Riot Compensation Bill

James Brokenshire Excerpts

Friday 5th February 2016 Commons Chamber

[Lyn Brown]

My right hon. Friend is absolutely right—the businesses that were affected in my constituency were small businesses along the Barking Road in Canning Town and, indeed, some in Green Street. As he rightly says, they are not like the businesses in Westfield that have massive resources behind them to enable them to make the claims, clean up quickly and get on with their economic lives.

Amendments 2 and 3 would ensure that victims were entitled to compensation for costs incurred as a result of having to seek alternative accommodation. We support those amendments too. Families should not be pushed into severe financial difficulty because their homes have been rendered uninhabitable by circumstances way beyond their control. Some families affected by the 2011 riots were not able to live in their homes for months, and some for years afterwards, putting them in severe financial difficulty. That was particularly the case in the private rented sector, but it also applied to some homeowners. We all know how expensive short-term rented accommodation can be, particularly here in London. It is only right, therefore, that that should be accounted for in the compensation awarded. I therefore urge the House to accept amendments 2 and 3.

Finally, let me turn to amendment 8, which would ensure that any money claimed in compensation for emergency relief in the immediate aftermath of a riot did not lead to a reduction in the amount of compensation a claimant might receive. It is shameful that this sort of deduction was made in 2011. We support the amendment, because people putting money into charity buckets to help their neighbours through the turmoil of rioting do not expect the compensation due to those victims to be reduced as a result of their kindness. I am not surprised that my hon. Friend the Member for Croydon North reports that his constituents were aghast that their donations led to a reduction in the compensation doled out.

My right hon. Friend the Member for Tottenham also argued in Committee, I thought convincingly, that we do not want to discourage big businesses from helping out small businesses with which they share a high street. Deducting payments as a result of charitable giving would have precisely that unwelcome and rather unpleasant effect. I urge the House to accept amendment 8 so that, in the unwelcome event of future riots, the police and charities can work together to help communities, rather than treating support as a zero-sum game.

I heard what the hon. Member for Dudley South had to say on that matter, but I now look forward to hearing from the Minister on these issues, because I am sure he is going to make us very happy today.

[The Minister for Immigration (James Brokenshire)]

I, too, want to associate myself with your comments, Mr Speaker, following the sad loss of Harry Harpham. Members throughout the House can all say that Harry was a dedicated public servant. Although we had the privilege of having him in the House only for a short time, he clearly served with distinction in his community, having sat on Sheffield City Council, and he was dedicated to public service. The fact that as recently as 20 January, Harry was here at Prime Minister’s questions standing up for constituents on an issue he believed in, Sheffield Forgemasters, underlines the sort of person he was, the dedication he showed and the fact that he always wanted to stand up for his constituents. The whole House will wish to pass its condolences, thoughts and prayers to his wife, Gill, his children and his whole family, his friends, colleagues and everyone who knew him and who mourns his loss.

I congratulate my hon. Friend the Member for Dudley South (Mike Wood) on the manner in which he has sought to advance the Bill. He has clearly reflected on the helpful debates in Committee, to which the Minister for Policing, Crime and Criminal Justice responded. The Committee worked on themes that were started on Second Reading. I believe that my hon. Friend’s amendments are helpful additions and clarifications to the Bill.

Amendment 1 deals with the time limits, which are set at not less than 42 days and 90 days respectively for lodging claims and producing detailed evidence. That is the right approach to the lodging of an initial claim, and then it is right to allow more time for detailed information to be provided. We support placing those minimum requirements in the Bill.

For clarification and for the further assurance of right hon. and hon. Members, I underline that there might be some exceptional circumstances in which more time is required, perhaps when a claimant falls ill and cannot meet the deadlines, when evidence has been destroyed or cannot be accessed owing to riot damage, or when final cost estimates are contingent on other processes such as planning permission or some other regulatory requirements. We expect the regulations sitting alongside the Bill to provide some flexibility in extenuating circumstances and to allow extensions of time, while recognising the framework and the statutory minimums set out in the Bill.

Amendments 2 and 3 deal with payments for alternative accommodation. They will allow compensation to be paid to uninsured individuals whose home has become uninhabitable as a result of a riot, to cover the cost of alternative accommodation. Amendment 3 makes it clear that regulations may provide for further details of considerations to be taken into account when such claims are made, as well as the length of time for which such costs may be covered.

During the passage of the Bill, Members have highlighted a number of cases in which their constituents had suffered significant hardship following the 2011 riots. We have certainly heard that from the right hon. Member for Tottenham (Mr Lammy) and the hon. Member for Croydon North (Mr Reed).

