Economic Crime and Corporate Transparency Bill (Fifteenth sitting)

Stephen Kinnock Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[The Minister for Security (Tom Tugendhat)]

It is a great privilege, as always, to be with you this morning, Mr Paisley, and to enjoy the possibility of conversing about the Proceeds of Crime Act 2002.

The clause introduces schedule 6 to the Bill, which amends the criminal confiscation powers contained in parts 2, 3 and 4 of the Proceeds of Crime Act 2002—known as POCA, not to me, but to some presumably—to make it easier for law enforcement agencies to seize, detain and recover cryptoassets in more circumstances than at present. Schedule 6 will amend the provisions in each of the three existing confiscation regimes that extend to England and Wales, Scotland, and Northern Ireland so that the measures apply in all parts of the United Kingdom. That is reflected in the three parts of schedule 6.

Key definitions in schedule 6, such as those of “cryptoasset” and “cryptoasset exchange provider”, are consistent with those used elsewhere in the Proceeds of Crime Act. The schedule includes powers to update those defined terms to ensure that the measures in the Bill can keep pace with the constantly evolving criminal use of cryptoassets, the rapidly changing nature of crypto technology as well as stay aligned with other legislation dealing with similar threats.

[Stephen Kinnock (Aberavon) (Lab)]

It is a great pleasure to serve under your chairship today, Mr Paisley. I take the opportunity to welcome the Minister to his place; I do not think that I have done so formally, although I might well have done informally. It is good to see him in his place.

I want to make some general comments about cryptocurrencies and about the clause and schedule 6. Broadly speaking, they have some positive aspects, but we also have some questions for the Minister, and I am sure that he will explain the position with his customary lucidity once I have sat down.

Cryptocurrencies and other digital assets are not new, but how they should be regulated is still very much an open question in the UK and internationally. The Government’s decision to expand the legal framework for asset recovery under the Proceeds of Crime Act is a positive development. For that to work, however, we need to be clear about what the legislation intends to achieve.

It is fair to say that the Government have sent mixed messages about their approach to regulating cryptoassets. On the one hand, they have acknowledged the need to tackle the use of cryptoassets for criminal purposes, hence the decision to extend the money laundering regulations to cryptoasset businesses, which has been under the supervision of the Financial Conduct Authority since January 2020. In the factsheet published alongside the Bill, the Government set out their view:

“Cryptoassets are now increasingly being used by criminals to move and launder the profits of various crimes including drugs, fraud, and money laundering. There is also an increased risk that cryptoassets are being exploited to raise and move funds for terrorist activities.”

On the other hand, earlier this year, the then Chancellor of the Exchequer, who is now the Prime Minister, said that it was his

“ambition to make the UK a global hub for cryptoasset technology”.

The then Economic Secretary to the Treasury echoed that, saying in a speech at the Innovate Finance global summit in April:

“If there is one message I want you to leave here today with, it is that the UK is open for business—open for crypto-businesses”;

and

“Because we want this country to be a global hub—the very best place in the world to start and scale crypto-companies.”

It concerns me that the Government do not seem to have made up their mind whether as a country we should value crypto firms and want to entice them to the UK, or whether we should recognise the ease with, and scale at which, criminal activity within crypto markets is allowed to happen and therefore should prioritise tightening regulation and enforcement by cracking down on the widespread use of such assets to defraud individuals and undermine our national security. Perhaps the Minister will shed some light on that strategic dilemma or ambiguity and on how the Government plan to reconcile those two apparently competing aims.

I do not want to pre-empt what the Minister will say, but I imagine that he will claim that it is possible to do both.

[Tom Tugendhat]

Indeed.

[Stephen Kinnock]

But is it not simply the case that we are not putting enough resources into the enforcement of laws and the policing of such markets? That is fundamental to achieving the regulatory aim of that side of the equation.

Crypto-expert Aidan Larkin recently told me how the US Government’s money laundering and asset recovery section brings in around $800 million a year in crypto-recovery alone, while the UK brings in close to nothing, because the UK Government fail to employ the handful of experts required simply to study the blockchains via things such as bitcoin analytics and to follow the illicit finance—“to follow the money”, as the saying goes. I cannot pretend to be an expert on the technical aspects of that, but it feels like a missed opportunity to go after illegal activity. We have surely reached a point in time when that could be self-funding, if we did it properly.

I am simply not convinced that the system for regulating cryptoassets is working as well as intended. Indeed, it is pretty telling that in response to written questions 86505 and 86504, which I tabled last week, the Minister admitted that none of the 200-plus crypto businesses operating without commission had been subject to any criminal or civil penalties.

As I mentioned, since January 2020 there has been a requirement for new businesses carrying on cryptoasset activity in the UK to register with the FCA. The requirement was extended to existing businesses the following year. The implementation of the register, however, has been beset by problems, not least of which is the fact that a very large number of the firms required to register have not done so. The FCA seems to have been unable to do much about that.

Only a couple of weeks ago, the Financial Times reported that only 16% of applications for registration have been approved by the FCA. The FCA has said that a large number of firms that failed to meet the conditions for registration have withdrawn their applications and that many of those appear to have carried on doing business without the requisite permission. Indeed, the FCA maintains a list of unauthorised cryptoasset businesses operating in the UK. As of last week, 245 firms were on that list. Will the Minister explain what is being done to prevent those 245 firms that operate outside the money laundering rules from scamming members of the public, facilitating money laundering or assisting the evasion of economic sanctions?

The Government have been aware for some time of problems involving the use of cryptoassets to defraud members of the public. In October 2018, the Government’s own Cryptoassets Taskforce published a report that identified advertising that misleads people deliberately, by overstating the potential gains from investing in such assets and downplaying the risks involved, as a significant problem for the Government to address. Only now, after four years, are new rules being introduced to expand the FCA’s remit to include consumer protection in relation to misleading financial promotions.

Despite that, however, a clear gap remains between the scale of criminal activity in the sector and the ability of the FCA and police forces to respond. In recent evidence provided to the Treasury Committee, Ian Taylor of the crypto trade body, CryptoUK, said that the recent collapse of high-profile crypto exchanges such as FTX could have been prevented had a stronger regulatory system been in place. Multiple witnesses testified to the Committee that, without additional staff with the right expertise, the FCA was unlikely to be able to regulate the crypto sector effectively.

Let me turn to the substance of the clause and schedule 6. It is clearly necessary for the law to be brought up to date to reflect the use of digital assets for criminal purposes. The clause and schedule amend the Proceeds of Crime Act 2002, to extend to intangible assets the same confiscation powers that are already used to recover physical assets like cash. That is an important first step, but in many ways the Bill leaves open more questions than it answers.

For instance, the Bill provides new powers to seize cryptoasset-related items, but the definition of those items is incredibly vague, encompassing any item of property that may provide access to some kind of information that could be relevant to an effort to seize a cryptoasset. Given the broad scope of the powers, alongside the related provisions on the destruction of confiscated property, we need more information from the Minister about how the powers are likely to be used in practice.

[Alison Thewliss (Glasgow Central) (SNP)]

I agree very much with what has been said from the Labour Front Bench. I ask the Minister about the interaction between this Bill and all the other Bills that are considering crypto at the moment, including the Online Safety Bill, which addresses some aspects of people being exposed online to financial crime. The Treasury Committee report on economic crime pushed quite strongly on having an aspect on economic crime in the Online Safety Bill, because it is important that people are not scammed online. To me and to many others, crypto seems very much a place where people do get scammed and lose all their money.

I draw the Committee’s attention to an interview by Henry Mance in the Financial Times yesterday with Stephen Diehl, who is very cynical about the crypto industry and its ability to rip people off. We have to be incredibly careful about the areas we are getting into; we are legislating for something that is moving very quickly. Given the number of Government amendment that will be made to the schedules in this part of the Bill, we need to think carefully about what we are putting in and whether it is suitable for seizing assets and for protecting people against crypto-related fraud more widely.

My other point is about expertise. I have talked an awful lot about the Government having expertise in various areas on the enforcement side, because if there is no expertise in enforcement, the laws that we are considering will just not be enforced. In our evidence session, Andy Gould said:

“We have been investigating cryptocurrency since 2015 or 2016. One of my sergeants has just been offered 200 grand to go to the private sector. We cannot compete with that. That is probably the biggest risk that we face within this area at the moment.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 24, Q37.]

If the money is not there in policing to retain the expertise to prosecute crypto crimes and to make sure that the legislation works in practice, rather than just on paper, the Government will be very much behind the curve.

I add my hesitation on the messages the Government are giving out on regulating and encouraging and on cracking down on a sector that has the potential, as we have seen with the collapse last week, of losing an awful lot of people their money and of making some people an awful lot of money out of those who have lost it.

--- Later in debate ---

[Tom Tugendhat]

So, $13,000. That certainly speaks to the level of volatility. It has been up and down like a yo-yo in between times, so it is not exactly as though anybody would have been recommended it as an investment vehicle. I understand the hon. Lady’s points about online safety and fraud, and she is completely correct, but that is being addressed in different aspects of Government policy. What the Bill does is make sure that those assets that are held in cryptocurrency can be seized, as other assets can. It is certainly true that they are held in different ways, as the gentleman who is going through the waste dump in Wales is discovering. That means that seizing the assets needs a certain ambiguity in the legislation in order to keep it updated for the future. The Government have made a sensible series of suggestions to balance that need for advancing the technology and protecting consumers.

[Stephen Kinnock]

The Minister is being very generous. On that point about seizing the assets, will the Minister comment on the feedback that Aidan Larkin, an expert in this area, gave me, which is that in the United States money laundering and asset recovery measures bring in about $800 million per year? He says that we do not employ enough people doing block chain analytics. We are missing a big opportunity to generate revenue for the Exchequer.

[Tom Tugendhat]

I am delighted that the hon. Gentleman will now be supporting this element of the Bill, because that is exactly what it is for.

[Stephen Kinnock]

I thank the Minister for sitting down even before I had intervened.

[Tom Tugendhat]

I thought I had finished.

[Stephen Kinnock]

It seems that this is an issue around resourcing and having the people in place—the handful of experts that we need to study the blockchains. Will the Minister assure the Committee that that resourcing will be provided?

[Tom Tugendhat]

I can assure the hon. Gentleman that the National Crime Agency, working alongside partners in places such as GCHQ, has enormous amounts of technology to look at cryptoassets in various different ways. The Bill—which I am delighted to hear the hon. Gentleman supports so enthusiastically—will indeed give the powers that he looks for.

Question put and agreed to.

Clause 141 accordingly ordered to stand part of the Bill.

Schedule 6 agreed to.

Clause 142

Cryptoassets: civil recovery

--- Later in debate ---

[Tom Tugendhat]

This is a series of small wording and technical amendments that make no substantial changes to schedule 7, but simply ensure clarity and maintain consistency in the Bill’s drafting.

[Stephen Kinnock]

The use of enhanced powers to seize and detain digital assets, as set out in schedule 6, will be subject to a court order. Clause 142 and schedule 7 and the related Government amendments extend civil recovery powers, which may be used in the absence of a criminal conviction, to a range of organisations including the National Crime Agency, His Majesty’s Revenue and Customs and the Serious Fraud Office, in addition to police forces. It would be helpful if the Minister could explain how the Government will ensure that these enforcement powers will be used effectively in a way that avoids duplication of effort and ensures that there is a clear division of responsibilities of the different agencies. As I have said before, numerous additional powers are provided for in the Bill that require further clarification.

[The Chair]

Order. I encourage you to speak to amendment 121. We will come to the other amendments in the next group.

[Stephen Kinnock]

I apologise—I thought we were already on that.

[The Chair]

I do not want to stop you in case you have something material to put on the record on amendment 121.

[Stephen Kinnock]

I have no substantial comment on the Government amendments. I should have made that clear. As the Minister says, these are technical amendments that do not have a huge amount of consequence.

I return to the issue of powers provided for in the Bill that require further clarification. I would be particularly grateful if the Minister could explain how the provisions enabling a digital asset to be converted into its equivalent value in cash might be used in practice.

In my view, there are other important issues in this area, which the Bill fails to address. I would be grateful if the Minister could set out what plans, if any, the Government have to update the asset confiscation powers we have been discussing and to extend the scope of the money laundering regulations to reflect technological developments such as non-fungible tokens and the use of digital works of art as a means of disguising illicit financial transactions.

[Tom Tugendhat]

I was rather under the impression that we had not voted on the amendment.

--- Later in debate ---

[Tom Tugendhat]

It is unusual to have the Opposition argument before the ministerial one—

[Stephen Kinnock]

I apologise for jumping the gun, but I thought we had already debated the group.

[Tom Tugendhat]

I am delighted to have had the position set out so clearly.

Perhaps it would be helpful if I answered some of the hon. Gentleman’s questions. The reality is that this part of the Bill is to allow law enforcement agencies to search for physical items linked to cryptoassets. As I said in answer to an earlier point, many of the assets are held in different ways. Therefore, seizing physical assets in order to link to cryptoassets is often necessary.

To use the proposed powers, officers will need reasonable grounds to suspect that the cryptoassets have been obtained through unlawful conduct or are intended for use in unlawful conduct. The powers to search for and detain assets are supplemented by powers to ultimately forfeit the cryptoassets where a magistrates court, or a sheriff court in Scotland, can be satisfied that they have been obtained through, or are intended for use in, unlawful conduct. The powers to seize or freeze and ultimately recover cryptoassets may be used irrespective of whether the asset holder has been convicted of a criminal offence. They are, therefore, an important tool for disrupting criminal activity.

Government new clause 23 and new schedule 1—which we have just heard the Opposition debate—mirror in counter-terrorist legislation the civil recovery powers in schedule 7 to the Bill by introducing new provisions into the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2000. That addresses a gap in existing counter-terrorism legislation and ensures that the UK’s world-leading counter-terrorism framework keeps pace with modern technology.

The creation of cryptoasset-specific civil forfeiture powers in both the Proceeds of Crime Act and counter-terrorism legislation will, importantly, mitigate the risk posed by those who cannot be prosecuted under the criminal system, but who use their proceeds stored as cryptoassets to perpetrate further criminality. Key definitions in the measures inserted by schedule 7 and new schedule 1 are in line with existing legislation and with schedule 6 to the Bill. Similarly, they include powers to update the defined terms and adapt the process for forfeiture of frozen cryptoassets, if needed. With that, I believe I have answered the Opposition’s questions before they were even asked.

