report back to him on the specific point about that spending. However, when it comes to looking at accommodation solutions for asylum seekers, we are driven by looking at what represents good value for money for the taxpayer. Accommodating asylum seekers in hotels is absolutely not good value for money, and we will continue to look at different solutions to help to accommodate those to whom we have an obligation.
My Lords, could the Minister perhaps confirm whether, under the international rules about using ODA for asylum seekers and, above all, Ukrainians—to whom the Government’s welcome was very good—that runs for only one year? Are the Government now cutting off the mulcting of the aid budget for this purpose for those Ukrainians who have been here for more than a year?
The noble Lord is right that ODA-eligible spending runs for the first year in country. Of course, the programmes have been designed to deliver support that is appropriate to those moving to this country and where there are costs beyond that year, they are met from elsewhere in government departments’ budgets.
My Lords, the impacts of cuts in aid have been and will continue to be significant. The equality impact assessment published by the International Development Committee revealed some of the effects, particularly on women. For example, the number of maternal deaths that will be averted by the women’s integrated sexual health programme will fall by more than half. In Afghanistan, the maternal mortality rate will worsen. How will the Government look to mitigate the impact of these cuts, particularly on women and girls?
My Lords, I recognise that the reduction in ODA spending has had important consequences and we are, as I say, committed to returning to 0.7% when the fiscal situation allows. In various international development strategy documents, we have also set out how we will prioritise spending to the lowest-income households in humanitarian efforts, while aligning our programmes further with our ambitions on supporting women and girls in order to address the issues that the right reverend Prelate has set out.
My Lords, the Minister has twice cited the Illegal Migration Act in defence of government policy. Can she say which part of that Act is working?
My Lords, that Act is only in the process of being brought into force but it is an important part of our approach to reducing the pressures of illegal migration, so that we can better address the needs of legitimate asylum claims in this country.
My Lords, following the previous question, how will the Act, when it is implemented, stop the boat people?
My Lords, by ending illegal entry as a route to claim asylum in the UK, we will change incentives for those who wish to enter the UK by that route, but it is not the only action that the Government are taking. We are working closely with law enforcement in France; we have a number of other initiatives upstream that are all aimed at tackling this problem, and we have seen that small boat arrivals to the UK are down by 20% this year.
(1 year, 3 months ago)
Lords ChamberThat the Regulations laid before the House on 26 June be approved. Considered in Grand Committee on 19 July.
(1 year, 3 months ago)
Lords ChamberThat the draft Regulations laid before the House on 29 June be approved.
Relevant document: 46th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument). Debated in Grand Committee on 19 July.
(1 year, 3 months ago)
Grand CommitteeThat the Grand Committee do consider the Postal Packets (Miscellaneous Amendments) Regulations 2023.
Relevant document: 46th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
My Lords, this statutory instrument will provide United Kingdom authorities with powers in relation to postal packets—parcels—moving from Great Britain to Northern Ireland. It does nothing more or less than that. It does not itself put in place the wider Windsor Framework arrangements.
These powers are part of delivering what we promised for consumers and businesses in Northern Ireland. They are necessary to ensure that we can implement the Windsor Framework and remove the burdensome regime that the old Northern Ireland protocol would ultimately have required. I am aware of some misunderstanding about what the Windsor Framework requires in respect of parcel movements, so I will attempt to address that also in my opening remarks.
Had it been fully implemented, the Northern Ireland protocol would have required international customs processes for all parcel movements from Great Britain to Northern Ireland. On the new arrangements, it is worth dealing up front with some of the issues where there has perhaps been a misunderstanding about what will be required in future under the Windsor Framework. In short, I would like to provide some reassurances to noble Lords in that regard.
First, someone in Great Britain sending a parcel to their friends and family in Northern Ireland will not need to engage with any customs processes under the Windsor Framework. Nothing will change for those movements, compared with today. Similarly, Northern Ireland recipients of parcels sent by their friends and family in Great Britain will not need to engage with any customs processes. For example, a grandson in Liverpool sending a package to his grandmother in Belfast will not need to do anything new to send the package and his grandmother will not need to do anything new to receive it.