[Mr Lammy]

On the issue of constituents who live in private rented accommodation, I recognise that regulations might be the best place to indicate the length of time for which support will be given, but can the Minister provide us with any clarity about whether he considers that to be a matter of weeks or months? People can be living without virtually everything for a considerable length of time after a catastrophe of this sort.

[James Brokenshire]

At this stage, it is probably best for me to say that we will reflect further before we bring forward the regulations. The right hon. Gentleman has made some important points on behalf of his constituents. I know from our discussions back in 2011 the direct impact of the issues that he rightly took up on behalf of his constituents. Other Members also made direct challenges on behalf of their constituents. We will continue to reflect carefully on the issue as we move towards drawing up the regulations. That is the right approach and provides us with an opportunity to reflect further on the important and powerful points that have been made.

It is the Government’s position that consequential losses should not be covered by the Bill, particularly bearing in mind the impact on the public purse. We agree that it would be unfair for legislation intended to help those in the greatest need not to provide support to people who have lost their homes, so we support the proposed exception to the prohibition on compensation for consequential losses to permit individuals to recover the additional costs of alternative accommodation following a riot.

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[Mr Steve Reed]

I take the right hon. Gentleman’s point about the public purse, but what reassurances can he give that charitable donations from members of a community that were given to help victims in the locality will not be—rather than should not be—deducted from official compensation payments?

[James Brokenshire]

Again, the best place to deal with that and give clarity about the operation of the Bill is in regulations. I hope that given what I have said today about the intention to introduce regulations to sit alongside the Bill, hon. Members will be reassured on this important point about charitable donations. The right hon. Member for Tottenham indicated that he thought the best place to deal with that would be in regulations. That is our judgment too, but I hope that what I have said to the House is helpful in providing clarification and setting out the how the Government will seek to operate the provisions in the Bill. Obviously, right hon. and hon. Members will be able to examine the regulations when they are published, following Royal Assent—we hope that will happen, but both Houses need to give the Bill their consideration.

[Mr Nuttall]

I appreciate the points the Minister has made. In the internet age, donations from the public often come through crowdfunding exercises. Will he confirm that the regulations will make it clear that funds raised in that way for the purposes he has just set out—I appreciate the distinction he made with respect to the purposes—will also be excluded?

[James Brokenshire]

The most important thing is that we define the charitable purpose for which contributions have been made, rather than reflecting on the manner in which those moneys have been given. It is about the fundamental purpose, although my hon. Friend makes an interesting point that people will want to examine as we introduce the regulations. I hope that my comments have helped in our consideration of the amendments.

[Mr Speaker]

Does the hon. Member for Dudley South (Mike Wood) wish to contribute further?

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That’s killed his career.

[James Brokenshire]

I do not know whether I am going to blot my copybook now or not, but I thank the hon. Lady for approaching this group of amendments in a constructive way, as she and the right hon. Member for Tottenham (Mr Lammy) did in Committee. That is the approach we have taken across the House, recognising that there is an issue in the Bill, and seeking to sensibly examine what is appropriate in terms of the manner in which it has been framed.

In introducing the amendments, the right hon. Gentleman highlighted his desire to probe these provisions and to ensure that the House has the opportunity to scrutinise them properly so that right hon. and hon. Members have the chance to underline important issues. He mentioned the Comptroller of Her Majesty’s Household, my hon. Friend the Member for Croydon Central (Gavin Barwell), who has also fought tirelessly on behalf of his constituents. Obviously, his role on the Front Bench means that he is not able to take part in these debates in the manner that we are. However, it is for him, the public and all of us to consider what the right mechanism is and to ensure that the Bill is appropriately examined so that we get it right. That is the overarching theme reflected in our debates on Second Reading, in Committee and on Report this morning.

I want to draw attention to the operation of clause 8(8), which gives the Secretary of State the ability, through regulation, to make changes to the overall cap of £1 million set out in clause 8(1). It is important to look at the Bill’s subsequent provisions, which, again, underline the protections that are there. If regulations come forward to increase the level of the cap, that would be by the negative procedure. To have an additional safeguard if, say, the level was to be reduced—that would certainly not be our intention—that would be by the more positive affirmative regulation mechanism. That, again, reflects the spirit in which the Bill has been approached and the manner in which it has been examined.