[Stephen Kinnock]

The Opposition are concerned about enforcement. As the Minister and I have agreed throughout the debate, and as his ministerial colleague has frequently said, legislation without implementation is not worth the paper it is written on. There is little point in us passing a law that cannot or will not be enforced effectively. I am, and the Opposition are, genuinely concerned about the real risk in the proposals, partly because so much detail has yet to be made clear, but mostly because of the huge gap between what we expect of law enforcement and what resources the Government are prepared to put in.

As I said about the FCA, even the most basic requirement for cryptoasset firms to register is starting to appear unworkable. Will the Minister explain, if we cannot even get such businesses to register, how on earth will we ever be able to identify which ones are breaking the law, much less impose any penalties? I look forward to his clarification.

[Tom Tugendhat]

I am pleased that the hon. Gentleman is so supportive of the work of the NCA, because it, GCHQ and others have been working extremely hard on identifying the movement of cryptoassets around not just the UK, but wider areas and jurisdictions. That is enormously important for the element of seizure to which he is referring.

It is also important that the conversion powers that the hon. Gentleman spoke about are understood for what they are. A few moments ago, the hon. Member for Glasgow Central asked about market volatility. That is true at any point, including at moments of seizure. Therefore, in order to avoid market volatility at moments of seizure—particularly when assets have been taken, converted to crypto in order to be moved abroad and then seized—having control of those assets means that one needs to put them into cash in order to have a recoverable asset, so this provision is extremely sensible.

The new powers are modelled on existing powers that many law enforcement agencies use to disrupt criminal and terrorist networks. They exercise proportionality and investigatory powers that are absolutely necessary, and no more.

Question put and agreed to.

Clause 142, as amended, accordingly ordered to stand part of the Bill.

Schedule 7

Cryptoassets: civil recovery

Amendments made: 51, in schedule 7, page 206, line 42, leave out “Chapter” and insert “Part”.

This amendment makes a minor technical correction to inserted section 303Z42 of the Proceeds of Crime Act 2002, which relates to the procedure for applying for the forfeiture of cryptoassets.

Amendment 52, in schedule 7, page 206, leave out lines 45 to 47 and insert—

“(3) Where an application is made under section 303Z41 in relation to cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order—

(a) subsections (4) and (5) apply, and

(b) the crypto wallet freezing order is to continue to have effect until the time referred to in subsection (4)(b) or (5).”

This amendment amends inserted section 303Z42 of the Proceeds of Crime Act 2002 to provide that a crypto wallet freezing order continues to have effect until the end of any forfeiture proceedings started in respect of cryptoassets held in a crypto wallet that is subject to such a freezing order.

Amendment 53, in schedule 7, page 207, line 12, leave out “(4)” and insert “(4)(b)”.

This amendment is consequential on Amendment 52.

Amendment 54, in schedule 7, page 211, line 24, leave out from “applies” to end of line 28 and insert “—

(a) the magistrates’ court or sheriff decides—

(i) to make an order under section 303Z41(4) in relation to some but not all of the cryptoassets to which the application related, or

(ii) not to make an order under section 303Z41(4), or

(b) if the application is transferred in accordance with section 303Z45(1), the High Court or Court of Session decides—

(i) to make an order under section 303Z45(3) in relation to some but not all of the cryptoassets to which the application related, or

(ii) not to make an order under section 303Z45(3).”

This amendment provides that an application under inserted section 303Z46 of the Proceeds of Crime Act 2002 (continuation of crypto wallet freezing order pending appeal) may be made in circumstances where a forfeiture application under section 303Z41 of that Act is transferred in accordance with section 303Z45 of that Act to be heard by the High Court or the Court of Session.

Amendment 55, in schedule 7, page 211, line 31, leave out “(1)(a) or (b)” and insert “(1)”.

This amendment is consequential on Amendment 54.

Amendment 56, in schedule 7, page 211, line 37, leave out “under section 303Z47” and insert

“(whether under section 303Z47 or otherwise)”.

This amendment is consequential on Amendment 54.

Amendment 57, in schedule 7, page 211, line 39, leave out “(1)(a) or (b)” and insert “(1)”.

This amendment is consequential on Amendment 54.

Amendment 58, in schedule 7, page 213, line 2, leave out “with the approval of” and insert

“if the officer is a senior officer or is authorised to do so by”.

This amendment amends inserted section 303Z48 of the Proceeds of Crime Act 2002 to provide that an enforcement officer may destroy forfeited cryptoassets only if the officer is a senior officer or is authorised to do so by a senior officer.

Amendment 59, in schedule 7, page 214, line 44, after “may” insert “, subject to subsection (7A),”.

This amendment and Amendments 60 and 62 amend inserted section 303Z51 of the Proceeds of Crime Act 2002 to provide that cryptoassets may not be released under that section while forfeiture proceedings are ongoing in respect of those cryptoassets.

Amendment 60, in schedule 7, page 215, line 8, after “may” insert “, subject to subsection (7A),”.

See Amendment 59.

Amendment 61, in schedule 7, page 215, line 24, at end insert “or”.

This amendment makes a minor technical correction to the release condition in inserted section 303Z51(7) of the Proceeds of Crime Act 2002.

Amendment 62, in schedule 7, page 215, line 29, at end insert—

“(7A) If an application under section 303Z41 is made for the forfeiture of the cryptoassets, the cryptoassets are not to be released under this section until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.”

See Amendment 59.

Amendment 63, in schedule 7, page 226, line 18, after “cryptoassets” insert—

“, or of property which they represent,”.

This amendment amends inserted section 303Z63 of the Proceeds of Crime Act 2002 (converted cryptoassets: victims and other owners) to provide that the condition in subsection (5)(a) of that section is met where the applicant was deprived of cryptoassets or of property which those cryptoassets represent.

Amendment 64, in schedule 7, page 227, leave out lines 1 to 5 and insert—

“(a) if the conditions in this Chapter for the detention of the converted cryptoassets are no longer met, or”.

This amendment amends the release condition in inserted section 303Z63(8) of the Proceeds of Crime Act 2002 (converted cryptoassets: victims and other owners) to provide that the release condition is met where the court is satisfied that the conditions in Chapter 3F of Part 5 of that Act for detention of the converted cryptoassets are no longer met.

Amendment 156, in schedule 7, page 230, line 22, at end insert—

“Amendments to the Proceeds of Crime Act 2002

1A In section 2C(3A) of the Proceeds of Crime Act 2002 (prosecuting authorities), for ‘or 303Z19’ substitute ‘, 303Z19, 303Z53 or 303Z65’.

1B (1) Part 2 of the Proceeds of Crime Act 2002 (confiscation: England and Wales) is amended as follows.

(2) In section 7 (recoverable amount)—

(a) in subsection (4)(c), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (4)(d), after ‘303Q(1)’ insert ‘or 303Z44(1)’.

(3) In section 82 (free property)—

(a) in subsection (2)—

(i) in paragraph (ea), for ‘or 10Z2(3)’ substitute ‘, 10Z2(3), 10Z7AG(1), 10Z7BB(2), 10Z7CA(3), 10Z7CE(3) or 10Z7DG(3)’;

(ii) in paragraph (f), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z32(1), 303Z37(2), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (3)—

(i) after paragraph (b) insert—

(ii) in paragraph (c), after ‘303Q(1)’ insert ‘or 303Z44(1)’;

(iii) after paragraph (e) insert—

(iv) in paragraph (f), after ‘10I(1)’ insert ‘or 10Z7CD(1)’.

1C (1) Part 3 of the Proceeds of Crime Act 2002 (confiscation: Scotland) is amended as follows.

(2) In section 93 (recoverable amount)—

(a) in subsection (4)(c), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (4)(d), after ‘303Q(1)’ insert ‘or 303Z44(1)’.

(3) In section 148 (free property)—

(a) in subsection (2)—

(i) in paragraph (ea), for ‘or 10Z2(3)’ substitute ‘, 10Z2(3), 10Z7AG(1), 10Z7BB(2), 10Z7CA(3), 10Z7CE(3) or 10Z7DG(3)’;

(ii) in paragraph (f), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z32(1), 303Z37(2), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (3)—

(i) after paragraph (b) insert—

(ii) in paragraph (c), after ‘303Q(1)’ insert ‘or 303Z44(1)’;

(iii) after paragraph (e) insert—

(iv) in paragraph (f), after ‘10I(1)’ insert ‘or 10Z7CD(1)’.

1D (1) Part 4 of the Proceeds of Crime Act 2002 (confiscation: Northern Ireland) is amended as follows.

(2) In section 157 (recoverable amount)—

(a) in subsection (4)(c), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (4)(d), after ‘303Q(1)’ insert ‘or 303Z44(1)’.

(3) In section 230 (free property)—

(a) in subsection (2)—

(i) in paragraph (ea), for ‘or 10Z2(3)’ substitute ‘, 10Z2(3), 10Z7AG(1), 10Z7BB(2), 10Z7CA(3), 10Z7CE(3) or 10Z7DG(3)’;

(ii) in paragraph (f), for ‘or 303Z14(4)’ substitute ‘, 303Z14(4), 303Z32(1), 303Z37(2), 303Z41(4), 303Z45(3) or 303Z60(4)’;

(b) in subsection (3)—

(i) after paragraph (b) insert—

(ii) in paragraph (c), after ‘303Q(1)’ insert ‘or 303Z44(1)’;

(iii) after paragraph (e) insert—

(iv) in paragraph (f), after ‘10I(1)’ insert ‘or 10Z7CD(1)’.”

This amendment contains consequential and other amendments to Parts 1 to 4 of the Proceeds of Crime Act 2002 in relation to the civil recovery of cryptoassets.

Amendment 157, in schedule 7, page 230, line 24, at end insert—

“(1A) In section 278 (limit on recovery)—

(a) in subsection (7)(a), for ‘or 303Z14’ substitute ‘, 303Z14, 303Z41, 303Z45 or 303Z60’;

(b) after subsection (7A) insert—

‘(7B) If—

(a) an order is made under section 303Z44 instead of an order being made under section 303Z41 for the forfeiture of recoverable property, and

(b) the enforcement authority subsequently seeks a recovery order in respect of related property,

the order under section 303Z44 is to be treated for the purposes of this section as if it were a recovery order obtained by the enforcement authority in respect of the property that was the forfeitable property in relation to the order under section 303Z44.’”

This amendment contains a consequential amendment to section 278 of the Proceeds of Crime Act 2002 in relation to forfeited cryptoassets.

Amendment 65, in schedule 7, page 231, line 3, after “may” insert “, subject to subsection (7A),”.

This amendment and Amendments 66 and 67 amend inserted section 303Z17A of the Proceeds of Crime Act 2002 to provide that money may not be released under that section while forfeiture proceedings are ongoing in respect of the money.

Amendment 66, in schedule 7, page 231, line 13, after “may” insert “, subject to subsection (7A),”.

See Amendment 65.

Amendment 67, in schedule 7, page 231, leave out lines 25 to 36 and insert—

“(7) The release condition is met—

(a) in relation to money held in a frozen account, if the conditions for making an order under section 303Z3 in relation to the money are no longer met, or

(b) in relation to money held in a frozen account which is subject to an application for forfeiture under section 303Z14, if the court or sheriff decides not to make an order under that section in relation to the money.

(7A) Money is not to be released under this section—

(a) if an account forfeiture notice under section 303Z9 is given in respect of the money, until any proceedings in pursuance of the notice (including any proceedings on appeal) are concluded;

(b) if an application for its forfeiture under section 303Z14 is made, until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.”

See Amendment 65. This amendment also replaces the release condition in inserted section 303Z17A(7) of the Proceeds of Crime Act 2002 to include changes for consistency with equivalent provisions in Part 5 of that Act.

Amendment 158, in schedule 7, page 235, line 5, at end insert—

“(20A) In section 386 (production orders: supplementary), in subsection (3)(b), for ‘or a frozen funds investigation’ substitute ‘, a frozen funds investigation or a cryptoasset investigation’.”

This amendment contains a consequential amendment to section 386 of the Proceeds of Crime Act 2002 in relation to production orders and cryptoasset investigations.

Amendment 159, in schedule 7, page 236, line 11, at end insert—

“(30) In section 416 (other interpretative provisions), in subsection (1), after the entry for ‘confiscation investigation’ insert—

‘cryptoasset investigation: section 341(3D)’.”

This amendment contains a consequential amendment to section 416 of the Proceeds of Crime Act 2002 in relation to the meaning of “cryptoasset investigation” in Part 8 of that Act.

Amendment 160, in schedule 7, page 236, line 11, at end insert—

“3A In section 438 of the Proceeds of Crime Act 2002 (disclosure of information by certain authorities), in subsection (1)(f), for ‘or 3B’ substitute ‘, 3B, 3C, 3D, 3E or 3F’.

3B In section 441 of the Proceeds of Crime Act 2002 (disclosure of information by Lord Advocate and by Scottish Ministers)—

(a) in subsection (1), for ‘or 3A’ substitute ‘, 3A, 3C or 3F’;

(b) in subsection (2)(g), for ‘or 3B’ substitute ‘, 3B, 3C, 3D, 3E or 3F’.

3C In section 450 of the Proceeds of Crime Act 2002 (pseudonyms: Scotland), in subsection (1)(a), for ‘or a frozen funds investigation’ substitute ‘, a frozen funds investigation or a cryptoasset investigation’.

3D In section 453A of the Proceeds of Crime Act 2002 (certain offences in relation to financial investigators), in subsection (5), at the end of paragraph (dc) (before the ‘or’) insert—

‘(dd) section 303Z21 (powers to search for cryptoasset-related items);

(de) section 303Z26 (powers to seize cryptoasset-related items);

(df) section 303Z27 (powers to detain cryptoasset-related items);’.”

This amendment contains consequential amendments to Parts 10 and 12 of the Proceeds of Crime Act 2002. The amendments relate to the disclosure of information obtained during cryptoasset investigations, the use of pseudonyms during such investigations and offences against accredited financial investigators exercising powers in connection with such investigations.