British businesses in Great Britain selling to Northern Ireland consumers will not need to complete customs declarations, international or otherwise, and Northern Ireland consumers buying from sellers in Great Britain, including via online shopping, will not need to engage with any customs processes. They will buy from the seller in Great Britain and receive their goods without doing anything new.
I emphasise that this means the Windsor Framework explicitly removes one of the most onerous requirements on goods being sold to Northern Ireland consumers and, of course, on goods being sent to friends and families. There will be no routine checks or controls applied to parcels, with interventions only on the basis of a risk-based, intelligence-led approach. This means that the overwhelming majority of parcels will not be subject to checks.
I turn to parcels sent from a business in Great Britain to a Northern Ireland business. These will be treated the same as equivalent freight movements: they can be moved through the new green lane where eligible when it is introduced from October 2024. As with freight movements, the green lane will ensure that eligible goods will no longer require international customs processes. They will instead require only the provision of routine commercial information. Movements via the red lane, including goods destined for the EU, will be subject to the customs processes required by the EU, as noble Lords would expect.
The Prime Minister negotiated the Windsor Framework to ensure that consumers and businesses in Northern Ireland—and, indeed, British businesses selling into Northern Ireland—could benefit by protecting internal trade within the UK. The Government need to ensure that the powers of HMRC and Border Force are sufficient to allow them to monitor the rules for movements of parcels and that, where certain requirements are in place, they can be enforced.
The Secondary Legislation Scrutiny Committee’s report suggested that we clarify the rationale for bringing the instrument into force on 31 August. There is a limited range of prohibited or restricted goods that the UK Government accept are required to comply with EU customs rules today—for example, certain drug precursor chemicals or products derived from or associated with endangered species covered by CITES. HMRC and Border Force cannot currently enforce these requirements, which is why this statutory instrument is needed now rather than in a year. The same powers will be used in respect of the new parcels arrangements that will come into force through the Windsor Framework arrangements for parcels from 30 September 2024. This is so that we are able to determine that parcels destined for the EU can be detected and ensure that they follow the requirements of the red lane.
The committee’s report also noted that arguments had been submitted to it that these regulations would contravene the principle of unfettered access within the UK by introducing a customs border. A submission by the Democratic Unionist Party argues that they would be contrary to the Good Friday agreement.
The Government recognise that there are a range of views on the Windsor Framework. Our view as the Government—as the Prime Minister and the Secretary of State for Northern Ireland have made clear—is that the arrangements support and protect the Good Friday or Belfast agreement in all its parts. They protect the integrity of the European Union’s single market and Northern Ireland’s place in the United Kingdom’s internal market. These regulations are discrete and relate solely to powers available to HMRC and Border Force. That said, I hope I have provided some reassurance about what the Windsor Framework does and does not require, and therefore what the powers granted by the regulations will be used to monitor and enforce.
The report also notes the absence of a public consultation. It is the Government’s view that a public consultation on an SI of such limited scope is unnecessary. The instrument implements requirements under the Windsor Framework that have been discussed extensively. The Treasury and HMRC continue to engage with a wide range of businesses and sectors, and indeed with fast parcel operators, on both this SI and the wider Windsor Framework.
In summary, the parcel arrangements set out under the Windsor Framework are a significant improvement when compared with the requirements under the old Northern Ireland protocol. But as well as comparing them with what the protocol would have required, it is vital to understand how little will change compared with the status quo for the vast majority of Northern Ireland parcel recipients and those in Great Britain sending goods to them. This statutory instrument is not a barrier but an enabler to the agreement that we have negotiated. I therefore beg to move.