The right hon. Gentleman highlighted a number of measures in the letter my right hon. Friend the Member for Hemel Hempstead (Mike Penning), the Minister responsible for policing, fire, criminal justice and victims, wrote to the Chair of the Public Bill Committee. Obviously, in previous consultations, we examined different ways in which compensation should be capped. My hon. Friend the Member for Dudley South (Mike Wood), in a very clear contribution to the debate, set out why that is needed and some of the thought processes involved. On further analysis, it was felt that the £2 million turnover cap initially suggested by Neil Kinghan would have meant more claimants not being able to get through the mechanism, with additional bureaucracy attached to the process. It was felt that that was not the appropriate way forward.

Through the different amendments, the right hon. Gentleman has made a number of different suggestions. I know he was not seeking to favour one over the other, but rather to ask, “Have we properly examined this? Have we properly thought this through?” In terms of replacing the £1 million compensation cap by a £10 million cap, the experience of the riots of August 2011 demonstrates that it is not right for the taxpayer to shoulder the burden of unlimited liability. As my hon. Friend highlighted, liability for the Sony claim alone has already run into tens of millions of pounds, so it is clear that a cap is needed. As a point of principle, it is not unreasonable to expect a business with more than £1 million in assets to take out insurance to protect itself from a wide range of risks. The £1 million compensation cap was generally welcomed by stakeholders. It will provide full protection to the vast majority of individuals and businesses, while ensuring that liability to the public purse is not unlimited.

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I do not think I am going to shock you by saying that I have had absolutely no indication of anybody coming forward with a statement. However, the hon. Gentleman has quite rightly, as ever, raised the matter, it is on the record, and I am sure that people in different Departments will be listening as we continue this debate.

[James Brokenshire]

A £1 million cap strikes the appropriate balance between protecting the public purse and helping those who need it most. Increasing it to £10 million would increase police and public purse liability tenfold, which is neither necessary nor appropriate. If the cap were raised to £10 million, the most likely beneficiaries would be insurance companies seeking to reclaim the costs of any very large claim from the relevant police and crime commissioner. I do not think that that was the intent behind the right hon. Gentleman’s approach in his amendment, but I respect the manner in which he has sought to draw the House’s attention to how we have reached this point and why we judge that £1 million is the appropriate level.

The right hon. Gentleman has proposed, as an alternative, that there should be regulations following a public consultation, with reviews taking place every three years. As I said, we believe that there is a compelling reason for having a cap in place. There are benefits that attach to having certainty on the level of the cap, with it being clearly defined, rather than perhaps having further uncertainty in the future as to what it might be. Leaving it to be set by regulations after a public consultation would serve only to remove certainty and increase bureaucratic burdens. A public consultation would achieve very little, given that 99% of claimants would have been paid in full from August 2011.

[Mr Lammy]

As this Bill and its consequences are a matter of public record, will the Minister undertake to write to hon. Members who have one of the six businesses beyond the Sony claim in their constituencies? I would certainly like to know whether there were any businesses in Tottenham that experienced a claim of more than £1 million, and the nature of those businesses. That would be helpful for the record as we move forward.

[James Brokenshire]

I do not know whether I am able to give the right hon. Gentleman the assurance he seeks, on the basis of legal constraints or data protection issues, but I note his point. I will reflect on it, and if there is anything more that I may be able to add, then I will obviously be happy to write to him. However, I draw the House’s attention to the fact that this might not be quite as straightforward as he suggests and there may be inhibitions that would prevent that sort of broader disclosure.

The Bill already provides for the power to amend the compensation cap through regulation should it be necessary to adjust it to reflect inflation. It would be a relatively simple task to examine cost of living and property price changes in the period since the cap was last set and apply any change to its level before making compensation payments.

In Committee and again today, the right hon. Gentleman raised the issue of regional variations that might affect the cap. The £1 million cap was determined using claims information from the London riots in 2011. One could say, therefore, that the analysis was conducted on claims from one of the most destructive riots in a generation in one of the most costly regions in which to live. It was a very serious example and the right benchmark. On that basis, the cap would not only adequately cover Londoners in the event of a future riot, but more than adequately cover those in other regions. That is the approach we have taken. I reiterate that according to our analysis and that of the Association of British Insurers, had the £1 million cap been in place for the August 2011 riots, then 99% of claims would still have been paid in full.

I hope that in the light of those comments the right hon. Gentleman will be minded to withdraw his amendment.

[Mr Lammy]

As I indicated, these are probing amendments. The whole House has heard what the Minister and the hon. Member for Dudley South (Mike Wood) said, and I understand that the Bill will now go to the other place and receive further scrutiny. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 2, page 5, line 23, at end insert

“, except in the circumstances described in subsection (2A).

‘(2A) Where a claimant’s home is rendered uninhabitable, the amount of compensation may reflect costs that the claimant incurs as a result of needing alternative accommodation.”

