David Lammy
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Riot Compensation Bill
David Lammy Excerpts(8 years, 3 months ago)
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Mike Wood
I will be brief, Mr Howarth. The main purpose of clause 2 is to clarify the property within the confines of the scheme, primarily extending it to motor vehicles. As has been said, 1886 was the year the first diesel engine was pioneered, so it would be too much to hope that those considering that legislation might have foreseen the extent to which the motor would come to dominate so much of our lives. The clause would explicitly extend the riot damages scheme to include motor vehicles. It also clarifies the position of mobile businesses and the equipment stored within them.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Regulations about claims procedure
Mr David Lammy (Tottenham) (Lab)
I beg to move amendment 5, in clause 3, page 3, line 12, at end insert “, which must be no shorter than 132 calendar days from the day on which the riot ends”.
This amendment would ensure that a person has at least 132 days from the end of the riot to make a claim for compensation.
The Chair
With this it will be convenient to discuss amendment 6, in clause 3, page 3, line 14, at end insert “, which must be no shorter than 132 calendar days from the day on which the riot ends”.
This amendment would ensure that a person has at least 132 days from the end of the riot to submit details and evidence in relation to their claim.
Mr Lammy
I am grateful to serve on this Committee but sad that we find ourselves here because my constituency has seen two riots in a generation. It is right to update this legislation, and I, too, pay tribute to the hon. Member for Dudley South for his work on the Bill.
I have tabled some probing amendments that I suspect will go to regulations. The Committee will understand that these matters are of great concern to my constituents, but many hon. Members might also want to raise these issues. Amendments 5 and 6 relate to the kinds of areas that experience riots in our country and the kinds of people and businesses that find themselves having to make a claim. Hon. Members might remember that the original legislation allowed for 30 days in which to claim compensation. After much lobbying by Members and others, that was extended to the 42 days that has been landed on.
Mike Penning
I fully understand the thought process behind the amendments and their tone. Of course, there was an extensive consultation process, but we have to draw a line somewhere. I fully understand the points made by the right hon. Member for Tottenham and the shadow Policing Minister, as I am sure other Members do. I will commit to putting exceptional circumstances into the regulations.
The Bill is for people who have suffered and the most vulnerable. It is a safety net; that is what it is there for. The regulations will cover exactly what the right hon. Gentleman has asked for. Exceptional circumstances could easily cover medical conditions, residential properties and small and medium-sized enterprises. The Bill is rightly not about the Nexts of this world. Given what I have said and will say, I hope that Members and other people will realise that we have listened. We will do this in the regulations, which is where it should be. That commitment is now on the record, so I hope there is no need for the amendments.
Mr Lammy
I beg to move amendment 3, in clause 3, page 3, line 17, leave out “may” and insert “must”.
This amendment would require the Secretary of State to require that any estimates of the cost of repairs are to be prepared by approved contactors.
The amendment deals with the approved contractors that act on behalf of the Secretary of State, engage with individuals who find themselves having to make a claim under the Riot (Damages) Act 1886 and estimate the cost of the repairs. It would be remiss of the Committee if we did not put on record the substantial findings in the months after the riots. That comes up time and again in the House, and it will come up in relation to the floods being experienced across the country.
The London Assembly committee chaired by John Biggs did very good work and published a very good report in 2012 on the riots. The committee took evidence from a range of people. The report said:
“Loss adjusters who were involved in assessing insurance claims after the riots faced a complex situation. Nevertheless, some loss adjusters behaved insensitively in handling claims, and lacked the skills needed to deal effectively with some owners of small businesses.”
As I said at the time, there is no point asking someone to provide receipts for their stock if their business has been burned to the ground. There was an inability, frankly, to understand where those small businesses were coming from and what they were facing. There were challenges in such areas as Croydon, Birmingham and Tottenham, where businesses—they are often independent, ethnic minority businesses—were made to feel like they were criminals attempting to defraud the state. I had an Adjournment debate after the riots where I expressed my concerns about the insurance industry and some—not all—loss adjusters.
I tabled the amendment to probe the Minister to say a little more about the nature of those approved contractors and how we might deal with the issue. I pay tribute to the independent review of the Riot (Damages) Act by Kinghan, which laid the foundation for much of the work that led us here. He recommended that a riot claims bureau be developed with the agreement of the Home Office and the insurance industry. He also recommended that a manual be prepared, as soon as is practicable, to provide guidance on the types of claims likely to follow a riot, including how to deal with clients unused to making claims and other issues. That is a part of his report that is pertinent to the issue raised by the amendment.
Members will understand that floods occur more often than riots in the United Kingdom, because of the nature of our geography. In 2011, much of the expertise simply was not there. The country had not seen widespread riots in the 10 years since Bradford and Oldham, and it is easy to lose the expertise, the necessary sensitivity and the understanding that the context in the communities experiencing such events is very different.