Amendment 161, in schedule 7, page 236, line 21, at end insert—

“Amendments to the Civil Jurisdiction and Judgments Act 1982

5 (1) Section 18 of the Civil Jurisdiction and Judgments Act 1982 (enforcement of UK judgments in other parts of UK) is amended as follows.

(2) In subsection (2)(g), for ‘or a frozen funds investigation’ substitute ‘, a frozen funds investigation or a cryptoasset investigation’.

(3) In subsection (4ZB)—

(a) after paragraph (b) insert—

‘(ba) a crypto wallet freezing order made under section 303Z37 of that Act;

(bb) an order for the forfeiture of cryptoassets made under section 303Z41 or 303Z45 of that Act;’;

(b) after paragraph (d) insert—

‘(da) a crypto wallet freezing order made under paragraph 10Z7BB of that Schedule;

(db) an order for the forfeiture of cryptoassets made under paragraph 10Z7CA or 10Z7CE of that Schedule.’

(4) In subsection (5)(d)(i)—

(a) after ‘(a)’ insert ‘, (ba)’;

(b) for ‘or (c)’ substitute ‘, (c) or (da)’.”—(Tom Tugendhat.)

This amendment amends the Civil Jurisdiction and Judgments Act 1982 to include provision about the enforcement of certain cryptoasset-related orders in different parts of the UK.

Schedule 7, as amended, agreed to.

Clause 143

Money laundering: exiting and paying away exemptions

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

--- Later in debate ---

[The Chair]

Thank you, Minister. It is not unusual to start when your name is on the clause.

[Stephen Kinnock]

According to the Government’s impact assessment, the purpose of clauses 143 and 144, which expand the scope of exemptions from money laundering offences, is to reduce the number of ineffective defence against money laundering reports submitted to the NCA’s financial intelligence unit. It is worth bearing in mind that the purpose of the reporting system is to enable regulated firms to notify the FIU when they are asked by a client to make a financial transaction that may amount to a money laundering offence. The FIU has seven days to review the report, and if it turns out that there is a connection to money laundering, it can ensure that appropriate enforcement action is taken.

The reports can, and often do, serve as a valuable means of identifying criminal activity. The Government’s wish to reduce the number of DAML reports is understandable, but we must not throw the baby out with the bathwater. It is important for the Minister to explain to the Committee how those measures are sufficiently targeted that they reduce the number of unnecessary or unhelpful reports without causing a similar reduction in reports that might help to identify serious crime.

Clauses 143 and 144 provide exemptions from money laundering offences for certain transactions involving property worth less than £1,000, and in cases where some but not all of a client’s assets may involve criminal funds. I would be grateful if the Minister would explain the Government’s reasoning in setting the relevant thresholds at the specific levels provided for in those clauses.

I want to touch on a couple of broader points. The Government are right that the SARs process is in need of considerable reform. There are many steps the Government could take to improve the quality of reporting in addition to the measures set out in those clauses. For instance, the Solicitors Regulation Authority published a report last month in which it noted that, in two thirds of the reports it reviewed, the firms making the report did not include the glossary codes that enable the NCA to triage reports effectively and ensure an appropriate enforcement response. Additionally, the SRA found that as many as a quarter of the DAML reports it reviewed failed even to describe the criminal conduct that was suspected. Those findings are clear evidence that many law firms do not have an adequate level of understanding of the laws they are expected to help enforce. The same may well be true in other regulated sectors.

Will the Minister set out what steps the Government are taking to ensure that regulated firms have a better understanding of their obligations under the law, and how official guidance might be improved to help firms to submit better quality reports? I point out that significant improvements could be made to the speed and efficiency of the SARs process by making use of new and emerging technologies. If the FIU could use more cutting-edge software applications and algorithms to help identify the most serious crimes, it would go a long way towards addressing the problems that the Government seek to tackle. Perhaps the Minister might comment on the Government’s work in that area.

[Tom Tugendhat]

I am delighted to respond to that. The rising volume of DAMLs being submitted has already had an impact on effectiveness. That is welcome, in that businesses are taking their responsibilities extremely seriously, and the UKFIU is responding appropriately when it receives them. Although, as the hon. Member quite rightly says, technology can help, the reality is that there is still an awful lot of work to be done. That is why these provisions are so reasonable.

The provisions are reasonable because property or criminal funds worth less than £1,000 are already exempt from asset seizures in different circumstances. It makes absolute sense to have a restriction on that in the Bill and apply the same threshold to allow the UKFIU to target, as much as possible, those serious money laundering accusations and investigations appropriately—and, indeed, to arrest more criminals.

[Stephen Kinnock]

I thank the Minister for that response. Would he care to comment on the feedback from the Solicitors Regulation Authority, which points particularly at the fact that many of the firms doing the reports were not including key information such as glossary codes and sometimes did not even describe the criminal conduct that they suspected? Is there something more that could be done so that the information at source was in a better state? Does he think that the feedback from the SRA could be a good basis on which to achieve that?

[Tom Tugendhat]

I am sure that having data at source in as clean and fluent a fashion as possible, so that it is complete and allows investigation, is absolutely essential. I am sure that solicitors will feel the responsibility to do that. I am grateful to the hon. Gentleman for raising that point.

Question put and agreed to.

Clause 143 accordingly ordered to stand part of the Bill.

Clause 144 ordered to stand part of the Bill.

Clause 145

Information orders: money laundering

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

--- Later in debate ---

[Stephen Kinnock]

I thank the Minister for including the provisions in the Bill, which should make it easier for the NCA to access the information that it needs to gather intelligence and conduct analysis of the range of threats that we face from money laundering and terrorist financing. The provisions in the clauses should also help to ensure that the UK is able to provide more effective assistance to law enforcement bodies in other countries in response to requests for information.

Given that so much economic crime is inherently an issue that cuts across international borders, it is absolutely right for the Government to do all that they can to enforce the law within our own borders and to help Governments in our partner countries overseas to do the same.

Question put and agreed to.

Clause 145 accordingly ordered to stand part of the Bill.

Clause 146 ordered to stand part of the Bill.

Clause 147

Enhanced due diligence: designation of high-risk countries

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

[Tom Tugendhat]

The clause amends the Sanctions and Anti-Money Laundering Act 2018 to allow the Treasury to directly publish and amend the UK’s high-risk third countries list on gov.uk.

Under the 2017 money laundering regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries. High-risk third countries are those identified by the Financial Action Task Force as having poor controls and significant shortcomings in their anti-money laundering and counter-terrorist financing regimes.

Currently, a statutory instrument needs to be laid several times a year to update the UK’s list each time the FATF’s own list is amended. The clause will allow for more rapid updates to the list, helping the UK to be even more responsive to evolving money laundering threats by ensuring that risks are communicated and mitigated by the regulated sector as soon as possible. By removing the need to introduce legislation for each update, the change will also ease pressures on ministerial and parliamentary time, thereby responding to Parliament’s call to streamline the process—very much like this Committee.

[Stephen Kinnock]

Clause 147 raises a number of concerns for us, which I hope the Minister will be able to address. It aims to change the procedure for updating the Treasury’s list of countries designated as high risk due to serious deficiencies in their anti-money laundering and counter-terrorist financing systems, which was established by the Sanctions and Anti-Money Laundering Act 2018. The clause will enable the Treasury to update the list directly, without the need for regulations, in effect removing the opportunity for Parliament to scrutinise any changes to the list.

During the passage of the 2018 Act, there was cross-party consensus on the need for any UK list of designated high-risk countries to reflect international standards, primarily by mirroring the lists maintained by the Financial Action Task Force. The problem with clause 147 is that it appears to enable the Treasury to make any future updates to the UK list, even in ways that diverge from the FATF lists, without any opportunity for Parliament to scrutinise or debate the proposals. Given the zeal for deregulation that we have often seen from the current Government, it takes no great stretch of the imagination to foresee a situation in which the Treasury determines that the FATF lists are unduly stringent and that certain countries and territories should be removed from the UK’s list of high-risk countries, even in cases where issues identified by the FATF remain unresolved.

Looking at the relevant impact assessment, it seems that the intention is to enable Ministers to update the list “more swiftly” when needed, thus making the UK’s list more “responsive” to emerging developments than is possible under the current system. But even if the aim is reasonable, the methods are questionable. For one thing, the 2018 Act stipulates that regulations updating the list of high-risk countries are subject to the affirmative procedure, under which Parliament is given the opportunity to retrospectively review changes that have already been made by the time the regulations are published. Together with the fact that updates are generally needed no more frequently than once every three months, this does not seem to place an undue burden on Ministers.

The changes made by clause 147 do not seem proportionate to any identifiable problem with the current system. The Opposition therefore strongly encourage the Minister and his colleagues to revisit the clause, on the basis that a convincing case for the need to remove Parliament’s oversight of this process has not been made.

[Dame Margaret Hodge (Barking) (Lab)]

I concur entirely with the remarks by my hon. Friend the Member for Aberavon, but I want to ask a couple of questions.

First, the Minister will know that we are considering how we can move from freezing the assets of people who are sanctioned to seizing them. One of the ways in which that could be facilitated, from the advice I have received from various non-governmental organisations and lawyers, is to have a sort of kleptocrats list. I wonder if he would take that idea away and, in considering the request for greater parliamentary oversight, look at whether we could designate particular jurisdictions as kleptocracies. All the advice I get indicates that that would make it easier to do the seizing as well as freezing. Of course, in relation to Ukraine, that would mean that some of the £18 billion that has been seized from Russia could be recommissioned and used to help us rebuild Ukraine.

--- Later in debate ---

[The Chair]

I call Neil Kinnock—I beg your pardon, Stephen. People used to do that to me and they always got it wrong.

[Stephen Kinnock]

Don’t worry, Mr Paisley—we could probably exchange notes on that at great length.

I thank the Minister for those points. I recall his time as chair of the Foreign Affairs Committee, when he pushed relentlessly and convincingly for parliamentary scrutiny of a whole range of key issues and decisions. Given that parliamentary scrutiny was built into the 2018 Act, it seems difficult to justify its deliberate removal from the process by this Bill. It seems like it would be good to have those guard rails in place to avoid the risk of somebody in the Treasury deciding at some point that big decisions should be made without any parliamentary scrutiny at all. Does he not agree that this is a real missed opportunity?

[Tom Tugendhat]

No, I do not. I always found that when I wanted to get parliamentary scrutiny as Chair of a Committee, I managed to find ways to do that—often through debates, in which the hon. Gentleman was a wonderful speaker—and to change Government policy by using not only Parliament, but the media and other forms of pressure. There is a difference between seeking to change Government policy on various aspects of areas that should really be considered as wider policy, and seeking to implement these changes, which are, let us be honest, rather technical and not issues of major parliamentary debate.

Question put and agreed to.

Clause 147 accordingly ordered to stand part of the Bill.

Clause 148

Direct disclosures of information: no breach of obligation of confidence

--- Later in debate ---

[Stephen Kinnock]

Clause 154 would lift the current statutory cap on the penalties that may be imposed by the Solicitors Regulation Authority, as delegated by the Law Society, for breaches of the law on economic crime. I am sure that Members on both sides will welcome the change if, as the Government argue in their impact assessment, it increases the deterrent effect of the financial penalties that may be levied for disciplinary matters. Although the Government provide limited evidence to support that claim, it is at least a reasonably logical conclusion.

However, the proposals raise a number of questions, principally around the degree to which clauses 154 and 155 reflect the input received from the sector in response to consultation earlier this year. Specifically, a number of serious concerns were expressed by the Solicitors Disciplinary Tribunal when the SRA consulted on planned increases to its powers to impose fines.

The tribunal argued that the SRA’s powers should be limited to imposing relatively low penalties for minor technical or administrative errors. It argued that increasing the maximum level of fines that the SRA could impose would erode transparency by preventing cases of serious misconduct from coming before a public hearing, which could also remove the scope for a detailed, publicly accessible explanation of any penalties, as is generally provided by the tribunal’s decisions under the current system. In summarising its concern, the tribunal argued that the diminution in the transparency of decision making and detailed reason would be in neither the public’s nor the profession’s interest.

It should be noted that those objections were raised, not in response to the proposed changes set out in this Bill, but in the context of the increase in the maximum level of financial penalties that the SRA may impose from £2,000 to £25,000, which came into effect in July. That change in itself begs a number of questions. In particular, can the Minister explain how many and what proportion of the fines imposed by the SRA since July have been at the £25,000 maximum? Could it not be argued that the Government have not provided enough time for the effectiveness of recent changes to be adequately assessed?

Can the Minister also set out the Government’s reasoning in lifting the cap on the SRA’s fining powers, with specific regard to the objections raised by the Solicitors Disciplinary Tribunal, and other stakeholders, around the transparency of the process?

Clause 155 would amend the Legal Services Act 2007 to set an additional objective for regulators in the legal sector to prevent economic crime. Given the objections that have been raised in the sector relating to clause 154, I would be grateful if the Minister provided further details of any consultation between his Department and providers of legal services, as well as the Legal Services Board, on this proposal.

Finally, it would be helpful if the Minister explained the rationale for the decision to set out, in this Bill, an explicit objective to prevent economic crime for providers of legal services, but not for other sectors covered by the money laundering regulations. The impact assessment sheds limited light on the Government’s thinking in this area, so any additional detail that the Minister could provide today would be welcome.

[Alison Thewliss]

My understanding is that the Law Society of Scotland has no particular objections to the amendments.

[Tom Tugendhat]

The hon. Member is asking about various of the different fining elements. Clearly, the fines discussion is a matter for the individual cases, and would be determined on a case-by-case basis, but I think that removing the cap, which, in modern terms, is actually relatively low—certainly, when compared with financial abuses and other forms of regulation—is entirely reasonable.

The Solicitors Regulation Authority does not, in any way, have any power to strike off a suspended solicitor, so the SDT remains an extremely important part of the disciplinary process. There are various different aspects at play here, but the proposals make good sense and are reasonable. I will happily write to the hon. Member on the issue he raised separately and come back to him about it later.

[Stephen Kinnock]

I thank the Minister for that clarification, and I am grateful for his offer to write with further details. On the point about using the Bill to prevent economic crime with respect to providers of legal services, but not for any other sector covered by the money laundering regulation, would he care to shed more light on the rationale for that decision?

