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Oral Answers to Questions
(8 years, 1 month ago)
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Peter Grant (Glenrothes) (SNP)
1. What assessment he has made of the effect of his Department’s welfare reforms on low and middle-income households since 2010.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As a result of our reforms, the number of people in work is at a record high; income inequality is lower than it was in 2009-10; the number of workless households in the social rented sector is also at a record low; the number of children living in workless households is at a record low; youth unemployment is at the lowest level in a decade; and the employment rate for women is also at a record high.
Peter Grant
I am grateful to the Secretary of State for his answer, but the question was not about work—it was about low income. It is one thing being in work, but it is quite a different matter if people are in work that does not pay them enough to earn a living. Is he concerned about reports at the weekend that the latest changes to the personal independence payment system will adversely affect 640,000 people by 2020, making it difficult or impossible for them to live independent lives? Does he not accept that welfare changes that start with a target saving before any consideration is given to the impact on vulnerable people are always going to go wrong?
Mr Duncan Smith
The hon. Gentleman talks about my answers to him about low and middle-income people and work, but the point to make is that work is the best route out of poverty, and it is by getting people back to work that we are getting people out of poverty. It is worth reminding him that the poverty figures show that poverty has fallen, both for adults and for children, and that is the critical bit. The reforms we are making are helping people to help themselves to get beyond dependency and back into full-time work.
Andrew Bridgen (North West Leicestershire) (Con)
Will my right hon. Friend confirm that the latest low-income statistics show that the percentage of individuals and children in relatively low-income circumstances is at its lowest level since the 1980s?
Mr Duncan Smith
Yes, and it is also worth noting that income inequality is now lower than it was in 2009-10. It is worth reminding ourselves that, for all the complaining from the Opposition, income inequality rose under Labour to the highest levels it had ever been.
Andrew Gwynne (Denton and Reddish) (Lab)
But the Secretary of State will know that research analysis from the House of Commons Library shows that three in four people who are currently receiving tax credits will see that in-work support reduced when they are naturally migrated over to universal credit. What does he have to say to those millions of workers whose in-work support will be revised downwards?
Mr Duncan Smith
As we have made clear on a number of occasions, anybody migrating across from tax credits will see no change to their income—the Institute for Fiscal Studies has made that clear publicly and we also make it clear. It is also worth reminding the hon. Gentleman, because his party seems to have opposed the advent of universal credit, that in the latest IFS-supported research universal credit claimants are seen to be much more likely to go into work than they would be under jobseeker’s allowance, they move into work faster, they stay in work longer and they earn more money. Those are major positives for people who are trying hard and working, whereas the last Labour Government penalised anybody who wanted to go to work.
Neil Gray (Airdrie and Shotts) (SNP)
A report published yesterday by the Women’s Budget Group highlighted that this Tory Government’s policies are predicted to be more regressive even than those of their coalition predecessor. The report highlighted that single parent women and single female pensioners will see their standard of living reduced by an average of 23% by 2020. The Secretary of State’s Department’s policies are having a negative impact on gender equality. Will he go back to the drawing board to create a social security and pensions system that is fair and equitable?
Mr Duncan Smith
There have been many forecasts and most of them have been absolutely wrong—even the IFS forecast about child poverty has been wrong. It is worth reminding the hon. Gentleman of our reforms: the national living wage will give a boost of £900 to full-time workers who are currently on the national minimum wage; the personal tax allowance rising to £12,500 helps those on low income; and general childcare provision is available. That brings me to his point about lone parents, because universal credit, coupled with the incredibly generous childcare provision, now makes lone parents better off in work than they ever would have been before. That is why more people are going to work.
Neil Gray
That answer will not provide a crumb of comfort to those being hammered by social security cuts up and down this country. Today I have written to the Chancellor, highlighting the devastating impact that the cuts to employment and support allowance and to universal credit will have on disabled and sick recipients. These cuts are predicted to save £1.4 billion, yet just £100 million appears to be set aside for the long-awaited, much vaunted White Paper on health and work. Does the Secretary of State agree that the White Paper must be properly resourced in order to provide direct financial support to the sick and disabled people who are seeing their support cut? Will he today finally confirm when that White Paper will be published?
Mr Duncan Smith
The White Paper will be published well before the summer break. It is worth reminding the hon. Gentleman of two things. First, and really importantly, half the spending on welfare and public services still goes to the poorest 40%, as it did in 2009-10. Secondly, it is also important to note that we expect no change in the proportion of spending projected to be received by the lowest and middle quintiles between 2010-11 and 2020. I also say to him that it is a bit rich that the Scottish Nationalists, who are in Government in Scotland and who now face a £15 billion deficit, which would have racked them had they gone for independence, have not once referred to the tough choices that they might have to make to reduce that deficit.
Owen Smith (Pontypridd) (Lab)
Politics is always about choices, about priorities and about values. This past weekend, we saw the values and priorities of the current Government laid bare in their decision to implement a so-called welfare reform that will see £1.2 billion cut from the incomes of disabled people to pay for—we are told—a tax cut for top-rate taxpayers. Will the Secretary of State come back to the Dispatch Box and honestly describe that as a welfare reform, and then justify those choices?
Mr Duncan Smith
The changes that have been announced on personal independence payment are about changing, reforming and improving what goes to those who most need it in this disability allowance. The key point about this, which has been made by the Under-Secretary of State for Disabled People, my hon. Friend the Member for North Swindon (Justin Tomlinson), is that we put out a consultation long before the Christmas period. The Opposition had an opportunity to make their submissions, which they did, and we listened to all the submissions that came back. As a result, we are not implementing any of the first four options. It is right to continue to recognise aids and appliances and all the activities, as we previously did, but with a change to activities 5 and 6, changing the points numbers from two to one. That brings them into line with activity 3, in which one point has always been awarded for aids and appliances. Finally, activities 5 and 6 are less reliable indicators of additional cost. This all came on the back of an independent review published just after the last election, asking us to look again at the way those indicators are used. We have done that and, in fairness, this is the right way to go and will improve the lot of the worst off.
Owen Smith
For the benefit of the House, may I translate what the Secretary of State has just said? What he means is that he will take away £1.2 billion, completely eroding access to personal independence payment for 200,000 people, and cutting it by a third, from £70 to £50, for a further 450,000 people—people who are quite often unable to use the toilet or get dressed unaided. That comes on top of the cuts to ESA that went through the House last week. Before I came to the Chamber this afternoon, I asked disabled people what question they would like to put to the Secretary of State. One answer stood out. It was quite simply, “How does he sleep at night?”
Mr Duncan Smith
I remind the hon. Gentleman that, under this Government, spending on sickness and disability benefits has risen every year. We spend more than £50 billion, which is more than any other OECD country of equivalent size, such as Germany. I am proud of that, and, even with these changes, we will continue to see spending on PIP rise every year all the way to the end of this Parliament. As I have said, I am proud of that, because our reforms ensure that those most in need get full support and that the way that we do it is fair to everybody. I am also proud of the fact that this represents 6% of all Government spending, because, by reforming the economy and reforming welfare, we can get the money to those who most need it. By contrast, when Labour was in Government, we had a lot of promises, a broken economy and cuts all round.
Helen Whately (Faversham and Mid Kent) (Con)
2. What steps he is taking to support people with disabilities into employment.
Peter Aldous (Waveney) (Con)
12. What steps he is taking to support people with disabilities into employment.
Rebecca Harris (Castle Point) (Con)
16. What steps he is taking to support people with disabilities into employment.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
This Government are committed to halving the disability employment gap. In the spending review, we announced a real-terms spending increase on supporting disabled people into work. In the last year, 152,000 more disabled people entered employment. Our forthcoming White Paper will set out our plans to support more disabled people into work.
Helen Whately
I recently met the Kent Learning Disability Partnership, and the people there with disabilities told me that they are keen to work and welcome the Government’s support for that, but they asked me whether the Government would consider following the example of the NHS and introducing an accessible information standard, because they said they often found the communications from my hon. Friend’s Department too confusing and would like them to be easier to understand.
Justin Tomlinson
That is a powerful point. On 14 January I launched a taskforce that included the Royal National Institute of Blind People, the British Deaf Association, Action on Hearing Loss, the National Federation for the Blind, People First, the British Institute of Learning Disabilities, Sense and Mencap to look at that issue and at how, as a Department, we can lead across Government. I would be delighted if my hon. Friend would join that taskforce.
Peter Aldous
May I urge the Minister to publish the White Paper on employment support for those with disabilities as soon as practically possible? I take note of the Secretary of State’s earlier response that it would be before the summer break, but there has been some slippage on that. Will my hon. Friend outline what provisions the White Paper will contain on integrating employment and health support?
Justin Tomlinson
We will shortly be publishing the White Paper, which will set out the reforms for improved support for people with disabilities and long-term health conditions. We will be looking at a number of issues, including ways to engage with employers as part of our commitment to halve the disability employment gap, integration across health and employment, and further localised tailored support. This is an exciting opportunity.
Rebecca Harris
My hon. Friend the Minister will be aware of the superb work that the Salvation Army does in my constituency in helping disabled people get back into employment, and of the fact that I and the jobcentre are about to hold a Disability Confident event. Can my hon. Friend expand on what more his Department can do in Castle Point, not least by engaging with employers to get more of them to take on disabled employees?
Justin Tomlinson
I thank my hon. Friend for agreeing to host her own Disability Confident event. More than 50 MPs from all parties are doing that, supporting our work to halve the disability employment gap, and promoting services such as access to work, where we now have funding for an additional 25,000 places on top of the near-record 38,000 that we are currently helping.
Mr Speaker
We may or may not get to question 21. Patience may be rewarded. We shall see.
Carolyn Harris (Swansea East) (Lab)
Last Friday we heard that an additional £1.2 billion is to be cut from the PIP budget. That translates into £2,000 a year less for more than 60,000 claimants. What method or madness led the Minister to think that cutting support could help PIP claimants into work or to achieve independent living?
Justin Tomlinson
We are continuing to make improvements for claimants across the assessment process for PIP. At the end of this Parliament, we will continue to see increased numbers going through the system and benefiting from PIP.
Stephen Pound (Ealing North) (Lab)
The establishment of a taskforce is occasionally a mechanism for kicking the can down the road, but in this case I give the Minister credit for his good intentions. Will he consider adding the Royal British Legion to the list of consultees, because there is a real issue of disabled ex-servicemen and women having a great deal of difficulty getting into work?
Justin Tomlinson
That is an important point, and something we are already doing work on. I would be happy to discuss that further.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Government have sunk to a new low with this cut to the personal independence payment. As my hon. Friends have said, by 2020 some 640,000 disabled people will have their personal independence payment cut, a third by £2,865 a year and two thirds by £1,400 a year, stripping disabled people of their independence and their dignity. That is on top of the £24 billion cut to 4 million people since 2012. What are the Government’s estimates of how many of those disabled people will be in work, and how many will be unable to work as a consequence of those cuts?
Justin Tomlinson
PIP is about the extra costs that those with a disability would face. We made these changes on the back of the independent review published by Paul Gray, in which he highlighted concerns about the use of aids and appliance, the three recent legal judgments, and the fact that in the past 18 months we saw a trebling of the number of claimants who were able to access the benefit purely for aids and appliances. We listened carefully to the extensive consultation, including feedback from the hon. Lady, and for that reason aids and appliances will continue to be taken into account across all eight of the daily living components. We have ruled out the other four measures, and by the end of this Parliament there will be even greater numbers benefiting from the PIP system. [Interruption.]
Debbie Abrahams
Well, a Government Member is saying, “Listen to the answer.” Again, I am afraid, it is a non-answer—a hallmark of this dodgy, inept and unjust Government. Let us see whether they can do a bit better with this question.
Social security spending on disabled people as a percentage of GDP is lower now than it was in 1960. The Conservative manifesto for the last general election pledged not to cut social security support for disabled people. How and why have the Government gone back on that commitment, and how much more do they think disabled people will be able to take?
Justin Tomlinson
We spend almost double what the Germans spend—about 6% of our Government spending, which is more than we spend on our police and defence budgets combined.
John Glen (Salisbury) (Con)
3. What assessment he has made of the effect of family stability on levels of poverty and on life chances.
Suella Fernandes (Fareham) (Con)
15. What assessment he has made of the effect of family stability on levels of poverty and on life chances.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Our family stability review found that family instability is one of the main drivers of poverty, with unstable families more likely to have low incomes. That is why support for families is firmly at the heart of what we are doing in Government, such as doubling the funding for relationship support and doubling the amount of free childcare.
John Glen
I welcome the Government’s determination to tackle the root causes of poverty. With respect to the doubling of funding for the relationship support scheme, what steps is the Secretary of State taking to ensure that the scheme can be accessed across the country by those who find it hardest to reach Government support and those who most need it?
Mr Duncan Smith
My hon. Friend is absolutely right, and I pay tribute to the huge amount of work he has done in backing this up and supporting it, and to the work he is doing at present to make sure it gets across to everybody. We are clear that any new or extended support that we provide—and we do—will need to be accessible and effective for all families, no matter where they are, with additional, complex needs, and more will be said on that when we bring forward the life chances strategy, to be published this summer. However, I can guarantee to him that it is the No. 1 priority to make sure everybody who needs support gets it.
Suella Fernandes
Domestic violence is a stain on our society and often a cause of family instability. The Southern Domestic Abuse Service supports victims of domestic violence in Fareham, providing help in the community as an alternative to fleeing for refuge, which is often more costly and disruptive for the family. Will my right hon. Friend join me in congratulating the Southern Domestic Abuse Service on the vital work it does?
Mr Duncan Smith
I certainly will. I myself have been in the House on a ten-minute rule Bill to try to improve access to legal means to prosecute those who drive people to suicide, and I still believe this is something that could be done. I congratulate my hon. Friend and her remarkable charity. The Government have backed that work up, because we have now trebled the amount of money going to these organisations. I would be very happy, at some point, to meet them to congratulate them myself.
Frank Field (Birkenhead) (Lab)
Would the Secretary of State like to confirm that if we look at the current poverty data, we see that there are almost no poor children in households where there is a parent in work and one parent is available for part-time work? What lesson does he draw from that?
Mr Duncan Smith
I simply draw the lesson that we want more people to get back into work, because a household with work is a household that is more likely to be out of poverty. As usual, I pay tribute to the right hon. Gentleman, because he has done a huge amount of work on this issue. That lesson has been the drive behind everything that we have done—universal credit, our attempt to make sure that people get into work, and increased childcare to improve the possibility for more women to be in work to boost household income. However, universal credit also ensures that the first person into work is better off, and that therefore improves the likelihood of a household having more income and less chance of being in poverty.
Conor McGinn (St Helens North) (Lab)
If we are talking about cause and effect, I fear the question is the wrong way around. What I would like the Secretary of State to explain is how increasing levels of poverty under his Government are affecting family stability. Perhaps he might answer that question.
Mr Duncan Smith
I just wish the hon. Gentleman would check the figures. There are 800,000 fewer people in relative poverty, including 300,000 fewer children. [Interruption.] I know it is always awkward for the Opposition when the facts do not bear out the rhetoric, but the reality is that the proportion on a relative low income is the lowest since the 1980s, income inequality is lower than it was when his Government left office, and household disposable income is £1,500 higher than two years ago. It is improving, but it is not good enough—we want to go further and further. All I can say is that we are working to get people into work and make sure that work always pays, as it is the route out of poverty. I just wish that instead of carping, Labour Members would one day support that.
Rachael Maskell (York Central) (Lab/Co-op)
4. What steps he has taken to review the system of assessments for disabled people seeking welfare support.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
Independent reviews have been carried out of the assessments for personal independence payment and work capability assessment. The first review of the assessment for personal independence payment was undertaken and published in December 2014. There have also been five independent reviews of the work capability assessment.
Rachael Maskell
Disabled people, particularly those with mental challenges, report that the work capability assessment is exacerbating their ill health, even to the point that they want to take their own life. Those constituents are vulnerable and fragile. The situation is made worse by changes in benefits, financial hardship, and threats of future cuts. Rather than deny the problem, will the Secretary of State order an independent review of those with mental health challenges to assess the impact of the system from a service user’s perspective?
Justin Tomlinson
Following the Dr Litchfield recommendations, we accept that more needs to be done. We are improving training for staff, and now, across the jobcentre networks, we have mental function champions who can spread best practice in mental health.
Mr David Winnick (Walsall North) (Lab)
In view of Friday’s statement, why do the Government have such a compulsive need to hit out at disabled people at every opportunity? Does the Minister not realise how difficult it is for those people to lead their lives while their income is being undermined by the Government? This can only be described as an ongoing Tory war against the disabled.
Justin Tomlinson
I simply do not accept that. We are increasing the numbers of people who will benefit from the PIP system, we continue to improve the claimant’s journey, and we work extensively with our stakeholders to make sure that improvements are ongoing. By the end of this Parliament, we will be spending more money in this area than we are today.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
One of my constituents, a Mr McLoughlin, is registered as blind, but he has been denied, through the access to work scheme, essential equipment to help him work. The reason given was that able-bodied people would also be able to use the equipment. I am interested to know what equipment the Minister believes an able-bodied person could not use that a registered blind person could. Will he personally look into Mr McLoughlin’s case and that of others who face the same difficulty?
Justin Tomlinson
I will happily look into it, because without having all the details I cannot comment. On the broader issue, we are now helping more than 38,000 people a year—close to record numbers—with the access to work funding, which is in the fourth year of growth, and we have just secured funding for a further 25,000.
Mark Pawsey (Rugby) (Con)
My constituent, who is also registered blind, has told me how valuable the access to work scheme has been in getting him into work. His disability employment adviser contacted a new employer about his needs and they made workplace adjustments without which it would be very difficult for him to hold down his job. Is it not the case that this scheme is extremely valuable in supporting people such as my constituent?
Justin Tomlinson
I thank my hon. Friend. That is why we were so delighted to secure the extra funding for a further 25,000 places. We will be doing a lot more to promote this scheme, and I encourage employers to take advantage of it.
Tom Pursglove (Corby) (Con)
5. What support the Government are providing to redundant steel workers to help them get back into skilled work.
The Minister for Employment (Priti Patel)
The rapid response service delivers tailored support for individuals and communities affected by large-scale redundancies. This service was used to help steel workers affected by recent job losses at SSI in Redcar, and of course at Tata in Scunthorpe and Port Talbot.
Tom Pursglove
I thank the Minister for that answer. A few weeks ago we heard the very troubling news that 30 jobs were to be lost at Corby’s Tata site. What support has the Department provided, alongside others, to those 30 individuals and their families?
Priti Patel
My hon. Friend is right to mention the Corby site. Again, support from the rapid response service and the Department’s team was offered to Tata workers following the announcement of the job losses. On top of that, at this very difficult time, we are giving those individuals support through our DWP network—for example, guidance on job applications, training and support—to enable them to get into work all over again.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
6. How many people his Department expects to be naturally migrated on to universal credit during this Parliament.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Universal credit is rolling out, with the live service available in over 90% of jobcentres, and full roll-out will continue according to the published plan. It is worth reminding everybody that it is complete in London, and very shortly—probably by the end of this month or the beginning of next—universal credit will be in pretty much every single jobcentre in the country.
Neil Coyle
The Secretary of State made reference earlier to unreliable predictions. He predicted that by today’s date 8 million people would be on universal credit, but the DWP confirmed last week that fewer than 365,000 people are on universal credit—a staggeringly pathetic success rate of 4.4%. The only reason why the Government are pushing out universal credit now is to deliver the tax credit cut that will hit thousands of working families in my constituency, so is it not time the quiet man went silent on pretending that universal credit is a success?
Mr Duncan Smith
I bet that looked good when the hon. Gentleman wrote it down. It is utter rubbish.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I hope that the Secretary of State does not think that this is a load of rubbish. I visited this morning, with Dame Steve Shirley, a wonderful place where young people with autism are prepared for work. They are very concerned about how universal credit is going to affect them, because they have already seen education not being allowed in their personal plans. Remember that autism costs this country £34 billion a year. If we do not get those young people into employment, the sum will increase and the misery of the families will also increase.
Mr Duncan Smith
The hon. Gentleman is right. Autism is a real problem, and we want to help the young people and adults who have that problem as much as we can. Universal credit lends itself hugely to that. Unlike in the past, when those people would have gone from jobseeker’s allowance to working tax credits by themselves and had no advice, help or support once in work, under universal credit the adviser will stay with them all the way.
Importantly, we have now committed £100 million to train advisers to be specialists in helping people who have medical conditions such as autism, and that should help enormously. I would be very happy for the hon. Gentleman to come and discuss with me and the Minister for Disabled People what more we can do, because we are determined to make sure that universal credit helps those in the deepest need as much as it possibly can.
Nick Thomas-Symonds (Torfaen) (Lab)
The Secretary of State told “The Andrew Marr Show” show on 6 December:
“Nobody will lose any money on arrival on universal credit from tax credits because they’re cash protected, which means there’s transitional protection. They won’t be losing any money.”
If there were any doubt about that reassurance, the Secretary of State repeated it earlier to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). But according to the Library, only 27% of the final case load for universal credit will have got there through managed migration, so 73% of them will not have received transitional protection. Apply that to the current tax credit claimants in work, and 2.3 million families will be worse off as a result of moving from tax credits to universal credit. [Interruption.] Oh, I will give you the question. Will the Secretary of State apologise to those families for giving such nonsensical reassurances?
Mr Duncan Smith
I say to the hon. Gentleman that he is completely wrong on all that. The Institute for Fiscal Studies has made it absolutely clear that
“no family will take an immediate…hit”
when transferred to universal credit. That is a reality. They are cash protected. Therefore, as they move across, their income levels at the time will remain exactly the same. As we said earlier, we are transitionally protecting them. I just wish that the Opposition, unless they want to stay forever in opposition, would get with it and support universal credit instead of attacking it all the time.
Christian Matheson (City of Chester) (Lab)
7. What estimate his Department has made of the likely average change in income for a disabled worker as a result of changes to the universal credit work allowance.
The Minister for Employment (Priti Patel)
The effect of changes to universal credit work allowances cannot be considered in isolation. They form part of a broader package of measures, including the new national living wage and the increase in the personal tax allowance.
Christian Matheson
I thank the Minister for that response, but the Library disagrees and suggests that next year, disabled people will lose £1,700 on average. May I suggest respectfully to the Minister that nobody chooses to be disabled, that they are that way through illness, accident or simply bad luck? Now is the time not to pile more misery on those unfortunate people, but to give them a bit of dignity by not making this dreadful cut.
Priti Patel
The only point I would make is that this Government are supporting more disabled people to get them back into work. I of course agree with the hon. Gentleman’s point about dignity. We absolutely are providing dignity to individuals, by supporting them into work and also in giving them the financial support that will secure their employment in the long run.
Jo Cox (Batley and Spen) (Lab)
8. What the average notice period was for women whose pension age was brought forward by the Pension Act 2011.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
Women whose pension age was increased had a notice period, between Royal Assent and their new state pension age, of between four years and eight months and 14 years and five months. The average notice period was 10 years and 11 months.
Jo Cox
One of the 1,400 women in my constituency affected by these changes recently told me that she is still waiting for official notification from the Department. Does the Minister accept the abject failure on the part of the DWP to communicate these changes to the women affected by them? Does he think it is acceptable that some women have found out only through the brilliant work of the Women Against State Pension Inequality campaigners?
Mr Vara
Between 2009 and 2010, over 5 million notices were sent to people, according to the records held by Her Majesty’s Revenue and Customs. I would point out to the hon. Lady that, in 2012, only 6% of women within 10 years of state pension age thought that their state pension age would be at age 60.
Kevin Foster (Torbay) (Con)
Given the rhetoric in the recent Opposition day debate about the state pension age changes, does the Minister share my surprise that the six options put forward by the shadow Secretary of State would not make much difference at all to many women born in the 1950s? Does he agree that it is time for the Opposition to be clear about the choices they would make and how they would pay for them, and also to be clear about the changes they would not make?
Mr Speaker
Order. I know that the Minister will want to focus exclusively, and doubtless with loving care, on his own policy, and will not dilate on that of the Opposition, which would be disorderly. Knowing the hon. Gentleman, I do not think he does disorderly.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
We are not just dealing with the issue of the notice period: there is a fundamental unfairness. Let us take an example: a constituent of mine born in 1953 would have retired at age 63, but a woman born on 10 February 1954 will not retire until July 2019, two and a half years later. That is patently unjust. What the Government can do is to mitigate the timetable so that people have time to react. That is the right thing to do, and the Government should act.
Mr Vara
The hon. Gentleman talks about mitigating things. May I just say to him that transitional arrangements were made at the time? Those transitional arrangements cost £1.1 billion. The period that women would have to work before they retired was reduced from two years to 18 months, and 81% of the women affected by that period of 18 months will not have an extension of beyond 12 months.
Angela Rayner (Ashton-under-Lyne) (Lab)
I am really disappointed that the Minister still does not recognise that those women were given a totally inadequate notice period. Given that unfairness and the Secretary of State’s earlier comments—this Government are pretending they want to take people out of poverty—will the Minister look at the six options we have presented to the Government to deal with this injustice? Will he, as many Members of his party would support doing, allow those affected—[Interruption.] I am coming to that, if the hon. Member for Hexham (Guy Opperman) would listen. Will the Minister allow those affected to take a reduced state pension at an earlier age and be paid a lower state pension for a longer period?
Mr Vara
As far as the six options are concerned, all of them have a cost. It is time that the Opposition started to think about where the money would come from. The hon. Lady lays the blame at the feet of this Government, but she might reflect on the 13 years during which her party was in power, when it did absolutely nothing. [Interruption.] She is chuntering from a sedentary position about £20-something billion. May I just say to her that the cost of undoing the Pensions Act 2011 would be £30 billion?
Amanda Solloway (Derby North) (Con)
9. What progress his Department has made on reducing the rate of unemployment.
Matt Warman (Boston and Skegness) (Con)
13. What progress his Department has made on reducing the rate of unemployment.
The Minister for Employment (Priti Patel)
In 2010, we inherited from Labour an unemployment rate of 8%. Since then, we have made excellent progress and the unemployment rate has continued to fall. It is now 5.1 %, which is the lowest rate in a decade.
Amanda Solloway
I thank the Minister for that answer. As I am sure all hon. Members are aware, this week is apprenticeship week. May I therefore ask her what steps are being taken to help to convert apprenticeship places into full-time positions, particularly in my constituency of Derby North?
Priti Patel
My hon. Friend is absolutely right—this week is national apprenticeship week. In her area, there have been in excess of 5,000 apprenticeship starts. We are working with employers and have an employer engagement strategy across the Government, to ensure not only that we leverage our work in terms of encouraging more employers to take apprentices, but that apprenticeships are converted into careers—not just full-time jobs, but lifelong careers—for those young people who have the privilege of participating in those schemes.
Matt Warman
Many of my constituents work hard in the tourism industry but unfortunately become unemployed at the end of the season. Forward-thinking employers are annualising those seasonal contracts so that people are better able to plan their money and fewer people become unemployed. Will my right hon. Friend tell me what the Government are doing to encourage that good annualising of contracts?
Priti Patel
My hon. Friend is right, particularly about seasonal work and seasonal trends in local labour markets. Working with employers is crucial in ensuring that the Department for Work and Pensions and our jobcentres understand the flows and patterns in the local labour market. It is also crucial for us in the Department for Work and Pensions—we are doing this—to work with those individuals who find that seasonal work or changes in hours suit their individual needs and flexibility. Obviously, we work with Jobcentre Plus to ensure that we support people to fill those roles.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
11. Whether he has had discussions with the Women Against State Pension Inequality campaign; and if he will make a statement.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
It is fair to say that many in the House have had discussions or correspondence with members of the WASPI campaign. The right hon. Gentleman will be aware that, in recent weeks, we have had a number of debates in which Members of Parliament on both sides of the House have expressed the views of their constituents.
Mr Carmichael
I am grateful to the Minister for that answer and encourage him to continue the engagement with the WASPI campaign. One of its achievements has been to bring forward an army of women who say that they were not given proper and effective notice of what was coming towards them in terms of their retirement age. Whether that was the right thing or the wrong thing to do is no longer the issue. The fact is that it was done badly, and that now needs proper attention.
Mr Vara
I have a huge amount of respect for the right hon. Gentleman—I had the privilege of serving in the coalition Government Whips Office when he was one of the deputy Whips. At the time, he supported the Pensions Act 2011 and was responsible for persuading his Lib Dem colleagues to do likewise. One thing that was always the case with the Lib Dems before the coalition Government was that they blew with the wind. There was a temporary pause during the coalition Government. He is now proving that blowing with the wind is part of the Lib Dems’ DNA, and that they are back to normal.