Amendment 3, page 5, line 26, at end insert—

‘( ) considerations that decision-makers must take into account in deciding the amount of compensation payable as a result of a claimant needing alternative accommodation (and the regulations may include provision limiting the amount of time for which the costs of alternative accommodation may be claimed),”—(Mike Wood.)

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[James Brokenshire]

We are verging the language used on Second Reading when we discussed how the terms of the existing Riots (Damages) Act 1886 are not fit for the purpose of providing compensation in the event of a riot. The Bill provides good flexibility. It is important to recognise that it enables matters to be dealt with by way of secondary regulation. If certain changes are required, we would not necessarily have to address them through primary legislation, with all that that entails. Indeed, as has been discussed, the Bill enables us to increase the overall cap by negative procedure.

In essence, our debate on amendment 10 is about whether primary legislation should include a mandatory requirement to review. In our judgment, that is not necessary, because of the flexibility given by the Bill, which has been well debated. The scrutiny the House has given it means that it is now fit for purpose for the years ahead, because of the latitude it contains. It enables changes to be made in a relatively straightforward way through the processes and procedures of this House and the other place.

The amendment addresses the question of the regularity of scrutiny and whether a review should be undertaken every time some form of riot takes place. In our judgment, that is bureaucratic and we question whether it would achieve the desired result. It is always open to Government to review legislation, and it is absolutely right and proper that they keep it under close review. That may not necessarily happen on a timed basis, but an event may occur to which the Government will respond—indeed, the House may prevail on the Minister in question to do this—by conducting a review of the legislation, to judge whether it is still appropriate. The Bill does not prevent that flexibility—far from it. It can still happen.

My hon. Friend the Member for Dudley South (Mike Wood) has spoken of the general approach to reviewing all legislation within three to five years of the date of Royal Assent. Therefore, in any event, come what may, there will be an assessment of the Bill. Rather than having fixed points, the Bill provides flexibility to make changes. The regulatory framework enables the issue to be contemplated in that way—it provides latitude—and that is the appropriate way to deal with it. Indeed, it is right and proper that, if such events were to happen, the House could say to the Government, “Look at the Bill now. This is the right time to do it,” without that being reflected formally in the Bill. For those reasons, we judge that the amendment is not needed.

[Lyn Brown]

rose—

[James Brokenshire]

I will, in due deference, give way to the shadow Minister.

[Lyn Brown]

Very brave. I say gently to the Minister that I was a bit flabbergasted by the length of time that passed before the introduction of such a Bill. There was a period of unrest in the 1980s, during my early childhood, and I can recall being in a restaurant in Leicester Square on my way to a concert during the poll tax riots. I am surprised, therefore, to be debating a Bill on a matter that has not been revisited during that time. Given that these things happen, given that there can be long periods of time between such occurrences and given that our predecessors did not see fit to revisit the legislation despite some fairly appalling riots in our capital city and elsewhere, why does the Minister genuinely believe and take comfort from the fact that the Bill is somehow different, and that 150 years will not pass before it is revisited?

[James Brokenshire]

The hon. Lady makes a fair point. I am sure that anyone who has been caught up in a riot, and who has suffered loss or damage as a consequence, feels that hugely keenly. We are talking not just about the immediacy of the situation and the fear that it creates, but about what that means in restoring a life, putting property back into place and dealing with adverse effects on a business. That has been at the heart of our debates on the Bill, and that is why I welcome and strongly endorse the approach of my hon. Friend the Member for Dudley South in bringing forward the Bill and seeking to address the problem.

There are a couple of points that I would make. First, the Bill has been drafted in a manner that allows greater latitude than the Victorian legislation. I return to the point about not requiring primary legislation. Dealing with things in secondary legislation gives greater latitude and flexibility to make changes to the regulatory framework more swiftly. That reflects the fact that other items may need to be covered, or the cap may no longer be appropriate. The Bill provides a real benefit in offering that level of flexibility.

Secondly, the hon. Lady made a point about individual occurrences and events, and she pointed to some serious incidents that might have made a review appropriate. The latitude provided by the Bill lends itself well to that, because it will not be necessary completely to recast primary legislation. Some riotous disturbances may not lead to a significant number of claims, so it might not be appropriate to trigger a formal procedure such as that proposed in the amendment. The student riots in 2010, for example, involved significant policing challenges but attracted fewer than five compensation claims. We have the ability to carry out such a review, but we do not need anything with quite such a rigid structure. I suggest to the House that the Bill gives the Government the flexibility and the latitude that they need. In that context, I hope that the right hon. Member for Tottenham will be minded to withdraw his amendment.