[Tom Tugendhat]

The other sectors are already covered by the money laundering regulation. That element is focusing on legal services because that was a lacuna in the law.

[Stephen Kinnock]

I thank the Minister for that clarification. There is a broader scope to economic crime, not just a specific focus on money laundering, and that covers a wider range of aspects of economic crime, although there is an explicit objective in the Bill that it is limited to providers of legal services. I wonder why that broader scope will not be applied beyond the money laundering concerns.

[Tom Tugendhat]

The changes are being made and the new clause is important for exactly the reasons the hon. Gentleman has highlighted. The new clause will remove an obstacle with respect to the SRA exercising its judgment and punishing appropriately those who might be committing any number of different crimes, which I hope they will not be doing. The measure will give us a provision to enable us to deal with that. The reality is that much of the money laundering regulation has already been covered, along with different aspects of financial services. The proposals specifically address legal services and particular aspects. They are an important addition, and I am happy to support them.

Question put and agreed to.

Clause 154 accordingly ordered to stand part of the Bill.

Clauses 155 to 157 ordered to stand part of the Bill.

Clause 158

Power to make consequential provision

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

Draft Immigration Skills Charge (Amendment) Regulations 2022

Stephen Kinnock Excerpts

Wednesday 16th November 2022 General Committees

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship, Ms Fovargue.

We are somewhat surprised that the Government are introducing this statutory instrument, because it appears to utterly contradict the Home Secretary’s stated objective of reducing immigration. She seems to recognise that the public have been expecting net migration to decrease post Brexit, but as the latest migration figures indicate, this year’s net migration is set to pass 300,000, matching the highs seen in the year of the EU referendum. Today, however, we see attempts by the Government to increase migration even further by creating a further exemption from the immigration skills for sponsored workers on the scale-up route, as well as for EU national intra-corporate transferees who take the route of getting a global business mobility visa for senior or specialist workers.

We are not opposed, in principle, to recognising that in specific areas of our economy, removing the red tape involved in bringing in overseas workers can benefit Britain, but we are opposed to the Government lurching from one extreme to the other, using dog-whistle, anti-immigration rhetoric one day and throwing the doors wide open the next. The Labour party is taking a more balanced, nuanced approach by ensuring that immigration works for our economy and communities. We support the principle of a points-based system for migrant workers. It was, of course, the Labour Government of 2008 that introduced the points-based system for immigration from outside the European Union.

We are clear that there will be no return to the freedom of movement that there was when we were in the EU, but we will build on and make much-needed improvements to the points-based system that is in place. Our long-term ambition is to ensure that all businesses in every sector, and indeed our public services, recruit and train more home-grown talent to fill vacancies before looking overseas. For instance, we need to train up more home-grown doctors; hence our shadow Health Secretary’s commitment to doubling the number of clinical placements, and to setting out a five-to-10-year workforce plan for the NHS in due course.

We recognise that if we simply turn off the tap of migrant labour without putting in place appropriate workforce structures, training and recruitment strategies, our public services will deteriorate and our businesses will struggle to meet our wider economic ambition to make, buy and sell more in Britain. As a result, more jobs could well disappear overseas. There would be other consequences; we cannot continue with the situation in the farming sector. In the past year, 30,000 pigs have been slaughtered and £60 million of crops have been burned. We recognise that we need to attract talent to help us to drive growth, but we are clear that when businesses are supported in recruiting from abroad, that should come with a commitment to increasing UK-based recruitment and training, so that we reduce long-term dependency on overseas labour.

Five years ago, when the first set of regulations on the immigration skills charge were made, the Government were clear about its intended purposes. Introducing the charge would, we were told, incentivise employers to invest in training and upskilling the resident workforce, thus reducing reliance on migrant workers. The skills charge would essentially be a tax on the recruitment of foreign workers, and the proceeds would be reinvested in skills training via the Department for Education. There was a related change: the resident labour market test would make it necessary for employers recruiting from overseas to demonstrate that they had first tried to recruit from within the UK. That test was scrapped by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) when he was Prime Minister, and the skills charge, while still in place, does not appear to be delivering its intended results, as is illustrated by this statutory instrument.

The regulations would exempt some sponsoring employers from having to pay the skills charge for migrant workers under the scale-up route, as well as some intra-corporate transferees. That implies that the Government are aiming to make it easier to recruit overseas workers, which is the exact opposite of what Ministers claimed was the purpose of introducing the skills charge. Does the Minister recognise this contradiction? Perhaps she could say whether this is a deliberate policy U-turn or just the result of incompetence.

It would have been helpful if an impact assessment had been published alongside the regulations. The scale-up route exemption could have far-reaching consequences. To qualify for the scale-up licence, a business simply has to show that it has increased either its profits or staff headcount by 20% on average each year for the past three years, and that it had more than 10 staff working for it at the beginning of that first year. How many businesses is that expected to draw in? It could be a really large number, could it not?

Since no such impact assessment has been provided, will the Minister answer the following questions? What exactly is the purpose of providing those exemptions, and what are the Government hoping to achieve in their overall immigration policy and strategy? What was the rationale for providing exemptions under the scale-up and global mobility schemes, but not for other skills-based routes? The explanatory note states that the reason no impact assessment was made is that

“no, or no significant, impact on the private, voluntary or public sector is foreseen.”

How can that possibly be, given how low the threshold is that I mentioned earlier?

Given the Government’s previous commitment to using revenue from the skills charge to invest in skills training for the UK workforce, and their previous estimate that the charge would raise £100 million in its first year, what on earth leads the Minister to believe that reducing the number of employers who have to pay the charge will have no significant impact? Has the Department done any work at all to assess what losses in Government revenue might result from those changes? Can the Minister guarantee that any reductions in funding for skills training will be made up from elsewhere in the budget?

Finally, if the Government are trying to support the growth of UK businesses, that is certainly welcome, but what has happened to the commitment to invest in skills training, so that growing businesses do not have to recruit from overseas? Have the Government just given up on those objectives? I look forward to the Minister’s response.

--- Later in debate ---

[Miss Dines]

I am grateful for the hon. Lady’s speech, although it may not be on the point of this technical change. I try my best not to be negative. This country is a magnet for businesses from across the world, and those who come under the skills schemes have very high-level skills. It is only right that the company sponsoring them pays into the kitty to promote our home development and training, which is exactly what the schemes will do. It is positives all round.

I know that the hon. Member for Glasgow North East would not want to be seen to be playing party politics on this matter. On Scotland moving away from the United Kingdom and becoming independent, she knows that the Government are committed to the Union. Although I am impressed by her fortitude in trying to make independence relevant to almost any issue, this is a technical regulation change. None the less, I thank her for her support, in that she is not opposing the regulations.

[Stephen Kinnock]

Will the Minister give way?

[Miss Dines]

Of course, although we really must conclude, rather than having a wide-ranging debate on everything to do with immigration. The regulations are about two exemptions that allow us to fulfil our legal obligations under our treaty with the EU.

--- Later in debate ---

[Stephen Kinnock]

I thank the Minister for giving way. My intervention is absolutely related to the regulations. I asked why there was no impact assessment. For the record, will she confirm that she does not think that there should be one, because she does not believe that the regulations could have a significant impact on the labour market? On cost, we are clearly reducing the number of employers that will pay the surcharge, so the changes will not increase revenue to the Exchequer as she says they will; they will do precisely the opposite. What will the cost to the Exchequer be? If there is to be no impact assessment, may I urge her to agree to keep the impact of this legislation under review, and will the Government make a statement on it within 12 months, so we can assess its impact on opportunities for our home-grown talent?

[Miss Dines]

I admire the hon. Gentleman’s ingenuity in asking for impact assessments; he has asked for one on almost everything that I have heard him speak about. However, the immigration skills charge is a tax, so an impact assessment is not required. If we had all the impact assessments that he has asked for, there would not be time in government to do much else.

I will conclude; the hon. Gentleman is always at liberty to write to me. The immigration skills charge is a financial tax through which the Government provide employers with vital funding that supports them in recruiting and training domestically. The regulations will not fundamentally change the operation of the charge; they simply create additional limited exemptions for highly skilled international workers recruited by UK scale-ups, and allow us to fulfil our legal obligations under our trade agreement with the EU relating to EU workers undertaking intra-company assignments in the UK. The exemptions will support our country’s economic recovery by supporting high-growth business in the UK and strengthening trade and investment to and from Europe. I commend the regulations to the Committee.

Question put and agreed to.

Oral Answers to Questions

Stephen Kinnock Excerpts

Monday 14th November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Stephen Kinnock.

[Stephen Kinnock (Aberavon) (Lab)]

The Nationality and Borders Act 2022 establishes a new category of asylum seekers that the Government claim are not permitted to claim asylum in Britain and should therefore be removed, but because the Government have failed to secure a returns agreement with France, and because their Rwanda policy is completely unworkable, 16,000 people in this category have been stuck in limbo waiting an additional six months for a decision, at huge cost to the British taxpayer. Of those 16,000 waiting in limbo, only 21 have been returned since the Act came into force. Do Ministers therefore accept that their own legislation is adding further delays, cost, chaos and confusion to an already broken system while doing next and nothing to remove failed asylum seekers who have no right to be here?

[Suella Braverman]

I find it staggering that Labour Members seem to love complaining about the system but when we introduced laws to fix it, what did they do? They opposed them every step of the way. We wanted to make it easier to deport foreign national offenders; Labour voted against it. We wanted to fix our asylum system; Labour voted against it. We secured a ground-breaking agreement with Rwanda; Labour would scrap it. Labour Members are very good at complaining, but they have absolutely no solution at all.

Labour and Skills Shortages: Temporary Recovery Visa

Stephen Kinnock Excerpts

Tuesday 8th November 2022 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship for the second time in two days, Mrs Cummins—it is truly a privilege for me. I thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for securing this important debate, and other right hon. and hon. Members for their thoughtful contributions. I particularly thank my hon. Friend the Member for York Central (Rachael Maskell) for her insightful speech. Her clarion call for pragmatism over ideology is something I hope everyone in this Chamber will support.

I would like to set out the Labour party’s approach to work-based migration in the UK. In a nutshell, we support the principle of a points-based system for migrant workers. I will not need to remind hon. Members that it was a Labour Government that introduced the points-based system in 2008 for immigration from outside the European Union. We are clear that there will be no returning to the free movement of labour that was a feature of our membership of the European Union, but we are equally clear that we need to build on and improve the points-based system currently in place. Our long-term ambition is to ensure that all businesses, in every sector, and our public services recruit and train as much home-grown talent as possible to fill vacancies, before they look overseas. For instance, we need to train more home-grown doctors, hence our commitment to doubling the number of clinical placements and to setting out a five to 10-year workforce plan, which is desperately needed when we consider the 7 million person waiting list and the huge issues with workforce shortages and challenges. We know that if we just turn off the tap of migrant labour, without the appropriate workforce structures and adequate training and recruitment in place, our public services will deteriorate and our businesses will struggle to meet our wider economic ambition to make, buy and sell more in Britain. In the end, it becomes a crutch, with more and more jobs eventually disappearing overseas.

Let me address the comments made by the spokesperson for the SNP, the hon. Member for Glasgow North East (Anne McLaughlin). I did not hear the comments today from the shadow Health Secretary, my hon. Friend the Member for Ilford North (Wes Streeting), but I know that our policy is very clear. We want to maximise opportunities for home-grown talent—doctors, nurses and care workers—but we absolutely recognise that we have to get the balance right. Where we have migrant workers playing vital roles, that is what we want to continue to have, but we want at the same time to maximise opportunities for home-grown talent. It is not an either/or question—a binary question. It is a “both …and”. It is a question of balancing—not turning the taps off here and turning the taps on somewhere else.

[Anne McLaughlin]

I appreciate the clarification, but it was quite clear that the leader of the Labour party said there were too many migrant workers in the NHS. The shadow Secretary of State for Health and Social Care seemed to be saying—I cannot remember the exact words, but obviously I will go and look again—“Yes, okay, we’ll allow migrant workers to be our doctors, nurses, whatever, until we have got enough of our own.” What does that say to them? “You are here when we need you, but when we no longer need you…” I support training people who want those jobs—training people here. But what does that say to those migrant workers who have committed themselves to our NHS? “As soon as we have got enough of our own home-grown people, we are going to kick you out.”

[Stephen Kinnock]

I think it would be a caricature of whatever comments were made to say that we are going to somehow stop people who are already here being here. That seems to be the logical extrapolation of what the hon. Lady is arguing, and I do not think that anybody would argue that. We value the workforce that we have, but we also want to build and create more opportunities for our own, home-grown talent. I am sure that that is something we can all agree on.

Let me turn away from the health and care sector for a moment and look at some of the issues that have been raised about the agricultural sector. We cannot have a situation such as we have had in the farming sector where 30,000 pigs are being slaughtered and £60 million-worth of crops are being burned, which is what happened over the past year. We also know that the construction industry lost 175,000 jobs in 2020-21, and that has had a big impact in the form of projects being slowed down. We know that, in September 2021, UKHospitality called for the Government to include the hospitality sector in temporary work visa schemes in the aftermath of covid-19 and reflecting the need to boost our economy. That call was of course echoed in the report by the Digital, Culture, Media and Sport Committee that was published on 24 October. It recommended the introduction of temporary recovery visas for industries—predominantly tourism and hospitality in this case—that are experiencing short-term labour shortages for so-called low-skilled roles.

We recognise these challenges and we feel that the way to find solutions is to go to the heart of the system so that it is better positioned and placed to deliver results on a sector-by-sector basis—pragmatism over ideology, as has already been said. The Opposition are well aware of the flaws in the current points-based system. We feel that the Government are failing to balance the need to encourage businesses to recruit and train home-grown talent with the need to use migrant labour to address short-term pressure points in the labour market.

The fundamental weakness is that the Government’s economic migration strategy is not joined up, so they will struggle to meet their economic and public-service priorities. For instance, we feel that the Migration Advisory Committee and the Skills and Productivity Board are not as integrated as they could be in making decisions on the shortage occupation lists.

