Riot Compensation Bill

Mike Penning Excerpts

Wednesday 13th January 2016 Public Bill Committees

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth.

The riots in 2011 saw disorder on a scale unprecedented for a generation, threatening life and limb, with businesses and homes burnt down and communities laid waste. What happened was nothing short of outrageous. I pay tribute to the police, fire and ambulance services for the role they played in the most difficult circumstances. I also pay tribute to the local communities that stood together in what were tough times. It was right that many people paid the price for what happened with their liberty, but there was then a price to be paid to the victims.

As the hon. Member for Dudley South has said—I pay warm tribute to him for pioneering the Bill, which we strongly support—the Bill is about updating the 1886 Act. There were many moving contributions on Second Reading about the severe losses of those affected by the riots in 2011 and how compensation was woefully inadequate, particularly in terms of the speed with which it was paid, as well as the scale of what was paid. My hon. Friend the Member for Ealing Central and Acton spoke movingly of her constituent, Ravi, a small business owner. It took 18 months for his shop to reopen at half the size, and he and his family were forced to live off their savings in the meantime.

My hon. Friend the Member for Croydon North spoke of the nine businesses and 40 flats that were destroyed in his constituency, putting poorer victims in severe financial difficulty. Some victims have not received the compensation that they are due to this day. The losses to people such as Ravi show that it is right that the legislation is updated to ensure that those who suffer the catastrophic consequences of riots are compensated fully and in a timely fashion.

Equally, there are other changes that we will come to shortly that necessarily deal with flaws in the existing legislation. For example, there was no mention of motor vehicles in the 1886 legislation, unsurprisingly, and no consideration of interim compensation for victims while claims were processed. There was no consideration of new-for-old replacement of damaged goods and no powers for the police to delegate administering the compensation process to experts. As a result, several years on from the 2011 riots, some victims are still waiting for more than £40 million to be paid out.

The Bill is a necessary update to very old legislation, and the broad thrust is welcome. There will be contributions during the passage of the Bill on particular issues to seek clarification and to address concerns from hon. Members who have constituency interests, but the Bill is welcome because it modernises the language of the 1886 Act and includes cars and other vehicles. It provides for much-needed interim payments and creates a new body to deal with insurance claims to avoid massive delays and the kind of bureaucracy seen last time around. The Bill proposes the capping of payments by police forces. It is right that they are not asked to promise a blank cheque, not least because of the immense financial pressures on police forces.

In conclusion, my right hon. Friend the Member for Tottenham has spoken movingly in previous debates and on Second Reading about the impact of what happened on his community and many others. “Never again” is our determination, but we need to ensure that the victims of what happened are finally properly and fully compensated, and we need to learn the lessons of the inadequacies of the 1886 Act and bring arrangements up to date to ensure that victims are compensated. I am pleased that we are in agreement on this welcome measure, which has the support of the Opposition.

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

It is a pleasure to serve under your chairmanship, Mr Howarth. This private Member’s Bill is a first for me as a Minster. I congratulate my hon. Friend the Member for Dudley South on piloting the Bill through. It has support from across the House. Tone is important when trying to persuade colleagues, and he is a champion of that. I apologise for not being in the House on the Friday when the Bill was debated on Second Reading, but I have read the Hansard report. I was not the duty Minister on that day, but my colleague, the Minister for Immigration, did very well to ensure that he read every note I gave him in the right tone.

I join the hon. Member for Birmingham, Erdington in paying tribute to the emergency services that were so valiant and brave in 2011 and in the other riots that sadly we have had over the years. We do need measures in statute to ensure compensation for those who need it; some would argue that we should have done that sooner, since this was first put in statute in 1886.

As someone born in Enfield and brought up in Tottenham, Mr Howarth, I found it very difficult to watch the riots on TV and later to visit the area where I have so many friends and relatives. That part of the world had done so much over the years, particularly since the terrible things that happened at Broadwater Farm. Politicians are supposed to be hardened, but we are not because those are our communities. I pay tribute to the right hon. Member for Tottenham, my hon. Friend the Member for Enfield, Southgate, Nick de Bois and other hon. Members now here who had their communities blighted and devastated by the riots. I say as the Minister that it is right and proper that we are here today to help the Bill through.

I have looked extensively at the amendments and spoken to hon. Members from across the House to see how we could help. I also pay tribute to my officials, who have given an extensive amount of time to ensure that we debate the Bill and get it right so that we can enact it and help our constituents in the way they need.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Property in respect of which claims can be made

Question proposed, That the clause stand part of the Bill.

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[Jack Dromey]

Birmingham was one of the cities hit hard by the riots, and the constituency of my hon. Friend the Member for Birmingham, Ladywood was particularly affected. I want to draw a distinction between, on the one hand, big retailers such as Next or supermarkets, which have the capacity to submit a claim quickly—they understand the process and can take advantage of the 1886 Act—and, on the other hand, smaller businesses. Business organisations have said to us—we are sympathetic to such representations—that some individuals were traumatised, some were injured, some faced financial problems and some literally faced bankruptcy. For those people to learn about the procedure, compose an application and submit it, they need time. I sense that the Government are sympathetic to the arguments that my right hon. Friend the Member for Tottenham has powerfully deployed, so I hope that the Minister will be flexible. This amendment might usefully be made.

[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 am grateful to the Minister for that undertaking and, if those regulations are forthcoming, am pleased to withdraw the amendment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[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.