Kinghan also recommended that, in their emergency plans, local authorities should be asked to include planning for riot recovery services to provide co-ordinated advice and support. I do not know whether that recommendation relates to all local authorities, but that, too, goes to the point about expertise. It would be wrong if I did not mention loss adjusters at this point. Will the Minister say something more about the approved contractors and how we can avoid the situation that caused real concern in the communities affected?
Mr David Burrowes (Enfield, Southgate) (Con)
Clause 3(4) is also about trying to prevent fraudulent claims, but I am just trying to understand what the amendment, by making this mandatory, would preclude. With approved contractors on an approved contractors list, it might be hard to identify a local authority or others outwith the approved process of the Secretary of State or local policing bodies. Is there an important flexibility that may help to a degree with timeliness? I know that the right hon. Gentleman was concerned, as I was, about the timeliness of compensation for our constituents’ businesses.
Mr Lammy
The hon. Gentleman makes a good point. In a sense, this is a probing amendment to get to the substance of what we are really talking about. The “must” probably goes too far; I accept that. I hope that I will get some comfort from the Minister shortly.
No one can predict when the next riot will be and no one can entirely control the individual loss adjuster who is behaving insensitively, but what one can guarantee is that, by and large, it will be in a deprived area and, if it is a high street area, it will involve independent shopkeepers. We have had a long history, over successive generations since the Windrush, of independent shopkeepers largely being of refugee and immigrant stock. I think of the parts of my constituency that are still Orthodox Jewish and of the émigrés who ran the shops many decades ago. Over the decades, different communities have run the shops. Shopkeepers find themselves in a situation where, if they have been ransacked, they are not getting understanding from parts of the insurance industry, particularly loss adjusters, about providing receipts, for example. That is why I make the points that I do.
Mike Penning
I fully understand and also respect, not least because of the conversation that we had outside, the right hon. Gentleman’s probing amendment. I have to agree with him that “must” goes a bit too far, but I fully understand exactly where the amendment is coming from.
May I say at the outset that we are looking to put together an approved list of loss adjusters who will be responsible should riots take place? Obviously this is different from the insurance side, because these measures are for people who are uninsured.
Mike Penning
It might have been a long intervention, but I think it was very useful to the course of the debate. I am sure you would agree, Mr Howarth, even if we need to keep interventions short. Should I need to intervene on anyone, I will try to keep my intervention short as well.
I say to the hon. Member for Croydon North on that specific point that I have just had the 10th anniversary of Buncefield in my constituency, which was the largest fire and explosion in this country since the second world war. The quality of the loss adjusting in some companies was brilliant; the quality in others was appalling. The insurers were very good in some areas and did not boost the premiums, while other premiums, particularly for smaller companies, were extremely harsh. It is something I have been working on with other Departments. If the right hon. Gentleman wants to join me outside the Committee in working on that issue, I will be more than happy to do so.
With regard to the probing amendment, there are two things we have to ensure. This is taxpayers’ money, so we have to make sure—this is a safety net for people who are uninsured—that fraud and other events do not in any way mean that taxpayers’ money is misused. However, we do not want to say that everybody will be a criminal and try to defraud; they are after help in 99% of cases. We also do not want to slow down the process of making the payments. If we look at the sheer scale of the riots in 2011—we have heard today about the myriad different communities across the country that were affected—we can see that to have all the estimates done by approved contractors would be enormously difficult.
The point about guidance was very well made; for want of a better word, on paper, it would say, “This is what should happen, should these terrible events happen again”. That was a recommendation of the review. That is something I will take away from the Committee, work on and make sure it happens.
With regard to the loss adjusters, an approved list is exactly where we need to go. On the need for this provision and the need for the word “must”, I am sure the right hon. Gentleman will agree to meet me and consider the comments I have made.
Mike Wood
Neither police and crime commissioners nor local police forces are experts in processing claims, which is why it is important to allow those bodies to delegate the functions, particularly to loss adjusters. Provisions in clause 4(3) allow the Secretary of State to specify the persons to whom those functions may be delegated, which will hopefully achieve the objectives that the right hon. Member for Tottenham was trying to achieve through amendment 3.
Mike Penning
Obviously, that was looked at extensively. We have to be slightly careful. Unlike my learned Friend I am not legally trained, but the authority is the police—it is the police who decide and no one else. That is the definition. From the police’s point of view, if a criminal offence has taken place, a riot is defined as such by the police, who have the training and expertise to do that.
I fully understand the sensitivities of local authorities and others, but it is not their decision and it must not be. It must be the police’s decision. The wording in the Bill makes it simple as to how we define that. I understand the concerns, but they were looked at extensively.