We believe that the way to understand the type of short-term support that sectors require, for instance access to temporary work visas, is to get the system working properly, with more flexibility. At the heart of that should be a three-way dialogue, led and convened by the MAC, drawing together representatives from employers speaking for the sector, trade unions, and relevant Government Departments, to look at the sectors on the Migration Advisory Committee’s shortage occupation lists in detail. That dialogue would be the mechanism through which decisions are made around the short-term visa schemes, such the seasonal worker scheme, the youth mobility scheme, and new ideas, such as the temporary recovery visa, which is being debated here today.

The three-way working group would not only look at the shortage occupation lists but set conditions that companies that have sponsorship licences would need to meet on workers’ rights. We are worried that the current points-based system is also failing when it comes to the enforcement of labour standards.

We know, for instance, that Nepalese health workers, Indonesian fruit pickers, and care workers from the Philippines and Ghana, are at serious risk of exploitation through recruitment agencies charging fees, leading to migrant workers ending up in illegal debt bondage through having to repay those recruitment fees. Many of those recruitment agencies operate abroad, and it would be good if the Government were able to investigate whether work could be done by British embassies overseas to look out for problems and red-flag agencies that are suspected of nefarious practices.

We must also clamp down on illegal practices in the UK. Of course, it is illegal to charge migrant workers recruitment fees in Britain, but the Association of Labour Providers said that some employers in the UK are still demanding that workers pay for their recruitment fees. We need solutions to those issues.

Part of the challenge is that, under the past 12 years of successive Conservative Governments, the number of labour market inspectors has decreased to one inspector for every 20,000 workers, when the International Labour Organisation recommends one for every 10,000. I hope the Minister will share his thoughts on that ratio, and whether he believes that it will enable the Government to crack down on exploitation.

In 2019, the Conservative party committed to merging the three enforcement bodies—the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and His Majesty’s Revenue and Customs’ national minimum wage enforcement teams—into one enforcement body. Perhaps the Minister could confirm what progress is being made on that, or is it perhaps another broken manifesto promise?

The main agency involved in the welfare of seasonal workers is the Gangmasters and Labour Abuse Authority. The scheme operators, which are responsible for recruitment, must have a licence from the authority and can have it revoked if they failed to abide by certain standards. However, the regulator does not routinely carry out inspections on farm premises, and some critics say it lacks the resources to police abuses of workers’ rights.

We also need to understand, for seasonal workers specifically, what action is being taken by the Government to ensure that the 40,000 businesses with sponsorship licences from the GLAA are being properly regulated by HMRC to ensure that they maintain high employment standards.

[Anne McLaughlin]

Is the hon. Gentleman aware of another issue, which the Daily Record in Scotland revealed the other day, that delivery drivers for Just Eat, Deliveroo and others—I cannot remember which of the others it was, so I had better not say any names—are able to rent out their accounts? They are told that they are responsible for ensuring that the person they rent it out to is allowed to work and has passed basic health and safety checks, and that is obviously not happening. People are having meals delivered, and do not know if that person has passed the checks that they should have. Just as importantly, some of the workers renting those accounts are not allowed to work and are being exploited. Would the hon. Gentleman agree that the agencies he mentioned should be able to look into that as well?

[Stephen Kinnock]

The hon. Lady is absolutely right that there is a vital role to play here, in terms of regulation and enforcement. Our major concern is twofold. There is a bit of a mixture of all of these agencies not necessarily co-ordinating together. There are three main agencies, so, first, let us have a single enforcement body. Secondly, the number of labour market inspectors should meet ILO standards. It is currently one to 20,000 and it should be one to 10,000. Those would be major steps in the right direction, and could be the start of cracking down on the issue the hon. Lady rightly raises.

Maintaining standards is not just important for the wellbeing of migrant workers and preventing undercutting, it is also good for employers, as we need to make Britain an attractive place to work, not least in sectors such as food and farming, where we are clearly more reliant on migrant workers than in other sectors. The National Farmers Union deputy president, Tom Bradshaw, told the Environment, Food and Rural Affairs Committee that, although a 30,000 quota for seasonal workers visas in 2021 was a lifeline for the industry, it has not been big enough.

We also know that the challenge for the sector is not just seasonal but year-round. We understand that there are recruitment challenges in relation to the short-term nature of these visas, which the Government must look at closely. Therefore, we need to be sure that the working conditions attached to the visas are as attractive as possible, in order to attract the workers that we need, and to avoid undercutting.

Of course, where sectors and businesses are given permission to recruit from overseas, we need to see commitment to long-term workforce planning. How, for instance, would a company plan to invest in home-grown talent in the long term? What is it doing to invest in research and development, in modernising its technology and machinery to boost productivity? Does it have a skills strategy? Those are the questions that should be asked of companies, as a quid pro quo and part of the conversation about being given shortage occupation and other permissions to bring labour from overseas. What is it doing to show its long-term workforce plan? How is it boosting productivity? Those are the questions that Government should ask. There should be a proper dialogue, rather than pulling arbitrary numbers out of the air within the Westminster bubble.

Are the Government asking for workforce plans from companies that benefit from the shortage occupation lists? If not, perhaps the Minister might like to say a few words on that. Those are the questions that Labour will ask, as and when we enter Government, committed as we are to ensuring that our points-based system strikes the right balance between incentivising employers to train and recruit locally with the right to recruit internationally where required.

I look forward to the Minister’s responses to my questions, in addition to those raised by other right hon. and hon. Members.

Draft Nationality and Borders Act 2022 (Consequential Amendments) (No. 2) Regulations 2022

Stephen Kinnock Excerpts

Monday 7th November 2022 General Committees

[Stephen Kinnock (Aberavon) (Lab)]

It is a real pleasure to serve under your chairship today, Ms Cummins.

Powers to deprive someone of their British citizenship in certain circumstances were initially introduced in section 40 of the British Nationality Act 1981. Those powers were subject to a requirement that the Home Secretary provide written notice to anyone subject to a deprivation of citizenship order. In recent years, some high-profile legal challenges have been brought against the Government by people who were deprived of their citizenship without having received the requisite notice.

During parliamentary consideration of the Nationality and Borders Bill, Ministers explained that under existing law written notice had to be sent to a person’s last known address, and in some cases it might not be possible to reach them at that address, including in cases where the individual in question was known by the Home Secretary to be abroad in a war zone. On that basis, the Government argued that there should be exceptions to the requirement to give notice. Section 10 of the Nationality and Borders Act provides for such exceptions to be made, primarily based on security concerns.

The Opposition were not convinced by all of the Government’s arguments and worked in the other place with colleagues on a cross-party basis to secure important safeguarding amendments, the first of which established a far more restricted range of circumstances in which notice could be withheld. The original clause would have allowed the Secretary of State to withhold notice whenever that appeared to be in the public interest. Amendments removed the subjective element and provided that notice may be withheld only if the Secretary of State does not have an address for service, or if she reasonably considers it necessary on one of four exceptional grounds.

The second amendment was about judicial oversight. If the Secretary of State wishes to withhold notice, she must apply to a superior court of record, the Special Immigration Appeals Commission, in advance or within seven days. The SIAC, applying judicial review principles, will examine her reasons and decide whether or not her assessment is obviously flawed. The same test is applied to the making of terrorism prevention and investigation measures under the Terrorism Prevention and Investigation Measures Act 2011. If she does not succeed on her first attempt or on a subsequent application, which must be based on a material change of circumstances or further evidence, the Secretary of State must either give notice in the normal way or revoke the deprivation order altogether.

Thirdly, decisions must be reviewed regularly. The Secretary of State must consider three times a year for two years whether the reasons for non-notification remain valid. If, after the sixth review, she still resists notification, she must make a further application to the SIAC, which will once again give independent scrutiny to her decision.

As mentioned, the second of the safeguards is the reason we are here today, and we welcome the specifics of the instrument. The Act also stipulates, in schedule 2, that the Secretary of State should apply to the SIAC when making an order to deprive someone of their citizenship without notice. The commission may then determine whether the Secretary of State’s reasons for not providing notice are valid. If the commission determines that the reasoning is obviously flawed, the Secretary of State may appeal that determination to the appropriate appeal court.

What the draft regulations do is enable the Lord Chancellor to make rules setting out details of how the process should work. The rules will need to be approved by Parliament before coming into force—a process that we think is vital. Governments have had the ability to revoke British citizenship in certain cases for decades now, so the concept is not new, but the specific measures introduced through the Nationality and Borders Act give the Secretary of State significant new powers. I am sure the Minister agrees that those powers should never be used lightly; their use should be the last resort, where there is no alternative, and there should be safeguards to ensure that the system is fair and subject to independent oversight. The regulations are the first step toward establishing mechanisms for that.

The Minister will be aware that some people have voiced concern about the proposed role of the SIAC, given the secrecy of its proceedings. Protecting sensitive material on security grounds is of course crucial. I have two questions for the Minister. First, what reassurances can she give that the new rules will strike the right balance between safeguarding national security and an individual’s right to appeal? Secondly, setting up the new process and establishing rules for how it should operate may take some time; can she indicate how long it might take and when the new system might be up and running?

Asylum Seekers Accommodation and Safeguarding

Stephen Kinnock Excerpts

Monday 7th November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Stephen Kinnock.

[Stephen Kinnock (Aberavon) (Lab)]

I welcome the Minister to his place. The Home Secretary has stated that after 12 years of Conservative government the asylum system is “broken”. We agree, and it is the Conservative party that has broken it. The Government are processing just half the number of asylum claims that they were processing in 2015, and as a result the British taxpayer is footing a £7 million hotel bill every single day. Their failure to replace the Dublin agreement on returning failed asylum seekers, their failure to crack down on the criminal gangs, and their failure to get agreement with France have also increased the backlog.

This catalogue of chaos has led to the overcrowding in Manston, for which the right hon. Member for North Thanet (Sir Roger Gale) has directly blamed the Home Secretary. The previous Home Secretary revealed today that on 20 October he received legal advice that Manston was

“being used, or in danger of being used, as a detention centre”,

and he took emergency measures to work within the law. However, the current Home Secretary met officials on 19 October, just before she was forced to resign for breaching the ministerial code. Can the Minister please confirm that the Home Secretary refused to take those same emergency measures, and can he explain why she ignored the advice that she was repeatedly given over a period of several weeks? The Home Secretary told the House just a week ago that she did not ignore legal advice. Can the Minister tell the House now whether he believes that statement to be correct? The key question on Manston is whether legal advice was followed or not. Given the Minister’s unlawful approval of a Tory donor’s housing project in his previous brief, is he really best placed to make that judgment?

We know that 222 children have gone missing from asylum accommodation. What are the Government doing to find those missing children, to prevent more children from going missing, and to meet their legal obligations to vulnerable children?

[Robert Jenrick]

For a few moments I thought that the hon. Gentleman was going to approach this in an intelligent and constructive manner, but sadly that was the triumph of optimism over experience. In fact, the Labour party is trying to politicise this, and we can of course say the same. The Labour party has no plan to tackle illegal immigration. It does not want to tackle illegal immigration. The Labour party left a system in ruins in 2010, as my right hon. Friend the Member for Ashford (Damian Green) would attest, as he had to help to pick up the pieces. We believe in a system of secure borders and a fair and robust asylum system in which all members of the public can have confidence.

The hon. Gentleman asked about the Home Secretary’s conduct. Let me tell him that my right hon. and learned Friend the Home Secretary has consistently approved hotel accommodation. More than 30 hotels have been brought on line in the time for which my right hon. and learned Friend has been in office, which has ensured that thousands of asylum seekers have been able to move on from the Manston site and into better and more sustainable accommodation. And look at her record over the course of the last week! The population at Manston has fallen from 4,000 to 1,600 in a matter of seven days. That is a very considerable achievement on the part of the Home Secretary and her officials in the Home Office, and I am proud of it.

International Doctors: Visas

Stephen Kinnock Excerpts

Wednesday 2nd November 2022 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship, Mr Stringer. I thank the hon. Member for Boston and Skegness (Matt Warman) for securing this important debate. His speech was an excellent example of a constructive critique of where his own party is on the issue, and he put forward some practical and thoughtful ideas. I hope the Minister has taken note. I suspect there is more chance he will take note of the hon. Member’s comments than he will of mine, but we never know. This debate is a great example of the cross-party discussion that we can have in this place.

Let me start by setting out the Labour party’s position on work-based migration in Britain, as it is important to set the context before drilling down into the specifics of the issue we are discussing today. In a nutshell, we support the points-based immigration system for migrant workers; it was of course the Labour Government in 2008 that introduced that system for immigration from outside the European Union. We are clear that there will be no return to the European Union’s freedom of movement. We want to build on and improve the points-based system currently in place. It is a very blunt, one-dimensional instrument that could be significantly improved.

Our long-term ambition is to make sure that every employer across the private and public sectors is recruiting and training more home-grown talent to fill vacancies before looking overseas, but we recognise that simply turning off the tap of labour from other countries without having the appropriate workforce structures, plans, training, skills and productivity strategies in place, our private sector and our public services will deteriorate, our businesses will struggle to meet the Labour party’s ambitions to make, buy and sell more in Britain, and we potentially risk jobs disappearing overseas.

We cannot have a situation like the one we have had in the farming sector over the past year, where 30,000 pigs were slaughtered and £60 million-worth of crops were burned. Indeed, we cannot have a situation in the NHS where we are short of doctors, all because our immigration system puts up red tape and barriers that prevent, or at least severely discourage and disincentivise, doctors who have come to the UK from overseas to do their three years of general practitioner training from staying on to fill critical vacancies in the job market. That is utterly counterproductive, not least because 47% of new trainees in England in 2020-21 were international medical graduates. Labour’s shadow Health Secretary, my hon. Friend the Member for Ilford North (Wes Streeting), has been clear that it is madness for the NHS to lose GPs whom the British taxpayer has paid to train.

Successive Conservative Governments have already cut 4,700 GPs over the last decade, meaning that patients are finding it next to impossible to get an appointment. There is a chronic lack of doctors, nurses and healthcare staff in the NHS. Staff shortages are reaching dangerous levels, when the need for NHS treatment is incredibly high, with huge backlogs and millions of people forced to wait for treatment. Patients are finding it impossible to get a GP appointment in many cases, and GPs are leaving the health service at an alarming rate. Last year, one in six people who tried to speak to a nurse or GP were unable to get an appointment at all. The hurdles placed in front of international medical graduates are a barrier to our NHS filling vacancies and providing the medical care that the British public deserve.