Richard Graham (Gloucester) (Con)
The Opposition suggestion that the Government could allow that group of women to take their pensions early from the age of 63 has not been fully costed by anyone. Will my hon. Friend share with the House what the implications might be in terms of cost, whether it needs primary legislation and whether men over the age of 65 will be affected?
Alberto Costa (South Leicestershire) (Con)
17. What steps his Department is taking to help young people into employment.
The Minister for Employment (Priti Patel)
We are determined that young people should not slip into a life on benefits, but that they are either earning or learning. That is why we have launched Jobcentre Plus support in schools and will introduce the youth obligation in 2017, to ensure that young people get the best possible start in life.
Alberto Costa
In my constituency of South Leicestershire, we have seen a welcome fall of 81% in the youth claimant count, from 505 in 2010 to 95 now. That has been achieved through the strong joint working between my right hon. Friend’s Department, local authorities such as Blaby and Harborough District Councils, local enterprise partnerships, and not least businesses. Does she agree that it is through empowering and devolving responsibilities to those closest to the communities that we are most able to provide the support needed to help young people to get back to work?
Priti Patel
I pay tribute to all the local stakeholders in my hon. Friend’s constituency who have been providing vital employment support to people to get the claimant count down so low. He is right to say that local decisions help to get people into work. That is why we are always mindful of local labour market trends.
Huw Merriman (Bexhill and Battle) (Con)
Next month, Bexhill will be holding its first jobs and apprenticeships fair. This event, which I have put on in partnership with Jobcentre Plus and other local organisations, will allow constituents to meet 50 participating organisations. Does my right hon. Friend agree that local organisations working together can help us towards the goal of full employment?
Priti Patel
My hon. Friend is absolutely right. I speak with experience of not just my own constituency but the many other constituencies I have visited where jobs and apprenticeships fairs have taken place. The crucial point is that they can only happen with the support of local employers. The Department will continue to work at national and constituency level with local employers to support jobs and apprenticeships fairs like the one to which he refers.
Sir Henry Bellingham (North West Norfolk) (Con)
18. What recent assessment he has made of trends in the number of private sector jobs; and if he will make a statement.
The Minister for Employment (Priti Patel)
Supported by welfare reform and the Government’s long-term economic plan, we have seen worklessness fall. This has helped to boost private sector employment. There are now a record 26 million people working in the private sector, up by 2.7 million since 2010.
Sir Henry Bellingham
Is the Minister aware that since 2010 unemployment in my constituency has fallen by 67% from 1,900 to 624? Does she agree that one should look behind those statistics to all those lives that have been transformed: families with hope for the future and pride in themselves?
Priti Patel
My hon. Friend is absolutely right. Work and employment turn around the lives of families and communities. In his constituency and region, we have seen record levels of employment. That is down to the Government’s policies and, as I said earlier, to the support we have had from employers, who are, ultimately, the job creators in our economy.
Chris Green (Bolton West) (Con)
19. What progress his Department has made on reducing the number of workless households.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
When we took office almost one in five households had no one in work and about 1.4 million people had been on benefits for most of the previous decade. Since 2010, the number of workless households has fallen by more than 680,000 to its lowest level since records began. The number of children in workless households is at a record low, down nearly 480,000 since 2010.
Chris Green
Does my right hon. Friend agree that making progress in reducing the number of people in workless households is key to improving the life chances of millions of children?
Mr Duncan Smith
I do agree with my hon. Friend. From all the evidence, we know that children in workless households grow up without the aspiration to achieve, something they might have if they grow up in driven families who are in work. They are almost certain to repeat the difficult lives of their parents and we want to turn those lives around. Since 2010, the number of workless households in the social rented sector has fallen by more than 280,000 to a record low. It is worth remembering that when we took office in 2010 the number of households where no one had ever worked had nearly doubled under the previous Labour Government.
Mr Speaker
I call Angus Brendan MacNeil. He is not here. Where is the fellow? I call Naz Shah.
Naz Shah (Bradford West) (Lab)
21. What assessment his Department has made of the effect of recent changes to benefits on levels of child poverty.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I congratulate the hon. Lady on getting her question in.
We have seen relative child poverty fall by 300,000 since we came to office. The number of children living in workless households is also down 480,000 to a record low. Living standards are up 3.3% and income inequality, which rose under the previous Labour Government, is down since 2010.
Naz Shah
In the light of research published by the Children’s Society, which shows that 104,000 children in Bradford are adversely affected by the benefit freeze and that in my constituency alone 29,500 children are living in poverty, does the Minister not think he would be better off arguing with his Chancellor about his Budget rather than needlessly pushing more families and children into poverty?
Mr Duncan Smith
I simply do not agree with the hon. Lady, because the figures do not bear it out. It is worth remembering that in-work and out-of-work poverty rose under the last Labour Government. Under this Government, out-of-work poverty, which affected 71% of households with children in 2009-10, has fallen to 61% and is still falling. As we know, three quarters of poor children living in families that move into employment leave poverty altogether. A child poverty transitions report made that very clear. I think we should all celebrate getting people and families back to work, as we have been doing, and giving them a real chance to earn and have aspiration.
Daniel Zeichner (Cambridge) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As agreed with the Work and Pensions Select Committee when I was last in front of it, I can now inform the House that today we are launching the sanctions early warning trial for claimants. From April, early warning letters will begin to be issued to claimants within the trial site. The trial is being run in Scotland and gives jobseekers an extra 14 days to provide further evidence of their reasons for not complying before a sanction is applied.
Daniel Zeichner
My constituent Nick Dale is 36 years old and has a complex range of disabilities. His care package has just been reduced by Cambridgeshire County Council from 17 hours a week to 6.5 hours. The council told him he should see this not negatively but as a way
“of utilizing the strengths and resources that he may not realise he has within himself.”
His mother is appalled by his loss and the patronising tone—borrowed from the Government. If I lift the Secretary of State’s wallet in the Lobby tonight, would it help him utilise hidden strengths he did not realise he had, or is he as furious as I am about the way Nick Dale has been treated?
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
I am happy to look at that case. The Health and Social Care (Safety and Quality) Act 2015 should have put stronger protections in place, but I am happy to look at this matter further.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
T2. JPMorgan Chase, Sunseeker, Lush, Cobham and many other local businesses are supporting the inaugural Mid Dorset and North Poole apprenticeships and jobs fair. Does the Minister agree that supporting young people into apprenticeships is vital, and will she agree to open my jobs fair in Wimborne?
The Minister for Employment (Priti Patel)
I thank my hon. Friend for his kind invitation. I would be happy to look into it and try to come to his constituency. It is National Apprenticeship Week as well. He is right of course that employers, such as the outstanding ones he referred to, continue to do their utmost to support young people. I myself will be visiting many employers in Essex this week just to make that point to them.
Joan Ryan (Enfield North) (Lab)
T4. Last month, the Minister said that the idea that there was a 20-metre rule for assessing eligibility for enhanced mobility allowance was an “urban myth”, but in the case of my constituent Cathy Walsh—I must acknowledge that the Minister listened to my case—it was only when her consultant provided evidence that she could walk no more than 20 metres that her eligibility was reviewed and her benefit reinstated. What steps will the Government take to clarify this issue with assessors and to ensure that other disabled people do not have to suffer as my constituent has?
Justin Tomlinson
To be absolutely clear, the assessment is whether an individual can safely, repeatedly, to an acceptable standard and in a reasonable time period walk a certain distance. It is not a case of saying that if someone gets to 19.9 metres, they qualify for the money, but if they get to 20.1 metres, they do not. It is assessed according to the criteria I have set out, and we will continue to make sure that assessors are aware of that.
Alex Chalk (Cheltenham) (Con)
T3. Un- employment in Cheltenham has fallen by 66% since 2010. Will the Minister join me in thanking staff at Cheltenham’s Jobcentre Plus office, who hosted a very successful jobs fair recently and who are working hard to bring opportunity to those seeking to get on in life and provide for their families?
Priti Patel
I am delighted to hear of the outstanding work undertaken by our local Jobcentre Plus staff. In fact, all our JCP staff across the country do great work supporting people, getting them off benefits and into work and helping to transform their lives. I am delighted to see that the employment rates in my hon. Friend’s constituency are going from strength to strength.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
T5. The House will be aware that hundreds of thousands of pensioners live in countries where there is no uprating. Now that we are facing the EU referendum, and given that 400,000 British pensioners live elsewhere in the EU, will the Minister tell us what will happen to either the partial or the full uprating for British pensioners if we leave the EU?
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I remind the hon. Gentleman that the position of the Government is that we are better off in the EU: the people of Britain will be safer and more secure.
Chris Green (Bolton West) (Con)
T8. The Octagon theatre in Bolton is undergoing an upgrade to improve accessibility to disabled people. Will my right hon. Friend update us on the work being done to ensure that more public venues have better accessibility to disabled people?
Justin Tomlinson
I thank my hon. Friend for raising this issue. We are doing extensive work in this area, recognising the combined spending power of £212 billion for those with disabilities. We are doing particular work with my colleagues in the Department for Culture, Media and Sport to make cultural and music venues accessible. Attitude is Everything is a fantastic charity. A task group is looking with leading operators at restaurants, and good progress has been made with sports facilities, particularly with the premier league.
Liz McInnes (Heywood and Middleton) (Lab)
T6. The Minister dismisses the six suggestions of my hon. Friend the shadow Secretary of State for transitional arrangements as somehow mathematically challenged—or perhaps it was challenging. This issue is about fairness, however, and about establishing a fair transitional arrangement for the WASPI women. Has the Minister actually costed any of the six suggestions, or has he just dismissed them all out of hand?
Mr Vara
Yes, we have costed them, and a response to a freedom of information request is coming out today. When the hon. Lady talks about fairness and says that there should be transitional arrangements, I simply ask her to look back at Hansard for the year 2011, where she will find that on Second Reading, the then Secretary of State who is the current Secretary of State said that he would go away and consider—and he did. Four months later, transitional arrangements were implemented. They cost £1.1 billion and a reduction was made to the period from two years to 18 months, so transitional arrangements have been put in place.
Amanda Milling (Cannock Chase) (Con)
Last year, the Under-Secretary of State for Disabled People, my hon. Friend the Member for North Swindon (Justin Tomlinson), met Newlife, a Cannock-based charity that provides specialist disability equipment to children across the country. Will my hon. Friend join me in commending Newlife’s work, and does he agree that the provision of this equipment at this early stage means that these children can have a better quality of life?
Justin Tomlinson
It is a fantastic organisation; I enjoyed meeting Newlife. I have already taken the opportunity to highlight its good work and how we can promote it further in tandem with my colleagues in the Department of Health.
Paula Sherriff (Dewsbury) (Lab)
T7. In December, the Secretary of State said:“For those already on universal credit, advisers will…ensure that their status remains the same”.—[Official Report, 7 December 2015; Vol. 603, c. 703.]However, the Government’s decision appears to have changed; they are now saying that it is at the discretion of work coaches to use the flexible support fund. Will the Secretary of State confirm that the 60,000 workers currently on universal credit will, in his own words, have their status remain “the same”?
Mr Duncan Smith
Universal credit is now pretty much rolled out all over the country. The Institute for Fiscal Studies made it clear in respect of anybody transitioning from tax credits that
“no family will take an immediate…hit”
because they are “transitionally protected”. I said at the time that we would do our level best, working with the advisers and through the flexible support fund, to make sure that people’s situations continued and actually improved. That is exactly what universal credit will do. That is why I wonder why the Opposition do not support it. More people go into work quicker; they get into work faster; they actually earn more money; and they stay and work longer.
Michelle Donelan (Chippenham) (Con)
The Minister will be aware that almost 15% of the working population are self-employed, and that in five years’ time, about 40,000 of them will be living in Wiltshire. Does he agree that something needs to be done and that a self-employed auto-enrolment scheme could be looked at? Would he welcome the inclusion of such a thing in this week’s Budget?
Mr Vara
Auto-enrolment is a very important issue that this Government are undertaking. I am happy to report that some 6 million people have already taken part in the initiative. This is something that will be of particular benefit to women, who will have the opportunity to enrol as part of a pension, which will certainly help their chances in the future.
Mary Glindon (North Tyneside) (Lab)
When the Minister for Disabled People recently met Ravi Metha, Sulaiman Khan and Tanvi Vyas-Brady, campaigners from Muscular Dystrophy UK’s Trailblazers group, he heard at first hand the challenges that young disabled people face looking for work. Will he confirm that he can and will arrange for these young people to meet his access to work team so that their experiences can directly influence future DWP policies?
Justin Tomlinson
I pay tribute to the hon. Lady for taking the time to introduce those truly inspirational young ambassadors. They were brilliant in the meeting, and I look forward to them actively engaging with our access to work team to help to improve that service. It was a real pleasure.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
One of the welcome provisions of the Pensions Act 2014 was the lifting of the Pension Protection Fund cap; yet, nearly two years on, this clause is still to be implemented. Will the Secretary of State agree to meet me and a cross-party delegation to discuss how we might move the issue forward and bring security in retirement to those who have found their pensions seriously curtailed through no fault of their own?
Mr Duncan Smith
I am very happy to meet my hon. Friend and any others he wants to bring with him. This Government have a proud record on reforming pensions. The single tier will mean that pension incomes improve dramatically, particularly for those who have broken care. We also have auto-enrolment, which is massively increasing savings among those who have never saved before. Finally, the freedom to take an annuity or not, as and when a pension comes due, is enormous. I am very happy to make sure that reform programme continues, and I will happily meet my hon. Friend.
Alison Thewliss (Glasgow Central) (SNP)
Can the Secretary of State tell me how many jobseeker’s allowance claimants have been sanctioned in the period between being offered work and taking up work?
Mr Duncan Smith
I do not have the figures to hand, but I am very happy to write to the hon. Lady about that. I have to say, the number of people who have been sanctioned has fallen dramatically in the last 12 months, and I am sure she will be very happy to see the figures.
Peter Heaton-Jones (North Devon) (Con)
I thank my hon. Friend the Minister for Disabled People for attending a highly successful Disability Confident event in my constituency on Friday 10 days ago. Does he agree that such events are vital to ensuring that employers get the help they need and, crucially, that people with disabilities are moved closer to the world of employment?
Justin Tomlinson
I thank my hon. Friend for his hard work in championing disability employment opportunities. The good businesses of Ilfracombe seized that opportunity, which will make a real difference in the local community.
Diana Johnson (Kingston upon Hull North) (Lab)
Have any DWP Ministers had conversations with Department of Health Ministers about the consultation on financial support for those who received contaminated blood in the ’70s and ’80s and whether they should have their benefits passported through to the new personal independence payment scheme?
Justin Tomlinson
I am very happy to meet the hon. Lady to discuss that further.
Appropriate Mental Health Treatment for Matthew Garnett
Helen Hayes (Dulwich and West Norwood) (Lab)
I rise to present a petition on behalf of my constituents Isabelle and Robin Garnett and their son Matthew Garnett. I draw the House’s attention to the fact that Isabelle Garnett is sitting in the Public Gallery this evening.
The petition states:
The petition of Isabelle and Robin Garnett,
Declares that the petitioner’s son, Matthew Garnett, has been detained under the Mental Health Act in an emergency transitional Psychiatric Intensive Care Unit for six months; further that he is not receiving appropriate care or treatment; further that he appears to be regressing which is causing enormous distress to his family; further that he has recently sustained a broken wrist; further that a specialist facility (Malcolm Arnold House, St Andrew’s in Northampton) accepted his referral in August 2015; further that Matthew urgently needs to be admitted to this facility so that he can be properly assessed and treated; and notes that an online petition of the same nature has received 262,636 signatories.
The petitioners therefore request that the House of Commons urges the Government to look urgently at this case and ensure that a bed can be made available for Matthew Garnett at Malcolm Arnold House as soon as possible, and to take action to address the wider issue of inpatient services for children and adolescents with mental health difficulties.
And the petitioners remain, etc.
[P001680]
EU Referendum (Privy Council)
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Speaker
Before I call the hon. Member for West Bromwich East (Mr Watson) to ask the urgent question, which I am allowing him to ask, I remind all Members of the House that, and I quote from “Erskine May”:
“Her Majesty cannot be supposed to have a private opinion, apart from that of her responsible advisers; and any attempt to use her name in debate to influence the judgment of Parliament is immediately checked and censured…A Minister is, however, permitted to make a statement of facts in which the Sovereign’s name may be concerned.”
I earnestly hope that hon. Members will spare me the embarrassment of having to stop them in their tracks if they seek to draw to the House’s attention any alleged views of the monarch on the EU or, indeed, anything else. The urgent question has been carefully drafted by the hon. Member for West Bromwich East to cover process and not substance. I hope that colleagues will frame their questions accordingly.
Mr Tom Watson (West Bromwich East) (Lab)
(Urgent Question): I seek not to embarrass you in any way, Mr Speaker, but to ask the Lord President of the Council if he will make a statement on the adherence to the rules and conventions of the Privy Council in the light of the suspension of collective responsibility in connection with the European Union referendum.
The Lord President of the Council (Chris Grayling)
The Privy Council provides support to Her Majesty in the implementation of the functions of the Crown. The members of the Council also have access to confidential national information and documentation related to national security, and receive briefings about secrets related to these matters. They swear an oath to maintain the confidentiality of these briefings. None of that has changed because of the current circumstances.
Mr Watson
Last Wednesday, The Sun published a front-page story relating to the EU referendum, which it said was based on two “impeccably placed” sources. The right hon. Gentleman will know that every member of the Privy Council swears a solemn and binding oath to the Queen that they will, in the words of the oath,
“keep secret all Matters committed and revealed unto you”.
My hon. Friend the Member for Rhondda (Chris Bryant) has written to the right hon. Gentleman asking for an investigation. Will he please confirm that that will take place? Will he also confirm that the Privy Council rules have not been suspended as a result of the referendum? Three members have categorically denied that they are the source, yet the Justice Secretary has only said:
“I don’t know how The Sun got all its information”.
That is hardly categorical.
The sovereign’s constitutional impartiality is an established principle of our democracy, and it is incumbent on those in political office to ensure that that remains the case. Such a breach would be particularly serious and significant. Had the Justice Secretary disclosed this information, he would have breached the principle of confidentiality and prayed in aid the monarch in a politically controversial manner, but he would also have undermined his role as the Minister responsible for upholding the rule of law. Does the Lord President of the Council and Leader of the House therefore agree that the public have a right to know whether the Justice Secretary was a source of this story, and will he now urge his colleague to confirm or deny such allegations?
There has been a referral to the Independent Press Standards Organisation to investigate a complaint about the story, but IPSO cannot investigate whether a Privy Counsellor has broken his oath. Only the Minister or the Prime Minister can order that investigation. A cover-up will not do. Surely any member of the Privy Council who was a source of this story, or whose special adviser or ally was, stands in contempt of his Privy Council oath, and should be removed from office if he will not honourably resign himself.
Chris Grayling
As the hon. Gentleman said, last week a national newspaper published a story that was allegedly based on a conversation that had taken place at a lunch following a Privy Council meeting. However, my predecessor as Lord President, the right hon. Member for Sheffield, Hallam (Mr Clegg), has said very clearly that the story is categorically untrue. As the House is aware, Buckingham Palace has referred the matter to IPSO, the new press complaints body, which is now investigating. Given all those facts, I do not believe that there is any need for further action here.
John Redwood (Wokingham) (Con)
I agree with my right hon. Friend that the proper way to conduct this matter is the way in which Her Majesty’s office has conducted it, and I do not see how the House can spend all its time investigating every story in the newspapers that upsets some people, to try to find out who the sources were if neither the sources nor the newspapers wish to reveal it.
Chris Grayling
My right hon. Friend makes an important point. As I have said, the last Lord President said very clearly that the story was categorically untrue, and therefore, by definition, it must be a matter for the body that investigates complaints about the media.
Stephen Gethins (North East Fife) (SNP)
I am surprised that the Leader of the House does not want to carry out an inquiry. Let me call on him again to do so. After all, the Government were able to carry out a successful leak inquiry into the Scotland Office’s dealings before the independence referendum. Will the Leader of the House reflect on that experience?
There also seems to be a disagreement on a question of fact between the Prime Minister and the Justice Secretary. Does the Leader of the House think that the Prime Minister is handling the situation well?
Chris Grayling
I can only refer to what I said a moment ago, which is that the former Lord President, who attended the said event, has said that the story is categorically untrue. It is therefore a matter for the press complaints body, and not a matter for anyone in the House or in the Government.
Dr Liam Fox (North Somerset) (Con)
Does my right hon. Friend agree that what we are witnessing is a poorly disguised example of the tendency of the Labour party to play the man and not the ball in any given circumstances? Does he also agree that the workings of the Privy Council are a matter for the Privy Council, and its rules are not the same rules that apply to Ministers who are answerable to the House of Commons?
Chris Grayling
My right hon. Friend is absolutely right—and it is worth pointing out that the conversation that is alleged to have taken place, and which the former Lord President said did not take place, did not take place at a Privy Council meeting.
Tom Brake (Carshalton and Wallington) (LD)
Does the Leader of the House agree that when it comes to serial offenders, one of the most effective forms of reparation for the victim is restorative justice, whereby the offender apologises directly to the victim? Does he support the principles of restorative justice?
Chris Grayling
I support the principles of justice, and I also support the principle that people are innocent unless proven guilty.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
As the Lord High Chancellor is the keeper of the Queen’s conscience, is it not inconceivable that he could misapply his conscience to Her Majesty? In the Privy Council oath, Privy Counsellors are asked to swear:
“You will to your uttermost bear Faith and Allegiance to the Queen’s Majesty; and will assist and defend all civil and temporal Jurisdictions, Pre-eminences, and Authorities, granted to Her Majesty and annexed to the Crown by Acts of Parliament, or otherwise, against all Foreign Princes, Persons, Prelates, States, or Potentates.”
How, therefore, can members of the Privy Council go off and be European Commissioners swearing allegiance to the European Union?
Mr Speaker
That is an interesting point—some would say a fascinating point—but it is perhaps mildly tangential to the urgent question that I have selected. But we all savour the observations of the hon. Member for North East Somerset (Mr Rees-Mogg), so let us savour the reply.
Chris Grayling
Mr Speaker, I think you would agree that my hon. Friend makes his remarks in his customary way and that what he has said perhaps says it all.
Kevin Brennan (Cardiff West) (Lab)
The Leader of the House prayed in aid the former Deputy Prime Minister’s categorical denial that that conversation ever took place. Could not this matter be put to bed very simply and straightforwardly by the Justice Secretary, who is an honourable man, coming to the House himself and categorically denying that the conversation ever took place?
Chris Grayling
All I can repeat is what I said earlier, which is that my predecessor said that the story was categorically untrue. I therefore do not think that there is anything to answer for.
Mrs Anne Main (St Albans) (Con)
The Cabinet Office has established a referendum unit. Can my right hon. Friend the Leader of the House explain what it does, when it was established, to whom it reports and how many civil servants work in it?
Mr Speaker
The short answer is no, not now. The right hon. Gentleman might be able to do that in the course of a private chat over a cup of tea with the hon. Lady, or by answering a written question if she were to table such, but today we must focus on the narrow terms of the urgent question that has been granted.
Joan Ryan (Enfield North) (Lab)
I have always considered it an honour and privilege to be a member of the Privy Council, and I take very seriously the trust that is placed in those of us who are part of it. I believe that the allegations carry a great deal of currency, and that if they are not properly investigated, they could undermine the whole of the Privy Council and everybody in it. The Prime Minister was right to say that it would be very serious if a member of the Privy Council was the source of the newspaper story in The Sun. I therefore think that it behoves the Government to ask the Member involved to come to this House and to make a statement himself, in order to lay this matter to rest.
Chris Grayling
All of us who are members of the Privy Council take that responsibility enormously seriously. It is a great honour for us to serve the Crown in that way. However, I simply repeat that my predecessor as Lord President, who is a Privy Counsellor and who also takes that responsibility very seriously, has said that the story is categorically untrue, and that there is therefore nothing to answer for.
Mr Philip Hollobone (Kettering) (Con)
It is quite right that Her Majesty, our sovereign, should have no views on important issues such as the EU referendum. How can it be in any way acceptable for members of Her Majesty’s Government from the Prime Minister downwards to encourage foreign Heads of State to comment on the EU referendum? Does this not demonstrate the fact that the international Bilderberg group is ganging up against the British people?
Chris Grayling
I would discourage any foreign leader from entering the debate at the moment. This is a matter for the British people and it should remain so.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
What discussions, if any, has the Leader of the House had with the Prime Minister and the Justice Secretary about allegations that the Justice Secretary might have been the source of the leaked information, since such allegations were made in the media?
Chris Grayling
Since my predecessor has said that the story is categorically untrue, there is no need for me to have such conversations.
Mr Peter Bone (Wellingborough) (Con)
I suppose the one thing that we have learned today is that we should not believe everything we read in the newspapers. However, I am learning more about the Privy Council and things like that, because I am obviously not a member of the Privy Council and not likely to be.
Sticking narrowly to the point, do Privy Council rules extend to former colonies that might now have a President who might want to come over here and tell us how to vote in the EU referendum?
Mr Speaker
Order. I think we know the President of whom the hon. Gentleman speaks. The President is a most illustrious individual, but the last time I looked he was not a member of the Privy Council. We will leave it there as I think it was a rhetorical question.
Toby Perkins (Chesterfield) (Lab)
The Leader of the House is clinging to the defence that he is using today, but it is clear that the Secretary of State for Justice wants people to believe that he was the source and that the story is true. Given that the right hon. Member for Mid Sussex (Sir Nicholas Soames), whom we all respect tremendously on such matters, considers this to be treason, the Leader of the House’s rather flippant approach massively undermines the importance of this important role.
Chris Grayling
I am not quite sure where the hon. Gentleman is coming from. Someone cannot be found guilty of an offence when none has taken place. My predecessor has said that the story is categorically untrue, so that really should be the end of the matter.
Andrew Bridgen (North West Leicestershire) (Con)
Does the Leader of the House agree that if the right hon. Member for Sheffield, Hallam (Mr Clegg) or someone else at the Privy Council meeting made a note of their recollection of a conversation with Her Majesty, perhaps for a book or diaries, which, amazingly, politicians tend to want to write at the end of their careers, perhaps the number of people who may have been privy to the information may include not only Privy Counsellors? That may be where the leak came from.
Chris Grayling
Lots of people talk to lots of others about lots of things, but the former Lord President has said that the story is categorically untrue and that the conversation did not take place.
Mr Dennis Skinner (Bolsover) (Lab)
I have never been to this palace, so I do not know what takes place there, but the most bizarre thing for me is what on earth the Queen was doing confiding in Clegg. [Laughter.]
Chris Grayling
The response to the hon. Gentleman’s comment from across the House suggests that not everyone disagrees with the view he puts forward. I hope that he gets the chance to go to the palace before he ends his illustrious career.
Mr David Nuttall (Bury North) (Con)
Will those members of the Privy Council who are also members of Her Majesty’s Government ensure that all the statistics that are usually published are published between now and 23 June?
Chris Grayling
I am sure that we will want to ensure that everyone on both sides of the debate has all the facts that they need to reach a conclusion when the vote comes in June.
Jo Stevens (Cardiff Central) (Lab)
The Prime Minister has described the EU referendum as a once-in-a-generation decision and
“more important than a general election”.
Does the Leader of the House agree that public confidence in the outcome of this significant vote rests largely on members of the Government on both sides of the argument behaving fairly and abiding by agreed rules and conventions?
Chris Grayling
Ministers on both sides of the argument are making their case clearly and will remain friends afterwards. I am pleased to have my right hon. Friend the Secretary of State for Energy and Climate Change, whose view is different from mine, sitting alongside me, demonstrating that we are a united team that is doing the right thing for this country.
Henry Smith (Crawley) (Con)
Without invoking the body of the sovereign, may I ask the Government when they plan to introduce a British sovereignty Bill?
Chris Grayling
We will soon be having a visitation from the Queen to this Palace for the Queen’s Speech, on 18 May, and I am sure that my hon. Friend will see on that occasion what our plans are for the legislative programme in the years ahead.
Mr Speaker
My natural generosity got the better of me; the hon. Member for Crawley (Henry Smith) is unfailingly courteous, but his question was a bit wide of the mark. Half a dozen or so people, perhaps slightly more, are still seeking to catch my eye and it would be good if everybody remained in order—led by Mr Stephen Pound.
Stephen Pound (Ealing North) (Lab)
Thank you, Mr Speaker. This whole business leaves a pretty nasty stench in the nostrils. Does the Leader of the House agree that there is an unpleasant characteristic emerging, whereby people are picking up little scraps, trifles, tittle-tattle, gossip and rumour and then parlaying that into a book later on in their careers? My Sunday morning fry-up was ruined when I turned to my copy of The Mail on Sunday only to read the memoirs of Mr Laws, so does the Leader of the House agree that we should impose a self-denying ordinance and stop writing these dreadful scandalous books, seeking to expose what should be confidential? May I say that I have no intention of doing this?