My Lords, I thank the Minister for outlining the purposes of the regulations before us. As noble Lords probably know, just the other day this was a matter of some heated debate in a Delegated Legislation Committee in the other place, and was subject to a vote in that House yesterday evening. Some consternation was expressed in the other place about the manner in which the Government had removed Members from that committee and replaced them with those who would vote these regulations through, but that is a matter for another day and it can be followed by reading Hansard on those committee proceedings.
The Minister said probably the most significant thing at the very end of her speech: these regulations facilitate the Windsor Framework. A lot of the debate is about the benefits of the Windsor Framework compared with the protocol as originally agreed, but the regulations before us are not about implementing the Windsor Framework; they are purely about creating the border for parcels between Great Britain and Northern Ireland. After that, we come on to the Windsor Framework, which is all about the EU law in which it decided, after discussions, to reduce the requirements that would normally be in place to move parcels into the EU for Northern Ireland.
But that is not what is before this Committee. Before this Committee is purely the creation of the parcels border. Whatever the EU then decides to do, whether by agreement or unilaterally, is facilitated by that border. It is our job as parliamentarians to examine the actual regulations before us, not necessarily today, although we can comment on them. The Windsor Framework proposals, which are in EU legislation, are separate, but I will reference them and no doubt they will be referenced by other speakers in this Committee.
The regulations treat Northern Ireland as if it is a foreign country for the purposes of moving parcels. They put in place another piece of the jigsaw of the Irish Sea border. They do not ameliorate or remove it; this is a new creation that is not here at present. Their effect is to separate Northern Ireland from the rest of the United Kingdom in the sense of placing it outside the same single market as Great Britain for postal purposes.
They amend the Postal Services Act 2000 and the Postal Packets (Revenue and Customs) Regulations 2011, so that movements from Great Britain to Northern Ireland cease to be unfettered within the same single market and become fettered by a customs barrier that effectively divides them into two single markets. As a consequence of the legislation before the Committee, postal packages destined for Northern Ireland from Great Britain have to be placed in the same group as packages destined for foreign countries. The definition of “export” is changed to include movements from Great Britain to Northern Ireland. Reference to the United Kingdom has to be removed so that the only references in play are Great Britain and Northern Ireland, with the UK single postal market terminated.
My Lords, I agree with the noble Baroness, Lady Chapman, on the approach that this Government should, and want to, take to implementing the provisions in the Windsor Framework. The noble Baroness described it as the least worst option for Northern Ireland; the Government describe it as the best option. In reality, there is not a gap between them, because it does restore the smooth flow of trade and protect Northern Ireland’s place in the union. It also delivers a robust framework for solving future issues, as we know they will come up.
The framework delivers by enabling smooth trade between Great Britain and Northern Ireland, resolving the problems that were undermining Northern Ireland’s place in our union and fixing the democratic deficit which has seen Northern Ireland have no say in its laws. It is worth responding at the outset that while we may disagree on the Windsor Framework in this Committee, it is important to be clear that with regard to the approach taken by the Government in the framework and the accusation that it reflects the fact that the Government do not care about Northern Ireland, the opposite is true. The effort put into negotiating for Northern Ireland by my right honourable friend the Prime Minister, and many others across government, is because we care deeply about Northern Ireland and its place in our union.
To provide an answer and reassurance to the noble Lord, Lord McCrea, Northern Ireland is a full part of the United Kingdom in every sense, and we negotiated the Windsor Framework to protect the UK’s internal market and trade between Great Britain and Northern Ireland. We are confident that the framework does this. We reject the claim that the Windsor Framework changes Northern Ireland’s status within the UK.
Nevertheless, while I acknowledge the range of views on the framework in this debate, I encourage noble Lords to recognise the nature of what this statutory instrument provides. It is solely about the powers available to HMRC and Border Force to ensure the improvements in respect of parcels that we have secured through the Windsor Framework are delivered. Focusing on what this SI does provides, in part, some of the answers to the questions put forward to the Committee today. Noble Lords are right that the provisions relating to parcels will come into force at the end of September 2024 and that there is more work to be done in implementing those provisions. That work will be taken forward by the Government, HMRC and the Treasury, working with businesses in Great Britain and Northern Ireland and having discussions with them.