A survey by the Royal College of General Practitioners found that around 30% of all IMG trainees consider not working as an NHS GP because of all the difficulties and red tape with the visa process. The first of those difficulties is that IMG GPs are not eligible to apply for permission to stay permanently until two years after completing their training. GP training takes three years to complete, and it is only after five years that IMGs can apply for indefinite leave to remain, in line with wider UK visa rules. That problem is unique to general practice: other medical specialty training takes a minimum of five years to complete.

The second difficulty is that international GPs must find employment with a GP practice with a visa sponsor licence before their existing visa expires in order to be eligible for a visa that allows them to stay and work as a GP after their training, and ultimately apply for permission to stay permanently. However, practical and bureaucratic obstacles can make that extremely difficult, because GP practices may struggle with the costs and bureaucracy associated with obtaining a licence to sponsor a foreign worker. The Royal College of General Practitioners warns that the cumulative effect of visa difficulties on IMGs is that some are

“feeling forced to take roles elsewhere in the NHS and others considering leaving the NHS, and in some cases the UK, altogether.”

The Government have so far been utterly intransigent on the issue of IMGs, and on tweaking the visa system to remove the red tape. Labour would look closely at the issue as part of our wider improvements to the points-based system. Those improvements would involve the Government working hand in hand with employers, trade unions and other key stakeholders to ensure that we have a properly planned, sector-by-sector approach, with a proper strategy that works for businesses, workers, the public sector, customers and patients alike. As part of that, we will review the length of work visas, processing times and the existing path to citizenship to ensure that they are all working for our economy and for the public.

Labour already has a long-term workforce plan for the NHS. That involves doubling the number of medical school places, which in turn will deliver more home-grown GPs. At the heart of the plan is the doubling of medical school places—an increase of 7,500—which means we will double the number of doctors trained in a year. Our shadow Health Secretary will also produce long-term workforce plans for the NHS for the next five, 10 and 15 years, which will ensure that we always have the NHS staff we need to get patients treated on time. The plans will not only provide good jobs for British workers and fill shortages in our NHS, but prevent us from having to do dirty deals, as mentioned earlier, with some of the poorest countries in the world—those on the WHO red list—and from recruiting medical professionals from impoverished communities that desperately need that medical knowledge locally. That is exactly what the British Government have done recently with Nepal.

In the short term, Labour has consistently pushed for a fix to punitive doctors’ pension rules. The fix would do away with the cap above which NHS workers incur additional tax burdens. That would support short-term recruitment and prevent the exodus of workers. The Government are yet to deliver on that.

The Labour party is committed to making the points-based system work, and to our NHS workforce plan. The current system is simply not fit for purpose, and at this time of crisis we risk losing newly qualified GPs because of unnecessary red tape. The Conservatives have broken promise after promise on GPs. Their 2019 manifesto promised to deliver 6,000 more GPs by 2024-25. The former Health Secretary, the right hon. Member for Bromsgrove (Sajid Javid), admitted that the Government are not on track to deliver that.

In contrast, the next Labour Government will put patients first, ensuring that they are able to get a face-to-face appointment when they want one, bringing back the family doctor to deliver continuity of care and implementing our workforce plans. The current Government are out of ideas, and we need practical solutions.

[Steve Brine]

It is interesting that the hon. Gentleman mentioned continuity of care, because he will be aware that that came up yesterday during Health questions. Would the Opposition introduce direct management of lists back into the GP contract from when it is next renegotiated? That is how we achieve continuity of care.

[Stephen Kinnock]

The key piece of our plan is to cancel non-dom status, which is estimated to generate approximately £3.2 billion for the Exchequer, and to use that money to invest in more GPs, doctors and nurses—indeed, doubling the numbers. We can have the best plans and legislation in the world, but we need the resources to deliver them. That is how we will pay for our plans and generate the kind of care that we need for our public. It is time for that Labour Government, so that we can clear the backlogs holding our country back, which we see right across Government, and get Britain’s public services back on track.

--- Later in debate ---

[Robert Jenrick]

Of course, adults who come to the UK on the Homes for Ukraine scheme have the right to work, and we actively encourage them to do so while they are here. There has also been an exercise across Government, which I have not been personally involved in, to help them to find equivalent professional qualifications while they are here, and to break down any barriers. I would be happy to look into whether there are remaining issues for doctors and nurses from Ukraine while they live here on the three-year visas that we are granting.

Some 30,700 nurses and 14,900 doctors obtained a health and care visa up to the end of August this year. In total, including care workers and other professionals, 96,000 such visas have been issued—a very significant number, which accounts for 52% of all skilled worker visas that have been issued to people taking up work in the health sector. I would like to think that that innovation has been a success, but we take seriously the legitimate concerns that have been raised in the debate and that we have heard from royal colleges and others. Let me now turn to some of those concerns and what we might be able to do to assist.

As my hon. Friend the Member for Boston and Skegness said, the Royal College of General Practitioners has made a number of suggestions. We believe that the best way to increase the number of international GPs taking up places in the UK is for GP practices to register as Home Office-approved sponsors. The Government have run a number of engagement events that aim to explain the sponsorship process. Sponsorship is not supposed to be onerous, and the Home Office believes that it is not as onerous as some people clearly perceive it to be. Over 48,000 organisations are licensed sponsors of skilled workers, and many are high-pressure, small organisations, such as GP practices. However, there is clearly an issue—whether in reality or in perception—so I have two proposals to answer the concerns raised by my hon. Friend.

First, I am prepared to consider other sponsorship arrangements suggested by the sector, provided that they are consistent with the sponsorship system and that the sponsor can continue to discharge the important duties of a sponsor, which enables us to ensure that the overall system is robust and defensible. In principle, the sponsor could be an appropriate national body, such as Health Education England. It has not approached us to ask to be such a body, but I would be open to considering that. As my hon. Friend the Member for Winchester (Steve Brine) suggested, the sponsor could be an integrated care board in England or an appropriate body in Scotland, Wales or Northern Ireland, or it could be a royal college. I will therefore ask my officials to work with the sector to see whether there is a way forward to create umbrella bodies, if there is mutual support on both sides, with the caveat that any umbrella body would need to discharge the required duties in law to ensure the robustness of the system.

Secondly, in the interim my officials would be happy to run further engagement events with the sector to talk them through how straightforward they believe it is to be a sponsor. I encourage anyone listening to the debate to get in touch with the Home Office if they would like us to host an event in their area or with their part of the health sector. I have asked my officials to organise at least one such event in the weeks ahead. We will take account of any feedback that we receive at these events, and if it is true that the system is simply too complex and burdensome, I have asked them to report back to me with that feedback and we will take it into consideration.

The shadow Minister—the hon. Member for Aberavon —and others, including my hon. Friend the Member for Boston and Skegness, raised the fundamental question of whether five years is the right length of time to demonstrate an individual’s commitment to the UK. That is a profound question, and it is important that we approach it fairly, rather than hiving out individual sectors, however important they might be for our economy or our public services. Although I am sympathetic to the arguments around granting GPs settlement on completion of their training, my view today is that it is better to stick to five years because that has been, by the long-standing convention of this Government and their predecessors, considered the right length of time for an individual to demonstrate sufficient commitment to the United Kingdom to obtain indefinite leave to remain. We should value indefinite leave to remain, because it is an important and significant moment for anyone committing to life in our country.

[Stephen Kinnock]

I thank the Minister for setting out that clear position, but does he agree that the nature of that kind of commitment—the three years, and the type of work that somebody studying to be a general practitioner is looking into and wants to do—is in itself a demonstration of something extra in terms of commitment to the United Kingdom? It is not as if they are coming here to work for a foreign company. Should such people not be given some kind of exceptional treatment because of the nature of the work? That is an open question.

[Robert Jenrick]

The hon. Gentleman makes a valid point. Of course, one could apply that to a number of other regulated professions, whether that be lawyers, nurses or others making significant contributions to the United Kingdom. It is an important step to obtain indefinite leave to remain, and not one that we should give away lightly. Asking an individual to spend five years here in order to demonstrate that level of commitment to the UK feels to me about the right length of time, but I am open and interested to hear other contributions on that point. At the moment we do not have plans to reduce the length of time that skilled workers would need to complete in the UK in order to apply for settlement.

The SNP spokesperson, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), raised a number of cases that I am aware of from my former role at the Department of Health and Social Care about allegations of the mistreatment of foreign workers—including doctors and nurses—coming to the UK. That is something we take seriously, and the Department of Health and Social Care and NHS England are investigating. If I receive further information from the Ministers in the Department of Health and Social Care, I will be happy to write to the hon. Gentleman.

On the broader question of the ethics of recruiting healthcare professionals internationally, the NHS takes that responsibility seriously. We have ethical guidelines nationally that are set by NHS England and individual trusts in England—that may well be the case in Scotland as well—and of course we take heed of the red lists, which give a strong indication of countries from which we should not be recruiting healthcare professionals because they clearly need them to satisfy their own healthcare requirements. The NHS proactively works with countries that have an excess of doctors and nurses, or that train individuals specifically for export. In fact, one of the last meetings I had as Health Minister was with the Chief Minister of the state of Kerala, which specifically trains nurses to be exported to other countries around the world.

That sort of arrangement is sensible and defensible by the UK, although it is not a sustainable answer in the very long term because we live in a globally ageing society; there will be competition from other states to recruit professionals. That is one of the many reasons we should be training more doctors and nurses in the UK and considering measures such as raising the cap on medical school places, if we are able to do so. That, of course, is a matter for the Treasury and the Department of Health and Social Care, not my Department. It is worth saying that it is an extremely expensive measure over time, and that the Opposition’s proposal would cost several billion pounds to deliver. That is not to say that it is not an important step, but it is worth bearing in mind the significant outlay.

[Robert Jenrick]

For a long time I have believed that one of the virtues of a national health service is that it should be able to plan for its workforce needs long into the future. My hon. Friend raises the specific campaign of our right hon. Friend the Member for South West Surrey (Jeremy Hunt), when he was Chair of the Health and Social Care Committee. I am sure that he will consider that carefully now that he has his hands on the controls as Chancellor of the Exchequer.

[Stephen Kinnock]

The Minister rightly mentions value for money. The British taxpayer pays for the training of international medical graduates in this country. Will the Government consider doing a value-for-money assessment of what the British taxpayer pays for people who train to be GPs but end up leaving our system all together because of all the visa issues? Is that not a waste of taxpayers’ money?

[Robert Jenrick]

The hon. Gentleman raises an important point. It really is a matter for the Department of Health and Social Care. I do not want to stray too far into policy questions that are rightly its domain, but clearly the UK benefits from retaining as many doctors who train here as possible. Staying will not always be the intention of those coming to the UK—many clearly want to make use of our world-class medical education and then return to their country of origin, or other countries that, for lifestyle reasons, they want to live in—but we benefit from encouraging more to stay.

Oral Answers to Questions

Stephen Kinnock Excerpts

Monday 5th September 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Stephen Kinnock.

[Stephen Kinnock (Aberavon) (Lab)]

We owe loyal-to-Britain Afghans a debt of gratitude and honour, yet with 10,000 of them still stuck in bridging hotels, at huge cost to their mental health and a cost of £1.4 million a day to the taxpayer, it looks as though Operation Warm Welcome has become operation cold shoulder. It is little wonder that the Minister for Refugees resigned yesterday in despair. Further still, the Government have broken their promises to vulnerable Afghan groups such as women judges and LGBT activists. Can the Minister therefore tell us why, if British Council employees and Chevening scholars can apply for asylum in the UK from within Afghanistan, pathway 2 of the Afghan citizens resettlement scheme does not allow women judges and LGBT activists to do the same? Does he accept that these failures put Afghan lives at risk, bearing in mind that the Taliban have already conducted at least 160 reprisal killings?

[Kevin Foster]

I know that whoever takes office this week can look forward to plenty of attacks but few alternatives from the hon. Gentleman. We are proud of what we have done. As I said, last year we arranged one of the biggest evacuations since the war years and a rapid process to bring people here. About 7,400 people have moved into new homes since the first ARAP flight in June, which is an unprecedented pace of resettlement. Yes, there is more work to do; we are working with local authorities to do that and to find more homes, but we have to be clear: it is about working with local communities, particularly given the size and scale of accommodation, particularly family accommodation, that needs to be provided across the country.

Windrush Review

Stephen Kinnock Excerpts

Wednesday 29th June 2022 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship, McVey. I thank my hon. Friend the Member for Edmonton (Kate Osamor) for securing this important debate on the latest report by Wendy Williams. My hon. Friend delivered a powerful and moving speech, as did my hon. Friend the Member for Battersea (Marsha De Cordova), my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) and my hon. Friends the Members for Streatham (Bell Ribeiro-Addy), for Birmingham, Erdington (Mrs Hamilton), for Sheffield, Brightside and Hillsborough (Gill Furniss) and for Sheffield, Hallam (Olivia Blake).

I have been moved and humbled by much of what we have heard today—the personal experiences, the family connections, the profound hurt, and the disrespect that was shown to a generation who helped to rebuild this country after the second world war. It is a stain on our conscience and it has not been adequately dealt with. That should shame us all, because we in this House should be united on the need to thank the Windrush generation, who did so much for us, worked so hard and paid their taxes, but who have been treated abysmally. I gently say to the Minister that, given the cross-party nature of the concerns about the Windrush scandal, it is disappointing that not a single Conservative Back Bencher has contributed to the debate.

The Wendy Williams report is a damning indictment of the culture at the Home Office. The sad reality is that the report has been published at a time when, rather than learning the lessons of the Windrush scandal, the Government are doubling down on their hostile environment policy and mindset.

Perhaps worst of all, none of the Government’s immigration policies is actually designed to solve any of the challenges that we face. In fact, they are just for show. The Rwanda plan is not putting people off crossing the channel. We were told that the mere threat of sending asylum seekers to Rwanda would be enough, yet hundreds of people are still coming every week on small boats. Even if a flight does one day get off the ground, the numbers will be so small that the policy will not deter people and will not break the business model of the people smugglers. As has been said, the Nationality and Borders Act is profoundly lacking in any basic human decency, and the Government have no answer to the growing backlog of 73,000 asylum seekers waiting for more than six months to be granted a decision.