Mr Speaker
I am not sure that a self-denying ordinance can be imposed. Those who have consulted their scholarly craniums advise me that that might not be possible—indeed, it might be either a contradiction in terms or a tautology. I will leave the hon. Gentleman to reflect on the matter.
Chris Grayling
We will see how robust the hon. Gentleman’s determination to stay outside the world of diary and book writing is when he concludes his illustrious career and receives a lavish offer from a publisher.
Paul Flynn (Newport West) (Lab)
Early-day motion 1182 and interrogation at a recent Select Committee hearing raised two other possible breaches of this kind involving Her Majesty and Prince William. It was noted that the carefully crafted answer from the Justice Secretary said that he did not know where the Queen gets all her information. As we have now been told that the Justice Secretary is a “Maoist”, may we take it that this is an attempt to do what Maoists do and achieve revolution by destruction—in this case, the destruction of the monarchy?
Chris Grayling
If we are talking about revolution by destruction, I have to say that the current Leader of the Opposition and shadow Chancellor take the biscuit.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I hope you will not deem my question to be tangential, Mr Speaker. Clearly, the Government have strong views on this matter and we are witnessing varied opinions from those on their Benches, but for future reference might the Leader of the House consider drawing up a list of approved contributors to the EU debate, saying whose view is acceptable and whose is not? Such a list would be very handy for future reference for the Scottish National party.
Chris Grayling
As far as I am aware, Mr Speaker, we are having a debate where everybody’s views are being put forward, on both sides of the argument, and that is going to carry on for another three months.
Clive Efford (Eltham) (Lab)
I am racking my brain trying to think of a previous occasion when the Leader of the House has agreed so readily with the right hon. Member for Sheffield, Hallam (Mr Clegg). Surely the Leader of the House must accept that the Justice Secretary’s failure unequivocally to state that he had nothing to do with this is the reason he is answering this urgent question now. Should the Justice Secretary not either make such a statement or resign?
Chris Grayling
So the hon. Gentleman is asking the Justice Secretary to say that something that did not happen did not happen—that just does not make any sense.
Justin Madders (Ellesmere Port and Neston) (Lab)
Millions of working people throughout this country know that when an allegation of gross misconduct comes to an employer’s attention, it is usually expected that an investigation will follow and that if the allegation is proven, dismissal is a potential outcome. Doing nothing creates a precedent that others may rely on in future if other allegations are made, so does the Leader of the House agree that the failure even to investigate this shows a lack of courage and creates an unwelcome precedent?
Chris Grayling
Normally, investigations are not launched into unsubstantiated stories. I simply say again that my predecessor, the former Lord President of the Council, said that the story is categorically untrue.
Melanie Onn (Great Grimsby) (Lab)
I am disappointed to hear the response of the Leader of the House, because Buckingham Palace is sufficiently concerned by this story to have made a formal complaint to the press watchdog. There are two impeccable sources involved, so why are the Government not taking the matter seriously by holding an investigation?
Chris Grayling
If I understand it correctly, Buckingham Palace is complaining about the story in the newspaper, and the proper body to investigate a complaint of that kind is the Independent Press Standards Organisation.
Mike Kane (Wythenshawe and Sale East) (Lab)
The Prime Minister has described the situation as “very serious”. Does the Leader of the House agree with him that it is very serious if a member of the Privy Council has breached confidential codes and been the source for The Sun story? If he does, why is he not launching his own investigation?
Chris Grayling
If I understand it correctly, the serious issue is about the story in the newspaper, which is being investigated, but my predecessor, the former Lord President of the Council, has said that the story is categorically untrue.
Naz Shah (Bradford West) (Lab)
Yesterday, the Sunday Telegraph reported that Government sources had described the alleged leak by the Justice Secretary as a “sackable offence”. Will the Leader of the House confirm that the Justice Secretary had the support of the Prime Minister and his Cabinet colleagues to remain in post?
Point of Order
Mrs Anne Main (St Albans) (Con)
On a point of order, Mr Speaker. On 7 March, I tabled a question which asked the Secretary of State for Business, Innovation and Skills whether he would publish any contingency plans that his Department has made on trade agreements in the event of the UK’s exit from the EU. I received this answer today:
“At the February European Council, the Government negotiated a new settlement, giving the United Kingdom a special status in a reformed European Union. The Government’s position, as set out by my right hon. Friend the Prime Minister to the House on 22 February, is that the UK will be stronger, safer and better off remaining in a reformed EU.”
That is not an answer to my question. I believe that, at the time of the Iraq inquiry, Lord Justice Scott agreed that it was parliamentary protocol that questions must be given a substantive answer. Is it possible that, through your good offices, Mr Speaker, I can get an answer to that particular question?
Mr Speaker
As the hon. Lady knows, the Chair is not responsible for the content of answers. There is a general presumption in favour of answers to questions that are both timely and substantive. If, however, the hon. Lady is dissatisfied with the substance of the reply, which she believes fails adequately to respond—or to respond at all—to her inquiry, she has two recourses open to her, neither of which involves the Chair. One is to table further questions with that dogged persistence for which she has become renowned over the past nearly 11 years in the House, and the other is to complain to the Chair of the Procedure Committee, the hon. Member for Broxbourne (Mr Walker), with a view to securing an inquiry into the approach by Ministers to providing answers to parliamentary questions. I hope that that constitutes an adequate answer to the hon. Lady, who has aired her concern today.
Energy Bill [Lords] (Programme) (No. 2)
Ordered,
That the Order of 18 January 2016 (Energy Bill [Lords] (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in the second column of the Table.
Proceedings | Time for conclusion of proceedings |
|---|---|
New Clauses relating to wind power; amendments to Part 5 | Two hours after the commencement of proceedings on the motion for this order |
New Clauses relating to carbon capture; emissions and decarbonisation; remaining new Clauses; remaining proceedings on Consideration | One hour before the moment of interruption |
4. Proceedings in Legislative Grand Committee and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption.—(Andrea Leadsom.)
Question agreed to.
Mr Speaker
As I informed the House on Monday 26 October, before a Report stage begins on a Bill, I will seek to identify in advance those changes made in Committee which I would expect to certify together with any Government amendments tabled for Report stage, which, if passed, would be likely to lead me to issue a certificate. My provisional certificate based on those changes and expected amendments is available in the Vote Office and on the Bills before Parliament website. At the end of the Report stage on a Bill, I am required to consider the Bill as amended on Report for certification. At that point, later today, I will issue my final certificate.
Energy Bill [Lords]
17:35 - The House divided: - Ayes: 183 / Noes: 270 - Question accordingly negatived.
17:49 - The House divided: - Ayes: 229 / Noes: 271 - Question accordingly negatived.
19:44 - The House divided: - Ayes: 229 / Noes: 268 - Question accordingly negatived.
19:56 - The House divided: - Ayes: 227 / Noes: 272 - Question accordingly negatived.
20:08 - The House divided: - Ayes: 229 / Noes: 275 - Question accordingly negatived.
Callum McCaig (Aberdeen South) (SNP)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
Amendment 24, in clause 79, page 46, line 20, leave out “31 March 2016” and insert “1 March 2017”.
This amendment and amendments 25, 26, 40, 41, 42, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38 and 39 have the effect of closing the Renewables Obligation for onshore wind a month earlier than the original date set out in the Statutory Instrument: Renewables Obligation Closure Order 2014: 2388, rather than a year earlier, as the Bill does in its present form.
Amendment 25, page 46, line 25, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 22, page 47, line 22, leave out clause 80.
Amendment 26, in clause 80, page 47, line 27, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 27, page 47, line 30, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 28, page 47, line 36, leave out “31 March 2017” and insert “1 March 2017”.
Amendment 29, page 47, line 42, leave out “31 March 2017” and insert “1 March 2017”.
Amendment 30, page 48, line 3, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 31, page 48, line 6, leave out “31 March 2017” and insert “1 March 2017”.
Amendment 32, page 48, line 20, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 33, page 48, line 33, leave out “1 April 2017” and insert “2 March 2017”.
Amendment 34, page 48, line 43, leave out “1 April 2017” and insert “2 March 2017”.
Amendment 35, page 49, line 8, leave out “1 April 2017” and insert “2 March 2017”.
Amendment 36, page 49, line 17, leave out “1 April 2017” and insert “2 March 2017”.
Amendment 37, page 50, line 13, leave out “18 June 2015” and insert “18 May 2016”.
Amendment 1, page 50, line 18, leave out “planning permission” and insert
“an application for 1990 Act permission or 1997 Act permission”.
Amendment 38, page 50, line 19, leave out “18 June 2015” and insert “18 May 2016”.
Amendment 2, page 50, line 20, leave out “or judicial review”.
Amendment 3, page 50, line 30, after “Act” insert
“(excluding an extension agreed for the purposes of section 78(2) of the 1990 Act or section 47(2) of the 1997 Act)”.
Amendment 52, page 50, line 34, after “application”, insert
“(provided that this period does not include any extension agreed for the purposes of section 78(2) of the 1990 Act or section 47(2) of the 1997 Act”.
Amendment 4, page 50, line 35, leave out paragraph (iii).
Amendment 39, page 50, line 40, leave out “18 June 2015” and insert “18 May 2016”.
Amendment 53, page 50, line 40, after “18th June 2015”, insert “whether”.
Amendment 6, page 50, line 40, leave out “following an appeal”.
Amendment 5, page 50, line 40, after “following an appeal” insert—
“or a decision made by the Secretary of State, Welsh Ministers or Scottish Ministers following directions given under section 77 of the 1990 Act or section 46 of the 1997 Act, and”.
Amendment 54, page 50, line 40, after “appeal”, insert “or otherwise”.
Amendment 23, page 50, line 46, at end insert
“, or
(e) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18th June 2015 for the station or for additional capacity,
(ii) a grant of planning permission was resolved by the relevant planning authority on or before 18th June 2015,
(iii) planning permission was granted after 18th June 2015, and
(iv) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 7, page 50, line 46, at end insert—
“( ) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18 June 2015 for the station or additional capacity,
(ii) the period allowed under section 78(2) of the 1990 Act or (as the case may be) section 47(2) of the 1997 Act (excluding an extension agreed for the purposes of section 78(2) of the 1990 Act or section 47(2) of the 1997 Act) ended on or before 18 June 2015 without the things mentioned in section 78(2)(a) or (aa) of the 1990 Act or section 47(2)(a) or (b) of the 1997 Act being done in respect of the application,
(iii) the application was referred to the Secretary of State, Welsh Ministers or Scottish Ministers in accordance with directions given under section 77 of the 1990 Act or section 46 of the 1997 Act,
(iv) 1990 Act permission or 1997 Act permission was granted after 18 June 2015, and
(v) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 8, page 50, line 46, at end insert—
“( ) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18 June 2015 for the station or for additional capacity,
(ii) the relevant planning authority resolved to grant 1990 Act permission or 1997 Act permission on or before 18 June 2015,
(iii) 1990 Act permission or 1997 Act permission was granted after 18 June 2015, and
(iv) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 9, page 50, line 46, at end insert—
“( ) evidence that—
(i) an application for consent for the station or for additional capacity was made under section 36 of this Act,
(ii) the consultation period prescribed by Regulations made under paragraphs 2(3) or 3(1)(c) of Schedule 8 to this Act had expired on or before 18 June 2015,
(iii) the Secretary of State caused a public inquiry to be held under paragraph 2(2) or 3(3) of Schedule 8 to this Act or decided that a public inquiry need not be held,
(iv) consent was granted by the Secretary of State after 18 June 2015, and
(v) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 10, page 50, line 46, at end insert—
“( ) evidence that—
(i) an application for development consent for the station or for additional capacity was made under section 37 of the Planning Act 2008,
(ii) the deadline for receipt of representations under section 56(4) of the Planning Act 2008 had expired on or before 18 June 2015,
(iii) consent was granted by the Secretary of State after 18 June 2015, and
(iv) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 11, page 50, line 46, at end insert—
“( ) evidence that—
(i) planning permission for the station or additional capacity was granted on or before 18 June 2015,
(ii) planning permission under sections 73, 90(2), 90(2ZA) or 96A of the 1990 Act or sections 42, 57(2), 57(2ZA) or 64 of the 1997 Act, a consent under section 36C of this Act, or an order under section 153 of, and paragraph 2 or 3 of Schedule 6 to, the Planning Act 2008 varying the planning permission under clause 32LJ(4)(i)(i) was granted after 18 June 2015, and
(iii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 12, page 50, line 46, at end insert—
“( ) evidence that—
(i) 1990 Act permission or 1997 Act permission for the station or additional capacity was granted on or before 18 June 2015,
(ii) consent under section 36 of this Act that permits a greater capacity for the station than that permitted by the planning permission under clause 32LJ(4)(j)(i) was granted after 18 June 2015, and
(iii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 13, page 50, line 46, at end insert—
“( ) evidence that—
(i) planning permission for the station or additional capacity was granted on or before 18 June 2015,
(ii) planning permission under clause 32LJ(4)(k)(i) was superseded by a subsequent planning permission granted after 18 June 2015 permitting a station with the same or a lower capacity than that granted under the planning permission referred to in clause 32LJ(4)(k)(i), and
(iii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”.
Amendment 14, page 50, line 46, at end insert—
“( ) evidence that—
(i) planning permission for the station or additional capacity was granted or refused on or before 18 June 2015, and was subsequently confirmed or granted after that date following a statutory challenge under section 288 of the 1990 Act, section 237 of the 1997 Act or section 118 of the Planning Act 2008, or following a judicial review, and
(ii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached.”
Amendment 15, page 50, line 48, leave out sub-paragraph 5(a) and insert—
“(a) evidence of an agreement with a network operator to carry out grid works in relation to the station or additional capacity and was originally made on or before 18th June 2015 notwithstanding the fact that may have subsequently been amended or modified, and
(ab) a copy of a document written by, or on behalf of, the network operator which estimated or set a date for completion of the grid works which was no later than 31 March 2017; or”.
Amendment 40, page 50, line 49, leave out “18 June 2015” and insert “18 May 2016”.
Amendment 41, page 51, line 10, leave out “18 June 2015” and insert “18 May 2016”.
Amendment 16, page 51, line 26, at end insert
“and includes planning permission deemed to be granted in accordance with section 90 of that Act”.
Amendment 17, page 51, line 31, at end insert
“and includes planning permission deemed to be granted in accordance with section 57 of that Act”.
Amendment 18, page 52, line 6, leave out “from a recognised lender”.
Amendment 42, page 52, line 16, leave out “31 March 2017” and insert “1 March 2017”.
Amendment 19, page 52, leave out lines 27 to 29, and insert—
“In this section “recognised lender” means a bank or financial institution or trust or fund or other financial entity which is regulated by the relevant jurisdiction and which is engaged in making, purchasing or investing in loans, securities or other financial instruments.”.
Amendment 20, page 52, line 32, leave out subsection (6).
Amendment 43, page 54, line 19, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 44, page 54, line 21, leave out “31 March 2017” and insert “1 March 2017”.
Government amendment 50.
Amendment 45, in clause 81, page 56, line 3, leave out “31 March 2016” and insert “1 March 2017”.
Amendment 21, page 56, line 3, leave out subsection (a) and insert—
“(aa) by a 33kV connected onshore wind generating station consented after 30 September 2015, or
(ab) by a cluster connected onshore wind generating station consented after 31 October 2015, and”.
Amendment 46, page 56, line 6, leave out “31 March 2016” and insert “1 March 2017”.
Callum McCaig
New clause 2 is straightforward. It would re-devolve the power to issue a closure order in respect of the renewables obligation for onshore wind back to the Scottish Government, where it used to belong. That power was re-reserved, so to speak, on the explicit understanding that there would be no changes—no closure and no material impact on Scotland from agreeing to that proposal. The proposal would have allowed for closure of the renewables obligation later next year, as had previously been agreed.
We have been through this. There has been extensive debate on the renewables obligation. It is worth reiterating briefly some of the concerns. As I said, power over the renewables obligation was removed from Scotland against the explicit undertaking that the Government had given to Scottish Ministers. An element of betrayal of trust has come about. That has woven its way through the entirety of the Government’s handling of onshore wind and the closure of the renewables obligation. For a long time the industry had trust in the Government. That trust has vanished.
Today’s debate and a number of the amendments offer the opportunity to improve the measure that introduces the closure of the renewables obligation, notably the numerous amendments tabled by my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Philip Boswell), who has meticulously detailed how the closure of the RO and the accompanying grace periods could be carried out in a way that is fairest to developers.
Last week the Energy and Climate Change Committee produced a report on investor confidence which suggested:
“Sudden and numerous policy announcements have marred the UK’s reputation for stable and predictable policy development.”
That is fairly damning. I am not steeped in the ways of Select Committee reports and how Committees finesse their arguments, but that is a clear criticism of the Government’s policy and how it has been implemented. It did not need to be done that way.
Through the various stages of the Bill we have accepted that the Government have a commitment to pursue that policy. We disagree with it. Their policy is short-sighted and is not the correct way of going about things. Onshore wind, in the view of the Scottish National party, has a significant role to play in the energy mix in the United Kingdom and should not have been taken out of the mix in a rather crude and cack-handed manner, but the Government have chosen to act in that way. [Interruption.] If the Government are to do that, they should do so in the best way possible. [Interruption.] I feel there is something else happening that I am not aware of.
Mr Speaker
Very disorderly conduct. The hon. Gentleman is pressing a serious case. If I may, at the risk of making an in-joke, be permitted to say this, that whatever is the subject of this debate, fortunately, not least for him, Otis is not.
Mr Speaker
Fortunately for the hon. Gentleman, he does not need to do so. He is innocent. He has been transgressed against; he has not transgressed. He can now speed ahead with his oration, to which we look forward.
Callum McCaig
Speed is the operative word, I think. We have called for the re-devolution of the power and for the grace periods to be dealt with in the most appropriate manner. In its manifesto and in debates the Conservative party has professed a desire to see local control of this matter, and nobody would argue with that. However, that requires that we respect local decisions, but the grace periods as they stand do not do that. That is why the new clause and the amendments are necessary, particularly amendment 8, in the name of my hon. Friend the Member for Coatbridge, Chryston and Bellshill, which relates to planning decisions at committee that were dealt with before the closure date, but where the approval certificate was not granted, in Scotland, owing to section 75 of the Town and Country Planning (Scotland) Act 1997, on planning gain—in England, I think it is section 106 of the Town and Country Planning Act 1990. This issue is clearly about local decision making, and the Government should give their consent so that it can be included in the Bill.
We accept that the change is going to happen. Having been explicitly opposed to it, the industry now sees that it is better to have some certainty, rather than continued uncertainty. However, that certainty needs to be correct certainty—it needs to be fair certainty and it needs to be certainty that does what it is intended to do.
We should respect local decision making. Where locally elected bodies—councils in England, Scotland, Wales and Northern Ireland, although there are different stipulations there—have agreed to projects but have not been able to get their certificate to allow them access to the renewables obligation because of the technical nature of decision making around planning gain and other such issues, that is simply wrong.
John Redwood (Wokingham) (Con)
Will the hon. Gentleman remind the House why he wishes to burden his constituents and others with much dearer electricity from an interruptible source we cannot rely on?
Callum McCaig
Onshore wind has clearly been demonstrated to be one of the cheapest forms of renewable energy. If we were having a tête-à-tête, I would ask the right hon. Gentleman why he supports the obscene waste of money that will be spent on the Hinkley power plant, which will cost considerably in excess of what would be spent on onshore wind. However, as we are not having a back-and-forth, I will resist that temptation.
The issue is straightforward: we need to press ahead. The industry needs to be given certainty. The issue has been handled incredibly badly, but there is time, particularly taking cognisance of last week’s Energy and Climate Change Committee report, for the Government to make amends, to change some of the stipulations on the grace periods and to allow things to happen in the best way possible. Repenting, however late, is better than carrying on regardless.
Several hon. Members rose—
Mr Speaker
Order. The hon. Gentleman is not giving way—he has concluded his remarks.
Mr Speaker
No. We will take Mr Chris Heaton-Harris and then come to the hon. Member for Southampton, Test (Dr Whitehead).
Chris Heaton-Harris
Thank you for calling me early in the debate, Mr Speaker.
I sat on the Energy Bill Committee, along with many right hon. and hon. Members present today, and I want to add a bit of balance to the Scottish National party’s contribution. We had this debate in Committee. The SNP would very much like the responsibility for the renewables obligation sent back to Scotland, and many people on the Government Benches would probably like the SNP to commit to paying for that, if it were to happen. However, only half of that is covered in the SNP proposal.
Chris Heaton-Harris
I am surprised that the hon. Gentleman wants me to give way.
Callum McCaig
The hon. Gentleman is absolutely right that we had that debate, but does he accept that we will be paying an extortionate price for the Conservative party’s nuclear power plans if he gets his way?
Chris Heaton-Harris
If we are talking about paying for things, I wonder how the SNP would have paid for its proposals had Scotland gone independent, given that the oil price is residing around $30 or $40 a barrel. Let us make sure that we talk about energy in a sensible way. We did have a constructive and sensible debate in Committee, even though it was good fun to fall out occasionally on different points.
Unfortunately, Mr Speaker, you did not select any of the amendments to which I put my name. I was not being cheeky in tabling them; I just wanted to make a point. The Conservative party had a manifesto commitment on removing the renewables obligations a year earlier than expected, with no new subsidies for onshore wind, and on some planning changes. Those provisions were in the Bill, but Members of the House of Lords did not like them. In Committee, we debated what would happen if we reinserted that clear manifesto commitment, and how that would be quite a foolish thing to do because there are other methods within the planning rules that we could use.
It would be fair to talk about amplitude modulation in relation to planning requirements. There is a huge amount of concern about noise from wind turbines. I thought that I would identify a couple of the concerns in a tiny bit more detail so that Members could understand my approach.
Mr Stewart Jackson (Peterborough) (Con)
My hon. Friend has a great deal of knowledge of and expertise in these issues. The other place set a very unfortunate precedent in disregarding the post-war Salisbury convention and considering it appropriate to decide that the British public were wrong to re-elect the Government on a manifesto commitment to undertake the proposals that he has elucidated.
Chris Heaton-Harris
I thank my hon. Friend for that intervention. I actually think there has been some sensible debate about this at the other end of the building. A number of sensible Labour peers, and a handful of Lib Dems, understand this point. It would be foolish for a once-coalition partner that has very few MPs in this place, but way too many peers in another place, to use that bulk of unelected opinion to force down a Government manifesto commitment. However, there are many ways to get around this problem. We can solve one planning problem in a way that would be good for communities affected by onshore wind, but it might not be the route that the peers at the other end of this building would like to go down. Perhaps they should think very sensibly about how they view this Bill in future, just in case.
A couple of years ago, I put in a freedom of information request to every planning authority across England because I wanted to see whether any of them had experienced, or had knowledge of, an element within wind noise called amplitude modulation, which is a kind of low whooshing sound that causes people great concern. I asked every environmental health officer across the country whether they had any experience of this. A large number, especially from rural areas where there are lots of onshore wind turbines, said yes, they did have had some experience of amplitude modulation, but as the current Government guidelines did not cover it, there was nothing they could do, and they wanted more information on it and better guidance from the Government. In fact, neither the wind industry nor the Department recognised that amplitude modulation existed until only a couple of years ago. That is quite bizarre considering that it was well recognised across the world at that time.
Fortunately, after I presented my findings to the Department, it came up with this statement:
“DECC has recognised that amplitude modulation (AM) noise produced by wind turbines can be a cause of concern for some residents. DECC has appointed an external consultant to review the available evidence on AM, with a view to recommending how excessive AM might be controlled through a planning condition. The INWG’s study”—
the independent noise working group study that I helped to commission, which studied what causes amplitude modulation and how it can be tempered—
“will be considered alongside other evidence that is being gathered as part of this review.”
The evidence that I presented showed that lots of communities and individuals up and down the country are living in houses close to wind turbines that are directly affected by excessive amplitude modulation.
In fact, it is a significant factor in people’s lives. Noise complaints from wind farms are primarily related to the phenomenon of the whooshing noise. In many cases, it means that people cannot get to sleep in their own houses, which puts them under a great deal of stress. The “whoomph”, swish or beating noise is known about by engineers, and we experience it when we stand next to helicopters or other turbine-like blades when they are turning. It is the most intrusive element of noise from wind turbines.
Mr Jackson
Does my hon. Friend agree that the issue that he rightly raises is compounded by the complementary problem of shadow flickering, which has caused distress to many people in the environs of onshore wind infrastructure? The movement of very large plant and machinery on suboptimal rural roads can also have an impact on the quality of life of people adjacent to those facilities.
Chris Heaton-Harris
Those are two very valid points. I have seen flicker for myself. Although I stood in the flicker of a wind turbine for only 10 minutes on one occasion, I understand how intrusive it could be if it affected someone’s house or their place of work. I know from my constituency—I am sure that other hon. and right hon. Members will have had similar experiences—that when those turbines are moved through small villages, sometimes they cannot get through without some sort of remedy having to be made to the road. A number of people visited me this morning from the lovely village of Guilsborough, where, if a turbine shaft were to be driven through the village to a nearby wind farm, there would be a gap of inches between the turbine shaft and the houses on each side of the road. Those things do cause concern. I would say that flicker causes more concern than traffic movement, and amplitude modulation probably more than flicker.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Does the hon. Gentleman share my concern about the fact that in Wales, policy is concentrated in strategic zones, and all developments are put into five or six big development zones? The fact that there is a series of different projects makes enforcement difficult when noise levels go above what they should be. Although technically we are talking about one giant development, as far as the planning regime is concerned it is a series of smaller developments within the strategic zone, so the issue about noise enforcement becomes acute.
Chris Heaton-Harris
That is a very wise point, and one that I will come to later, if I may. I will just tease the hon. Gentleman briefly. It is possible to monitor such noise and predict where it might occur. Therefore, when amplitude modulation is causing distress to nearby residents and that is being monitored, it is possible with the agreement of the wind farm developer to stop the turbines turning during that period of time—this has happened in a couple of places in England—so the noise stops and everybody goes about their business happily.
I know that some of the proposals in Wales have been massive, and I have been working hard with my hon. Friend the Member for Montgomeryshire (Glyn Davies) on some amazingly large proposals for his constituency. I know that the matter is of real concern to many people across Wales.
As I have said, the current guidelines do not require amplitude modulation to be monitored at all. In fact, the noise falls outside ETSU monitoring. I know of only one wind farm planning decision in the United Kingdom in which a planning condition for amplitude modulation noise was imposed, which was the Den Brook development in Devon.
My concern is that everybody has known about this issue for a very long time—for decades—but no one has spoken up about it. We gave the green light to this industry, and I have previously spoken in this place about how some of the developers have not been particularly kind to villages and constituents of mine when proposing developments, because they knew everything was stacked on their side. I have previously made the argument to the hon. Member for Wigan (Lisa Nandy) that developers could have done a lot better in the past, and we might not have the current problem if it had been recognised that local people’s views should carry a great deal of weight.
For decades, there was no such recognition. The wind industry has consistently denied the existence of excessive amplitude modulation, even though I can point hon. Members to experts who have demonstrated that amplitude modulation is a frequent occurrence that potentially affects all large industrial wind turbines. It often does so for long periods, and more frequently than not during the night. I point to my survey of environmental health officers and planning authorities, many of whom said that they knew amplitude modulation or something of that ilk was happening, but had no powers to deal with it and did not have the correct guidance from Government to point them in the right direction.
People complain about amplitude modulation to Members of Parliament and local planning authorities, but I think there is a hidden silent majority. People are willing to suffer such noise in silence and do not want to complain because they fear the adverse implications of getting involved, such as having to disclose any complaint they have made to a planning authority or a council when they come to sell their house.
The existing legal remedies have been found wanting. Remedies are available for neighbours of wind farms who are affected by turbine noise under ETSU, but they are simply not fit for purpose, and they are certainly not fit for measuring amplitude modulation. Taking action for statutory nuisance has been actively advocated by the wind industry and supported by planning inspectors, but the evidence suggests that an abatement notice is not an effective control to protect nearby residents from excessive amplitude modulation. Other remedies, such as taking action for private nuisance and similar legal actions, have been considered, but they place too much risk and burden on residents for a problem that is not of their making, with the likelihood of adverse long-term financial implications.
In addition, the recent trend is for secondary operators to form individual shell companies for each wind farm. The impact of that was highlighted in July 2015 when my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) introduced a Bill to require wind farm developers to obtain public liability insurance for any nuisance they caused to nearby residents. That was particularly aimed at noise nuisance. One of his constituents had had a problem with noise from a local wind farm, but had found it impossible to sue because the operator was purely a shell company and had very limited assets.