The Minister was describing the work and who would actually be involved in it. Can she provide the Committee with a little more detail about the type of work? Maybe she could elucidate that.
I was going to come later to ongoing co-operation with businesses in Northern Ireland and Great Britain, in terms of implementing the provisions when it comes to parcels. For example, we are working through in detail with the couriers and the people who take a lot of this traffic on how we can make it as seamless as possible. If I have anything further to add in my speech, I will do so later.
In respect of the point from the noble Lord, Lord Dodds, on this statutory instrument being about creating a border between Great Britain and Northern Ireland, as I said just now and in my opening speech, this instrument does not put in place the Windsor Framework arrangements. The noble Lord is right that that has already happened, but we disagree that the Windsor Framework or these regulations separate Northern Ireland from Great Britain in the way that he describes. The regulations do not treat movements from Great Britain to Northern Ireland as exports or movements from one country to another; they make some powers that are available in respect of international movements available in respect of movements from GB to NI. However, it is not the case that they treat them the same as parcel movements that are international or exports.
As the noble Baroness, Lady Chapman, said, these arrangements are unique. The Windsor Framework is a bespoke set of arrangements. If you move a parcel internationally, such as to your grandmother in France rather than in Northern Ireland, you and she would need to make customs declarations and possibly pay tariffs; that is not the case for the arrangements for GB to NI. Similarly, if you buy from an international retailer, the package goes through customs when it enters the UK; as I set out, that is not the case for GB to NI orders from internet sellers to individuals.
Does the Minister accept, however, that the reason for what she has set out is in EU law, and that nobody in Northern Ireland is elected and nobody in the EU is accountable to anyone in Northern Ireland—indeed, in the United Kingdom—for those laws? If those laws change—for example, if the EU changes, tweaks or modifies them—that is what will apply. So the Minister cannot give any guarantee or assurance that the position she is outlining will continue to pertain and apply because no Government, nor this Parliament, will have any power in that respect.
The Windsor Framework is a bilateral agreement. To the noble Lord’s point, there are detailed governance arrangements around the Windsor Framework. Either side can raise issues through those mechanisms. It is not the case that the EU could just impose new requirements without consultation. Of course, the Stormont brake will be available to the Northern Ireland Assembly, when it is sitting.
With regards to the lack of an impact assessment, that point takes me back to what this statutory instrument itself does. It does not impose any requirements on businesses; it is solely about the powers for HMRC and Border Force. The Government are dealing with the resources available to those agencies in the normal way. I cannot remember who asked about this—it was the noble Baroness, Lady Ritchie of Downpatrick, I think—but we will of course ensure that resources are available, in particular to HMRC, to ensure that these agencies can engage with businesses in order to ensure that the process is as smooth as possible.
I understand the Minister’s point with regards to the powers for HMRC under these regulations, but it assumes that HMRC will not then use those powers to ask businesses to carry out certain procedures. If that is the case, there will be an impact on businesses. Secondly, my reading of Regulation 3 is that, for the first time, a postal packet going from GB to Northern Ireland will now be categorised alongside a foreign postal packet. That is what the regulation says.
Again, that takes me back to what these regulations do versus the wider process around how parcels will move under the Windsor Framework. These powers do not and cannot do anything to impose anything on businesses.
I come to a few of the points made by the noble Lord, Lord Purvis, about understanding and beginning to quantify how the new process will work. It is not possible to give precise numbers on volumes of parcels and how they will fall into the different lanes, because volumes are not consistent year on year. However, based on estimates and commercial information provided by the parcel industry, we understand that about 5% of parcels are sent from business to business, with 90% moving from businesses to consumers and 5% from individuals to individuals. Based on those figures, for 95% of movements no difference will be felt in how customs operate now, under the easement that we have to the protocol. Compared to the protocol itself, they will face significantly fewer burdens.