Those examples are directly relevant to the topic of today’s debate because of the message they send to the Windrush generation: the hostile environment is alive and kicking in the Home Office. These strong-arm approaches, of course, are all designed to create Daily Mail headlines and keep the Prime Minister in power. In policy terms, they only make the situation worse, as the attempts to crack down on those who have sought to make a home here have caused so much unnecessary pain in so many areas, as we have heard from the powerful contributions today. Those examples are also indicative of the culture change needed at the Home Office. That is emphasised in the Williams report, which makes clear that we must treat every individual as a human being, not just slap a number on a forehead—or worse, use them as a political football.

I associate myself with all of the comments made about the compensation scheme. The decision to place that scheme in the hands of the Home Office was a grave error. The Windrush generation have absolutely no reason to trust the Home Office, so how can anyone possibly be surprised that people are reluctant to even apply for compensation, as we have seen from the very low number of applications? Responsibility for the scheme must therefore be handed to an independent organisation. I can confirm that I will do everything that I can, as the shadow Minister for Immigration, working with my colleagues here and beyond, to push for that to happen as urgently as possible.

The Williams report is clear that the Home Office must open itself up to external scrutiny. Ministers should not be marking their own homework. The report is also clear that culture change is simply not happening quickly enough. In her foreword, Wendy Williams states:

“My hope for the future is that the department acknowledges the efforts of its staff and the achievements it has made so far, but also recognises that there is still a great deal to be done.”

She later writes:

“The failure to implement changes promptly and consistently is a common thread running through the revisit…there are many examples where the department has not made progress at the pace it envisaged, or in some cases at all.”

The lack of progress on training is also a concern:

“Alongside internal training, there is the failure to make progress on certain outward-facing activities, such as senior-level engagement with those affected…and stakeholder engagement…But equally concerning is the pace of developing wider external scrutiny arrangements.”

Wendy Williams also makes it clear that the culture at the Home Office is not conducive to positive change:

“The lack of progress goes to the heart of how the department operates and is indicative of an organisation which was not yet confident enough to secure an increase in the type of independent insight and scrutiny that my recommendations envisaged.”

That is all extremely worrying, and external stakeholders are not impressed either. The report states that

“the majority of external stakeholders who chose to take part in the revisit believe that little, if anything, has changed. This view is also held by some of the people I spoke to in my original review, who expressed scepticism about the department’s progress.”

Wendy Williams therefore feels:

“The concerns voiced remain deep-rooted and will have to be addressed if the department is to truly transform the way it engages with those who were affected.”

Finally, the report makes clear that, all these years later, Government Ministers are still to show that they understand the true extent of the wrong and harm done to the victims of the Windrush scandal. All of that is very damning, in terms both of the specifics of Home Office incompetence and indifference, and of the broader issues with the hostile environment.

I am deeply concerned that we are not witnessing the changes that need to be made inside the Home Office. I have long said that the Home Office is not fit for purpose under the current Home Secretary, based on failures over crime levels, prosecution rates, the English channel crossings, the Passport Office and the Afghan and Ukrainian migration issues. The failures on Windrush go to the very heart of the wretched culture encouraged by consecutive Conservative Home Secretaries.

I will put to the Government today the very questions that Wendy Williams puts in her report. How will the Department demonstrate to the Windrush generation that it has changed and show improvements on how it carries out its duties? How will the Department demonstrate a focus on outcomes rather than outputs, to assure itself that it has made the necessary changes? How will the Department show that its culture is improving? What measures will it use to check that it has brought all staff with it? How will the Department harness local initiatives and good will, and scale them up to demonstrate to its workforce that it is a learning organisation?

How will the Department be more dynamic in its efforts to develop, achieve and retain a more diverse and inclusive senior leadership cadre? How will the most senior leaders convey to the whole organisation what the priority is in terms of culture? How willing is the Department to hear from a range of voices, whether supportive or opposing? How will the Department demonstrate that it is truly taking action continuously to improve, in order to rectify some of the scandalous decisions and acts that have taken place?

The Minister has a prime opportunity today to answer all of those questions head on. I truly hope that he will grasp that opportunity.

[The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)]

It is a pleasure to serve under your chairmanship. Ms McVey. I thank the hon. Member for Edmonton (Kate Osamor) for securing the debate, and all right hon. and hon. Members for their contributions, many informed by their own, in some cases, very personal experiences and memories of the impact of the Windrush generation. Although she is not in her place now, I was struck by the hon. Member for Birmingham, Erdington (Mrs Hamilton) recalling her family’s experience in the 1950s and ’60s.

Although I might not agree with the hon. Member for Edmonton on every aspect, I know from my regular engagement with her on casework issues that she is a committed representative of her constituents and all those affected by the Windrush scandal. Wendy Williams’s report outlined that that scandal was formed under successive Governments and over many decades. This is not about one particular period but an accumulation of issues. Those who read the physical version of the report will know that the case on the front page is from 2009. This is an immensely important subject, and I welcome the chance to debate it again.

With this debate taking place so soon after Windrush Day, I want to take this opportunity on behalf of the Government to pay tribute to the Windrush generation. They are an essential part of our national story, and we should recognise, cherish and celebrate the enormous contribution that they and subsequent generations have made, and continue to make, to our country. As the hon. Member for Battersea (Marsha De Cordova) and others have outlined, Britain would not be what it is today without them. As the right hon. Member for Hackney North and Stoke Newington (Ms Abbott) pointed out, many viewed themselves as British, coming to the mother country, having been invited here.

Many, particularly from the Caribbean, had already been here defending this country in its darkest hours. Our democracy survives partly due to the immense contribution of many members of the Commonwealth who volunteered to come thousands of miles, under no compulsion, when this country faced its darkest hours, to stand on our shores in the face of a potential Nazi invasion. They felt that this was their country, not a country that they were migrating to. This was not a matter of arriving in a foreign land for them.

I will turn to the core focus of today’s debate. In September 2021, Wendy Williams and her team returned to the Home Office to assess the progress made since the publication of her original report in March 2020. The progress update, which was published in March this year, found that there are several areas where good progress has been made, noted that structures have been put in place that should provide appropriate levels of oversight of the Department in the future, and also commended some excellent behaviours and initiatives from members of staff and teams.

In her original lessons learned report, Wendy Williams made 30 recommendations. Her progress update assesses that eight have been met, a further 13 partially met, and the remaining nine not met. I certainly recognise that there is more work to be done. As the update report acknowledges, change on the scale required takes time. It is also right that the Home Office is held to account on recommendations where sufficient progress has not been made. I want to be clear that it remains our commitment to deliver each and every one of the recommendations.

Regarding training, significant progress has been made, as has already been touched on. For example, training has been developed that covers the history of the UK’s immigration and nationality system from 1960 to 2020. This training has been delivered to policy makers and continues to be undertaken by operational staff across the Department. Colleagues may be aware that, following a campaign by the hon. Member for Liverpool, Riverside (Kim Johnson), we are seeking to add to that the experience of Chinse seamen who faced deportation shortly after world war two.

As has been said, it is also important that senior leaders are at the forefront of the effort to drive change across the Home Office. Abi Tierney, the director general of Her Majesty’s Passport Office and UK Visas and Immigration, has taken on the role of ethics adviser to the Home Office board, in which she will champion ethical behaviour and systems, advise on ethical considerations and spearhead the roll-out of a new ethical decision-making model, making clear that this is at the core of what we should be doing and at the core of how our systems should function.

As has been touched on, it is also vital that we continue engaging outwardly and openly, and not just with people who are likely to agree with the Home Office or to share the views and opinions of any particular party or Government. Earlier today, I welcomed to the Home Office some of the groups that have received funding from the Windrush community fund, both to thank them for their fantastic efforts in helping to promote the Windrush compensation scheme and to hear their views on where we can go further and what more work we can do to reach out to more people. We are clear that we work with those groups—the funding is supplied to support their work for their community.

We remain committed to the relationships we have formed with these hard-working grassroots and community organisations. Their insight and experience are invaluable, and we will ensure that the Home Office is proactively listening and learning all the time from their experiences and comments.

Understandably, a lot of people have focused on the Windrush compensation scheme. Indeed, among the reasons I regularly meet some of the Members present is to discuss individual cases. We recognise that although financial compensation is an important part of this process and is necessary, it is, as has been touched on in other debates, only part of it. For many people, this issue was about not just the monetary impact on them but feeling that their identity had been taken away. We must recognise that as well.

We have made significant progress and have now paid or offered a total of more than £48 million in compensation. We have also made changes to the Windrush compensation scheme in order to ensure that people receive the compensation to which they are entitled as quickly as possible. In many cases, those changes were made in direct response to feedback we have been given, including from Members of Parliament.

I was pleased that we were able to welcome members of the Home Affairs Committee and other stakeholders to the Windrush compensation scheme office in Sheffield on 14 June, following the invitation that I extended during a previous Westminster Hall debate. Again, I say to Members who have a particular interest in this issue—particularly those who represent areas with a number of Windrush communities—that we are very happy to welcome them, subject to all the usual arrangements that people would expect to put in place, to meet our team so that they can understand the work they are doing.

[Stephen Kinnock]

Before the Minister moves off the compensation scheme, he will know that at the end of January only 960 people had applied to the scheme, which is only about 20% of those eligible. Those statistics are in the Home Affairs Committee report on the compensation scheme, which he just mentioned. Does he agree that putting the compensation scheme into the hands of the Home Office—the very institution that is so profoundly mistrusted by the Windrush generation—was a grave error, and that the only way this will get sorted is by moving it out of the Home Office and into an entirely independent organisation?

[Kevin Foster]

I am not sure where the shadow Minister gets his figures from. He said that 960 claims have been made, but the actual figure is 3,878, and more than 1,800 had been made by 1 January 2021.

On the engagement figures, we continue to encourage people to apply to the compensation scheme. I have visited some of the community fund groups in Birmingham, Cardiff, Edinburgh, Nottingham and London. It was evident during those visits that innovation and collaboration are helping to support local communities and raise awareness of the Windrush schemes. We have also written to 6,200 individuals to encourage them to consider applying. In January, we launched the second phase of our national communications campaign, which featured new content to address misconceptions that could prevent people from applying to the scheme. It included campaign videos that have been played across community TV stations.

HM Passport Office Backlog

Stephen Kinnock Excerpts

Tuesday 14th June 2022 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

I beg to move,

That this House censures the Minister for Safe and Legal Migration, the hon. Member for Torbay, for his handling of the crisis at Her Majesty’s Passport Office; and directs him to come to the House, no later than 20 June 2022, to apologise for the tens of thousands of people who have waited more than six weeks for their passport.

I will start from the outset by saying what this debate is not about. It is not about the hard-working staff who have been so badly let down by the management and the Government. There are countless examples of the fact that the infrastructure that holds our country together is creaking—indeed, in some cases, at breaking point. There can be no doubt that the frankly shambolic state of the Passport Office is an example of the systemic failure that has been designed and delivered by successive Conservative Governments since 2010, because by the time covid hit us in early 2020, a decade of underinvestment had left us with our defences down, lacking resilience and ill prepared for an external shock such as a global pandemic. NHS waiting lists were already at record highs and there were already more than 100,000 staff vacancies. A steady stream of Conservative Chancellors had failed to grow the British economy in line with western competitors, thus depriving the Exchequer of an eyewatering £12 billion of potential income that could have helped us through the pandemic—or indeed £30 billion if the growth trajectory that was established by the last Labour Government had continued.

Manufacturing had been at best ignored and at worst actively undermined by successive Conservative Governments, with 230,000 job losses in manufacturing since 2015 alone, thus leaving our country staggeringly overdependent on China for everything from personal protective equipment to lateral flow tests, and culminating in the disgraceful spectacle of the Government wasting £8.7 billion of taxpayers’ money on PPE that did not even meet the required safety standards. A toxic Tory decade of incompetence and indifference left us in early 2020 with a high-tax, high-inflation, low-wage and low-resilience economy, so that when the pandemic struck, we were left stranded in the storm without so much as an umbrella for protection.

But the catalogue of failure that left us in the lurch when covid struck has been matched only by the litany of errors that characterised the Government’s chaotic approach to planning for the end of lockdown restrictions.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Speaking as the last passport Minister for the Labour party, we saw the problem coming when the banking crisis hit, with a dip in passport applications, and had a plan for what would happen. This Government seem to have no plan and understanding that after two years of no travel there would be an increase in passport applications. Does my hon. Friend not think that the Government were asleep on the job?

[Stephen Kinnock]

My hon. Friend is absolutely right. A Government who fail to plan are a Government who plan to fail, and that is what we have seen throughout this process. We have seen nothing but a Government who are asleep at the wheel, and the British people are paying the price. The catalogue of failure that left us in the lurch is exactly as she says.

Of course, this failure to plan applies to the Passport Office, as set out in the motion before us, but it also applies across Government. The Government are presiding over a country that is mired in bureaucracy, red tape and waiting lists, crippling our economy, costing the taxpayer billions of pounds in emergency spending, and preventing the British people from simply getting on with their lives.

[Paul Holmes (Eastleigh) (Con)]

At the risk of making the shadow Minister come back to the actual topic of the debate, which is passports, his motion outlines that the Minister should apologise to anyone who has waited more than six weeks for their passport. Is he aware that for at least a year the official Government policy, and HMPO’s policy, has been a 10-week wait, so would it not have been better for him to check the website instead of coming here and being opportunistic?

[Stephen Kinnock]

On the causes of this, it is absolutely vital to recognise that the lack of investment in our public services is what has fundamentally left us exposed, and these are the problems we are facing today. On the hon. Gentleman’s specific point, the fact of the matter is that there should be an apology to people whose holidays have been wrecked and who have not been able to get to job appointments, funerals and weddings within the timeframe that we are discussing today.