Of more concern is the effect of amplitude modulation on health. I have read studies demonstrating adequately that wind turbine noise adversely affects sleep and health. It is abundantly clear from evidence examined by a world-renowned expert, Chris Hanning—I asked him to help me, and he worked with the group that I got together—that wind turbine noise adversely affects sleep and health at set-back distances and noise levels that are permitted by the current ETSU noise regulation. There is no reliable evidence—not one single study—that wind turbines are safe at those distances and noise levels. By contrast, an increasing volume of studies and evidence have outlined the contrary. There is a particular concern about the health of children exposed to excessive wind turbine noise. The inadequate consideration of amplitude modulation is a major factor in why I believe that ETSU fails to protect the majority of people who live near wind turbines and why I believe that it needs to be reformed. The wind industry’s denial is reminiscent of other denials of health issues in the past. It could be a very big public health issue.
I contend that the current noise standard, ETSU-97, is not fit for purpose and I have plenty of evidence to suggest that its methodology is completely incorrect. I do not have to go into that evidence because I am fortunately supported by the findings of a recent Northern Ireland Assembly report in January 2015 on wind energy. The report recommends a review of the use
“of the ETSU-97 guidelines on an urgent basis, with a view to adopting more modern and robust guidance for measurement of wind turbine noise, with particular reference to current guidelines from the World Health Organisation.”
I therefore contend that we need an effective planning condition for amplitude modulation. The wind industry’s claims that an amplitude modulation planning condition is not necessary, and that the legal remedy of statutory nuisance provides adequate protection, are thoroughly discredited by the evidence I have seen and that I have published on my website. Without a planning condition, there is no effective remedy for wind farm neighbours who suffer from excessive noise. The relevance of amplitude modulation in causing noise complaints has driven the wind industry to ensure that a planning condition of that type is not applied as standard planning practice. That is why I raise it today when we are having a conversation about renewables obligation certificates and the planning guidance that goes alongside them as part of our manifesto commitment.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
Does the hon. Gentleman agree that the decision on whether projects go ahead should sit with the local people via the planning process, so that when local people have agreed to and are in favour of the project, it should be allowed to go ahead?
Chris Heaton-Harris
I have long contended—I have said it in pretty much every speech I have given on wind in the House—that, if local people want a wind farm, who is the local MP or any politician to get in their way? I want it to be subsidy-free and I want people to benefit from it, but if the majority of local people believe that it is a benefit to their local community, I have no issue with it whatever.
People should be aware of the potential health concerns from the noise from amplitude modulation. We have the opportunity to ensure that those concerns can be mitigated. When a local community steps forward and says, “Yes, we’d desperately love to have 100 wind turbines surround our village, devalue our houses and hide us from our rural hinterland,” they can do so knowing that they could get the turbines that produce amplitude modulation turned off, so that they could at least sleep comfortably in bed at night.
Mr Jackson
Is my hon. Friend aware of the work of Professor Peter Styles of Keele University, who published a study on vibrations from 60 metre-high wind turbines at Dun Law in Scotland? He states that
“when the windfarm starts to generate, even at low wind speeds, considerable infrasound signals can be detected at all stations out to”
about 10 km. He adds that some developers propose to install bigger turbines, so the older studies that showed that turbines are safe for the purposes of noise are out of date. He says that modern wind turbines in excess of 100 metres high cause more problems.
Chris Heaton-Harris
I am very much aware of that study and obviously agree with what Professor Styles found. The interesting thing is that, as turbines get larger, amplitude modulation is generated over a slightly larger area. We have gone past the 80-metre stage. My constituency has dozens of wind turbines of 126.5 metres and upwards. That is about the size of the London Eye. When the blades move around and chop the wind, they create amplitude modulation. There is an understanding now that this is happening, so we need a suitable and sensible planning condition to ensure that local communities affected by this problem have a way of stopping it happening to them.
John Redwood
Can my hon. Friend tell us what the fix is for this? Is there a realistic way of suppressing the noise?
Chris Heaton-Harris
The best way to suppress the noise is to turn the turbine off for the period of time when the noise is likely to occur. As acousticians have demonstrated to me, the noise is more likely to occur at night when other background noises have dropped down. We can predict it, because we know which way the wind is blowing and at what speed. It drops down to ground level in a certain way, so we can know exactly which houses and which zone it will affect. Therefore, with sensible meteorological readings using the correct monitoring equipment, which is now remarkably cheap to purchase—it used to cost an awful lot—we can do a lot better.
Chris Heaton-Harris
I will give way to my hon. Friend, who has a vast amount of experience in this area.
Heidi Allen
Not me personally, but certainly the residents in my constituency have. Everything my hon. Friend has said is right. I find it staggering, given that the world of physics and wave technology is well understood, that amplitude modulation should suddenly be a surprise to us in relation to wind farms. It is a natural occurrence of wave technology. We have a wide knowledge and evidence base in my constituency, mostly because of Cotton Farm wind farm, which is just outside my constituency in Huntingdon. The residents have been blighted for years by the wind farm. They cannot sell their houses and they cannot open their windows. The data are available and the Government would be wise to make use of them and incorporate them in their review.
Chris Heaton-Harris
I thank my hon. Friend for her contribution and I agree with her. I have been to Cotton Farm to see the wind farm for myself and to meet some of the residents. I met the illustrious Bev Gray—I do not know if he is a constituent of my hon. Friend—who has provided me with more information than any man could ever possibly want about amplitude modulation readings and the noise his community suffers on a regular basis. As my hon. Friend suggests, this is not rocket science. Where there is amplitude modulation, people suffer and genuine health concerns have for too long been swept under the carpet.
The Den Brook planning condition, as it has become known, was a chance to introduce a sensible planning condition that evoked amplitude modulation and tried to deal with it. The wind industry could have welcomed it as a method to defeat wind farm opponents across the country who say “You don’t deal with the problem of wind” by saying, “We understand there is a problem with wind noise, and we will deal with it and mitigate it when it happens.” Instead, the industry went into complete denial and actual upfront aggressiveness. It fought the planning condition through the courts over an eight-year period to ensure that it was not applied, and to get it removed and then sufficiently weakened so as to make it pretty pointless if it were ever to return. In fulfilling our manifesto commitment and making this change to the renewables obligation as of the end of the month, I suggest that we also bring forward the appropriate planning conditions to address the problem of amplitude modulation and make wind developers and farms a bit more acceptable in the parts of the country where they already exist.
David Mowat (Warrington South) (Con)
My hon. Friend is making an interesting speech about amplitude modulation. Is it predictable—is it possible to say, given a certain design, “There will be this much modulation”—or is it something that just happens, depending on other factors, and therefore quite hard to plan for?
Chris Heaton-Harris
It is as predictable as the wind. We know which direction the wind will come from and how fast it will be, which means we can predict a zone that will be affected by amplitude modulation on any given day. So yes, we can predict it.
I ask the Minister not to give up on the changes to the renewables obligation, which were part of a manifesto commitment, and to hear our plea about amplitude modulation. I have some concerns about the report she has commissioned from her Department and would like it judged against the evidence I have given her. Had the wind industry behaved more pragmatically and sensibly a few years ago, we probably would not be in this position. I am known for my views on this subject, but I know that there are sensible developers of wind technology who try to do their best for the local communities in the areas in which they install turbines. Unfortunately, I do not have an example of that in my constituency. It might be that the wind industry has woken up to this issue after the horse has bolted.
Dr Alan Whitehead (Southampton, Test) (Lab)
I rise to speak to our amendments 24 to 33 and 40 to 46, which, although standing individually, form a collective whole and refer to successive amendments the Government made to the Bill in another place in Committee to bring forward the closure date of the renewables obligation from 31 March 2017 to 31 March 2016. Our amendments would move that date and those of the various grace periods to 1 March 2017. They would therefore bring forward the closure date by one month, rather than one year, as is the present proposal.
I have some fears about the robustness of the present closure date in the face of the Bill’s passage. We are discussing a closure date that is very close to the day on which we are actually discussing it. The passage of the Bill, given that it came from the other place in the first instance, will have to finish in the other place shortly. The fact that the closure date before us is just a fortnight or so away from today creates considerable difficulties for the closure of the RO itself. It is not the case that we are discussing something that does not exist that can be brought into existence under legislation. We are discussing something that not only exists but, if we do nothing by way of legislation, will continue to carry on until 31 March 2017. We are discussing something that is in the legislation already, in that there is a specific mention in the Bill that the RO comes to an end on 31 March 2017, so if nothing happens to stop the RO carrying on, it will carry on until that date. In a sense, then, we have just one go in this place at changing the date in the legislation. If the Bill continues its passage through Parliament after the closure date has come into being, we will be dealing with retrospective legislation.
John Redwood
Is it not the case that from the moment people knew who had won the general election, they knew what would be Government policy in this area and they knew that it would be done as expeditiously as possible? Surely everyone could plan perfectly well around that obvious point.
Dr Whitehead
The right hon. Gentleman might have jumped the gun in respect of the point he wanted to make about the effect of the proposed closure, but it is a different point from the one I am making about the closure. My point is that we stand in danger not only with respect to investor confidence, investor certainty or other considerations about what investors should do, which I shall come on to in a minute, but in respect of what we do, potentially exposing this House to legal action. Although the Government will have closed the renewables obligation administratively, they will not have closed it legislatively. There could be difficulties if discussions here and in the other place mean that the Bill receives Royal Assent after 31 March 2016.
Mr Jackson
I hear what the hon. Gentleman is saying, but is there not an issue of fairness and social equity here? He is making a special plea on behalf of the renewables companies for what is effectively a de facto fiscal payment from some of the poorest consumers who are in fuel poverty to those individuals and those companies. Is that not the bigger issue, not least when we also have an electoral mandate to carry through this policy, as the hon. Gentleman is well aware?
Dr Whitehead
I shall come on in a few moments to the question of whether the Conservative party has an electoral mandate to carry through this particular policy. This is not the point I am making right now. My point is that we stand in some danger of making legal action available to those who do not want this RO to be closed. The hon. Gentleman might like to reflect on the fact that if there is a mandate, it is to get on and do it, but to do it properly, not incompetently, so that exposure to legal action can be avoided. The point about the fact that the RO is here, has been here for quite a long time and, as the legislation states, will continue until 31 March 2017—unless someone does something to stop that—is that, in principle, if no one does anything to stop it by 31 March 2016, then claims can still be put forward for receipt of an RO after that date, because that is what the legislation says. Although I do not think that in practice very many people would venture to seek certification of an RO after 31 March 2016 if we are still discussing this in the House, that possibility is nevertheless open.
John Redwood
Is the hon. Gentleman inventing a new doctrine: that Governments should never try and change the law because the Opposition might delay it?
Dr Whitehead
Again, the right hon. Gentleman misses the point I am making. This is not about the Opposition attempting to delay the imposition of the law. It is about the rush to close the renewables obligation on the part of the Government, not the Opposition, and the subsequent, rather dilatory way in which the Energy Bill was placed before this House—and, indeed, the way in which it has been scheduled in this House and the distinct possibility that further stages of the Bill may be scheduled. The net result of that dilatoriness in the legislative process is that the Government, not the Opposition, may put us in a position where retrospective legislation is apparently the case and the possibility of legal action is also apparently the case. It is important that we remember that today. One reason I am suggesting that the closure of the RO ought to be much later, albeit still early, is that it would avoid that potential legal action.
In reality, we know that the proposed closure of the renewables obligation a year early is not about implementing a manifesto pledge. The RO is not a new subsidy—that is what was in the Conservative manifesto. Indeed, we had discussions about that in Committee. The proposals before us are not only about putting an end to something that has been in place for a considerable period, that has worked well and that was about to change, in good time, to a new system that allows for degression in underwriting and a path towards effectively dissolving subsidies for a technology that has achieved close to market parity; they are about putting an end to something that industry investors were clear and confident about. Investors were confident not just because the renewables obligation had worked for a while; there was also a clear process whereby it would come to an end and a clear line of progression to contracts for difference—the new system, which we discussed at some length during the passage of the Energy Act 2013—and an orderly roll-out of renewable energy as something progressively more effective and cheaper.
Jonathan Edwards
In formulating his amendments, has the hon. Gentleman had time to consider the recent excellent report by the Select Committee on Energy and Climate Change, which said that the Government’s current policy would lead to bills increasing due to uncertainty?
Dr Whitehead
The hon. Gentleman is absolutely right to draw attention to that report and, indeed, to the issue that has arisen not just from these changes, but from a series of other abrupt lurches in policy from the Government in the field of renewable energy. The net result has been a dramatic drop in investor confidence and a dramatic fall from our advanced position as a country that was regarded as a safe, good place to invest in renewable energy. This policy lurch has led to a feeling among many investors that they are now living in a world of confusion, in which it may be recommended in the boardroom that—perhaps in light of the competitiveness of many other countries—they should invest elsewhere when it comes to renewables. It has thrown a great many programmes into confusion and affected a great deal of potential investment in this country, not just in onshore wind but in many other renewables. Policy lurches of this sort tend to creep and spread across confidence in other areas of investment. If things had been left well alone, it would have been possible to envisage the continued progression of a secure investment circumstance, along with a clear understanding of what investors were doing and of how investments would change over a period.
This is not about putting an end to new subsidies; it is about the removal of a well-understood, long-lived subsidy before the point at which investors, the market and everyone else had expected it to be replaced by another system. As late as the spring of last year—after, I imagine, the Conservative manifesto had been written—the Secretary of State announced that the renewables obligation would close in March 2017, and the changeover would then be undertaken. I think that that came as a particular surprise to investors and the market because the Government had previously seemed to be so confident that the procedure would be as it had been originally set out.
It has been claimed that the removal of the renewables obligation at an early date is okay because we are reaching one of our European targets relating to the proportion of renewable energy that should make up our overall energy mix by 2020. The claim is that because the component that is represented by wind, and particularly by onshore wind, is reaching its target, it is okay to throw the market into its current confusion. We must, however, bear it in mind that we are failing substantially on the two other components of our European 15% target, heat and transport. Incidentally, the United Kingdom can be fined for missing that target.
The target can be achieved through overachievement in some areas, even if there is underachievement in others. The 12% renewable heat target, on which we are failing fairly miserably at the moment, and the 10% renewable fuel target, on which we are also failing, could be supported by our continuing to deploy onshore wind in particular. It might be suggested that to cut onshore wind at this time, given the extent of the failure to keep up with the overall energy target, is irresponsible to say the least.
A further claim that we have heard during the Bill’s passage is that all this is being done to help the customers who will have to pay for the underwriting of onshore wind. Of course it is important for us to consider the bills that customers are paying when deciding how best to establish our energy mix for the future.
We will have to establish an energy mix that is the most affordable, the most secure and the least carbonising over the next period, but the claim that this change is being introduced to help customers is in reality paper thin.
If the Government were serious about renewables in general, as they claim, the hole left by onshore wind over the next period as a result of the early closure of the RO—estimates suggest that a loss of investment of £1 billion is on the cards, as the Select Committee has noted—would have to be filled by other renewable sources that are currently more expensive to underwrite than the onshore wind they would replace. The net outcome of this measure could well be that the cost to customers is considerably more than it would have been if the present arrangements had been allowed to continue to their conclusion.
Onshore wind is at the leading edge of market parity. As the Government will be aware, it was on a sustained glide path down to parity, with investor confidence high and costs coming down. I emphasise that the damage to investor confidence as a result of this essentially retroactive Bill will be enormous. If it goes through, it will effectively replace a steady path down to market parity in which competitive deployment could progress—a cliff over which investment will fall.
A further claim that the proposed change is necessary is connected to the levy control framework, the éminence grise in many of our discussions on energy, particularly renewable energy. It is a control framework formed in obscurity by the Government and continuing in background gloom as people attempt fruitlessly to find out about its calculations, its variations and its consequent prescriptions. The levy control framework was devised in 2011 by the Government to get us into a position where about £7.6 billion at 2012 prices of levy payers’ money—money derived not from Government sources but from levies on energy companies, which would pass those costs on to their customers—would provide a framework within which renewables could develop.
However, the levy control framework is based on a static endpoint—2020 in this instance—even though prices will be variable over the period. It is based on the idea of a strike price that renewable energy will receive and that has been agreed, certainly for onshore wind, at an auction process, set against a reference price, which is the median price for energy at a particular time. The strike price is considered in relation to what rewards will be undertaken for that renewable energy. When and if energy prices go down, the difference between the strike price and the reference price widens. Although a renewable energy developer will receive the same amount of money for their energy, the make-up of the amount paid to the developer will be different. The more prices go down, the less the developer will get in relation to the reference price and the more they will get in relation to the difference between the reference price and the strike price, which will come from the levy control framework. Therefore, over a period of time the levy control framework, as designed, increases the reward to those inside the system, even though they do not get a total additional reward. New entrants are squeezed out, because the money goes to rewarding those who are already in the system and less money is provided to new entrants outside the system. Indeed, many commentators consider the present form of the levy control framework to be, in essence, bust as far as new entrants are concerned. The relatively small amount of change that the levy control framework will undergo through the ending of the renewables obligation period a year early is all about how the framework balances itself, which is a pretty thin claim bearing in mind the range of theoretical headroom in the framework and the difficulties it has experienced.
David Mowat
A few moments ago, the shadow Secretary of State appeared unhappy that the capacity auction announced by the Government two weeks ago had been brought forward. Is the Labour Front-Bench position that the auction should not be brought forward?
Dr Whitehead
The question of whether the capacity auction should have been brought forward is secondary to the extent to which the Government believe that the auction will actually produce new capacity, as I am sure the hon. Gentleman is fully aware. Like the levy control framework, capacity auctions warrant a much deeper reorganisation than the rather tepid arrangement undertaken by the Government. Simply bringing an auction forward by a year, using roughly the same parameters about the likely clearance price and the distance between the clearance price and the likely price necessary to secure any new investment over a 15-year period for new gas-fired power stations, does not strike me as the smartest way to procure longer-term capacity in the capacity market. A deeper reorganisation of capacity auctions is required to secure that aim over the next period.
Before that intervention, I was briefly thinking about the subject of my amendments 23 and 52, to which I wish to draw the House’s attention. If the Government were serious about the proposals in their manifesto—that schemes that have local support should proceed—they should immediately adopt these amendments. They are about schemes where all the right moves in getting local agreement to the plans have been undertaken, all inquiries, concerns and planning arrangements have been dealt with, the schemes are on the cusp of getting agreement at planning and local authority level, and they have the support of local communities, but the Government have just pulled the plug on them and they now cannot proceed. The Government ought to adopt these amendments if they were, in principle, serious about their own principle that local areas should decide on local schemes and that those local schemes could be supported where local communities support them. Conversely, I fear that if clause 80 remains in the Bill, as amended, we will have in store a programme of onshore wind execution and not the execution of an onshore wind programme.
Labour’s vision is for a locally supported, appropriate programme of onshore wind deployment, complementing other renewables such as solar, biomass, offshore wind and tidal in reaching renewable targets, not because we have to, but because it is the right thing to do in ensuring that we have a balanced, low-carbon energy mix for the future. This clause points us squarely in the opposite direction and I urge hon. Members to support amendments that put us back on track again.
John Redwood
I rise to support the Government and to urge the rejection of amendments that would delay getting rid of the subsidies for wind power. Our country desperately needs more electrical power to be available, and I am pleased that the Government are now taking action, with capacity auctions, to try to get some more power available. We need more affordable power. We need to tackle fuel poverty and have power at prices that households can afford. We also need to have affordable power for extra industry, which is one of the Chancellor’s aims. We need reliable power; we want to know that the power is there whether the wind is blowing or not, and whether the sun is shining or not. People expect continuous power, in order to light and power their homes, and industry needs continuous power for its processes. On all those grounds, wind does not cut the mustard, and I am glad that we now have a Government who recognise that.
When the history of the past 15 or 20 years comes to be written, what the European Union is doing and what the previous Labour Government did on energy policy will go down as one of the catastrophic failures. It will be at least as big as the exchange rate mechanism, which destroyed so much activity, jobs and prosperity in our country. It may not be as big as the disaster of the euro, but it will be one of the big, classic disasters of the European Union that Europe as a whole is becoming an area of too little energy and very high-cost energy, driving industry out of the European Union area and into Asia and America, where more plentiful and affordable energy is available. Far from sparing the planet extra carbon dioxide, all this mad policy is doing is making sure that the carbon dioxide is produced somewhere else, rather than within the European Union itself.
Germany has much more wind power than we do and many Opposition Members admire it in this respect, but what happens when the wind does not blow? I will tell them what happens: Germany relies on a large number of extremely dirty coal power stations to churn out the electricity, producing more carbon dioxide than it would if it had opted for a fleet of modern gas stations in the first place. On average, that would have been better than this strange mixture of intermittent wind, which is very good on carbon dioxide when the wind blows, and back-up power, which in Germany and elsewhere in Europe is often generated from coal, and is extremely bad on carbon dioxide when the wind does not blow.
David Mowat
Germany uses coal all the time and the wind power is the intermittent stuff. Germany’s carbon emissions are 30% higher than the UK’s per unit of GDP and per capita just because it uses so much coal and fossil fuels, even though its renewables level is quite high as well.
John Redwood
Yes, but, as my hon. Friend will agree, when the wind does not blow, Germany has to use more coal. When there is no wind energy, the replacement must come from fossil fuel. A wind system with fossil fuel back-up does not even work on its own terms, and he is right that the German merit order is somewhat different.
I was going on to point out that from an economic point of view, we in this country have managed to damage every kind of power generation. If we insist on giving priority to dear, interruptible, intermittent sources such as wind, the more reliable, cheaper sources such as gas become intermittent, as they are switched off every time the wind blows and switched back on every time the wind is not blowing, which in itself is difficult and expensive. That undermines the economics of what would otherwise be good-value power. It means that we cannot run the plants flat out. We have higher operating costs because of the complications of switching on and off and managing the furnaces accordingly, with much less revenue coming in because less power is generated and power cannot continuously be sold to the market.
The ham-fisted interventions—[Interruption.] The hon. Member for Southampton, Test (Dr Whitehead) does not seem to understand the policy that his party put in place and that the European Union supports. The ham-fisted interventions in our energy market mean that we have less reliable energy, because we deliberately subsidise a lot of intermittent and unreliable energy; that we have dearer energy, because, as is commonly accounted, renewables are considerably dearer; and that we have much dearer energy overall, because of the extra cost, which is not included in the way that the cost of renewables is accounted for, which means that non-renewable power becomes a lot dearer per unit as well.
Jonathan Edwards
Has the right hon. Gentleman had an opportunity to reflect on the complete U-turn by Energy UK, which now says that the Government need to promote renewables instead of fossil fuels? Indeed, it says that an energy policy based on fossil fuels is a smartphone equivalent of placing all our bets on Nokia as opposed to Apple and Samsung.
John Redwood
No, I have not had the chance to reflect on that, but it does not seem to be a very interesting observation given the fundamental truth that I have just given him, on which the hon. Gentleman has not reflected at all. The truth of our current energy policy—
John Redwood
Let me just deal with the hon. Member for Carmarthen East and Dinefor (Jonathan Edwards), and then I will happily deal with the shadow Minister. The truth about our energy policy is that the various interventions have conspired to make less power available at a much higher price and that, unless we start to reverse some of those interventions, we will get those pernicious effects. If he is saying that, yes, the price of energy from fossil fuels is variable, depending on the world market price, that is self-evidently true, but it does not mean that it is a good idea to put in something that is very unreliable and intermittent and is dearer than fossil fuel at more or less any realistic market price that might be commanded in the market by fossil fuel.
Dr Whitehead
Has the right hon. Gentleman had the opportunity to go to the national balancing services centre, which is in his constituency, as it undertakes a great deal of work balancing the system? There are substantial constraints on non-fossil fuel as well as fossil fuel inputs to the system, which cause shortages in power delivery at various stages, whether non-fossil fuel or fossil fuel delivery. Perhaps he could reflect on that in his comments.
John Redwood
Of course, as Member of Parliament for Wokingham, I have visited the centre on several occasions, and met the dedicated group of people there. The last time I visited was quite recently, and they were saying to me how much more difficult it is to manage a system that relies on wind, which is becoming more and more intermittent. That is self-evidently true. I am grateful to the hon. Gentleman for reinforcing my point, although I am not sure whether that was what he was trying to do. It used to be much easier when we had baseload power that could be relied upon and that was not interrupted by changes in the weather or the wind, and where the swing factor could be accounted for primarily by the pumped storage systems at Dinorwig. A command could be sent from Wokingham to Dinorwig. The water would come down the hill very quickly, and the kettles could boil in the interval of the big movie or whatever it was that was causing the surge in power demand. It is much more difficult now to call up power if, at the same time, the wind suddenly drops.
That is leading to our having to put in more and more interconnectors with other countries, so we become a net importer of power on a more regular basis, which is not something I value. I want us to have security of energy supply in our own country. We are, after all, an island of coal in a sea of oil and gas, and one would think we could find environmentally acceptable ways of exploiting that and burning it to produce the power we need. As I want an industrial revival in this country, that could well start with us importing less electricity.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The right hon. Gentleman talks about security. Does he share the concerns that I have and that have been expressed by my hon. Friend the Member for Southampton, Test (Dr Whitehead) about the operation of the capacity market? That is costing us a great deal of money and it is manifestly failing to bring on new gas, which is its central aim.
John Redwood
As I have been trying to explain, the reason we end up with dear gas is all the other subsidised interventions we have been making. We cannot run gas flat out and get the benefits of running it in the most economical way possible. Yes, I would rather have a much simpler market. The market worked a lot better in the 1980s and 1990s when we first set up a pretty open competitive market and power prices came down a lot. We had roughly a 25% margin of extra supply so that we were secure and we never had to worry that, if there was a cold day with the wind not blowing when industry was doing quite well, we would have to tell industry to switch its machines off. We did not get to such a position under that regime.
Now that we have a grossly intervened regime with all sorts of subsidies and priorities that do not reflect the economics of power production, we get to exactly the point that the hon. Gentleman rightly identifies, when we have to bid quite high to get people to provide gas-based power because we cannot guarantee full access to the market on a continuous basis. Of course, the more interventions there have been over the years of Labour and coalition and now the Conservatives, the more changes are needed in that intervention regime as the Government tinker or try to change it to make it work better, and the higher the prices tend to have to be because people become more suspicious if Government have so much power and if Government keep changing their mind.
So it is quite easy to get from a relatively free, successful market to a badly damaged, rigged, subsidised market. It is quite difficult getting from a badly damaged, subsidised market where the interventions are not very helpful to one that works better, because there is suspicion in the minds of investors, and they need longer contracts, bigger guarantees and higher prices to give them some kind of offset as they fear the Government may tinker unnecessarily.
This debate is about the amendment. I support the Government in their view. I want the Government to get on with removing the subsidies to onshore wind, as we said we would do. I hope the Opposition and the other place will not delay that further. We gave plenty of notice of this, and the sooner we do it the sooner we will get a bit closer to having a less damaged energy market.
Philip Boswell
Onshore wind is one of the most inexpensive forms of renewable energy, and it is therefore critical to maximise its input into a renewable energy solution across the UK to enable Scotland and the rest of the UK to meet our climate change targets.
Closing the RO early puts in jeopardy £3 billion-worth of onshore wind investment in Scotland alone for a forecast 30p saving in energy bills. This is a false economy because £3 billion of onshore wind investment equates to 63 million tonnes of CO2. That is from DECC’s own analysis and represents a missed opportunity both economically and in terms of hitting climate change targets.
I spoke at length in Committee on the grace periods and the importance of getting them right, so I will not labour the point here. However, it is important that they are fair and do not disadvantage projects which, through no fault of their own, fall through the crack owing to early closure of the RO.
My hon. Friend the Member for Aberdeen South (Callum McCaig) and the hon. Member for Southampton, Test (Dr Whitehead), who is no longer in his place, spoke eloquently about the real and very difficult deterioration in investor confidence caused by the early closure of the RO. Now that that is proceeding, it must be done fairly and with a view to the critical part that onshore wind plays in the overall energy solution for the UK. We must keep the lights on, which is why we intend to press amendment 8 to a Division.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
Before dealing with other proposals, I would like to speak to Government amendment 50. As I made clear during our last debate on this issue, I would like to see an equivalent approach taken right across the UK to the early closure of the renewables obligation to onshore wind, to provide consistency to industry and to protect consumer bills. Amendment 50 relates to clause 81—the backstop power regarding Northern Ireland.
In Committee, I introduced a clause with a view to protecting consumers in Great Britain from the costs of any additional support that Northern Ireland may decide to provide to onshore wind. I remind hon. Members that the clause received considerable support at that stage and that it is a backstop power—this is to say, it is intended to be exercised only if Northern Ireland decides not to close the Northern Ireland renewables obligation scheme to new onshore wind on equivalent terms to those in Great Britain.