There will be no routine checks or controls applied to consignments, with interventions made only on a risk-based, intelligence-led approach. This is decided by HMRC and Border Force. We expect a very small proportion of parcels to be checked or opened, only when there is reason to suspect circumvention of the rules.
The 5% of business-to-business goods will be treated the same, as if they were moving in freight. They can access the UK internal market scheme and the green lane, and they will benefit from radically reduced checks and data requirements compared to those under the protocol. Businesses can apply to HMRC to become a trusted trader and access the green lane. It is a simple process. Tens of thousands of traders are already in the scheme, and the Windsor Framework extends eligibility to it further. New arrangements under the framework are being phased in over nearly two and a half years. We will continue to use that time to undertake extensive engagement with stakeholders, including businesses in Northern Ireland and Great Britain, trader support services and parcel operators, to provide support and ensure that everyone is ready.
As part of that work, will the Government look at the extra cost to business? There will definitely be an extra cost to businesses in GB that want to send to Northern Ireland, whether they go through the green or the red lane. Those costs will eventually end up with consumers in Northern Ireland. Do the Government agree?
The whole purpose of the Windsor Framework is to reduce any extra costs and burdens from moving from business to business in Northern Ireland. We need to put this in the context of the figures that I gave earlier about personal packages and business-to-consumer packages which, on some estimates, account for around 95% of parcel movements from GB to NI. The aim of our ongoing engagement with parcel operators, in both GB and NI, is to make sure that this process is as easy and seamless as possible for those that rely on existing information and data, where that is possible.
Several noble Lords also raised the question of timing. As I said, provisions under the Windsor Framework are being brought in over two and a half years and will come into effect on 30 September 2024. As I said in opening, although the majority of Northern Ireland protocol requirements on parcels were not implemented as the Government sought to renegotiate arrangements, we accepted that certain categories of goods moved in parcels, as in freight, should require customs declarations to ensure that both their entry to Northern Ireland and possible onward movement to the EU were notified to HMRC.
These requirements related only to a specific list of prohibited and restricted goods that includes, for example, certain drug precursor chemicals, endangered animals, et cetera, covered under CITES. The powers we are taking now will allow those requirements to be monitored and enforced from now, and those same powers will be used in respect of the new parcels arrangements that come into effect on 30 September 2024.
(1 year, 3 months ago)
Lords ChamberThat the draft Order laid before the House on 12 June be approved.
Considered in Grand Committee on 12 July.
(1 year, 3 months ago)
Grand CommitteeThat the Grand Committee do consider the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2023.
My Lords, this Government recognise the threat that economic crime poses to the UK and our international partners, and are committed to combating money laundering and terrorist financing. To help respond to these threats, and building on the recently enacted Economic Crime (Transparency and Enforcement) Act, the Government are currently taking through a second Bill, the Economic Crime and Corporate Transparency Bill, which will bear down on kleptocrats, criminals and terrorists who abuse the UK’s financial and services sectors.
The money laundering regulations provide the legislative framework for tackling money laundering and terrorist financing, and set out various measures that businesses must take to protect the UK from illicit financial flows. Under these regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries. These are countries identified as having strategic deficiencies in their anti-money laundering and counterterrorist financing regimes that could pose a significant threat to the UK’s financial system.
This statutory instrument amends the money laundering regulations to update the UK’s list of high-risk third countries. It removes Cambodia and Morocco from the list to reflect changes agreed by the Financial Action Task Force, the global standard setter for anti-money laundering and counterterrorist financing. The FATF found that both Cambodia and Morocco have made the necessary domestic reforms to improve their compliance with FATF standards, which have been confirmed through on-site visits to both countries.
The Government will pass further changes in due course to add to the UK’s list of high-risk third countries those that the FATF added to its own list in February and June 2023. The reason for passing these changes separately is to give time to complete a full impact assessment for these additions.