Crime was already at record highs going into the pandemic, but now the court backlog is so long that in 95% of cases victims of violent crime will be waiting more than a year for their day in court—a direct result of Conservative Ministers cutting one pound in every four from the justice budget. Those who need an operation on the NHS can enjoy the luxury of 6 million people on NHS waiting lists, or, if they are in too much pain, they can take their sleeping bag down to their local A&E department for a 12 or 13-hour stay. If you want to go on holiday, you had better hope that you have ridden your luck in the game of pre-flight bingo we are all now forced to play as we cross our fingers and turn up at an airport—that is, of course, assuming that you are lucky enough to receive your new passport. Welcome to backlog Britain.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I am sure the hon. Gentleman will share my dismay at learning that a professional seafarer was forced to miss the crew change on his vessel having waited for 11 weeks to receive a replacement for a damaged passport, specifically because of this Government’s inefficiency. This is a professional seafarer who is a key worker forced to miss his crew change. It is not just a matter of holidays—it is affecting people professionally as well.

[Stephen Kinnock]

The right hon. Lady is absolutely right. There are holidays, weddings and funerals, but there are also direct impacts on people who have needed to go on work assignments abroad. There is the seafarer that she mentioned. There are so many examples of why, when public services are failing, that directly undermines productivity in the private sector. That is why this debate is so important in terms of our economy.

This brings me to a very particular catalogue of failure delivered by the Home Office and a Home Secretary who is completely out of her depth. Under the current Home Secretary, the Home Office is simply not fit for purpose. Crime is up by 18% while prosecutions have collapsed. The six-month asylum waiting lists have hit 73,000 because the number of asylum decisions made under the Home Secretary has halved, costing the taxpayer £4 million a day in emergency hotels alone. The Passport Office delays are causing sleepless nights for thousands of families nationwide.

So today Labour Members will be voting to demand an apology from the Minister to the British people for the abject failure of the Passport Office to meet the standards that it has promised and that the taxpaying British public expect and deserve. The Government had two years to prepare for a spike in passport applications once travel restrictions were lifted. Ministers were warned repeatedly about the possible backlog but they failed to plan and so inevitably failed to deliver. Indeed, the Government’s own data shows that the number of full-time HMPO staff has dropped by 681 over the past five years. After a really tough couple of years, British families deserved a well-earned break, but thousands have missed out.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I look forward to hearing what the Minister has to say. This is an important issue. We want to get these passports sorted. However, this backlog has been unprecedented. I did not look at my kids’ passports until very late in the day, after the covid restrictions were lifted, only to find that they were out of date by a number of months. But I was able to get them expedited—not any more so than anybody else—and we got them done. The system actually worked. I hope the hon. Gentleman would agree that one way we can advance the system today is to make sure that civil servants return to working in the Home Office, not from home, because the security checks that need to take place need to be done in that secure environment, not from home, where they cannot be done so efficiently.

[Stephen Kinnock]

I congratulate the right hon. Gentleman on getting those passports. I have to say that he was one of the lucky ones. The reality is that it was absolutely clear that at some point the travel restrictions would be lifted and there would be a surge in passport applications, and there was plenty of time for Ministers to meet Passport Office officials and make a plan for when that happened. That is basic common sense, basic logic and basic planning. It is the opposite of the incompetence and indifference that we have seen from this Conservative Government.

[Fleur Anderson (Putney) (Lab)]

Does my hon. Friend agree that much of the system is broken, because people are phoning up for appointments that they cannot get, and travelling to Belfast from London, or from Yorkshire to London, to get their passport? Information issues, as well as not getting passports in time, are leaving people high and dry. The Home Office is a Department that should be in special measures.

[Stephen Kinnock]

I thank my hon. Friend. What an utterly absurd position to be in that somebody who lives and works in London has to go to Belfast to get their passport processed. What kind of crazy, upside-down world are we living in when that is happening?

It is not just about holidays, as I was saying. People have missed vital work interviews and assignments abroad, weddings and funerals. They have not been with crucial identification needed for renting accommodation and the like. I have been inundated with emails from Opposition Members about these very situations faced by their constituents—usually hard-working families who have had their dreams shattered or their nerves shredded. This morning, my Aberavon office is dealing with seven new cases that came through last night alone. I will talk through just a few examples of these nationwide cases so that the Minister can get a clearer picture.

[Christine Jardine (Edinburgh West) (LD)]

The point that the hon. Member is making is the most significant one we should make here today. Yes, the Home Office has shown itself to be unfit for purpose at the moment, but these delays in passports and visas—we are also seeing it with driving licences—are having an enormous impact on the lives of ordinary people up and down this country. Every constituency is inundated with people whose lives have been turned upside down by Home Office incompetence. Does he agree that it is past time it did something about it?

[Stephen Kinnock]

The hon. Lady is absolutely right. The cost of this issue is not just in broken-hearted families who were not able to go on long-planned holidays, or to go to weddings and funerals; there is a direct cost to the British economy and to productivity, and the huge cost of people having to pay through the nose for fast-track applications. The cost, when it is finally calculated, will be eyewatering.

To give a few examples of the nationwide cases, one family in County Durham had to cancel a dream holiday of a lifetime just before Easter, at a cost of £6,000, because they had been waiting 10 weeks for their six-year-old’s passport to come through. The guidance at the time of application was that it would take a maximum of three weeks.

Two parents from north Wales had been living and working overseas in France for two years and were due to return home once the father’s visa had expired, with their rent agreement ending this month. They applied for a passport for their new-born baby in mid-February but, four months on, they have still not received that passport, meaning that they have been forced to pay for a hotel at huge personal cost because they are unable to travel back to the UK.

Another set of parents in the west midlands were desperate to get their two-year-old boy, who was having medical difficulties, away on holiday. Despite applying for a passport on 2 January, poor communication from the Passport Office meant they were still waiting several months later.

In my constituency of Aberavon, one individual applied for her first adult passport on 26 February, yet had to cancel her plans to attend a wedding on 4 June. Another of my constituents applied for a passport on 23 March, yet is still waiting 12 weeks on and does not know whether they will be able to travel on 21 June. What does the Minister have to say to those families? Will he apologise to them from the Dispatch Box today?

These failures date back further than the past few months and are about not just resources, but levels of Home Office competence. One man living in east London applied for his first adult passport in September 2021. He was told to send his old passport back. Then, after 12 weeks, he was told that the application had been cancelled. The Passport Office maintained that his old passport had never been received. The man was then advised to make another application free of charge. That application was rejected. Then, after several weeks of telephone and email exchanges, he finally received confirmation that the old passport had been received with his original application and that his original application should never have been cancelled. He was advised to make a third application, which he has done. You could not make it up.

[Beth Winter (Cynon Valley) (Lab)]

Like Members from all parts of the House, my office has been inundated with queries from constituents distraught at the fact that they either cannot go on holiday or could lose the cost of holiday travel. The situation is chaotic, unacceptable and must be resolved immediately. Does my hon. Friend agree that this could be resolved by the Government if they improved staff retention by meeting the Public and Commercial Services Union’s pay demands, worked with the PCS to end insecure agency staff and outsourcing, and completed the roll-out of the digital application programme as soon as possible?

[Stephen Kinnock]

Is it not extraordinary that the Government’s response to the crisis we are seeing is to cut the civil service by 90,000 jobs? In what world is that going to work, when we clearly need more resources, and people focused on customer-facing services? We need to build morale, not destroy it, and we need to show people that they should have good jobs on which they can raise a family. Instead, it is about cutting, undermining and passive-aggressive notes from the Secretary of State for Brexit Opportunities, I think he is called, put on the desks of his civil servants. It really is a disgrace.

Some applicants are having to travel the length and breadth of Britain to get an appointment. One man, as has been mentioned, had to travel all the way from London to Belfast to get his passport sorted. Others are having to pay extortionate costs for fast-track passport services or face losing hundreds of pounds. The number of monthly fast-track applications has more than doubled since December 2021. In April 2022, British families spent at least £5.4 million on fast-track services. The Passport Office’s own forecasts show that it expects to receive more than 240,000 fast-track applications between May and October this year, amounting to up to £34 million.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend is right to raise the issue of fast-track applications. My constituency office, like his and no doubt like those of every other Member, is inundated with application cases, but even the fast-track applications are only just coming in under the wire, causing lots of anxiety and lots of work for my staff. What does he therefore have to say about the ability of the private contractors operating passport services? The Home Office has known for some time that this privatised system is deeply inadequate in how it operates passport services.

[Stephen Kinnock]

My hon. Friend is absolutely right. He is referring to the two main companies, I think, which are TNT and Teleperformance. In both cases, the level of performance is abject. The question is: to what extent are they being held to account by the Government to ensure that they are delivering? I believe that TNT is on the record saying that its performance is meeting the service level requirements. I would like to see what those service level requirements are, because frankly it is an abject performance.

[James Wild (North West Norfolk) (Con)]

Like the hon. Member, I have had examples of constituents who have had cases and been delayed, and I am grateful for the support that the Minister has given me to help to get those cases resolved so that people have been able to go to weddings and other life-changing events. I thank the great teams working in Portcullis House to unblock these things. I encourage all Members to take that help up. Does the hon. Member recognise that, by the end of this month, more passports will have been issued this year than in the whole of last year?

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention. It is nice to know that his friend the Minister is helping him out, but the reality is that our inboxes are groaning with issues, failure and the chaos and shambles we are seeing. Because of failure to plan from the outset, we have a bottleneck and a crisis. We hope eventually that the system will catch up, but the pain, heartbreak, missed appointments and missed weddings and funerals have already happened, and the British public cannot get them back. Those moments have passed and that is why this is too little, too late.

Thousands of people have had to wait more than 10 weeks for a passport, making a mockery of the Prime Minister’s initial claim on 25 May that almost everybody was getting their passport within four to six weeks. I am sure he will come back and correct the record, although I am not holding my breath on that. Ten weeks is of course the new target introduced by the Home Office when it failed to meet the standard, long-established Government target of just three weeks. More than 30,000 people are waiting more than six weeks and they deserve an apology from the Minister.

The performance of the Home Office simply is not good enough. Ministers are not doing their jobs and the system is simply not working. The Home Office is currently paying millions of pounds to failing outsourced contracts across the Passport Office, including a courier service that is so incompetent that it loses hundreds of passports every year. The Home Office awarded TNT, the US-owned company that is part of FedEx, a £77 million three-year contract to deliver official travel documents in 2019. It has since been criticised for missed deliveries, poor communication and long delays. Meanwhile, Teleperformance—an ironic name, we have to say—the French private company providing private call centre services, has been criticised by the Immigration Minister himself for providing a service that is, in his words, “unacceptable”.

It is therefore utterly staggering that the Prime Minister’s answer to the problems facing the Passport Office is, in his words, to “privatise the arse” off the Passport Office. Why? If the blame lies with the contractors, rather than the performance of the Ministers dealing with those contracts, how can more privatisation possibly be the answer—unless he feels that the performance of his own Ministers is so poor that he no longer trusts them? We would not disagree with that assessment, because we firmly believe that the buck stops with Ministers and that the Home Secretary and her Ministers need to step up their leadership and recognise that they got the planning for the end of restrictions badly wrong.

There is plenty of evidence that the Home Secretary failed to plan. In April 2021, the vaccination programme was being rolled out and restrictions were lifting, but Passport Office numbers decreased by 5%. This year’s increases are too little, too late; they should have been in the pipeline since last year, as experts were warning of delays throughout the pandemic. Interestingly, Ministers refused to directly answer my recent written question about how many calls the Home Office had had with Teleperformance contractors and TNT to plan ahead in the run-up to lockdown restrictions being lifted. Perhaps the Minister can provide a fuller account of those discussions today, if any took place.

The PCS says that the Home Office originally estimated that 1,700 new staff members would be needed to deal with the backlog but, as far as we know, only around 500 have been recruited, many of whom are agency staff without the full training. Agency staff inevitably cost the taxpayer more money, which is a clear case of how the failure to plan is putting yet more strain on the public finances.

It is not just staffing levels that have caused the problem. It was staggering to learn recently that the new digital application processing system for passports was supposed to be fully implemented three years ago, but staff are still using the older, clunkier application management system. The Home Office will reportedly be paying penalties for failing to implement the new system, but it is unclear what those penalties will amount to. The new DAP system would increase the speed of passport processing, so this is a major error that is again costing British holidaymakers and other travellers dear. To make other things worse, at this time of backlog Britain, the Prime Minister’s second not-so-bright idea is to cut 91,000 civil servants, whom we desperately need to put everything they have into reducing delays and cutting waiting lists.

I have some specific questions for the Minister. What specific steps is the Home Secretary taking to improve the performance of the Passport Office, Teleperformance and TNT? By what date does the Minister expect all passports to be delivered within the 10-week window? How many of the staff brought into the Passport Office are agency staff? What training has been given to agency staff brought in to deal with the surge? Is that training fit for purpose?

Why is the Passport Office still using the legacy AMS? When was AMS originally planned to have been replaced by DAP? Are there any penalty costs for still using the legacy AMS? If so, what are those penalty costs and who will they be paid to? What is the timeline and final implementation date for DAP to be fully functional, and what is the end date for AMS? How many staff are currently engaged in working on the development programme of DAP? How many people were engaged in working on the development programme of DAP on 31 March 2020, 31 March 2021 and 31 March 2022? Why have there been delays in fully deploying DAP and is there a plan to recruit further people to develop and facilitate that? I ask again: how many meetings did the Minister have with the contractors throughout 2021 in preparation for international travel reopening, and what was discussed at those meetings?

The Home Office is simply not fit for purpose under this Home Secretary. The Department has already been placed in special measures twice, with the Ministry of Defence taking over Border Force operations in the channel and the Department for Levelling Up, Housing and Communities managing the Homes for Ukraine scheme. Unless the Home Secretary ups her game, the Passport Office may be taken off her hands as well. More immediately, we need the Minister to apologise to all those people who did what was asked of them throughout the pandemic, worked hard and earned their trips abroad, only to have their hopes dashed and their nerves shredded.

From NHS waiting lists to our courts, from the Driver and Vehicle Licensing Agency to passports, from chaos at our airports and lorry queues at Dover to our broken asylum system, everywhere we look, our country is bogged down in delays and chaos. The year is 2022 and this is backlog Britain. Let us hope that the Minister will do the decent thing today and apologise, and then let us hope that the Government will at least start trying to get their act together, because the British people deserve better than this.