The new amendment simply clarifies the drafting of the clause to ensure consistency with the provisions relating to the early closure of the renewables obligation in Great Britain by making it clear that the power in clause 81 extends to capacity added to existing onshore wind stations, as well as to new stations. I should highlight that the intent behind the clause has not changed at all.
I thank all hon. Members for their comments on the non-Government provisions. A number of them—specifically amendments 1 to 21, tabled by the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell)—were discussed in some detail and at length in Committee. As far as I can see, the amendments have not changed at all since we last discussed them. Following our agreement not to include them then, the hon. Gentleman has tabled them here once again.
To ensure clarity for hon. Members who did not attend the Committee debates and to move forward with this debate, and indeed the Bill, I am happy to set out the Government’s position again. I will first remind hon. Members of the intended effect of clauses 79 and 80. Clause 79 implements the early closure of the renewables obligation to new onshore wind in Great Britain. Clause 80 sets out the grace period conditions under which certain projects may continue to accredit beyond the early closure date.
Let me be clear: the Government remain committed to delivering our manifesto pledge to end new subsidies for onshore wind, and I am grateful to my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friend the Member for Daventry (Chris Heaton-Harris) for the clear support they expressed. The Government are, however, also conscious of the need for industry certainty. Therefore, in response to the question from the hon. Member for Southampton, Test (Dr Whitehead), I would like to make it clear that, if Royal Assent for the Bill goes beyond 31 March, the Government intend the provisions to come into force from the date of Royal Assent and do not intend to backdate them. I reiterate that there is absolutely no change to our commitment to end new subsidies for onshore wind, and our actions have shown that we will be tough on subsidies to keep bills down for families and businesses.
Onshore wind has deployed successfully to date. Based on our analysis, and taking early closure of the renewables obligation into account, we still expect the deployment of onshore wind to fall within our electricity market reform delivery plan projections of 11 to 13 GW by 2020. That is our best estimate of what is needed to meet our 2020 targets and of what is affordable under our low-carbon spending cap.
When we announced early closure on 18 June, we made it clear that it was appropriate to curtail further deployment of onshore wind, balancing the interests of onshore wind developers with those of the wider public. As I explained in our earlier debates, the grace period conditions in clause 80 were developed following extensive stakeholder engagement and have been designed specifically to provide certainty and clarity for industry. In particular, we engaged in detail on the core grace period conditions, referred to as the “approved development condition” in the Bill. This requires projects wishing to accredit under the RO beyond 31 March 2016 to provide evidence that, as of 18 June 2015, they had, first, relevant planning consents; secondly, a grid connection offer and acceptance of that offer, or confirmation that no grid connection is required; and thirdly, access to land rights.
Following further industry engagement and analysis by my Department, the Bill’s provisions have been improved in a number of ways: first, to capture those projects that had a planning application refused on or before 18 June 2015, or where the relevant planning authority failed to determine a planning application where a decision was due by 18 June 2015, and which are then subsequently granted consent on appeal; secondly, to introduce an “investment freezing condition” allowing certain projects that qualify for the grace period an additional nine months in which to accredit where they have been unable to secure debt funding due to legislative uncertainty; and thirdly, to provide that the existing grid and radar grace period will continue to be available so that projects that have suffered delays outside their control in this area will have a further 12 months in which to accredit.
Let me take a moment to reflect on the important point about investor confidence. The Government believe that the early closure and grace period provisions that we have presented within the Bill strike the right balance between protecting investor confidence and ensuring our ability to control costs under the levy control framework.
Jonathan Edwards
The Minister has outlined the criteria for closing the scheme. Does she share my concern that in Wales this has created some difficulty in understanding which schemes will now fall outside the RO and which will fall within it, because in Wales the generation applications and infrastructure applications come separately, whereas in England they come together in the same application?
Andrea Leadsom
I am grateful to the hon. Gentleman for making that point, but I think that our grace periods are absolutely clear, and that developers who have sought clarity have been able to get it from the words in our debates and in the Bill.
Investor confidence seems to be the main reason used to support further changes to the grace periods, as proposed in the amendments from the hon. Member for Coatbridge, Chryston and Bellshill and in many of the other amendments that have been tabled. The Energy and Climate Change Committee’s inquiry into investor confidence concluded earlier this year. I want to reflect on one point in particular that was raised during the Committee’s very thorough evidence sessions. The evidence given by Peter Dickson from Glenmont Partners suggested that
“investments continue to attract capital in the UK—for example in offshore wind”.
Far from Government policies putting investors off investing in renewables in the UK, in fact it seems that significant investment is still coming forward.
I thank my hon. Friend the Member for Daventry, my hon. Friends the Members for Peterborough (Mr Jackson) and for South Cambridgeshire (Heidi Allen), and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) for raising with me the important issues around visual, amenity and noise impacts from onshore wind farms and the impact that they can have at local level. I can confirm that our manifesto commitment specifically called for a halt to the spread of onshore wind farms and a change in the law so that local people have the final say on wind farm applications. We are making sure that people’s concerns are addressed. Specifically, the Government are considering measures related to noise and amplitude modulation. We touched on this matter in Committee. As I said then, we are determined to address this and find a solution to the problem. This is possibly taking longer than my hon. Friends would like, but we are taking independent advice and will consider how best to act in the light of that advice, which I expect to receive shortly. At this stage, I cannot comment further, but I hope that my hon. Friend the Member for Daventry will continue to be patient with me in the knowledge that we are looking at this very closely.
On new clause 2, tabled by the hon. Member for Aberdeen South (Callum McCaig), it is imperative that the early closure applies consistently across Great Britain in order to protect consumers from the risk of over-deployment beyond what has been agreed is affordable under the levy control framework. The new clause would allow Scottish Ministers to provide for further deployment of onshore wind in Scotland under the renewables obligation at a cost to consumers right across Great Britain. In fact, our estimates show that in 2015-16, £520 million, or approximately 60%, of RO support will already go towards funding Scottish onshore wind farms, even though only about 10% of UK bill payers are in Scotland.
The hon. Gentleman tabled the new clause in Committee at the beginning of February, and at that time we discussed the question of Scotland being willing to take responsibility for funding its own renewables obligation. During the debate, the hon. Member for Coatbridge, Chryston and Bellshill expressly responded to that suggestion:
“The short answer to that is no.”––[Official Report, Energy Public Bill Committee, 2 February 2016; c. 133.]
I cannot imagine that his position has changed in the brief period since that debate.
Jonathan Edwards
Further to my previous intervention, is the Minister in a position to inform the House and my constituents whether the Brechfa West project in my constituency will be eligible for the RO? It had generating planning permission but not infrastructure planning permission. Despite my requests to the Department and to Ofgem, nobody can tell me or my constituents whether the Brechfa West project will be able to claim the RO.
Andrea Leadsom
As I have said to the hon. Gentleman, I think our intentions are clear from words spoken in this Chamber and in the Bill Committee. I will certainly look into the case he mentions, but I do not have the information that he is looking for right now.
Amendments 24 to 46 are all intended to delay the early closure of the RO until 1 March 2017, closing it only one month earlier than the original closure date of 31 March 2017. It is therefore my understanding that the hon. Members who have tabled the amendments want the RO to close to onshore wind only a month earlier than planned, while maintaining the grace period provisions set out by the Government. Clearly, such a change would not meet the objectives of the early closure policy, which I have consistently set out in debates on the Bill and have explained again today. To change the early closure date to 1 March 2017 would go against the intentions of our manifesto commitment, and would be likely to make no reduction to overall deployment or costs under the levy control framework.
I remind hon. Members that those limits have been set for a crucial reason. As my right hon. Friend the Secretary of State set out in a speech in November last year:
“We can only expect bill payers to support low carbon power, as long as costs are controlled. I inherited a department where policy costs on bills had spiralled. Subsidy should be temporary, not part of a permanent business model.”
I remind hon. Members again that the Government have an electoral mandate to deliver on our manifesto commitment to halt the spread of onshore wind, and that is exactly what the clause is intended to do. However, the Government are mindful of the need to protect investor confidence and to take into account the interests of the onshore wind industry. That is why we have set out grace period provisions, which appear in clause 80.
I believe that I have consistently explained that the Government have an obligation to protect consumers from the risk of over-deployment of new onshore wind and rising energy bills. The date changes proposed in the amendments would simply put us back to where we started, providing no protection for consumers and putting us at risk of deploying up to 7.1 GW of additional onshore wind, which is well beyond what the Government have decided is affordable under the levy control framework.
To conclude, I stress the importance of swiftly moving forward with the proposals. I again quote the hon. Member for Coatbridge, Chryston and Bellshill, who said in Committee on this very issue:
“We agree that swift passage of the Bill with clear and consistent RO grace period provisions is needed in order to provide certainty to investors in the onshore wind sector as quickly as possible.”––[Official Report, Energy Public Bill Committee, 2 February 2016; c. 127.]
Clear and consistent provisions are exactly what the Government are attempting to provide, and we need to be able to move forward with the debate to do so.
Callum McCaig
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Clause 79
Onshore wind power: closure of renewables obligation on 31 March 2016
Amendment proposed: 24, page 46, line 20, leave out “31 March 2016” and insert “1 March 2017”.— (Dr Whitehead.)
This amendment and amendments 25, 26, 40, 41, 42, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38 and 39 have the effect of closing the Renewables Obligation for onshore wind a month earlier than the original date set out in the Statutory Instrument: Renewables Obligation Closure Order 2014: 2388, rather than a year earlier, as the Bill does in its present form.
Question put, That the amendment be made.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
New clause 6—Emissions trading: United Kingdom carbon account—
In section 27 (net UK carbon account) of the Climate Change Act 2008, after subsection (2) insert—
“(2A) No carbon units deriving from the operation of the EU Emissions Trading System may be credited to or debited from the net United Kingdom carbon account for any period commencing after 31 December 2027.””
New clause 7—Carbon capture and storage strategy for the energy industry—
‘(1) The Secretary of State must—
(a) develop, promote and implement a comprehensive national strategy for carbon capture and storage (CCS) for the energy industry to deliver the emissions reductions required to meet the fifth and subsequent carbon budget, as advised by the committee on climate change;
(b) develop that strategy in consultation with HM Treasury, the Department for Business, Innovation and Skills, the Oil and Gas Authority, the National Infrastructure Commission, energy intensive industries and other relevant stakeholders including the CCS industry; and
(c) have that strategy in place by June 2017 and report to Parliament on the progress of its implementation every three years thereafter.
(2) The strategy provided for by subsection (1) shall, amongst other things, include—
(a) the development of infrastructure for carbon dioxide transport and storage;
(b) a funding strategy for implementation including provision of market signals sufficient to build confidence for private investment in the CCS industry;
(c) a strategy for international co-operation on the development and implementation of relevant technologies;
(d) priorities for such action in the immediate future as may be necessary to allow the orderly and timely development and deployment of CCS after 2020.
(e) a strategy for co-operation through the European Union.”
New clause 8—Decarbonisation target range—
‘(1) Section 1 of the Energy Act 2013 is amended as follows.
(2) Leave out subsection (2) and insert—
“(2) The Secretary of State must by order (“a decarbonisation order”) set a decarbonisation target range, which shall be reviewed annually thereafter.”
(3) Leave out subsection (5) and insert—
“(5) The decarbonisation order shall be made within six months of the adoption of the fifth carbon budget set by virtue of the duty of the Secretary of State under section 4 (2) (b) of the climate Change Act 2008.””
New clause 9—Amendment to Energy Act 2013: Capacity agreements—
After Section 28(4) of the Energy Act 2013, insert—
‘(4A) Electricity capacity regulations introduced by subsection (1) for any fossil fuel generating plant granted 15 year capacity contracts under the capacity agreements established by this section shall be subject to the Emissions Performance Standard as established by Section 57 (2) of this Act.””
New clause 10—Emissions trading: United Kingdom carbon account—
In section 27 (net UK carbon account) of the Climate Change Act 2008, after subsection (3) insert—
‘(3A) In respect of any period commencing after 31 December 2027, the regulations must not make provision for carbon units to be credited to or debited from the net United Kingdom carbon account on the basis of the number of carbon units surrendered by operators of installations in the United Kingdom pursuant to the European Union Emissions Trading Scheme.””
New clause 11—Zero net UK [carbon] emissions—
‘(1) The Climate Change Act 2008 is amended as follows.
(2) After section (3) of the 2008 Act, insert the following—
3A Net UK carbon emissions target: zero emissions year
‘(1) The Secretary of State shall set a date by which net UK emissions must be zero or lower (“the zero emissions year”) by order no later than 12 months from the date on which the Energy Act 2016 comes into force.
(2) It is the duty of the Secretary of State to ensure that the net UK emissions for the zero emissions year and each year thereafter is zero or less.
(3) If an annual statement of UK emissions under Section 16 for a year after the zero emissions year shows that net UK carbon emissions are more than zero, the Secretary of State must, as soon as reasonably practicable lay before Parliament a statement which—
(a) explains why the zero net emissions target has not been met, and
(b) sets out proposals and policies to ensure that the target will be met in subsequent years.
(4) The Secretary of State may by order amend the zero emissions year.
(5) The power in subsection (4) may only be exercised if it appears to the Secretary of State that it is appropriate to do so due to significant developments in—
(a) scientific knowledge about climate change, or
(b) European or international law or policy.
(6) An order under subsections (1) or (4) may only be made by statutory instrument that has been laid in draft before, and approved by a resolution of, each House of Parliament.
(7) Before laying a draft of a statutory instrument under subsection (6) the Secretary of State must obtain, and take into account, the advice of the Committee on Climate Change.
(8) As soon as is reasonably practicable after giving its advice to the Secretary of State, the Committee shall publish its advice in such manner as it considers appropriate.
(9) If an order under subsections (1) or (4) sets or amends the zero emissions year in a way that is different from the recommendation of the Committee under subsection (7), the Secretary of State must lay a statement before Parliament explaining his reasons for that decision.
(10) When the Secretary of State comes to any decision under this section, or the Committee on Climate Change considers its advice in relation to any such decision—
(a) the matters listed in Section 10(2) must, and
(b) other matters may,
be taken into account.”
New clause 12—Strategy for a Just Transition away from fossil fuels—
‘(1) The Secretary of State must develop a comprehensive national strategy for the UK energy sector to move away from fossil fuels and towards 100% renewable energy by 2050, under the framework of a Just Transition outlined in subsection (5)(a).
(2) The strategy must be developed by June 2017 and the Secretary of State must report to Parliament on the progress of its implementation every year thereafter.
(3) The transition must ensure that UK carbon emission reductions make a fair contribution to the goals set out in the 2015 Paris Climate Change Agreement.
(4) The strategy must be developed in consultation with—
(a) energy sector workers,
(b) trade unions,
(c) the Committee on Climate Change,
(d) HM Treasury,
(e) the Department for Business, Innovation and Skills,
(f) the Oil and Gas Authority,
(g) the renewable energy industry,
(h) the National Infrastructure Commission,
(i) Scottish and Welsh Ministers,
(j) civil society organisations, and
(k) other relevant stakeholders.
(5) The strategy must, amongst other things, include—
(a) the adoption of the principles of Just Transition set out by national and international trade unions, including—
(i) full participation and engagement of workers, trades unions and communities most directly affected, and
(ii) training, education and skills policies to enable workers to make the transition to employment in sustainable, low carbon industries,
(b) an assessment of the proportion of existing UK oil and gas reserves that should remain unexploited,
(c) a strategy for redirecting all direct and indirect fossil fuel exploration and production subsidies into low carbon industry; and
(d) cooperation with EU institutions and EU member states to embed the principles of Just Transition at EU level.”
This new clause would require the Secretary of State to develop a strategy for a Just Transition away from fossil fuels and towards a renewable energy future.
New clause 1—Strategy for incentivising competitiveness of UK-registered companies in decommissioning contracts—
‘(1) By June 2017, the Secretary of State must develop a comprehensive strategy for the Department of Energy and Climate Change to incentivise the competitiveness of UK-registered companies in bidding for supply chain contracts associated with the decommissioning of oil and gas infrastructure (the strategy), which shall be reviewed annually thereafter.
(2) In developing the strategy, the Secretary of State must consult—
(a) HM Treasury;
(b) the Department for Business, Innovation and Skills;
(c) the Oil and Gas Authority;
(d) Scottish Ministers, and
(e) any other relevant stakeholders that the Secretary of State thinks appropriate.
(3) The strategy must include, though shall not be restricted to—
(a) an appraisal of tax incentives that can be extended to oil and gas operators to incentivise their use of UK-registered supply chain companies; and
(b) an outline of other appropriate support that can be provided by the Government, or its agencies, to UK-registered companies which express interest in bidding for decommissioning contracts.”
This new clause would compel the Secretary of State to bring forward a strategy for ensuring that UK-registered supply chain companies benefit from decommissioning contracts.
New clause 4—Contract for Difference—
After section 13(3) of the Energy Act 2013 insert—
‘(3A) An allocation round must be held at least once in each year which the carbon intensity of electricity generation in the United Kingdom exceeds 100 grams per kilowatt hour.”
This new clause would compel the Secretary of State to hold a Contract for Difference allocation round at least once in each year that the carbon intensity of electricity generation in the UK exceeds 100g per kilowatt hour.
New clause 5—Amendment to the Petroleum Act 1998: definition of “the principal objective”—
In subsection 9A of the Petroleum Act 1998, leave out subsection (1) and insert—
“(1) The “principal objective” is the objective of maximising the economic return of UK petroleum, while retaining oversight of the decommissioning of oil and gas infrastructure, and securing its reuse for transportation and storage of greenhouse gases, in particular through—
(a) development, construction, deployment and use of equipment used in the petroleum industry (including upstream petroleum infrastructure), and
(b) collaboration among the following persons—
(i) holders of petroleum licences;
(ii) operators under petroleum licences;
(iii) owners of upstream petroleum infrastructure;
(iv) persons planning and carrying out the commissioning of upstream petroleum infrastructure;
(v) owners of offshore installations.””
Government amendments 48 and 49.
Amendment 47, in clause 8, page 6, line 10, at end insert—
“Hierarchy of matters relating to decommissioning
The need to consider the most advantageous use of North Sea infrastructure for the overall benefit of oil and gas extraction prior to the decommissioning of such sites”
To require the OGA to have regard to the need to ensure most advantageous use of North Sea infrastructure for the overall benefit of oil and gas extraction prior to the decommissioning of such sites when exercising its functions.
Government amendment 51.
Callum McCaig
Having moved new clause 3, I shall speak to new clauses 1 and 4—I am rather confused by the ordering—and I shall support the cross-party new clause 10 on behalf of the SNP.
I was struck when, in the earlier debate on the previous group, the right hon. Member for Wokingham (John Redwood), who is no longer in his place, talked about how to find an environmentally sustainable way of getting power from the island of coal in a sea of oil and gas. I take it that he was referring to Great Britain in that regard. There might well be a way of achieving that in an environmentally sustainable way—through carbon capture and storage. My new clause 3 calls on the Government to bring forward a proper, well thought out and extensively consulted on plan and strategy for carbon capture and storage for utilisation in both the energy industry in particular and industry more widely, including energy-intensive industries, which might move offshore if they are not able to consume power in an affordable way that meets our higher environmental standards.
We have talked about the discussion and report from the Energy and Climate Change Select Committee, which referred to the innumerable sudden changes to policy as having an impact on the reputation of the United Kingdom for investor confidence. The decision to withdraw the £1 billion funding available for the CCS competition at the same time as the Secretary of State for Energy and Climate Change was in Paris leading the “high-ambition coalition” on behalf of the country at the Paris talks is perhaps the most grave of the changes.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I agree with the hon. Gentleman. Does he agree with me that the fact that this information was extolled to the City of London and the stock exchange rather than this place on the very same day demonstrates this Government’s real attitude to this place?
Callum McCaig
I very much agree. I remember sitting on this very Bench, looking through the Budget statement and being somewhat relieved that the rumours I had heard about this competition being scrapped did not appear to be in that statement. Lo and behold, however, an announcement was made to the stock market a few moments after the Chancellor had left the Chamber, removing that funding. I understand that no greater certainty was provided to the companies involved in both White Rose and Peterhead.
Philip Boswell
Further to that point, on the very morning of that Budget, I intervened on another Member and asked the Minister to provide assurances that both the Peterhead and the White Rose projects would not be cut, but no answer was forthcoming. There was nothing in the paperwork that day to show that this was going to happen.
Callum McCaig
I agree with my hon. Friend. The fact that different parties have the same essential view not only about the Government’s abysmal handling of this process, but about how to salvage something from the ashes of the carbon capture competition suggests that there is not a huge amount of difference between my new clause and new clause 7, tabled in the names of Labour Front-Bench Members. The main difference—we discussed the issue in Committee—is that our provision includes the devolved Administrations as bodies that should be developing a strategy. I know that the Scottish Government—who, working with DECC, pursued what should have been the second phase of carbon capture and storage at Grangemouth—have high ambitions for the deployment of CCS and share the concerns of many Members here about the way in which the Government have handled this matter.
As for short-sighted decisions, I understand that the White Rose project had substantial European Union funding associated with it. The potential for Peterhead to use carbon capture and storage—or potentially carbon capture and utilisation to create a virtuous cycle for enhanced oil recovery—was there, but that potential has now been lost. The suggestion from the Energy and Climate Change Committee that this will make meeting our climate change commitments all the harder, highlights the need for the strategy that I am proposing.
We have seen that the Government are all over the shop when it comes to CCS. One minute they are for it; another minute they are against it. One minute it is not working; the next minute it is looking promising for the future. These represent severe mixed messages for investor confidence, when we need clarity. If we are to get investment from industry—I hope we do, and I gain the impression that Members of all parties want to see this become a reality in the UK—we need an unequivocal statement from the Government. Then we need an unequivocal strategy, which is what I am calling for today.
There is a tie-in between the utilisation of the infrastructure in the North sea and what can be deployed for CCS. I believe that it is also incumbent on the Government to bring forward a strategy for decommissioning, which is the subject of my new clause 1. Decommissioning is one of the sad realities of the North sea that is going to happen. We all, or at least the majority of us, hope that this will happen at some time in the future. The Government can take steps to deal with that. The industry has called for tax cuts, and loan guarantees for oil and gas companies are also a key part of ensuring that decommissioning happens as far in the future as possible. It is, however, going to come.
Decommissioning provides a huge opportunity, when there is upwards of £30 billion-worth of work to be done. A large part of the bill will be paid back by reimbursing the companies for previous tax paid. They have built up the tax to offset against decommissioning costs. Essentially, as we go forward, the Treasury will be footing the bill for a large part of decommissioning.
It strikes me and my party that we need to ensure that the greatest possible benefit comes to these shores. The east coast of this island is ripe with opportunities for ports and the like. Frankly, they should be champing at the bit to see the work come ashore. I believe that the Shell platform at Brent is coming to Hartlepool. That is a strong commitment and an investment in infrastructure, but also in skills.
Tom Blenkinsop
The hon. Gentleman is spot on about Teesport work at Hartlepool and the decommissioning of rigs. Does he agree, however, that including the decommissioning of rigs also provides potential for extra surveys of where rigs are currently based to investigate syngas potential? The infrastructure is already there for looking at sub-sea coal, for example.
Callum McCaig
A large number of things need to be done before we commence wholesale decommissioning, and this includes the widest possible consideration of what the infrastructure could be used for. The proposals and possibilities are perhaps not endless, but they are numerous. Whether we are talking about carbon capture, storage of hydrogen or looking for further hydrocarbon resources that are yet to be discovered, there are vast possibilities. While the infrastructure is there, the opportunities for doing other things with it will remain; once it is gone, the opportunity is gone. The Oil and Gas Authority—which a large part of this Bill deals with, although not the aspects we are debating at this precise moment—has done a lot of work on that and is to be commended on that development.
Decommissioning is a reality. If we are smart collectively —if we can line up the ducks, in terms of the supply chain, skills and investment in the ports and suchlike—there could be a massive windfall. We have considerable leverage, as funders of a large part of this work, through tax receipts offset against previous earnings, and we should be looking to maximise that economic potential, in the same way as we were looking to maximise the economic recovery of the North sea.
Philip Boswell
On the point about that opportunity, does my hon. Friend agree that decommissioning goes hand in hand with the critical assessment, evaluation and management of the infrastructure that surrounds these isles to enable access to marginal fields, which would not otherwise be available, were the critical infrastructure not kept in place, as part of an overall plan with a long-term vision for the energy supplies of these isles?
Callum McCaig
I agree with my hon. Friend, and that is something the Oil and Gas Authority is set to look at. It will also be hugely beneficial to the oil and gas industry, so that work needs to take place. We need to be aware of what opportunities exist, but we also need to remember that this Government have a duty to support the oil and gas industry at this time, so I reiterate the calls made by me and others in my party to see substantial movement in Wednesday’sBudget.
It might seem somewhat ironic to some that I am moving from how we best exploit the North sea to how we best tackle climate change but, as I have said a number of times in this place, because we have been a major producer and user of hydrocarbons, there is a moral duty on us to do what we can. I note new clause 11, standing in the name of the right hon. Member for Doncaster North (Edward Miliband), among others, which is not something I would be ready to support, although I wholeheartedly endorse the principle. This is something we need to do, but I would see new clauses 4, 8 and 10—which deal more closely with the short term—plus the issue around carbon capture and storage, as being the correct pathway.
It strikes me that we are very much at a crossroads when it comes to the deployment of technology. It is likely—or, I am hopeful—that a zero-carbon future can be achieved, but the pathway to that is not clear to me, and I do not think it would be clear to the Government if they were to commence that work now. I would rather see things that are in the gift of the Government at this precise moment in time—if they were to focus on them, to deliver on them and act sooner rather than later—because the more work we do now, the less we have to do in future. It is about timing and priorities. The concept is to be wholeheartedly commended and supported, but I am not quite sure I am there when it comes to prioritising it now.
Finally, I would like to talk about new clause 10, to which I was happy to add my support—I imagine that a number of others who also put their name to it will talk about it in greater detail. Our carbon accounting mechanisms need to be brought into line with what is happening and going to happen. The fact that we can get to the stage where upwards of half our emissions do not properly factor into our carbon accounting means that we cannot set about achieving what we must in an open and honest way. Following on from Paris, numerous people have said that we need to get serious about this. If we are to get serious about taking the steps we need to take to make our contribution to tackling climate change, we absolutely have to be clear about what we are counting, which is the basics of this. The bean counting of climate change might not seem particularly appealing to some, but it is fundamental. If we do not know what the emissions are and we are not counting them properly, how can we tackle the challenge of reducing them properly?
David Mowat
I rise perhaps early in this debate but, in the absence of alternatives on this side of the Chamber, I am happy to follow the hon. Member for Aberdeen South (Callum McCaig). I agree with much of what he said about carbon capture and storage, but my comments will be about new clause 10.
I do not agree with the thrust of new clause 10 and want to set out to the House why not, but first let me be clear: I, like possibly everybody in this House, also regard man-made climate change as a clear and present danger. The concern I have, though, is that we in this country are acting increasingly unilaterally in what we are doing to fix it. Indeed, the emissions trading system was an attempt to find a pan-European solution to a pan-European problem and I do not want us to turn our back on it.
I speak also for the 900,000 people who work in energy-intensive industries in this country and the many other millions of people who work in manufacturing industries. The central premise of my remarks is that I do not believe it is possible to rebalance our economy, to have a march of the makers and to do more in the north of the country predicated on electricity prices that are approximately double what they are in continental Europe. Of course, nobody in this House wants higher electricity prices, but the fact is that some of our actions are resulting in higher electricity prices, in so far as similar actions are not taken by our trading partners. This morning, our energy-intensive industries were paying something like 9p a unit of electricity; in Germany and France, they are paying 4p a unit. Broadly speaking, the gap between UK and EU electricity prices is 80% to 90%. I am an MP for the north of this country. I want to see manufacturing re-established much more strongly in the north, but it cannot be re-established on the basis of differentially higher electricity prices.
Tom Blenkinsop
In reference to new clause 10, it is quite obvious that the market in the European ETS is set, yet we decided as a country—or rather, the Government decided—to introduce the carbon price floor, which exceeded the EU ETS, so this is an issue for those on the Government Benches. Our European competitors also weight the cost of energy far more to the consumer than to industry, which is ultimately a Government decision, and by and large the costs are generally the same, varying from country to country.
David Mowat
The hon. Gentleman makes two points, the first of which is about the carbon price floor. As it happens, I do not support policy in that area. The consequence of that policy is that we are now importing electricity produced on the continent by power stations that do not pay the carbon tax at the level we do. As my right hon. Friend the Member for Wokingham (John Redwood) said earlier, that is no sort of economic and industrial policy. I have forgotten the hon. Gentleman’s second point. Perhaps he could just remind me.
Tom Blenkinsop
It was about the differential. The distribution of costs is much more on the consumer in EU member states.