This is the seventh SI amending the UK’s list of high-risk third countries to respond to the evolving risks from third countries. This update ensures that the UK remains at the forefront of global standards on anti-money laundering and counterterrorist financing. In 2018, the Financial Action Task Force assessed that the UK has one of the toughest anti-money laundering regimes in the world. The UK was a founding member of this international body, and we continue to work closely and align with international partners, such as the G7, to drive improvements in anti-money laundering and counterterrorist financing systems globally.
Lastly, this list of high-risk third countries is one of many mechanisms that the Government have to clamp down on illicit financial flows from overseas threats. We will continue to use other available mechanisms to respond to wider threats from other jurisdictions, including applying financial sanctions as necessary. This amendment will enable the money laundering regulations to continue to work as effectively as possible to protect the integrity of the UK financial system. It is crucial for protecting UK businesses and the financial system from money launderers and terrorist financiers. I therefore beg to move.
My Lords, I thank the Minister for introducing and explaining the regulations. I realise that all they do is follow the recommendations of the Financial Action Task Force, FATF, to change the list of countries designated as high risk and therefore subject to enhanced due diligence requirements in relation to anti-money laundering, counterterrorism financing and counterproliferation financing. In that respect, so far so uncontroversial.
It has to be said, however, that the list is somewhat surprising—both for those on it and, in particular, those not on it. The changes made by these regulations are also somewhat surprising: they remove Morocco and Cambodia from the high-risk list. It seems rather odd that Cambodia, which is generally regarded as among the most corrupt countries in Asia, is no longer treated as high risk. I am very fond of Cambodia and have spent a lot of time in that country, but that does not change the fact that it is extremely corrupt.
According to Transparency International’s Corruption Perceptions Index, Cambodia is ranked 150 out of 180 countries on the index. This is a slight improvement on previous years, but still considerably lower than many countries that remain on the high-risk list, such as Albania at 101, Panama at 101, the Philippines at 116, Barbados at 65, Burkina Faso at 77, Iran—which is on the blacklist—at 147, Jamaica at 69, Jordan at 61 and Mali at 137. I could go on. In fact, Cambodia has a worse corruption score than all but seven of the 27 countries that remain on the FATF high-risk list. It is not only Transparency International that ranks Cambodia badly. With perhaps more relevance to this regulation, the Basel AML Index ranks Cambodia as having globally the seventh worst money laundering and terrorism financing score. Despite that, we are reducing the level of due diligence that the regulated sector will have to apply to it. Seriously, is there anybody in this Room who believes that Cambodia should be treated better than, say, Gibraltar, Barbados or even the Philippines? I should like the Minister to look me in the eye and state that she really believes Cambodia is not a high-risk country for corruption.
This starts to beg the question about the value and legitimacy of the FATF high-risk assessment process, known as the mutual evaluation assessment. That value is called into even greater question when we look at the countries not included in the high-risk designation. I will give a high-profile example: until February of this year, Russia was a member of the FATF. In February, the FATF suspended its membership because of the war against Ukraine—somewhat belatedly, one could say. I emphasise “suspended”; Russia has not been expelled. It is evidently a paragon of virtue when it comes to money laundering and terrorism financing because, unlike the British territory of Gibraltar, Russia is not designated as high risk and therefore not subject to enhanced due diligence. It is odd, then, that we have spent so much time passing Bills in this House specifically to deal with the stolen laundered money coming from Russia. Almost unbelievably, in its last review of Russia in 2019, the FATF praised Russia’s efforts to prosecute terrorist financiers and suggested that AML/CFT is afforded the highest priority by the Russian Government. This is a country that finances and supports organisations such as the Wagner Group, while Putin’s Government is generally regarded as a kleptocracy. Other countries not on the list, and therefore not subject to enhanced due diligence, include such famously uncorrupt ones such as Somalia, Venezuela, Libya, Turkmenistan, Nicaragua and Zimbabwe, to name but a few. All score worse than Cambodia in the corruption index; all are apparently low risk, according to the FATF. The Explanatory Memorandum refers to the FATF’s “robust assessment processes”; frankly, those do not stand up terribly well to scrutiny, if this list is anything to go by.