Mike Penning
That is a fundamental point. The Minister will understand that that goes to the heart of our policing model: that is, policing by consent. Unlike other police forces in the world, our police do not routinely carry guns; we, as citizens, police alongside the police. Therefore, given the policing by consent model, he will understand that in some scenarios the police authority may be reluctant to declare a riot. What are the safeguards in those circumstances?
Mike Penning
The right hon. Gentleman makes an important point, but that is the same as any other decision that the police make. We have an independent police who make independent decisions based on their best knowledge at the time. To say that no policeman is ever influenced by events going on is wrong. Of course they are. They can listen to arguments, but it is their decision. We looked carefully at that to ensure that the police have and can keep powers to make the decision as to what is a riot and what is not. There is a whole debate to be had about that, but the definition in the Bill is important in allowing the police to continue to have the powers that they have had. That is why I support the clause.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5 ordered to stand part of the Bill.
Clause 6
Delegation of Secretary of State’s functions
Question proposed, That the clause stand part of the Bill.
Mike Penning
That is an important point. From my own constituents’ point of view, I understand the frustration when money is sitting in a bank account and not being used by the local authority. I cannot comment on why that happened, because I do not know, but I fully understand the frustration.
If we are asking local people to take part in and to be part of their community—if we believe in localism—it is critical that they are listened to. Perhaps the hon. Gentleman and I could meet after the Committee. I will look into the recommendations that were made—I was not in post at the time—and we can see the reasons why they were not implemented and whether those reasons were logical. The Secretary of State wants the power to do something with the local community—localism in action—which is exactly what he will do.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7 ordered to stand part of the Bill.
Clause 8
Amount and payment of compensation
The Chair
With this it will be convenient to discuss the following:
Amendment 4, in clause 8, page 5, line 29, at end insert—
‘(3A) Money received by the claimant from emergency or recovery funds, whether funded publicly or privately, in the aftermath of a riot must not be taken into account by the decision maker when deciding the amount of compensation to be paid.’.
This amendment would ensure that money received by the claimant from emergency or recovery funds in the aftermath of a riot does not reduce the amount of compensation a claimant receives.
Amendment 2, in clause 8, page 6, leave out lines 16 and 17.
This amendment is consequential on amendment 1.
Mr Lammy
The amendment relates to the £1 million cap that the Government have landed on. I am probing what is behind the £1 million limit.
Someone who sets up a small business on Tottenham high street might buy the shopfront and have a home of sorts above the shop. In London the average price of a house is estimated to be £470,000, and the average price of a shopfront is a little more than that. A number of individuals on the high street found that they were underinsured, or not insured at all. The issue of insurance premiums in the kinds of areas affected by the riots is very real.
In response to my hon. Friend the Member for Croydon North, we do not want to see parts of our country looking like areas of America, such as the city of Detroit. That city has experienced successive riots, has a falling population and was effectively declared bankrupt a few years ago. Showing great sensitivity to those areas that experienced riots, we do not want them to become failed communities. We want them to be communities where people can set up businesses and thrive. Successive Governments in our country have been in the business of regeneration and improvement. We do not currently have areas in our country that are like Detroit.
The question of where to set the cap is in the context of the ability to find insurance, its cost and whether some of the big players on the high street decide not to come to the area. We lost easyGym, the post office and Carpetright from our high street; all were really important for us. The big issue is whether they are going to come back. If they do not come back there is no footfall for the small independent retailers and shopkeepers. How did we arrive at the £1 million cap?
We also have to look at the regional context. The cost of running a small business in Croydon is different from the cost of running one in Salford. There is currently no regional variation before us to indicate an understanding of that.
Mr Reed
My hon. Friend is making an important point. In a riot, police resources are necessarily overstretched and they have to prioritise, and they tend to prioritise the wealthier areas. Once again it is the poorer businesses that can least afford the loss that suffer. It is those areas that would be affected by the inability to claim above the cap. What is my right hon. Friend’s view on that?
Mr Lammy
My hon. Friend makes a good point. He and I are regular soldiers in the fight for very poor areas. With regard to the £1 million cap, I would say that the 2011 riots were unusual. As a Londoner born and bred, I would never have imagined that on the second day I would see the constituency of Ealing Central and Acton caught up in the riots.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The word on the street in Ealing, once known as Queen of the Suburbs, was that our police were diverted to Westfield, which is a shopping centre of high-value, high-end designer shops. That is why we were left empty-handed when the riots hit.
Mr Lammy
My hon. Friend makes a serious point. There was a similar context in Salford. That goes to the point about the £1 million cap meaning different things on the high streets of Tottenham, Ealing, Salford and Croydon. It goes to the cost of running a business, to the detail of loss of stock as a result of flooding or following fire damage because a business has been burnt to the ground, and it goes to insurance. We want businesses to be insured and not to have to rely fully on the legislation. Given that we do not want to have areas in our country that cannot recover because of under-insurance or no insurance, the point about the £1 million cap is very important.