David Mowat
That is true of Germany in particular. Apparently—I am not an expert in this area, but I hear Ministers from the Department for Business, Innovation and Skills talking about this—there is an issue with state aid, which does not apply to Germany because it started doing that in advance of state aid rules being set up, which is why it can charge such a differential and apparently we cannot. I agree that that is unsatisfactory.
I was talking about the 900,000 jobs in energy-intensive industries that we in this place need to be cognisant of as we legislate and move forward. These are jobs in steel and what is left of our primary aluminium industry—there were three smelters in this country until a few years ago; there is now one left, in Scotland, and a consultation is under way on its closure. This stuff matters. Of course, so does climate change. My only point is that we must get it right. There is a balance to be struck, and the people who pay for that balance cannot be the people who work in some of those industries.
I have four points to make about what I believe is an increasing difference between the approaches of the United Kingdom—with our climate budgets and our Climate Change Act 2008—and the European Union. The first relates to the Paris agreement which was reached in December, and which we have discussed in the House before. Some people describe it as a triumph, and in many respects it was. I personally do not think that it will be enough to limit the temperature rise to 2.7°; I think that that is an optimistic analysis. However, the key fact that we, as legislators, need to understand is that the United Kingdom did not have a submission to the “intended nationally determined contribution” process. Europe did, and Europe’s submission was a reduction in carbon emissions by 40% over 40 years. The UK is part of Europe, and it is therefore implicit that we must do the same, but the commitment for which we have legislated is to reduce emissions by—
Tom Blenkinsop
I recognise that the hon. Gentleman is talking about individual states’ emissions and Europe-wide emissions, but I have a responsibility for people who work in energy-intensive industries, and I know that a far more acute problem for the Government is the problem of Chinese dumping. Of course we cannot talk about that now, but it is far more serious than anything that it coming out of the European Union.
David Mowat
I agree that Chinese dumping is an issue. I also agree that business rates are an issue. However, I think that the hon. Gentleman is wrong if he is suggesting that energy prices are not an issue as well. The steel industry, and indeed the aluminium industry, is not under such pressure in parts of Europe as it is here.
Tom Blenkinsop
What the hon. Gentleman is saying contradicts comments from Eurofer and UK Steel. The two primary issues for energy-intensive industries, especially the steel industry, are market economy status for China and Chinese dumping. I am sure that the hon. Gentleman will return to the point about the EU emissions trading system, but those are the main concerns of the industries themselves.
David Mowat
The hon. Gentleman’s position strikes me as rather odd. I agree with him that the ETS status is important, that dumping is important, and that business rates are important, but, as is made clear in report after report—there is one from the aluminium industry in my office now—so are energy prices.
I do not think that I am making a massively controversial point. I am merely saying that in an industry that uses significant amounts of electricity, it is not a competitive advantage if our electricity costs more than other people’s. I agree with the hon. Gentleman that Chinese dumping is probably more significant, but we are talking about economics, and in economics everything happens at the margin. The stuff that I am talking about matters to our manufacturing industry. My central point is that if we are intending to have a march of the makers that involves a rebalancing of industry predicated on high electricity prices, it is going to be tough.
As I was saying before the hon. Gentleman’s interventions, the cross-European Paris INDC submission is about 50% less onerous than the requirements of our own Climate Change Act. When I first saw that statistic, I thought it odd. Why had we allowed this to happen? Given that we have a stringent, rigorous and, in many respects, very good process involving carbon budgets driving down emissions, and all that goes with that, why did we become involved, at a big world summit, in a European submission that was so feeble? Although the requirements of the European submission are so much lower than those of the UK, in terms of the Climate Change Act, it is not allocated by country, even now. I believe that that process will start this year, or perhaps next year.
My second point relates to the European emissions trading system itself. New clause 10 was deemed necessary because it was felt that the system was not acting as enough of a brake on carbon emissions. The European price of carbon—which is implicit within the system—is too low: it is about €5 a tonne, as opposed to the €23 a tonne or so that we are paying. In 2013, precisely that point was debated in the European Parliament. It was proposed, in an amendment, that the emissions trading system should be “re-baselined” in a way that would have made it meaningful. The amendment might have prevented the need for a carbon price floor in the UK, and created a carbon price that properly reflected where the market needs to be in order to drive actions. However, the European Parliament did not pass it, probably in response to the vested interests of big manufacturers in a number of big countries in Europe. I think that that was a pity.
As a consequence, here we are now, saying that the ETS is not fit for purpose, that the accounting that it implies—which was intended, in the Climate Change Act, to serve as a way of controlling generated power—does not work, and that therefore we are doing something different. However, the right answer is not to turn our back on the European system. I am a Conservative. I may be an “inner”, but only just. It is odd that those in the Opposition parties who are deeply committed to the European ideal should turn their backs on this European solution.
My third point is that there is no country-based reporting or control of emissions in Europe. Since 1990, Austria has increased its emissions by 13%, Ireland has increased its emissions by 7%, and Holland has kept its emissions static. During the same period, the United Kingdom has reduced its emissions by some 28%. If the European Union were serious about getting to grips with emissions, and getting to grips with individual countries that are tackling the problem, it would have addressed that fact.
My final point is that we are seeing dysfunctional member state behaviour. Germany and Holland are building brand-new coal-powered stations—lignite-burning stations. I believe that those countries not only do not engage in carbon capture and storage, but have made it illegal, which does not suggest that they understand the challenge that must be faced.
I have just been given a note saying that I should wrap up. Let me end by saying that, while there is no doubt that we all agree that climate change is a clear and present danger, we must bring the rest of the world with us, and by turning our back on arrangements such as the European emissions trading system and allowing the EU to put a submission to the Paris COP talks that is frankly feeble, we are doing the opposite. We will not solve the problem of global warming by fixing our 1.5% of total global emissions.
Dr Whitehead
I want to speak about new clauses that relate to a number of aspects of the Bill, and to the position in which we find ourselves in relation to a low-carbon economy for the future.
New clause 7 is very similar to new clause 3, and concerns an issue about which I think both Opposition parties feel very strongly: the need to develop a systematic strategy for carbon capture and storage. We have heard several references to what the Conservative manifesto at the last general election did or did not say, but the Government mentioned CCS in that manifesto. They also mentioned the least-cost routes to decarbonisation. Clearly—this is certainly the advice of the Committee on Climate Change—they will have to think carefully about CCS when they respond on the fifth carbon budget this summer, because CCS, among other things, represents a substantial implementation of least-cost routes to decarbonisation in the long term. The shameful pulling of the two CCS pilot projects mentioned by the hon. Member for Aberdeen South (Callum McCaig), in essence on the grounds of cost, represents a missed investment opportunity that could have reduced the cost of decarbonisation at a later date. That cost is an important element of our approach to a future CCS strategy. It is important to be clear that the cancellation of the projects does not and should not mean the end of CCS in this country.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I absolutely agree with the hon. Gentleman. How likely does he think it will be that any private money will ever be forthcoming, given the somewhat irrational manner in which the funding for the projects has been abandoned in this country?
Dr Whitehead
The right hon. Gentleman makes an important point. Indeed, a carbon capture strategy that sets out a longer-term route for our carbon capture and storage would play an important part in ensuring that investment for CCS was available. He also makes the point that the cancellation of those pilot projects has cast quite a pall over the future investability of carbon capture and storage projects, despite the fact that many such projects are now getting under way across the world.
It is important to reflect on how we will import the relevant technology under a new CCS strategy and how we might keep as much as possible of the rest of the supply chain and other CCS arrangements in the UK, particularly the substantial developments and intellectual property gained from the White Rose and Peterhead projects, which must be retained in the UK for use in future CCS developments. All of that should be part of a strategy, but we simply do not have one at the moment. Having a strategy in place would enable us at least to recover substantially from the immense setback caused by the cancellation of those pilot projects. The new clause calls for such a strategy to be articulated at an early stage and for us to be clear about exactly how and why we will keep CCS on track for the future.
We have heard about targets today, but new clause 8 does not set a new target. It relates to the undertakings in part 1 of the Energy Act 2013 relating to setting a target for the decarbonisation of the energy sector by 2030. Part 1 makes it clear that the Secretary of State has a duty to ensure that the carbon intensity of electricity generation in the United Kingdom is no greater than the maximum permitted level of the decarbonisation target range. There is a clear undertaking in the Act to set a decarbonisation target range and a requirement for the Secretary of State to take related actions.
As I have mentioned, that target already exists. It has done so since the Energy Act 2013 was passed. The outstanding issue at the time was not whether there should be a target but what the target range should be. Under the legislation, it is up to Ministers to clear up that matter through secondary legislation. It is not a particularly small matter: it is in the gift of Ministers to decide whether the target for decarbonisation is strong or not. During the passage of that legislation, it became clear that Members across the Committee envisaged the target being strong and in line with the aim that carbon reductions should make a proper contribution.
Unfortunately, during the passage of this Bill in another place, we heard about a letter to the Opposition from the Minister in the other place. In Committee, I quoted the Minister stating in that letter that
“a power was taken within the Energy Act 2013 which gives the Secretary of State the ability to set a ‘decarbonisation target range’ for the electricity sector, for a year ‘not before’ 2030. This allows a target to be set on the same date or after setting the Fifth Carbon Budget which must be set before end of June 2016 (measured in emissions intensity in grams of CO2 per kWh)…it is the intention of this Government not to exercise this power. This position is consistent with our manifesto pledge not to support additional distorting and expensive power sector targets.”––[Official Report, Energy Public Bill Committee, 4 February 2016; c. 206.]
Clause 8 does not propose an additional distorting target. It is a target that was included in the Energy Act 2013, and it is incumbent on the Government to take action on the decarbonisation target range through secondary legislation. It is extremely disappointing that the Minister in the other place indicated that the Government were not going to exercise this power. The new clause would require the Secretary of State to set a decarbonisation target and discharge section 1 of the Energy Act 2013. I am sure that, in the light of our discussions this afternoon, Members would agree that it is extremely important that such targets should be placed as waystations on our way to 2050. That is what the new clause seeks to achieve.
New clause 9 addresses an aspect of that decarbonised structure for energy in looking at the perverse results of the first two capacity auctions in not procuring any long-term new large generating plant; instead, almost the only long-term outcome was the procurement of diesel sets as generators. More than 1 GW of generators was procured, and they are more polluting than coal, which the Secretary of State has pledged to take off the system by 2025. The new clause adds to the 2013 Act’s requirements relating to fossil fuel-generating plant that is granted a 15-year capacity contract. That plant must adhere to certain conditions if the contract is to be granted. One of those conditions is the emissions performance standard. Section 57 of the Act contains a target or formula that, under subsequent secondary legislation, has led to a performance standard of 450 grams per kWh being established.
The new clause clearly does not seek to capture gas, because new plant for gas comes in at about 370 grams per kWh and is below the emissions performance standard. It refers to diesel coming into the provision of electricity, particularly in the context of what has happened in the two previous capacity auctions. Those diesel engines escaped the provisions of the 2013 Act because they were individually below the size at which plants were caught by the legislation. However, in terms of their individual emissions, they are among the dirtiest of the energy generation devices.
Diesel is exempt from present EPS levels because of the individual size of the reciprocating sets, and it has therefore cumulatively obtained a substantial proportion of long-term capacity payments coming into the system. Diesel sets have been able to get into the capacity auctions not because they are particularly cheap to run but because until recently they were already receiving a substantial underwriting from the Treasury through the enterprise investment scheme payments for the establishment of such plants. It appears that the payments were originally introduced to encourage the plants to be established for standby purposes, but they have of course been used for other purposes in the capacity auction. Although that route has been changed in the autumn statement, the most polluting generating plants have managed to get two lots of subsidies for generating and have got in through the capacity auction process as well. That is not only bad climate policy but bad public policy in general.
The question of diesel sets was discussed in Committee, and in a recent ministerial statement on changes to the capacity auctions, the Government undertook to look again at the matter. They suggested that this might happen through proposals to change the air quality regulations under the large plants directive, which might include diesel sets. However, they said that those changes might not occur until 2019 at the earliest, which would be too late for the next series of capacity auctions. The new clause seeks the most straightforward route to ensuring that diesel is not the perverse beneficiary of auctions as of now.
New clause 10 looks further forward, to the fifth carbon budget, but perhaps not quite so much further forward, in that we will have to decide on the fifth carbon budget by the summer. The new clause seeks to strengthen the Government’s intention to use their powers to ensure that we keep on track by outlawing the use of private trading sector credits at and after the fifth carbon budget. The hon. Member for Warrington South (David Mowat) made some valuable points about that.
Hon. Members will recall that when the Bill arrived in the House from another place, clause 80 sought to simplify the accounting of the UK’s carbon budgets under the Climate Change Act 2008. That clause was removed during the passage of the Bill in Committee. This new clause seeks a slightly different route to the goal of more effective carbon accounting in the fifth carbon budget and beyond. It seeks to make the Government directly accountable for emissions in the sectors covered by the EU emission trading system when determining whether the UK is staying within its national carbon budgets. The EU ETS covers emissions in the electricity sector and heavy industry, and the carbon accounting regulations currently allow the Government to ignore emissions from those sectors when determining whether the carbon budgets have been met. For that reason, the UK’s carbon budgets, as currently designed, fail to provide a framework that offers investor confidence in the UK power sector. In particular, it provides no assurance that the Government will put in place the necessary measures to ensure that the power sector is largely decarbonised by 2030 despite the fact that the Committee on Climate Change has repeatedly indicated that the power sector must reduce emissions to below 100 grams per kWh by 2030 in order to maintain a cost-effective trajectory to our 2050 climate target.
If the accounting rules are changed, the Committee on Climate Change has indicated that it will provide new advice on the appropriate level for the fifth carbon budget, and the committee will for the first time be able to recommend a budget that reflects a cost-effective pathway for UK emissions across the economy. The new clause differs from the original clause 80 in a key respect: while clause 80 prevents any carbon units in the EU ETS from affecting the UK carbon account, the new clause specifically prevents the carbon trading behaviour of private firms from affecting the national accounts, which is what allows the Government to ignore emissions from the ETS sectors. Under the new clause, the Government would retain the option of purchasing and cancelling ETS carbon allowances to offset UK emissions at state level, an environmentally preferable form of carbon-offsetting compared with the many types of international offset credits available to the Government. If exercised, the offsetting option would also strengthen the EU ETS.
Finally, amendment 47 reminds us of the first part of the Bill and the wide consensus for change regarding North sea oil. It seeks to give the Oil and Gas Authority new powers and oversight to ensure that decommissioning is used to best advantage in the North sea. Decommissioning should not operate in the short-term interests of those involved in it but in the longer-term interests of the co-operative use of infrastructure, which hon. Members have touched on, and for the benefit of not only the production of future, more marginal fields over the next period, but the future possible use of the North sea as one of the world’s finest repositories when carbon capture and storage gets under way. The amendment would add an important tool to the Oil and Gas Authority’s arsenal and I hope that the Minister will accept it.
Edward Miliband (Doncaster North) (Lab)
I rise to speak to new clause 11, which was tabled in my name, that of my hon. Friend the Member for Sheffield Central (Paul Blomfield) and those of Members from five other parties across the House. I thank the hon. Members for Westmorland and Lonsdale (Tim Farron), for Brighton, Pavilion (Caroline Lucas), for Beverley and Holderness (Graham Stuart), for Central Suffolk and North Ipswich (Dr Poulter), for Belfast South (Dr McDonnell) and for Arfon (Hywel Williams) for their support. I also thank my Front-Bench team and Baroness Worthington in the other place for her support and advice.
The new clause would insert the commitment to zero emissions in the Paris climate change agreement into our domestic law, with the Committee on Climate Change advising on when it should be achieved. It is the right thing to do and the science is clear: the world needs to get to zero emissions early in the second half of this century, and it is worth reminding the House of the debate’s context.
We know from recent scientific analysis that 2015 was the hottest year on record. The record for global temperatures has been broken in each of the past five months, with February’s record broken in shocking fashion. Atmospheric concentrations of CO2 are now higher—this is hard to get your head around—than they have been for at least a million years. That is what the scientists tell us and it highlights the necessary urgency, which is shared by Members on both sides of the House.
My proposal makes economic, moral and political sense. It makes economic sense because we have to get to zero emissions eventually. It will be tough, so we need to start planning now. We are already aware of some of the tools we will need, but not all of them. We need clean energy supplies, a revolution in the household sector and reforestation. As the hon. Member for Aberdeen South (Callum McCaig), who speaks for the SNP, said, we need carbon capture and storage to trap emissions. We will also need other technologies that are in the early stages of development. Crucially, we need to start the work now so that we can get to zero emissions at least cost. The economic case is proven by the support from the business community, and I thank Aviva, GSK, Unilever, Kingspan, Kingfisher and the broader “We Mean Business” coalition for their backing. The proposal also makes moral sense. Achieving zero emissions is necessary, so it would be irresponsible to pretend otherwise. Future generations will look badly on a generation that stuck its head in the sand and refused to plan ahead.
Rebecca Pow (Taunton Deane) (Con)
I have enormous respect for the right hon. Gentleman. I applaud his positive steps and everything that happened in the 2008 Act, but we must be economically realistic. I wonder whether this is the right time and whether it might be better to ask the Committee on Climate Change to have a closer look at the proposal. After all, we are in the process of agreeing the first carbon budget, so perhaps all the energy should be put into that.
Edward Miliband
I agree with the end of the hon. Lady’s point. My proposal is deliberately pragmatic. It would put zero emissions into law, but the date would be decided by Government on the basis of advice from the Committee on Climate Change. That is right and it would be the lowest-cost way of proceeding. We need the experts’ advice. After all, they were appointed with cross-party support.
I am delighted to say that since I made this proposal three months ago I have had constructive discussions with the Government. I will not try to predict the reaction of the Minister of State, but I want to record my thanks to her, the Secretary of State, and the Minister for the Cabinet Office for their willingness to engage. I hope that we can move the idea forward in the months ahead and demonstrate once again the cross-party commitment to tackling climate change that is shared by the vast majority of hon. Members. I look forward to the Minister’s response.
Mr Alistair Carmichael
New clauses 5 and 6 stand in my name, but they are covered by other new clauses, so I do not intend to press either of them to a vote; the other new clauses lead in broadly the same direction.
First, let me deal with carbon capture and storage. When I intervened on the hon. Member for Southampton, Test (Dr Whitehead), the term I used in relation to the Government’s decision to pull the funding from the project was “irrational”. I hope I was not unkind to the Government in saying that, but if it was not irrational it must have been ideological. In any event, it certainly did not make any sense. A competition was running and the point at which they withdrew the funding was significant. Had they allowed the competition to run a little longer, it might have reached the conclusion that there would be no more money to be spent—who knows? We will never know now. The decision was irrational, because of the impact it will have on getting our own CCS sector up and running in this country. As he said, the work on this is being done elsewhere and inevitably we will end up playing catch up and importing expertise that could have been generated here. Who will ever suggest that a shareholder put money into CCS in this country? This is the ultimate failure of evidence-based policy. Notwithstanding the provisions on the amendment paper tonight, I now wonder whether it is worth calling for any more rethinks, because even if we got new Government commitment, who on earth is going to believe it, given events thus far?
The hon. Member for Aberdeen South (Callum McCaig) made the point that there is a synergy between CCS and the issues relating to decommissioning in the North sea. For some years, the technology used in CCS has been routinely and effectively used in the North sea in enhanced oil recovery; gas has been used to extract more oil from other parts of the existing substantial infrastructure network. It gladdens my heart that the Oil and Gas Authority goes from strength to strength, as I have followed the project closely from its inception, from the work of the Wood commission and through the creation of the shadow authority. To get the maximum benefit, it will be necessary for the OGA to get on, use the powers that we have already given it and those we give it in this Bill, and come forward with the strategy that will make these things happen.
Of course, for there to be a strategy there will first have to be survival, and the very real danger at the moment is that the age of the assets in the North sea, especially those in the north North sea, will mean that the critical mass may tip over and there is then a rush to decommissioning. Not only could any such rush be bad for the economy of the north-east of Scotland, and the Northern Isles in particular, but it would be tragic if it meant that the infrastructure was removed and the opportunities to develop CCS at some future date were therefore then lost.
Callum McCaig
I made the point about a large part of the tax liability for decommissioning falling on the Treasury. If there is the rush to decommissioning that the right hon. Gentleman describes, the Chancellor will find it more difficult to meet his fiscal target, as he will have to hand out the cash. Does the right hon. Gentleman therefore agree that there needs to be proper support from Government to delay that?
Mr Carmichael
There absolutely has to be that support. We have seen the tax intake from the North sea fall off a cliff. I cannot recall the exact figures, but I seem to recall that about £20 billion is set aside to deal with this rush to decommissioning, if it occurs. That is a future liability at the moment, but if the liability were to appear on the left of the sheet, the Treasury would be dealing with a double-whammy; it would not only be losing the income, but it would suddenly be liable for expenditure at an earlier stage. The real significant event in that regard will take place not tonight but on Wednesday, when the Chancellor comes forward with his Budget. The Minister and the Secretary of State will doubtless have heard the measured and well-thought-out requests from Oil & Gas UK, and I trust that even at this stage they will be using all their influence in government to ensure that as many of these requests as possible are delivered when the Chancellor stands up.
The right hon. Member for Doncaster North (Edward Miliband) spoke to his new clause 11, and he has been absolutely right in how he has brought it forward. It is measured and it future-proofs the commitments. Given the substantial commitment the Secretary of State showed in relation to the Paris negotiations, it would be a suitable way for this House to give that commitment some legislative heft.
Caroline Lucas (Brighton, Pavilion) (Green)
I wish to speak mainly to new clause 12, which stands in my name and deals with the need for a strategy for a just transition from fossil fuels and towards 100% renewable energy. I also wish to highlight a few of the other proposals in this group that I support.
First, I wish to speak in favour of new clause 11, tabled by the former Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), and to thank him for the constructive work he has been doing on promoting zero emissions. The new clause would put one crucial part of the Paris climate agreement into UK law. The somewhat convoluted text of that historic agreement makes it clear that globally we must reach net zero emissions in the second half of this century. Many argued that this long-term goal should have been stronger, including by making explicit reference to phasing out fossil fuels. None the less, it seems immensely reasonable for the UK Government to set a date for zero emissions, on advice from the Committee on Climate Change. It seems like a win-win, both economically and environmentally, to have that date set, so that we can have a clear direction of travel and clarity for investors. I am reassured to hear that the right hon. Gentleman has had constructive conversations with the Government and I look forward to hearing their response.
I also support new clause 10, which deals with carbon accounting and the ETS, as it would mean the UK taking responsibility for making our own carbon emission cuts and is another immensely reasonable proposal. The need for such a change is underlined by the recent incredible claims that a new dash for gas would be compatible with our climate obligations. The UK’s renewable energy potential is vast. The costs of solar and wind power are falling, and the need to leave the vast majority of fossil fuel reserves in the ground gets more mainstream by the week. There is no longer a case for using the EU ETS as an excuse for not meeting our own carbon budgets by cutting our own emissions here in the UK. The global carbon budget is rapidly shrinking and there is simply no room for free riders. The UK should be leading the race to a zero-carbon economy, not weaselling out of making a fair contribution, which is why new clause 10 is so important.
My new clause 12 deals with a just transition, which is another aspect of the Paris climate agreement that should become a central tenet of the UK’s climate and energy policy. A just transition is about the essential steps a country needs to take to transform into a zero-carbon economy in a way that creates new jobs and supports and engages workers and communities currently reliant on high-carbon sectors.
Jonathan Edwards
Does the hon. Lady think the German strategy, Energiewende, offers a way forward for the UK? It is about that transition from fossil fuels to renewables, with specific targets.
Caroline Lucas
I thank the hon. Gentleman for his intervention and I agree with what he says, as that strategy does point to a helpful direction of travel.
As we would expect, trade unions are at the forefront of campaigning for a just transition, in the UK, the EU and globally. During the Paris climate talks, the unions made an incredibly powerful case for stronger ambition and faster action to cut emissions, and for making this transition away from fossil fuels. Central to that is the huge opportunity for job creation in new low-carbon industries. I spoke a moment ago about win-win situations, but I should have said win-win-win, as we have the jobs, the economy and the environment and energy advantages of having a clear direction of travel for this transition.
Alex Cunningham (Stockton North) (Lab)
I rise specifically in support of new clause 7 relating to carbon capture and storage, both as chair of the APPGs on CCS and energy intensive industries and as a Teesside MP who sees it as a major generator of jobs and potential saviour of many of the country’s manufacturing plants.
The absence of CCS policy in the UK is a major concern, it being a critical technology for reducing emissions from steel, cement and other industrial processes, as well as power stations. In the past 72 hours, another steel company at Stillington in my constituency has decided that it will close its doors in May with the loss of 40 jobs, so it is critical that we start making the right decisions now.
The Chancellor’s decision to axe the funding to develop the two power station projects on Humberside and at Peterhead was a major blow not just to those two projects but to the entire industry and also very specifically to Teesside, where the country’s first industrial CCS project is still being planned by the Teesside Collective.
When the Energy Minister attended a packed meeting of the CCS all-party group just over a month ago, she claimed that the economics did not add up, despite the fact that the final business cases were yet to be submitted. She said that an updated policy would be developed by the autumn, but then went on to suggest that we learn from other countries as they develop their CCS industries. Well, that is not good enough. Britain has tremendous capability in this area, and could be leading where the Minister says that we should follow. I am also worried that the Chancellor does not even understand what CCS is—a worry made all the worse when I asked him a question at Treasury questions a few weeks ago. I asked him what funding would be available for CCS projects once the Department of Energy and Climate Change comes up with its new policy in the autumn. He answered:
“We have set out our capital budget and our energy policy, which will see a doubling of the investment in renewable energy over the next five years.”—[Official Report, 19 January 2016; Vol. 604, c. 1269.]
There was no capital for CCS projects there. The Chancellor talked not of CCS but of renewable energy. I would like to think that he was just dodging my question, but I am not too sure that he understood it or the need for him to send a signal to industry that he was personally committed to making CCS a reality in our country.
New clause 7 provides the Government with a new opportunity to demonstrate their commitment to CCS and to develop a real strategy with a real intention to make the UK a leader in the field.
Tom Blenkinsop
CCS is vital, because it gives a means by which steel—and other existing energy intensive industries—manufactures the very foundation product that then goes into wind turbines and other mechanisms that we need for renewables. This is absolutely and fundamentally dependent on carbon-intensive technologies, such as virgin steel capacity and oxygen burning intensive processes. If we want a renewable strategy, whether 42% or higher, we need to have steelworks that burn in the traditional sense.
Alex Cunningham
My hon. Friend and near neighbour makes the point clear.
Being a leader is critical to our energy-intensive and other industries if we are to overcome the competition threat from across the world. It is no use hanging back when other nations look like stealing a march on us. I have mentioned the Teesside Collective project to develop an industrial CCS project on Teesside, home to some of the country’s most energy-intensive industries. I invite the Minister and the Chancellor to the next meeting of the all-party parliamentary group on 23 March to learn about those ambitious plans. I know the Chancellor will be busy until the night before, but I guarantee that the APPG will be much more focused on the needs of industrial Britain than will his Budget.
The Government have made clear their intention to build a new series of gas-fired power stations and nowhere is better placed than Teesside to build one. Not only does a site exist there, but so does the infrastructure to put the electricity out directly into the national grid. Developers Sembcorp believe it could house a conventional combined cycle gas turbine plant or an integrated gasification combined cycle plant, both of which could incorporate carbon capture. Although Sembcorp could develop its own power station, a potential partner is looking to install a 300 MW gas-fired power plant on the plot.
I know that some may have reservations about the use of fossil fuels, but what an opportunity for the Government to put some meaning into the much abused term “northern powerhouse”—a large-scale power plant, an opportunity to develop it with CCS, but with the immeasurable bonus of doing it with the Teesside Collective and developing an exciting project that could mean boom time for Teesside, with the kind of inward investment that only people in the south believe can be a reality.
Anna Turley (Redcar) (Lab/Co-op)
I appreciate my hon. Friend’s generosity. He is right. At a time when Teesside has seen so many job losses in the past few weeks, carbon capture and storage could provide a huge opportunity for people there. Does he agree that in order to enable a transition to a low-carbon economy, we need to ensure that such jobs go to local people, and that nationally agreed terms and conditions are not undercut by recruitment from overseas?
Alex Cunningham
Indeed. I know that local trade unions have been campaigning on this. There are examples on Teesside of companies undercutting what is, in effect, a living wage for the skilled people on Teesside.
I know that projects such as a power station are always fraught with planning complications, but I hope that when the time comes the doors of Ministers in both the Department of Energy and Climate Change and the Department for Communities and Local Government will be open to ensure a quick decision on the planning application.
It is difficult to see how some of our industries, many of them critical to our economy, can remain located in the UK without CCS if our long-term national carbon reduction commitments are to be met. The Government appear to have no strategy for CCS development, let alone a means of funding it.