It is worth quoting the recently departed FATF CEO, David Lewis, who was very highly regarded. He said the agency structure of “mid-level bureaucrats” means that it does not have the scale to take on the big global financial crime issues. He said that they are
“very comfortable dealing with the finest minutiae of technical detail, but aren’t comfortable or able to have big picture discussions and are often only in their jobs for one of two years”.
He stated that genuine reform of the FATF is difficult to achieve, with typically two to four countries blocking consensus, meaning it is rare that you can get any meaningful change, which probably explains the list we are looking at.
Concerns are often raised about the FATF’s lack of transparency. The minutes of plenary sessions that make these risk designations are not published and it is clear that political horse-trading plays a significant role in the decision-making process. To be fair, there is no doubt that the FATF has had a positive impact on global financial crime since its inception in 1989, but there are growing doubts about its ability to cope with the challenging global situation we currently face. In an article for RUSI, Tom Keatinge of the Centre for Financial Crime and Security Studies makes some helpful suggestions about how the FATF could be improved. He suggests, first, greater transparency: it should provide greater assurance of independence and oversight. Its activities should be overseen by an independent board and its evaluation should be independently reviewed, not subject to the evidently politicised horse-trading that occurs currently. The minutes of the plenaries should be published, or the plenaries themselves could be livestreamed. Secondly, it needs to create a dedicated technical-assistance capability to ensure that unintended negative consequences, such as financial exclusion and the use of the FATF recommendations by autocratic regimes against civil society organisations, are addressed.
Thirdly, he suggests that the FATF needs to show greater ambition. Ultimately, the question is whether it is addressing financial crime effectively. It currently evaluates how effectively its recommendations are implemented, but not the extent to which financial crime is addressed as a result. He suggests an independent review of the FATF’s effectiveness, which seems a simple and sensible suggestion 45 years after it was founded.
Fatima Alsancak, also of the Centre for Financial Crime and Security Studies, suggests that Russia is a good
“case study in the deficiencies of the … FATF mutual evaluation process, which allows countries with high levels of institutionalised corruption to complete their evaluations despite the lack of integrity in their AML systems”.
She goes on to say:
“It is essential for the watchdog to revisit its standards”,
and again highlights the need for greater transparency in the decision-making and listing process.
I was going to ask why South Africa, Nigeria, Croatia, Cameroon and Vietnam are not the list, but the Minister answered that in her opening statement. I mentioned earlier that Gibraltar, a British Overseas Territory, is on the high-risk list. Will she please comment on that, too?
There are important questions to answer about the value of the FATF evaluation process. We should not rely passively on what are, frankly, flawed recommendations. Do the Government agree that FATF’s procedures and the high-risk list itself appear to have important deficiencies and, if so, what are they doing about it? Do they agree with the recommendations that I referred to earlier?
My Lords, I am aware that we always follow the FATF’s recommendations but, given what we have just heard, it is just as well that we have this procedure as an opportunity to ask the Minister about some issues of concern that arise from the recommendations we are considering. I will not repeat everything that has already been said, because immediately following this we have another SI that took three and a half hours to consider in the Commons and, looking around the Room, I anticipate that it may take a little while this afternoon as well.
This instrument is perhaps relatively straightforward, but I will highlight a couple of the points that have been made in which we are especially interested. On the issue of reputation and our overseas territories, the fact is that Gibraltar and the Cayman Islands are on this list. Do the Government think that this has any reputational impact on the UK? What is the Government’s assessment of that? When this issue was considered in the Commons, providing some kind of support or input from the UK to Gibraltar to move things along was discussed. I do not think that the Minister there gave a particularly expansive response at that point so it might be helpful, if there is an opportunity, to hear from the Minister here today whether a request has been made by Gibraltar and whether any input has been forthcoming from the UK.
I will leave it there for today, given the next SI that we will consider and the fulsome contributions that have already been made by others, which I know the Minister will answer fully.