[Mr Lammy]

The shadow Minister, my hon. Friend the Member for West Ham (Lyn Brown), has expressed my views strongly from the Dispatch Box, and I hope that the matter will receive greater scrutiny in another place. Self-evidently, issues arise in the peculiar event of riots, and the Government ought to think seriously about producing some sort of impact assessment, which need not be onerous. I undertake to write to colleagues in the other place to ensure that that receives further examination.

As I have listened, not to myself but to my hon. Friend, I have been convinced of my own argument. Nevertheless, I will not press the amendment to a Division. This is an important Bill, and it must find its way to the other place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

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[James Brokenshire]

I pay tribute to my hon. Friend the Member for Dudley South (Mike Wood) for his excellent stewardship of the Bill. It takes enormous focus, dedication and drive to take a private Member’s Bill through this House. It is not straightforward. I commend him for identifying this important issue, which has affected so many of our communities, and for having the ability, early in his parliamentary career, not only to bring the Bill forward, but to chart its passage through this House. It will now go on to the other place and, I hope, become law so that he achieves what he wants, which is to provide the protection and benefit of a safety net for those who are drawn into something that we hope will never happen, but which experience tells us might happen. We need those protections to be properly in place so that we no longer need to fit into the Victorian legislative framework, with concepts such as “riotous or tumultuous assembly”, but have legislation that reflects the needs of our modern society.

As we prepare to send the Bill to the other place, I want to express my gratitude to Members on both sides of the House who have engaged in a constructive and thoughtful debate on these measures. They have added to our scrutiny and consideration, and have added benefit to the Bill. We have reflected on how best to support communities, families and people in recovering from the often devastating impacts of riots.

Some of the contributions with the greatest impact have been made by Members who represent riot-affected constituencies. They have spoken movingly and with passion about the difficulty and distress that is caused to individuals, families and business owners by riots, particularly those of 2011. Five people—Trevor Ellis, Haroon Jahan, Shahzad Ali, Abdul Musavir and Richard Mannington Bowes—lost their lives in those riots. It is right that we remember them at this time. Our sympathies remain with their families, friends and all who loved them. Their memory reminds us of the impact that these appalling events can have. Although our debate has rightly and inevitably been about issues of compensation, it is people’s lives that we are talking about. The contributions of many right hon. and hon. Members have underlined that point. This Bill is important because it will help people build their lives back up after such appalling events.

The Bill will not prevent riots, nor will it tackle the base criminality that often surrounds them, but it will provide the legislative platform for a modern, well thought-out package of compensation for people who, through no fault of their own, find themselves facing damage and loss to their homes and businesses. It will also help those caught in the wake of a riot to recover from the violence and criminality more easily.

The amendment that my hon. Friend the Member for Dudley South proposed to cover the cost of alternative accommodation for those who are left homeless in a riot is important. When these measures become law, the Government will work to ensure that the compensation can be accessed quickly by individuals in the aftermath of a riot, recognising that rapid support and reassurance are of the utmost importance. The further amendment to set out the time limits on the face of the Bill demonstrates our commitment to provide a more generous approach to the submission of claims and evidence. As I have indicated, further flexibility on deadlines to cover extenuating circumstances will be provided for in regulations.

The Bill provides an important legislative platform for outlining what individuals and businesses affected by riots will be entitled to. It will be supplemented by regulations that will cover a number of important aspects, such as underlining our commitment to afford new-for-old replacements in most circumstances, providing more detail on the riot claims bureau, and confirming that charity payments will not be deducted from riot compensation payments. In addition to the regulations, as stated in previous stages of the Bill, we will also publish guidance for the public and decision makers, to provide further awareness and understanding of the legislation. As has been said, this is not simply about the law; it is about how the schemes are applied so that people know how they can claim, what they need to provide, and when they need to do that. We must respond to those practical realities, and consider how we can learn from the experience of the 2011 riots, incidents of flooding and other events where support needs to be provided.

In conclusion, the Bill sets out the framework for a modern, fair and affordable compensation scheme that supports communities that are recovering from riots, without placing unreasonable burdens on the taxpayer. The amendments and improvements that have been made are in keeping with that principle, and the Government support them. I pay tribute to my hon. Friend the Member for Dudley South for using the time afforded to him to promote a private Member’s Bill to deal with an important issue that has affected so many lives. As the Bill proceeds to the other place, I believe that it will provide assurance and protection into the future, and the framework that it provides means that it will remain as relevant as it is now for decades to come.

Question put and agreed to.

Bill accordingly read the Third time and passed.