New clause 7 could compel Government to fill this huge hole in their energy policy platform. It does everything that any self-respecting Government would want to do, but, more than that, it could send that much wanted signal to the sector that Ministers are serious about carbon capture and storage, understand it and are prepared to deliver, and our country could benefit from potentially hundreds of thousands of jobs if they got it right.
Paul Blomfield (Sheffield Central) (Lab)
I shall speak briefly in support of new clause 11, to which I am delighted to have added my name, and I pay tribute to my right hon. Friend the Member for Doncaster North (Edward Miliband) for the amendment, the consensual way in which he has built the discourse around it, and the work that he did as the country’s first Secretary of State for Energy and Climate Change.
Climate change is an issue on which all of us have been lobbied by many groups. Most strikingly for me, I was lobbied last year by a group of students from Notre Dame school, a secondary school on the edge of my constituency, who came to Westminster to make the point that their generation was conscious of the consequences they would face if our generation failed to act. It is an incredibly powerful point, but our responsibility goes beyond the immediate generation.
A report published only last month in the journal Nature Climate Change pointed out that much of the discourse has been focused on the consequences of failing to act by the end of this century. Looking beyond that, the problems are even more serious. According to one of authors,
“We are making choices that will affect our grandchildren’s grandchildren and beyond.”
He continued:
“We need to think carefully about the long timescales of what we are unleashing.”
That was Professor Daniel Schrag from Harvard University.
The need to act, and to act more ambitiously, has never been clearer. The agreement of the Paris summit is a step forward, but as last month’s report highlighted, even if global warming is capped at Governments’ target of 2 oC, which is already seen as difficult, 20% of the world’s population will eventually have to migrate away from coasts swamped by rising oceans. Cities including New York, London, Rio de Janeiro, Cairo, Calcutta, Jakarta and Shanghai would all be submerged. We have seen the struggle to grapple with the refugee crisis that has grown over the last couple of years, a crisis driven by war in one country and a number of other related conflicts. Imagine for a moment what we will face if 20% of the world’s population is forced to do what people have always done when their homes become uninhabitable—to move to somewhere better.
So we need greater ambition and a greater sense of urgency. That is provided by new clause 11. In the words of Professor Thomas Stocker from the University of Bern, one of the other authors of the report:
“The actions of the next 30 years are absolutely crucial for putting us on a path that avoids”
the worst outcomes
“and ensuring, at least in the next 200 years, the impacts are limited and give us time to adapt.”
The reservations that the hon. Member for Aberdeen South (Callum McCaig) expressed in his comments on the new clause are taken into account in the careful and thoughtful way that the clause has been drafted and the role that it provides for the Committee on Climate Change. What we need is the ambition embodied in the clause. As my right hon. Friend said, we did it with the Climate Change Act 2008, passed with all-party support, which sent a signal to the world. We can do that again; we cannot afford not to. The future is bleak if we do not cut our emissions further than Paris suggested.
The role that the new clause proposes for the Committee on Climate Change is important for the robustness of that ambition and its workability. I am pleased to hear the constructive engagement that there has been between my right hon. Friend and the Secretary of State. I hope that in her comments later we will hear that together we can move forward on the issue.
Andrea Leadsom
Government amendments 48 and 49 add the relevant provisions of the Oil Taxation Act 1975 and the Corporation Tax Act 2010 to the legislation listed at clause 2(6), which contains the Secretary of State’s relevant oil and gas functions. This ensures that the functions provided for by these Acts fall within the definition of “relevant functions” and can be transferred from the Secretary of State to the Oil and Gas Authority by regulations made under clause 2(2).
Schedule 1 to the Oil Taxation Act 1975 and chapter 9 of part 8 of the Corporation Tax Act 2010 contain the important oil and gas functions of determining oil fields and cluster areas, respectively. These functions form the basis of oil taxation. Petroleum revenue tax is applied by determined field, and allowances are given by cluster area to reduce the amount of profits to which the supplementary charge is applied. Both of these are functions currently undertaken by the Oil and Gas Authority in its capacity as an Executive agency, and are fundamental to our tax regime and to incentivising investment. These amendments are technical in nature and simply seek to put it beyond doubt that these key functions can be transferred to the OGA once it becomes a Government company, as we have always intended.
Let me briefly explain Government amendment 51, to the long title. The amendment is consequential on the removal from the Bill in Committee of the clause on carbon accounting under the Climate Change Act 2008, which was introduced in the other place. It ensures that the Bill is compliant with the parliamentary convention that Bills should move between the Houses in a proper state.
New clause 3 was tabled by the hon. Member for Aberdeen South (Callum McCaig), and new clause 7 was tabled by the hon. Member for Wigan (Lisa Nandy) and others. I should add that the hon. Member for Stockton North (Alex Cunningham) has been a long-standing advocate of CCS, which he and I have discussed on a number of occasions, so I hope he will acknowledge that I have studied the subject.
Alex Cunningham
I am pleased to acknowledge the work the Minister has done, but the important thing is that we convince the Chancellor to fund CCS at some time in the future. How optimistic is she that we will be able to do that?
Andrea Leadsom
The new clauses seek to place a duty on the Secretary of State to produce and implement a CCS strategy by June 2017 and to report to Parliament on progress every three years. They also set out that the strategy must help to deliver the emissions reductions needed to meet the fifth and subsequent carbon budgets.
As I emphasised in Committee, the Government’s view remains that CCS has a potentially important role to play in the long-term decarbonisation of the UK’s industrial and power sectors, the long-term competitiveness of energy-intensive industries and the longevity of North sea industries. However, CCS costs are currently high, which is why we remain committed to working with industry to bring forward innovative ideas for reducing the costs of this potentially important technology.
Philip Boswell
I thank the Minister for her commitment to carbon capture and storage. However, in terms of our commitment on climate change, we have seen the increased construction and usage of coal-fired power stations around the world, and it has also been well noted in the House that the removal of the CCS competition was a missed opportunity. In Scotland, we still have the Grangemouth CCS project, involving a facility fitted with CCS technology that would cut 90% of emissions. Does the Minister agree that the CCS advisory group should look at that, as an opportunity to get us back on track?
Andrea Leadsom
What I can say is that the Government have invested more than £220 million in CCS since 2011. This financial year alone, we have invested £6 million, including £1.7 million in October 2015, to support three innovative CCS technologies—from Carbon Clean Solutions, C-Capture Ltd and FET Engineering—and £2.5 million to investigate potential new CO2 stores. We have also invested £60 million of our international climate fund to support CCS capacity building and action internationally. The hon. Member for Stockton North will be aware that DECC provided £1 million in 2014 for a feasibility study into industrial CCS on Teesside, as part of the city deal.
As I said, CCS prices are currently high, so we are committed to working with industry on bringing forward innovative ideas to reduce costs. A key part of that is our continuing investment in CCS through innovation support, international partnerships and industrial research projects.
I recognise that industry and others are keen for the Government to set out our approach to CCS as soon as possible. As I emphasised in Committee, we will do that by the end of 2016. In doing so, we will continue to engage closely with industry, the all-party group on carbon capture and storage, the CCS strategy group and Lord Oxburgh’s CCS advisory group, which is planning to deliver its findings and recommendations to the Government by the summer.
I hope I have reassured hon. Members that the new clauses are unnecessary. I therefore hope they will be content not to press them.
Alex Cunningham
Before the Minister moves on, will she hazard a comment on the proposed project on Teesside, which would see a 300 MW power station built on the Wilton site and wrapped up with CCS?
Andrea Leadsom
As I have said to the hon. Gentleman, I continue to engage with him and others, and Lord Oxburgh’s CCS advisory group will publish its findings. We will be looking at individual projects, but as the hon. Gentleman and other hon. Members will know, CCS costs are currently extremely high, so I absolutely cannot make any commitments on particular projects right now.
New clauses 6 and 10, tabled by the right hon. Member for Orkney and Shetland (Mr Carmichael), the hon. Member for Wigan and others, are intended to restrict the carbon accounting rules that are allowed under the Climate Change Act from 2028—from the fifth carbon budget period. Under the current rules, we count the UK’s actual emissions for some sectors; for other sectors, we reflect how the EU emissions trading system works.
The new clauses would prevent us from continuing with that approach beyond the fourth carbon budget. Instead, the intention is presumably that the UK’s actual emissions for all sectors would be counted, but without the ability to offset any of those through a system of carbon accounting. As I have said previously, we would still participate in the EU emissions trading system even with that change, and the effect of the new clauses would simply be that we would not reflect how the EU emissions trading system works in our carbon budgets.
Of course, there are arguments for and against different accounting methods, and the issue requires careful consideration of several different factors, including the impact on consumers, businesses and industry, and on our ability to meet our domestic, EU and international commitments in the cheapest way. My hon. Friend the Member for Warrington South (David Mowat) clearly set out some of the challenges for energy-intensive industries in that respect.
It is absolutely right that we keep under review our carbon accounting practices, but now is not the right time to make the proposed changes, because we are focused on setting the fifth carbon budget. We have to do that by 30 June, as required by the Climate Change Act, and that is less than four months away. Accepting new clause 6 or 10 at this point in the process would threaten serious delay in setting the fifth carbon budget. That cannot be right, and it cannot be what hon. Members intended. I just cannot accept putting us at risk of not complying with our legal commitment under the Climate Change Act. I therefore hope hon. Members will be prepared not to press the new clauses.
New clause 11, tabled by the right hon. Member for Doncaster North (Edward Miliband), would set a new climate change target for the UK. Specifically, it would require the Government to set a year by which net emissions will be zero or less, and to ensure that that target was met for that year and subsequent ones. The year would have to be set within 12 months of the Bill coming into force and following advice from the Committee on Climate Change.
I sincerely thank the right hon. Gentleman for raising this important issue and for his statements to the House on the matter over a long period. I know the House was delighted with the Paris agreement, which included a goal for global net zero emissions by the end of this century. My right hon. Friend the Secretary of State played a crucial role in securing support for that goal in Paris, and I thank the right hon. Gentleman for his support in securing such an ambitious deal. I am grateful for his past and continued commitment to the important subject of climate change.
The Government believe we will need to take the step of enshrining the Paris goal of net zero emissions in UK law—the question is not whether, but how we do it, and there is an important set of questions to be answered before we do. The Committee on Climate Change is looking at the implications of the commitments made in Paris and has said it will report in the autumn. We will want to consider carefully its recommendations, and I am happy to give the right hon. Gentleman the undertaking that we will also discuss with him and others across the House how best to approach this matter, once we have undertaken that consideration.
This is an example, once again, of the House demonstrating on a cross-party basis a determination to tackle climate change, as we showed in the Climate Change Act. The Government are determined to build on the momentum of Paris, and our positive response to the right hon. Gentleman today is a clear example of that. On that basis, I hope he will not press his new clause to a Division.
Next I will respond to new clause 12, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas). This would require the Secretary of State to develop and publish a national strategy for the energy sector towards 100% renewable energy by 2050, under the framework of a so-called just transition. I want to start by recognising the areas where I hope the hon. Lady and I can agree. She is a passionate advocate for action to tackle climate change, to which this Government are firmly committed. Our domestic Climate Change Act is world leading, and my right hon. Friend the Secretary of State played a critical role last year in securing a strong global deal in Paris. We can also agree on the important role for renewables in helping to reduce emissions. In particular, I welcome the progress we have seen so far in driving down the cost of renewables technologies such as offshore wind and solar.
Caroline Lucas
Will the hon. Lady elaborate a little more on her point about technology neutrality? All I am talking about is renewables, energy efficiency, storage and so forth. If she knows of some wonderful new technology that can get our emissions down more quickly and more cheaply, I would love to hear about it.
Andrea Leadsom
As the hon. Lady well knows, one transitional approach to decarbonisation is to move away from coal and towards gas as a bridge to a low-carbon future. She will also be very aware that new nuclear offers a low-carbon technology for the future, and this Government are committed to supporting that.
I appreciate the intent behind much of the hon. Lady’s new clause, but I hope that she can see why I cannot accept its specifics and that she will be content to withdraw it.
I turn now to new clause 8, tabled by the hon. Member for Wigan and others. This would require the Secretary of State to set a decarbonisation target range for the electricity generating sector. We debated very similar amendments in the previous Parliament, and during the passage of this Bill in the other place and in earlier Commons stages. The Government have made our position on this matter very clear. We are committed to ensuring that the UK continues to play its part to tackle climate change, in line with the Climate Change Act and our international and EU obligations. However, we want to do this as cost-effectively as possible in order to keep costs down for families and businesses while delivering on legally binding commitments. We cannot do that by locking ourselves into additional expensive and inflexible targets relating to the power sector. There are too many things we cannot predict about how the energy system will develop over the next 15 years and beyond. The costs of getting this wrong now would be picked up by families and businesses for decades to come.
I find it strange that Opposition parties often argue that we are not doing enough to tackle fuel poverty, and yet they are urging us to sign consumers up to a distorting and expensive power sector target. Investors want to know that we have clear, credible and affordable plans. The Government are now setting out the next stages in their long-term commitment to move to a low-carbon economy, providing a basis for electricity investment into the next decade. The huge investment we have seen so far is evidence that our approach is working. Between 2010 and 2014, our policies have secured an estimated £42 billion of investment in low-carbon electricity, including £40 billion in renewables, and we have more in the pipeline for the future. I therefore cannot accept this new clause, and I ask hon. Members to withdraw it.
I would now like to deal with new clause 9, tabled by the hon. Member for Wigan and others. This seeks to introduce additional capacity market eligibility criteria requiring any new-build capacity accessing 15-year capacity agreements to be made subject to the emissions performance standard, or EPS. As I have explained previously, the new clause does not achieve its intended aim, so I am surprised to see it reappear. The EPS sets an annual limit specifically on CO2 emissions from new fossil fuel plant with an output above 50 MW. Any new fossil fuel generators above 50 MW seeking to participate in the capacity market will already be subject to this limit, so nothing would be gained by introducing this as a further eligibility requirement in the capacity market. Existing generators, which form the majority of capacity market participants, cannot access 15-year agreements, so the new clause would also have no impact on those generators.
As I have set out before, the emissions impact from smaller generators that sit below the 50 MW threshold is often assumed to be larger than it is in reality. Small “peaking” generators have a relatively small impact on overall CO2 emissions due to the short hours that they run. These generators typically run for less than 100 hours a year, in the case of diesel engines, while larger fossil fuel plants will run for 2,000 hours or more. The new clause is therefore not effective, for the simple reason that the annual EPS CO2 emissions limit would be very unlikely to have any impact on small generators participating in the capacity market.
Dr Whitehead
Is not the proposal that the Minister herself is putting forward for the future inclusion of small diesel sets in air quality standards subject to exactly the same problem, in that smaller diesel set generators are brought into a scheme that was originally proposed for larger generators, thereby including them in the system? That is exactly what the new clause proposes through smaller diesel sets coming into an emissions performance standard that otherwise would apply to larger plants.
Andrea Leadsom
As I have explained to the hon. Gentleman, his new clause would not actually have that effect.
However, I am not complacent about concerns associated with local pollutants from small generators. I am very aware of the concern about diesel, in particular. Later this year, the Department will consult on options that will include legislation that would set binding emissions limit values on relevant air pollutants from smaller engines, with a view to having legislation in force no later than January 2019, and possibly sooner. These limits would apply to generators or groups of generators with a rated thermal input equal to or greater than 1 MW and less than 50 MW, irrespective of their number of hours of operation during any given year. This shows that the Government are taking appropriate action to avoid any disproportionate impact on air quality from smaller engines where those could contribute to harmful levels of air pollutants and the exceeding of existing air quality limit values. These limits, along with other proposals we have recently announced, send a clear message about the viability of developing and running diesel generators in future. I hope that hon. Members have found my explanation reassuring and will be content to withdraw their new clause.
I turn now to new clause 5, tabled by the right hon. Member for Orkney and Shetland (Mr Carmichael). This seeks to reinsert the clause added by the Opposition in the other place, once again rewriting the Oil and Gas Authority’s principal objective of maximising economic recovery of UK petroleum. This topic has been debated at length throughout the passage of the Bill. The Government successfully removed the previous iteration of this clause in Committee, with the support of Scottish National party Members. Importantly, I note that it was agreed across the room, including by Opposition Front Benchers, that diluting the focus of the OGA in such a way was undesirable. In light of this, I am surprised and rather disappointed that the right hon. Gentleman has tabled this new clause, not least because of the serious implications it has for jobs and growth in Scotland. As I have said many times, any amendment that detracts from the OGA’s focus on maximising economic recovery is damaging to the North sea. Such a move is unacceptable, particularly at a time of unprecedented challenge for the oil and gas industry.
Mr Alistair Carmichael
I am as disappointed with the Minister as she claims to be with me. To suggest that the OGA, which is an exceptionally effective public body, is incapable of doing more than one thing is rather insulting to the body that we worked so hard to set up.
Andrea Leadsom
The right hon. Gentleman misses the point. The OGA is going to have an enormous brief. The point about its principal objective being to maximise the economic recovery is that that would focus its efforts on the long-term sustainability of the North sea and not what the other House tried to put in place, which is related to short-termism and trying to maximise profitability and so on. That would be counter to the interests of jobs and growth in his constituency and others. Removing the OGA’s focus on that principal objective seriously risks weakening its ability to provide support to an industry that is urgently in need of it, and the potential knock-on effect would be significant. Doing so would risk the premature decommissioning of key North sea infrastructure and would seriously jeopardise vital skills and experience, including those that could help to promote the longevity of the industry through carbon storage projects. From that perspective, the amendment is self-defeating. Furthermore, the “Maximising the Economic Recovery” UK strategy has now been published and is currently before Parliament. The amendment would undo the significant amount of work that has been undertaken with industry and would require the OGA to revise its MER UK strategy to take into account the expansion in the principal objective.
As the hon. Member for Aberdeen South has mentioned on several occasions, it is mission critical that the OGA maintains a “laser-like focus” on maximising economic recovery above all else. Without such a focus, we risk conflicting the OGA—setting it up to fail in its crucial mission to protect our domestic energy mix and to support hundreds of thousands of jobs. That is not what is best for the UK continental shelf now or in future.
Callum McCaig
I thank the Minister for drawing attention to that. It is absolutely fundamental that the OGA has that laser-like focus. It is also fundamental for the industry that the Chancellor has that laser-like focus. I reiterate to the Minister the need for her to use her good offices to make sure the industry gets the support it needs on Wednesday.
Andrea Leadsom
I am grateful to the hon. Gentleman for that. He will be aware that the Chancellor and the Prime Minister have looked carefully at the matter, so I hope that he will be pleased. I assure him that his interests and the interests of the UK continental shelf are being carefully considered. I hope that the right hon. Member for Orkney and Shetland will be content not to press the new clause to a vote.
Finally—hon. Members will be pleased to hear that—I turn to amendment 47, which was tabled by the hon. Member for Wigan and others. The amendment would oblige the OGA to consider the most advantageous use of North sea infrastructure for the overall benefit of oil and gas extraction prior to the decommissioning of such sites. I am delighted to note the support across the House for the measures to establish the OGA and give it the powers needed to maximise economic recovery. The impact of the fall in oil prices on industry makes that even more critical.
Although we are taking urgent steps to stimulate investment in exploration, it is equally important to the overall viability of the North sea that we make the best use of infrastructure in order to mitigate the risks of premature decommissioning. That requires a holistic approach in which operators, licence holders and infra- structure owners collaborate to ensure the maximum economic recovery of petroleum from the UK continental shelf. That is precisely provided by the OGA’s principal objective set out in section 9A of the Petroleum Act 1998.
The strategy to maximise economic recovery further addresses that issue. It includes duties to plan, commission and maintain infrastructure in a way that meets the optimum configuration for maximising the value of economically recoverable petroleum, taking into account the operational needs of others. The strategy and the measures in the Bill ensure that before commencing the decommissioning of any infrastructure in relevant UK waters, the owners of the infrastructure and the OGA must ensure that all viable options for its continued use have been suitably explored. The OGA is already working to support a stable and sustainable decommissioning framework focused on improving late-life management. The OGA will publish its decommissioning sector strategy early in the summer. I hope that hon. Members have found my explanation reassuring and will be content not to press the amendment to a vote.
Callum McCaig
indicated dissent.
Question put, That the clause be read a Second time.
Mr Speaker
Our consideration having been completed, I will now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will table the appropriate consent motion, copies of which will be made available in the Vote Office and distributed by the Doorkeepers.
Mr Speaker
I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have confirmed the view expressed in my provisional certificate issued on 9 March. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.
Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and on the parliamentary website, and have been made available to Members in the Chamber. Does the Minister intend to move the consent motion?
Mr Speaker
Under Standing Order 83M(4), the House must forthwith resolve itself into the Legislative Grand Committee (England and Wales).
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Mrs Eleanor Laing in the Chair]
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
There will now be a debate on the consent motion for England and Wales. I remind hon. Members that all Members may speak in the debate but, if there are Divisions, only Members representing constituencies in England and Wales may vote on the consent motion. I call the Minister to move the consent motion for England and Wales.
Andrea Leadsom
I beg to move,
That the Committee consents to the following certified clause of the Energy Bill [Lords].
Clause certified under Standing Order No. 83L(2) as relating exclusively to England and Wales and being within devolved legislative competence.
Clause 78 of the Bill as amended in Committee (Bill 128).
The consent motion stands in the name of my right hon. Friend the Secretary of State for Energy and Climate Change, as set out in the written ministerial statement tabled on 10 March. Nothing has changed since the Bill was introduced. I urge hon. and right hon. Members to support the consent motion.
Question put and agreed to.
The occupant of the Chair left the Chair to report the decisions of the Committee (Standing Order No.83M(6)).
The Deputy Speaker resumed the Chair, decisions reported.
Third Reading
Queen’s and Prince of Wales’s consent signified.
The Secretary of State for Energy and Climate Change (Amber Rudd)
I beg to move, That the Bill be now read the Third time.
This Government are focused on delivering measures that support our long-term plan for secure, clean and affordable energy supplies. This Bill puts in place key manifesto commitments to achieve those objectives—first, by meeting our commitment to support the development of oil and gas in the North sea. The Bill provides the Oil and Gas Authority with the direction and powers it needs to be an effective regulator and to maximise recovery of resources in the North sea to the benefit of Britain’s energy security. Secondly, the Bill meets our commitments to ending new public subsidies for onshore wind and giving local people the final say on wind farm applications. In doing so, the Bill will protect bill payers by helping to control the costs to the public of support for renewable energy.
Let me take those in turn, addressing the action we have taken since the Bill’s Second Reading in January, before touching on other measures in the Bill. As I set out on Second Reading, amendments made in the other place sought to expand considerably the objectives of the Oil and Gas Authority. Our view is that this would dilute the focus of the OGA at a crucial time for the oil and gas industry. This House has reinstated the OGA’s original principal objective for maximising economic recovery. Both the industry and the unions are agreed on that. The OGA must have clarity on its primary objective. The Bill as it now stands provides that.
I set out our intention on Second Reading to re-introduce clauses on onshore wind that were removed in the other place. This was a clear Government commitment, and I am pleased to see those provisions put back. Let me be explicit: this Bill enacts a manifesto commitment. Clause 79 helps to implement that commitment to end new public subsidies for onshore wind. Onshore wind has deployed successfully to date, but without control there is a risk of over-deployment beyond the range we have set for 2020—the range that we consider affordable. Over-deployment could add extra costs to consumer bills or reduce the amount of support available to less mature technologies such as offshore wind that need help to bring their costs down, just as public subsidies have brought down the costs of onshore wind. To protect investor confidence, we have inserted clause 80, which sets out in legislation the grace period for those projects meeting certain conditions as of 18 June last year. That allows such projects to continue to seek accreditation under the renewables obligation after the early closure date.
I have also introduced a clause relevant to Northern Ireland. It remains my position that consumers in Great Britain should not bear the cost of Northern Ireland providing additional support to onshore wind. We have been clear about that throughout the process. The intention of the backstop power is to ensure that, should Northern Ireland choose to provide additional support for onshore wind, consumers in Northern Ireland, not Great Britain, will bear the cost.
The Government are committed to the Climate Change Act 2008 and our target to reduce emissions by 80% by 2050. We will meet our obligations and responsibilities by setting the fifth carbon budget by the end of June this year, covering the period 2028 to 2032. As the Committee on Climate Change has said, while we are on course to meet the second and third carbon budgets, the fourth carbon budget will be tough to achieve. We will set out our proposals for meeting our targets in our new emissions reduction plan. Our working assumption is that this will be published at the end of the year. Work on the fifth carbon budget is well under way across Government and has been progressing for over a year.
I understand the intentions of those who have sought to amend the Bill to change the way we count carbon for the purposes of the fifth carbon budget, and of course it is right that we keep our accounting practices under review, but I am afraid that accepting such an amendment to the Bill this far into the fifth carbon budget process would have risked serious delay, at a time when the UK should be showing clear, decisive leadership in the aftermath of the Paris climate change conference.
Before I conclude, I wish to express my thanks to those who have supported the proper scrutiny of the Bill. First, I give thanks to my team on the Front Bench: the Minister of State, who has expertly steered the Bill through the House, and Lord Bourne for his management of the Bill in the other place. I would like to thank my hon. Friends the Members for Skipton and Ripon (Julian Smith), for Blackpool North and Cleveleys (Paul Maynard) and for South East Cornwall (Mrs Murray) for their excellent contributions and support. We are very grateful.
Let me also express my gratitude to Opposition Members for their measured approach to the scrutiny of the Bill. It is fair to say that there have been moments of disagreement, but we have also agreed on many issues, including the need swiftly to complete the work started in the previous Parliament to implement fully the recommendations of the Wood review. I therefore thank the hon. Members for Wigan (Lisa Nandy), for Southampton, Test (Dr Whitehead), for Norwich South (Clive Lewis), for Aberdeen South (Callum McCaig), and for Coatbridge, Chryston and Bellshill (Philip Boswell) for their considered scrutiny. I am also extremely grateful to my hon. Friends for their participation in our proceedings and in discussions both in and outside the Chamber, which has been very helpful.
During the passage of the Bill, my colleagues and I have listened carefully, and, where appropriate, have made amendments or added details to provisions. However, when it comes to the fundamental purpose of the Bill, we have stood firm on our commitments, and we intend to continue to do so.
Lisa Nandy (Wigan) (Lab)
With the important exception of its provisions relating to the North sea industries, the Bill has absolutely nothing to say about the major energy challenges that we face. It constitutes a missed opportunity to mend our broken energy market, and to make good the promise that the Prime Minister delivered four years ago when he told the House that he would legislate to put every household in Britain on to the cheapest energy tariff. It is extraordinary that, during the Bill’s passage, we have learnt that that broken promise has cost Britain’s households an extra £1.7 billion every year, and that, once again, an Energy Bill led by this Government has let the energy companies off the hook.
Despite our best efforts, the Bill is also silent on the growing risk of power shortages. That is astonishing, given that official figures from National Grid show that next winter Britain could be forced to rely on back-up measures and imports from abroad just to keep the lights on. We sought to address that in Committee, especially in view of the doubt that has been cast over Hinkley Point C, the failure of which would blow a major hole in the Government’s energy policy. Where is the plan B? It is not in this Bill.
Against a background of failure—the failure to get new power stations built—it is a great shame that Ministers rejected our attempts to amend the Bill in order to correct that failure and provide incentives for the building of a number of new gas plants by changing the design of the failing and expensive capacity market scheme. Our proposals would also have had the benefit of ending the absurd practice of increasing household energy bills to provide generous handouts for dirty diesel generators. Now, however, there is nothing in the Bill that will help to address the power crunch and secure the investment in the new power stations that we so urgently need.
John Redwood
Will the hon. Lady remind us why, when Labour was in office for all those years, it made no decisions to put in new capacity?
Lisa Nandy
The right hon. Gentleman is wrong. As a matter of fact, he is wrong about a number of other things, but I will stick to the point that he has just raised. It was a Labour Government who initiated the new nuclear process for Hinkley Point C, but, six years after the right hon. Member for Witney (Mr Cameron) became Prime Minister we have seen no further progress. In fact, the only new gas station that has appeared under the present Government was initiated and commissioned by the last Labour Government.
Remarkably, the Bill will actually make our energy security position worse. It seeks to shut down, a year early, a major energy investment scheme that has been helping to ensure that wind farms are built. Wind farms already provide a substantial amount of electricity—enough power for more than 8 million homes every year—but, because of their ideological crusade against green energy, the Government do not want to increase their number even if that means that they are sending our power supply into the red. [Interruption.] Ministers can protest, but the reality is in front of us. It is there for us all to see—not just Labour Members, but Ministers’ constituents, who will pay the price for it. The Government will pursue their proposal even if it means retrospectively blocking projects whose development is well advanced and even if it means ruling out one of the cheapest energy options that are available to us, thus breaking their manifesto promise to cut emissions as cheaply as possible.