My Lords, I thank noble Lords for their contributions to this debate. I know that we have also touched on this issue in other Bills progressing through the House.
I will start with the FATF process. As I think I said in my opening speech, the UK is an active member of the FATF. We participate in mutual country evaluations, looking at its processes and rules, which we are fully supportive of. Indeed, we were a founding member of the FATF. The processes are agreed internationally and based on rigorous, detailed and robust technical assessment. The FATF also regularly co-ordinates with other major international organisations.
It is worth saying two further things on the FATF. First, as a member of the FATF, we will always look to improve its work and processes and we will always reflect on those. Secondly, it is an important piece of the picture on setting standards for international action on anti-money laundering and counterterrorist financing, but it is only one piece of the picture when it comes to the UK’s overall approach towards tackling economic crime more broadly and some of the issues raised in today’s debate.
Cambodia being delisted is within the scope of the SI. Cambodia has addressed key deficiencies relating to the legal framework for international co-operation and preventive measures, risk-based supervision, financial intelligence, investigation and prosecution of money laundering, asset confiscation and targeted financial sanctions for proliferation financing. By addressing those deficiencies, Cambodia met the criteria to be removed from the list.
The noble Lord, Lord Vaux, also raised Russia’s membership of the FATF. As he noted, in February 2023 the FATF suspended Russia from the organisation. It continues to call on all jurisdictions to remain vigilant to threats to integrity, safety and security of the international financial system arising from the Russian Federation’s aggression in Ukraine. We are absolutely clear that Russia’s actions run counter to the principles on which the FATF is based and we fully support the ongoing suspension of Russia’s membership of the FATF. We have taken a wide range of measures against Russia, including the most extensive sanctions regime that we have ever put in place. We will continue to bear down on the Russian state in that way.
The noble Lord, Lord Wallace, and the noble Baroness, Lady Chapman, asked about the overseas territories and Crown dependencies. The UK has engaged with both on this issue to share best practice, improve understanding of risks and increase compliance with the FATF standards. I went to the ministerial meeting of MONEYVAL, which is a regional organisation that feeds into the FATF process. Some of the Crown dependencies are members and I met the Ministers responsible for FATF compliance as part of that forum. We will continue doing that, as several of the Crown dependencies have assessments that are either ongoing or upcoming this year.
Gibraltar and the Cayman Islands were mentioned. Gibraltar continues to make good progress against its action plan with only one action remaining—for it to show that it can pursue more final asset confiscation judgments commensurate with its high-risk profile. When it comes to that action, judgments coming through can take time and that timing is not all within Gibraltar’s control.
I met representatives from the Cayman Islands this year and we touched on this area. They have made significant progress in addressing deficiencies since the Cayman Islands were listed in February 2021. In June 2023—just last month—the FATF made the initial determination that the Cayman Islands have substantially completed their action plan. On this basis, it plans to conduct an on-site visit in September to verify this, which is the final stage before delisting. We have a positive story to tell in both those areas.
I look forward to the Minister writing to me, because I was a little alarmed to hear her say—if I heard her correctly—that the UK would work with Sudan on this. There is no one to work with in Sudan at the moment and, if a case cannot be made for the UK not to act on Sudan, which has a civil war, with two warring partners and with considerable financial interests on each side—SAF and RSF—then I cannot see a case that would be stronger.
I will write on Sudan to the noble Lord, Lord Purvis, as I committed to do, and I will copy in the Members in this debate.
The UAE is making swift progress on its FATF action plan. It has several actions still to complete, focused on money laundering investigations, transparency of beneficial ownership and the investigation of money laundering cases. We hope to see further progress on those areas, as it looks to deliver on its action plan.
I have not managed to cover in detail all the points raised by noble Lords. They have gone slightly wider than the countries in question on the listing today, but I understand noble Lords’ interest in the process that we use to update these lists, adhering to international standards. I will read Hansard and ensure that I write to noble Lords if I have not addressed any questions.