I go right back to the very good Kinghan report, which of course suggested the cap in the first place. Options were explored in Kinghan’s review. His first option was that we set a percentage—say, 25% or 50%—as the limit of compensation that the police or Government would pay in respect of claims paid by insurers to their customers. His second option was that we put an absolute limit on any single claim that the police or Government pay to an insurer—say, £500,000 or £1 million. The third option was that the limit be set by reference to the size of the insured business, so that the insurer receives compensation only for claims made by businesses with a turnover below the limit. I liked the third option a lot and thought it was fair, because it allowed for an understanding of the differences between small businesses.
In drafting the Bill and landing on the figure of £1 million, were the Minister’s officials in touch with the Federation of Small Businesses or with high street businesses, for example small retailers and newsagents? Where did they get their estimates for the cost of running a business? Will the Minister say more about the claims we saw as a result of the rioting across the country?
Mike Penning
If I may, I will speak to amendments 1, 2 and 4. I know, because I spoke extensively to the right hon. Member for Tottenham before the Committee, that he has some concerns about amendment 4 that he did not have an opportunity to talk about, but I am more than happy to take an intervention.
Mr Lammy
I am grateful. I want to raise the question of the high street funds that were set up after the riots. I pay tribute to Sir Bill Castell, chairman of the Wellcome Trust and one of our great industrialists, for all the work he did to encourage big business to fund small business. I put it to the Minister that it cannot be right that any payment from charitable interests—a high street fund helping small business on the high street—is somehow offset against the riot damage. I want reassurance. Sir Bill raised this a lot at the time and I spoke to him today. We hope that that is not to be the case.
Mike Penning
It will. I completely agree morally that charitable donations should stay outside, whether from a lady putting 50p in a tin on the high street, as I know took place, or from some of our great businessmen coming together to offer help. I will set that in regulations. I hope that alleviates concerns on amendment 4.
On the £1 million cap, we have to be honest about what the Bill is for. It is a safety net for those who are not insured should a riot affect them and their businesses. Of course, if it is taxpayers’ money a limit has to be set somewhere, and 99% of all claims following the terrible riots that took place across the country in 2011 were below that limit. I am happy to share that information with colleagues before Report.
In looking at where to set the cap, we should not encourage people not to be insured or insurers to take the view that the state will pick up the cost for which they and businesses have responsibility. That is why we set the cap at £1 million. I will make the commitment today that that will be continually reviewed within regulations without the need for primary legislation. At the moment we have very low inflation nationally, although building and residential inflation is quite high, particularly in London. We will keep a close eye on that but there has to be a limit. There cannot be a blank cheque from the taxpayer; I think we all accept that.
In response to the shadow Minister’s point, if the money comes out of the police or Home Office budget, it is still taxpayers’ money and there is a limited amount available. I think £1 million is fair and we will keep it under review. We will also ensure that charitable donations, no matter where they come from, are exempt, and I will place that in the regulations for the Bill. I hope that the amendment will be withdrawn.
Mr Lammy
I am grateful for what the Minister said about the charitable donations set up after the riots and the points I made about the high street fund. I am still a little concerned about the £1 million figure because regionality has not really been addressed by the Minister. There are big differences across the country.
Mike Penning
Perhaps I could offer an olive branch. I will write to members of the Committee explaining the logic and thought processes behind the decision, rather than putting the question to a vote now, which would prevent it being brought back on Report. If the right hon. Gentleman is still concerned on Report, options will be open to him then.
Mr Lammy
I am grateful for that undertaking from the Minister. With that, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 ordered to stand part of the Bill.
Clauses 9 and 10 ordered to stand part of the Bill.
Clause 11
Regulations
Question proposed, That the clause stand part of the Bill.
Mike Wood
Earlier, I referred to mobile businesses being within the scope of the Bill. To clarify, they are not in the Bill but the intention is to include property contained within mobile businesses in the regulations. I hope that the Minister will take that on board.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12 ordered to stand part of the Bill.
Schedule agreed to.
Question proposed, That the Chair do report the Bill to the House.
Mr Lammy
On a point of order, Mr Howarth. May I put on record my gratitude to Mr Kinghan for all his work on the review, and for spending time with me? This has not come up in Committee, but there were five fatalities during the riots in 2011, and I am sure all hon. Members would want to send their sympathies to the victims’ families. Such fatalities are not the sort of thing that we associate with riots in this country. This is a very serious matter, and for that reason we are all grateful to have served on the Committee under your chairmanship, Mr Howarth.
Question put and agreed to.
Bill accordingly to be reported, without amendment.