[The Chair]

The Minister mentioned the issue of insurance and I wanted to raise that issue in this regard. The areas that tend to be worst affected by riots tend to be poorer areas, as my right hon. Friend the Member for Tottenham has described. One of the issues that affected businesses in the London Road area just outside the town centre of Croydon—it was the London Road that was hit the hardest; that is where businesses tend to be poorer and to be led by ethnic minority owners—is that after the riots insurance premiums grew so rapidly that many of those businesses became uninsurable. That led to further pressure on those businesses to close down. The last thing that we want to see is areas that are already poor, and where businesses are starting to grow and bringing life back into those areas, being hollowed out and shops closing down. Do the Government have any intention of addressing the issue of insurance becoming unaffordable in areas that have previously been hit by the riots?

[The Chair]

Order. Before the Minister resumes, I want to say that I have exercised quite a bit of latitude so far in these proceedings. The hon. Member for Croydon North could well have made a very good speech consisting of exactly the words that he has just used. Interventions should be much briefer than that. I say that very gently, but advisedly.

[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.

[Mr Lammy]

With that statement from the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

Clause 3 ordered to stand part of the Bill.

Clause 4

The decision-maker on a claim

Question proposed, That the clause stand part of the Bill.

[Mr Burrowes]

This Bill is particularly important to my constituents in Enfield, who suffered great loss. It is an area that would not have dreamed of being caught up in a riot, but was. I want to draw on situations where, instead of there being huge riots that transcend many regions, there may be an issue as to whether a riot takes place at all and whether what happens comes within the definition of riot.

In Enfield, as elsewhere, even though it was obvious that there had sadly been a riot, there was a concern and nervousness among the authorities about mentioning the word “riot”, because they would then click into a conversation. The Bill has rightly dealt with the antiquated language of the 1886 Act and the definition in the Public Order Act 1986, but there is still the same issue that liabilities follow from definitions; I know that, as a lawyer. We may not have such an obvious situation of riot on the streets of London, Birmingham or elsewhere. As a lawyer I know that when 12 or more people gather together in a public order incident, there is an issue as to whether it comes under the strict definition of a riot or whether it is an affray or another Public Order Act incident.

When a claim is considered, the responsible person or authority is the policing authority, the appropriate decision-making body. We need to look at the process and ensure that there is not an undue conflict and that we do not wait on cases to go to court to see whether anyone mentions the word riot or wait for a determination and court judgment that says that those responsible have been convicted of riot. We do not want our constituents and businesses to have to hang on for that process, which could take a long time and be subject to further appeals and criminal court proceedings before a decision is made.

I ask the Minister whether that has been considered and whether it may be appropriate not necessarily to delegate the matter away from a policing authority, but to get an independent view from a separate prosecutorial authority. That could separate the prosecutorial function of those responsible for a public order incident from the function of determining the claim to ensure that a conflict cannot get in the way of a timely response and compensation.

[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.

[Mr Reed]

I will be brief. The proposal for the Secretary of State to be able to set up riot claims bureaux is welcome and a sensible move forward.

First, after the 2011 riots one of the problems was that communities did not have a voice in decisions taken about compensation or about models of reinvestment in affected areas. For example, in Croydon the council set up an independent riots panel with the community, but three years later, when I held a review meeting with people who had participated in the panel and with businesses and agencies affected by the riots, I found that not one of its recommendations had been implemented in full. That was extremely disappointing for the community, who had been told that they would be listened to and that action would be taken, although, regrettably, subsequently it was not.

Secondly, the riots recovery fund allocated by the Greater London Authority, a sum in excess of £20 million, was handed to the council, but half the money was spent in an area that was not among the worst affected by the riots and the other half was simply left in the bank account for several years until the GLA asked for it back—reasonably, if the money was not going to be spent. The businesses and property owners in the affected areas again felt severely let down, because not only had they been promised additional support, but it had been made available and never used.

If riot claims bureaux are to be set up, are the Government minded to ensure community representation on them? The needs and wishes of the community should be fully represented in decisions taken in the aftermath of riots, if we are ever unfortunate enough to see a repeat of the disturbances that happened in 2011.

[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

[Mr Lammy]

I beg to move amendment 1, in clause 8, page 5, line 19, leave out from “compensation” to “that”.

This amendment would remove the £1 million compensation cap.

--- Later in debate ---

[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.

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[Mike Penning]

I can immediately alleviate the right hon. Gentleman’s concerns. No matter where the charitable donation comes from it will be outside the £1 million, and I will set that in regulations.

[Mr Reed]

Croydon, of course, is the king of the suburbs. The mayor of Croydon set up a fund immediately after the riots. Many of the generous citizens of Croydon donated to that and were aghast to see that the money that was handed out to businesses and individuals that had suffered was deducted from the compensation payments made. I hope the proposal that the Minister now makes will also address such circumstances.

[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.

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[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.

[Mike Penning]

On a point of order, Mr Howarth. May I take the opportunity to thank my hon. Friend the Member for Dudley South on his excellent work in bringing the Bill through Committee, and to thank colleagues across the House for their tone and attitude? They have represented their constituents brilliantly. When the Bill becomes law after Report and Third Reading, I hope that people will not need to use it any time soon. We all hope and pray that riots will not take place in our constituencies. Sadly, they sometimes do, but we will now be better prepared to compensate those who are not insured when that happens. I pay tribute to the independent reviewer—who is, I am sure, listening intently—for their excellent work, and I pay tribute to the Bill Committee.

[The Chair]

I think that that was a point of order. I will happily accept it.