The aim of every one of our amendments has been to attract new investment in new energy projects, to create jobs and to improve our energy security, but the Government have rejected all of them. Energy UK, the trade body that represents businesses across the sector, recently called for more clarity from the Government about what was expected from companies on reducing carbon pollution. It stated:
“It is essential the industry gets a clear signal of the focus, direction and speed of travel to 2030 and beyond.”
It is hardly surprising that Energy UK wants more clarity, because while Ministers talk about their action on climate change, they are simultaneously dismantling the clean energy schemes that could help to address the problem. We proposed to amend the Bill, in response to calls from business leaders, by requiring the Secretary of State to offer clarity on the direction and speed of emissions reduction to 2030, but the Government rejected our proposals. Together with other parties from across the House, we tried to close a loophole that will enable Ministers to square this circle through carbon accounting tricks, but that move was also rejected. This all means more uncertainty for investors, rather than less.
I welcome the fact that the Government have accepted the principle, put forward by my right hon. Friend the Member for Doncaster North (Edward Miliband), that we must ultimately build a carbon-neutral economy. I welcome the spirit in which they accepted that principle and the basis on which they accepted it, which was that we need to develop a strategy that will give a clear signal to the top businesses that are supporting my right hon. Friend’s campaign as well as to the leading environmental campaigners who have shown that energy policy need not be contentious.
The truth is that few people in this country beyond those on the Conservative Back Benches doubt the need to act on emissions. Only today, NASA reported shocking levels of global warming, and one top scientist said this morning that we are in a “climate emergency now”. Despite the Energy Secretary’s words today, however, people will be left scratching their heads over what exactly the Government’s plan is to make good on their new commitment and on the promises that the Prime Minister made at the historic Paris summit in December.
Let us take carbon capture and storage as an example. The Government’s own advisers say that without this cutting-edge technology the cost of achieving emissions reduction in Britain could double. Some experts say that, without it, making good on the Paris agreement might even be impossible. As my hon. Friend the Member for Stockton North (Alex Cunningham) pointed out, however, the Chancellor has shamefully pulled the rug from under from businesses that were on the cusp of pioneering CCS projects in Yorkshire and Scotland. Investment and jobs have gone, and the possibility of a new maritime industry in our North sea has been put on hold. We proposed that a comprehensive new CCS strategy should be adopted within a year to undo the damage caused by that decision but, despite strong cross-party support, our reasonable proposal was rejected.
When the Bill arrived here from the other House, it was in a much better state than we now find it in. That makes it difficult for us to support it this evening, but the low oil price means that our North sea industries need and deserve our support. We have all benefited from the revenues produced by North sea oil in better times, and we owe it to those industries to support them now that times are hard. The Bill contains important measures that act on the recommendations of the Wood review which can support workers in this crucial sector of our economy.
Yesterday, with my support, colleagues in Scottish Labour rightly called for the Government to go further and to invest directly in strategically important offshore assets in the North sea. I hope that the Energy Secretary will support that call. The fact is that substantial reserves remain unexploited and it is essential that we work on a cross-party basis to support investment in those untapped opportunities. For that reason alone, we will not oppose the Bill tonight.
However, I say to the Energy Secretary that the poverty of ambition encapsulated in the Bill is increasingly clear, and that it is increasingly untenable to dismantle plan A without putting a plan B in its place, to duck the challenges of the coming century and to set Britain’s face against the opportunities that that century presents. I should like to thank my hon. Friends the Members for Southampton, Test (Dr Whitehead), for Norwich South (Clive Lewis) and for Brent North (Barry Gardiner). Together, we will look to Ministers to do much better than this in future.
John Redwood
I welcome the Bill because it attempts to deal with some of the damage that has accumulated in recent years as a result of the policies of the Labour Government, who neglected the need for more energy and security of supply, and some of the European Union’s interventions.
I welcome the cross-party attempts to breathe some life into the North sea industry, which has been crucial over many years. As many have pointed out, it is going through a troubled time and anything that can be done by the Oil and Gas Authority or directly by the Government is to be welcomed. For example, now is a good time to remove the petroleum revenue tax, which is a rather silly, unpleasant tax introduced by the Labour party for internal political reasons near the beginning of activities in the North sea. It yields no revenue at the moment, so it would be a good time to get rid of it to show that we want normal profit and revenue taxes, not super-taxes, on North sea activities when the good times return. I hope that the Chancellor will bear in mind the needs of the industry in his forthcoming Budget, because things could be done on tax to promote more investment against the background of a weak oil price, which is no great incentive for making new things happen.
I hope that the Bill will contribute towards taking security of supply seriously. The Government regularly tell us that they want our country to be secure—an aim that I hope is shared across the Chamber. An important way for a country to become more secure is through controlling its own energy resources. The United Kingdom is a relatively privileged country geographically, because it has substantial reserves of oil, gas and coal. We have recently discovered the likelihood of new gas reserves onshore, which should be available to exploit sensibly. We also have plenty of water around that allows us to have hydro-type renewables, which are genuinely renewable and continuously available, unlike the unreliable wind, about which we had a good debate earlier. As the Government go about implementing the Bill, I trust that they will have security of supply at the forefront of their mind.
George Kerevan (East Lothian) (SNP)
Where does the security of supply lie in the Prime Minister flying to Paris to ask the French President to fund a nuclear power station that will supply 7% of our electricity, when France clearly will not do so?
John Redwood
That must be worked out between the contracting parties. I have not been urging them to do that, but I wish them well in whatever negotiations are under way. I accept that if they can find a way of producing relatively sensibly priced power on a continuous basis from a nuclear power station, that has all sorts of advantages for the security of supply. I assume that they will ensure that all the technology and the ability to control, repair and maintain the station will rest in the United Kingdom, because we can have true security only if we control the technology and have the industrial resources to be able to build and mend the facility being created. We must also bear that in mind for weapons procurement. If we want a secure country, we need an industry that can support it and is capable in adversity of seeing us through. We cannot rely on imports for everything, and we are already relying too much on imports in the crucial area of energy, so I hope the Bill will help us to stop thinking that we can automatically rely on French electricity and Russian gas indirectly through the European system.
George Kerevan
On that point, after France, the Chancellor of the Exchequer seems bent on handing over the entire British nuclear industry to China.
John Redwood
I trust not. I have not seen all the documents, but I am sure that we will see more of the detail in due course as and when more decisions are taken. If my right hon. Friend the Chancellor is negotiating such a deal, I urge him to ensure that we have control over and an understanding of the technology. I see from the nods from my Front-Bench team that that is exactly what they have in mind. A country does not have secure power if it is dependent on those abroad to maintain a power station and does not understand how to mend it, improve it or make it function at a crucial moment. Of course we need to probe to make sure that the Government are doing the right thing, but we get that security only if we control the technology.
Let me return to the point about security vis-à-vis imports and our own capability. We are becoming too dependent on imported power, and we have to remember that if our imports are to come from the European continent, that area is short of energy in general, and it has a policy to make energy scarce and very expensive. The west of the continent does not get on well with Mr Putin, yet indirectly it relies on his gas, and that is not a strong strategic position to be in. I want our country not to be in any way beholden indirectly to Putin’s gas or to the general network on the continent, which is clearly weakened by the necessity to have Russian supplies in the eastern part of the system. The UK, as an island nation, with access to such riches both onshore and offshore, and with the ability to generate more genuine renewables that are continuously available, should be able to have a secure supply and sufficient capacity in reserve when need arises.
We wish to be a greater industrial power than we are. We are the fifth largest economy in the world but we are very dependent on a very big service sector and our industrial sector has, under Governments of all persuasions in the past 30 years, shrunk as a proportion of it. We still have some great companies and some great technology but we need more of them and we need to broaden the industrial base. In order to have that capability in Britain, so that we can make our own power stations, generators and engines, we need to make sure that we have sufficient and cheap energy to fuel those factories, forges, facilities and blast furnaces.
We meet tonight against the backdrop of our steel industry gravely at risk. One of the main contributory factors to the risk to our steel industry is scarce and dear energy; there are also chronic problems with steel prices and Chinese competition now, but this began with an energy problem. We cannot hope to be one of the big world forces in energy-intensive industries if we do not have more plentiful energy at cheaper prices.
I wish the Bill and the Secretary of State well. The Government must have as their fundamental aim security of supply, because without secure energy a country is very limited in its foreign policy options and has to tailor its diplomacy accordingly. I see us becoming too dependent. We wish to correct our balance of payments, and getting into energy surplus would not only be a very good contribution to that aim, but would strengthen our diplomatic and political security. As we wish to reindustrialise, we need more and cheaper energy. We are not going to get that on a diet of wind farms and speculative renewable technologies that are not yet available, and are very expensive and difficult to scale up. We can get that affordable energy if we extract the oil, gas and coal, and process it in an environmentally friendly way to the extent that can be achieved, if we have more gas turbine power stations and more reliable baseload power stations. We are going to leave ourselves vulnerable and insecure if we depend on a combination of European imports and too many wind farms. I therefore say: may the OGA do well, may it find ways of bringing on stream the new reserves we are just discovering and may it find ways of extending the lives of the existing fields and of the pools of talent and expertise we have, particularly in Scotland, where we need them still.
Callum McCaig
I have learned a lot from this process, and I thank my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Philip Boswell) for helping me to work things out as we have gone along. This has been an interesting process, but I am happy that I will not have to go through it for the first time again.
Throughout the process, as is natural in a political environment, we have focused on that which divides us, and there have been significant and, in some cases, profound divisions on aspects of this Bill. I do not wish to go back over that at this stage, because the discussions we have had repeatedly about onshore wind are a matter of record. I am aware that the Bill will go back to the House of Lords, so I make a final plea to the Secretary of State to look once again at grace periods. We accept that the Government have a mandate to do this, but we disagree with how it is being done and we ask that it be done in the best way possible. If there are concessions to be made in the Lords, please make them and take the possible benefits into account.
We have had some good suggestions and individual contributions from Members from all parts of the House. The Government have said that they are prepared to listen to a number of those suggestions. In fact, generally speaking, there has been a spirit of open-mindedness. The view was expressed that now is not the time for some measures to be put into practice, but the time will come soon, so I hope that we will continue to see that open-mindedness to suggestions, particularly to those from my party about making the most of the opportunities arising from decommissioning. We need to create a stable and sensible platform to ensure that the United Kingdom can develop a carbon capture and storage industry.
I wish to focus on one part of the debate that has received little attention, but which, to my mind, is the most important, and that is the creation of the Oil and Gas Authority. Broadly speaking, there has been unanimous support for that across the House, which is impressive in and of itself, but what is perhaps more impressive is the fact that in Aberdeen and in the north-east of Scotland—and probably the oil and gas industry the length and breadth of the United Kingdom—the Oil and Gas Authority is seen as the correct body with the correct tools at its disposal. That will be even more so once this Bill has completed its passage, as the authority will be properly equipped.
There is also tremendous support for Andy Samuel and his team in the work that they are doing, and I wish to pay tribute to him and all his staff for their endeavours. The OGA was envisaged in very different times. The role that Andy Samuel and his team have taken on was not what they expected, and they have taken to it impressively with sheer determination. They have taken the industry with them on a journey that none of them was expecting. The work that they have done, which was not really in their remit, has fostered the collaborative spirit that the industry needs if it is to ride out this time, and that is to be commended. In large part, this industry will survive if those in it work constructively together and stop some of the needless competition that adds unnecessarily to cost merely for the sake of differentiating themselves from their competitors.
The industry was rife with daft practices, by which I mean unnecessary duplication. By bringing people together and facilitating the exchange of ideas in a constructive way, the OGA has a major part to play. It is interesting that it has such support in the House, but it also has the support of the trade unions and the large and small players in the industry, and that is something that needs to continue. I wish the OGA well in its efforts.
We must recognise that the OGA was formed as part of the Wood review, which has also had cross-party support, but both come from different times. The Wood review was commissioned and completed at a time when oil was trading at above $100 a barrel. We cannot expect the creation and the formalisation of the OGA’s powers to be enough to solve the difficulties of the oil and gas industry at this moment in time.
I welcome the comments from the right hon. Member for Wokingham (John Redwood) about the need for fiscal concessions. [Interruption.] I see that the hon. Member for Waveney (Peter Aldous), chair of the all-party group on offshore oil and gas, is seeking to intervene on that point, and I would expect nothing less from him than to be pushing for that too. This is critical. The Oil and Gas Authority will do what it can. Industry is doing what it can. A 40% reduction in costs has been achieved, which is impressive. More needs to be done, but the one thing that has not moved on since last May are the changes to taxation. The suggestion was welcome then, but we must recognise that that was a different time. Oil was selling at about $60 a barrel then as opposed to $40 a barrel now. These are changing times. The oil price has been lower and lower for longer and longer than anyone expected, and to expect the taxation regime from the time of super-profits to work for this basin at this time would be naive at best.
In the Budget on Wednesday the Chancellor will have the opportunity to provide the oil and gas industry with the shot in the arm that it requires. That opportunity cannot be missed.
Peter Aldous (Waveney) (Con)
As we have heard, this Bill is predominantly about setting up the Oil and Gas Authority. We need to complete this task as a matter of urgency. The North sea oil and gas industry is facing significant challenges. There have been 75,000 job losses in the past 15 months and there is a risk that whole communities along the North sea coast could be very badly affected.
The United Kingdom continental shelf is now a mature basin, but the remaining reserves are significant and they are vital to the UK in many different respects. These resources are best managed through a new tripartite approach, with the Oil and Gas Authority, industry and the Treasury working together—the Oil and Gas Authority promoting the maximisation of economic recovery, industry working to deliver efficiencies, building on the good work that it has carried out since 2014, securing a 40% fall in operating costs, and the Treasury. This is a last minute plea to provide the low tax regime that will attract footloose global investment.
The UKCS has so much to offer in terms of promoting energy security in an uncertain world, facilitating the transition to a low-carbon economy and continuing to be the cornerstone of British industry. Perhaps we could have done this better over the past 50 years. To do so now it is essential that the OGA continuously promotes collaboration. That must be ingrained in its DNA. What is needed is not just collaboration between the OGA, industry and the Treasury; it is collaboration between operators, as evidenced by the partnership of Faroe, Petrofac and Eni working together, collaboration between operators and their service providers, building long-term partnerships and learning lessons from other sectors, such as aviation and the car industry, and collaboration with other sectors, in particular offshore wind. I urge the Chancellor to consider introducing measures on Wednesday that encourage such collaboration.
The North sea oil and gas industry has been the leading actor in the country’s post-war economy. In the past we have perhaps taken it for granted and perhaps at times not managed it prudently. If we had our time again, perhaps we would do it differently. It now needs us to act and work for it to ensure that it can move forward. We must not let it wither on the vine. We must grasp the opportunity tonight and the Chancellor must do so on Wednesday to give the industry every opportunity to survive and then thrive. We owe it to those working in the industry and the communities in which they live.
The final chapter of oil and gas exploration on the UKCS must not be a harsh, bleak winter. It must be an Indian summer. Let us pass this Bill tonight and get on with the task of securing that Indian summer.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
Business without Debate
Delegated Legislation
21:04 - The House divided: - Ayes: 272 / Noes: 228 - Question accordingly agreed to.
Petitions Committee
PEtition
Helen Hayes (Dulwich and West Norwood) (Lab)
I rise to present a petition on behalf of my constituents Isabelle and Robin Garnett and their son Matthew Garnett. I draw the House’s attention to the fact that Isabelle Garnett is sitting in the Public Gallery this evening.
The petition states:
The petition of Isabelle and Robin Garnett,
Declares that the petitioner’s son, Matthew Garnett, has been detained under the Mental Health Act in an emergency transitional Psychiatric Intensive Care Unit for six months; further that he is not receiving appropriate care or treatment; further that he appears to be regressing which is causing enormous distress to his family; further that he has recently sustained a broken wrist; further that a specialist facility (Malcolm Arnold House, St Andrew’s in Northampton) accepted his referral in August 2015; further that Matthew urgently needs to be admitted to this facility so that he can be properly assessed and treated; and notes that an online petition of the same nature has received 262,636 signatories.
The petitioners therefore request that the House of Commons urges the Government to look urgently at this case and ensure that a bed can be made available for Matthew Garnett at Malcolm Arnold House as soon as possible, and to take action to address the wider issue of inpatient services for children and adolescents with mental health difficulties.
And the petitioners remain, etc.
[P001680]
Commonwealth Day
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liddell-Grainger (Bridgwater and West Somerset)
It is a considerable honour and a real pleasure to address the House tonight because today is Commonwealth day. I am afraid that it is drawing to a close, but it is a good time to hold this highly topical debate. I have just been told something I did not realise, which is that the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), is the longest-serving Commonwealth Minister, having served for four years. He has done extremely well, and it is lovely to have a Minister serve so long in one place. That has to be something of a record, so there is more than one celebration.
Our Commonwealth unites 2 billion people in 53 nations around the world. Today, we have celebrated the fact that even though we all come from different backgrounds, we are joined purposefully together for a single purpose. The Commonwealth charter declares that everyone is equal and deserves to be treated fairly, regardless of race, age, gender or belief and never mind whether we are poor or rich. Those are very fine principles, and I tell the House that it is well worth dwelling on them.
It is too easy to snipe at the concept of the Commonwealth. The fact that it is carrying on successfully after so many years is a constant puzzle to certain people. What is it for? What does it do? Why do we still need it? As my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), who held the chair of the executive committee of the Commonwealth Parliamentary Association before me, would also say, that line of questioning can be annoying at all sorts of levels. Let me offer one gold-plated reason for cherishing the Commonwealth—the huge financial opportunities it can bring.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for bringing this subject to the House. Every Member who is in the Chamber is here because we support the Commonwealth. The world’s fastest-growing economies and markets are in the Commonwealth. Does he agree that, now more than ever, we can reignite our bountiful relationship with our natural allies and friends throughout the whole Commonwealth?
Mr Liddell-Grainger
The hon. Gentleman is absolutely right. The startling effect of the Commonwealth, through from the old empire to the Commonwealth as it is now, and what we have achieved in harmonisation, governance and friendship has been remarkable. I was going on to make exactly his point by saying that India is now one of the world’s leading economies, which is a very good example.
It is no accident that countries that follow the Westminster model of democracy tend to have ambitions to grow and prosper. If we look at the best academic index of economic progress among African nations, we can see that Commonwealth members always emerge in front. That is why the City of London has for a very long time had a soft spot for the Commonwealth. Our business and financial institutions have long had links throughout this family of nations. They need our expertise, and we can reap the benefits of the trade and prosperity that it brings to all our nations.
Ian Paisley (North Antrim) (DUP)
I thank the hon. Gentleman for raising the issue of the City of London. He will know that this week it celebrated Her Majesty’s 90th birthday by inviting Commonwealth heads to the City, which, as with numerous events that have been organised, helps to promote the great links that the City has had since 1926. Does he agree that one country is missing from all this and that, to help in that friendship and fraternity, the Republic of Ireland should come back into the Commonwealth as the 54th country?
Mr Liddell-Grainger
I would just say in response that Her Majesty’s trip to the Republic of Ireland was one of the great diplomatic successes of the past few years. I believe that Her Majesty has been leader of the Commonwealth for about 48 years—[Interruption.]— 63 years. I thank all hon. Members who said that from a sedentary position; it just shows that my public school upbringing did me no good. It is an enormously long time, and her Majesty has never put a foot wrong with the Commonwealth, which she has championed. She has absolutely been a brick, a rock and the person around whom all this has been built. Through times that have been very bad and times that have been very good, she has never wavered in her absolute understanding of the Commonwealth. I know that my right hon. Friend the Minister, who was in the Abbey to support Her Majesty during the service today, will say exactly the same. We wish her happy birthday, and long may she reign.
Patrick Grady (Glasgow North) (SNP)
As the hon. Gentleman is taking bids for membership of the Commonwealth, this is an opportunity to put on the record the fact that the White Paper on independence, which was published by the Scottish Government in advance of the 2014 referendum, stated that Scotland would be proud to be an independent member of the Commonwealth, with the Queen as the Head of State.
More appropriately for this debate, may I echo the sentiments that the hon. Gentleman has expressed about the value of the Commonwealth and the role that we can all play in that family of nations? I am expressing the Scottish National party’s sentiments in that regard. I particularly take note of our relationship with Malawi as a Commonwealth member. It is very appropriate to mark the day with this debate.
Mr Liddell-Grainger
We have now heard from Northern Ireland and Scotland. Ours is a group of nations just as the Commonwealth is a group of nations. That is the beauty of it. It is a family of people who are bound together by an historical anomaly that has now become a Commonwealth of trade, prosperity and understanding. The hon. Gentleman’s point on Scotland’s long history with Malawi is an example of that. Any nation can make friends with any other nation. We welcome it and will help it, and we will do everything we can to be part of it. It is important because we stride the entire compass of the world as a Commonwealth together. It makes it a smaller place.
Richard Graham (Gloucester) (Con)
My hon. Friend is right to be generous on Commonwealth day. Debates on Commonwealth day were instigated some five years ago at the time when I became founder chairman of the all-party parliamentary group for the Commonwealth. He is right to highlight both the value of the Commonwealth across the world and the importance of the Head of the Commonwealth and the remarkable service she has given. Will he pay tribute to the outgoing secretary-general of the Commonwealth, Kamalesh Sharma, who has been a tireless advocate for the Commonwealth, and congratulate his successor, Patricia Scotland? It is an important role, and we should be proud that a Member of the House of Lords is taking up the position for the first time.
Mr Liddell-Grainger
Baroness Scotland will be delighted to hear that and will take a keen interest in the debate. My hon. Friend is right. It is remiss of me not to mention that he set up the all-party parliamentary group, which is a wonderful organisation. For the past five years, the Commonwealth Parliamentary Association has been very ably chaired by my right hon. Friend the Member for Saffron Walden, who will probably intervene later. He did a remarkable job before I became chair, year in and year out, with the same agenda, and we should celebrate that remarkable achievement.
This week, the City of London is playing host to the Commonwealth high commissioners as a mark of Commonwealth day and a celebration of Her Majesty’s forthcoming 90th birthday. The City is a founding partner of the Commonwealth Enterprise and Investment Council. Anyone who turns up at the Commonwealth Heads of Government conference will find the City of London there too. Frankly, if the City of London gives the Commonwealth its backing, I suspect the rest of us should do so.
The Commonwealth Parliamentary Association believes strongly that stable government and high parliamentary standards lead to confidence, investment, job creation and ultimately a better life for all the people. I can find no better advocate for the continuation of the Commonwealth than the very person who has sat at its head since her coronation. If I may, I will quote Her Majesty. She said that the Commonwealth
“has the power to enrich us all”
and
“in an uncertain world, it gives us a good reason to keep talking.”
Amen to that.
Here at Westminster, we jolly well ought to appreciate the value of talking and sharing ideas. We have developed and nurtured parliamentary government over centuries. As the British empire slipped away and the Commonwealth was born, many independent nations appeared and chose to adopt the Westminster system. It is not surprising that Westminster, with all its little failings, has a great deal going for it. We have learned to respect other people’s points of view. We have developed, over a very long time, effective systems for scrutinising laws and holding—dare I say it?—Governments and Ministers to account. Whatever our faults, we always try to make democracy work.
The Commonwealth Parliamentary Association was established 105 years ago to link Parliaments throughout the Commonwealth and to share all the positive lessons of good governance. That is a splendid ambition, and rightly so, but it is a very tall order.
Dr Blackman-Woods
I am very grateful to my hon. Friend for giving way—I can call him my hon. Friend—and congratulate him on securing this important debate on Commonwealth day. Does he agree that the theme of the Commonwealth this year—inclusivity—is an important one? We obviously want to learn and share best practice across the Commonwealth. Does he also agree that this is an important year for Commonwealth Women Parliamentarians as we elect a new chair? Hopefully, they will take the organisation forward in securing better representation of women in Parliaments and Assemblies throughout the Commonwealth.
Mr Liddell-Grainger
I am going to have to embarrass the hon. Lady terribly. Without her input in championing women throughout the Commonwealth, I do not think we would be where we are today. The hon. Lady, through various incarnations within the CPA, has done a remarkable job. Just this morning I shared a platform for young parliamentarians with the hon. Lady—who I will say is suffering from a slight sniffle. They are the future. She was asked, very poignantly, about women’s issues and the way that women interface not just with our Parliament but many Parliaments. The hon. Lady gave a very robust and absolutely correct view of the challenges for younger people in empowering women, something we all face in this House and across the world. I cannot say more than that the hon. Lady has been a great colleague and a great friend to the CPA. She will continue to be so and I hope she gets better very soon from that ghastly cold.
We are talking about bringing together about 17,000 parliamentarians from 185 very different law-making bodies, some with traditions and practices all their own, and others relatively new and untested. In the past 10 years, for instance, more than 50 new Parliaments and law-making bodies have joined or re-joined the CPA. Fiji is now back in the fold after democratic elections a few years ago and Rwanda is the most recent new member. If I were to reel off the A to Z of membership it would start with Alderney, an island in the English channel just 10 miles off the French coast, and stretch all the way across the globe to Zambia in south Africa. In fact, I will be visiting Zambia in the next few days on another mission, but I will also speak to Commonwealth partners when I am there.
Valerie Vaz (Walsall South) (Lab)
The hon. Gentleman is making an excellent speech. As someone who originates from Goa in India and was born in the British Protectorate of Aden, I am well aware of the importance of a club. Groucho Marx said that he would not want to belong to a club that would have him as a member, but we are part of a very important club. Does the hon. Gentleman agree that we are the interface with the European Union, which places us in a very great position? And will he join me in thanking the staff of the CPA, who organise all these visits and help the rest of the world come to see what it is like to live under a rule of law in this country?
Mr Liddell-Grainger
I thank the hon. Lady. Her background is proof that anybody from anywhere can be part of this marvellous family—India, Pakistan, Bangladesh or anywhere else. It is a wonderful family. She is absolutely right: the staff are remarkable. They do an incredible job. Today, they have literally gone from conferences to seminars to a drinks party and much else—it has been remarkable. There are not many weeks—I am sure we could count them—when there is not somebody coming to town to talk, be they a high commissioner, an ambassador or a group of parliamentarians. They always know our door is open, and we always love to have a conversation with our friends and our family.
The CPA’s UK branch elected me chairman last year. I took on the responsibility with enthusiasm, but with some trepidation. It is one thing to glance at the CPA from the outside; it is quite another being inside and getting involved in the inner workings. Thanks to the knowledge and efficiency of a superb CPA team, I have—I hope—begun to get to grips with it. They deserve credit and so do the whole CPA committee, without whom the CPA would not operate. The work that goes on by Members from both this place and the other place is crucial to its fair running. I am very grateful to everybody. In fact, CPA UK has just been recognised by the Investors in People scheme for outstanding levels of people management. Well done. We happen to be the most active branch under the CPA umbrella. And what a big umbrella it is! The sheer number of Commonwealth nations demands a giant executive committee to manage it.
Jim Shannon
It is fair and important to have it recorded in Hansard that the Christian principles of the United Kingdom of Great Britain and Northern Ireland and the Commonwealth have taken Christianity to the many parts of the world where it exists today and is growing. We need to recognise the Christian principles that drove the Commonwealth forward.
Mr Liddell-Grainger
Yes, that is an extremely good point. We have had a wonderful service in Westminster Abbey today. Unfortunately, I was chairing a conference, but my right hon. Friend the Minister was there. Her Majesty attended, too, as did His Royal Highness the Duke of Edinburgh. It is a wonderful get-together. The hon. Gentleman is absolutely right that it was based on a lot of British principles. In many ways, it was the missionaries who trail-blazed during the empire days and then under the Commonwealth. We can look back at some amazing people who went to places that nobody else would and took those Christian principles with them. We still see that today. We have to admit that there are tensions in certain parts of the world—we have to be honest about that—but we still talk. The Archbishop of Canterbury and many other churchmen work together to better people’s lives, so that when we have a disagreement we can say, “Let’s keep talking”, as Her Majesty succinctly put it. The Gentleman’s point, therefore, is pertinent and absolutely correct.
The day-to-day responsibility for ensuring that the CPA is steered on a steady course falls to the office of secretary-general. Since the start of this year, we have had a new man in this important post—someone with wide experience of governance and diplomacy; someone who already knows the CPA inside out and has been involved in the legal niceties of the organisation; somebody with the enormous drive and vision to carry this international organisation forward. His name is Akbar Khan and his mission is to make the CPA fit for the 21st century. I strongly believe that we should wholeheartedly applaud this aspiration, and I hope that the House will join me in doing so.
It is a sobering fact that in my constituency many young people know little about the Commonwealth, let alone the CPA. I am sorry to say that there is a wide canyon of ignorance among young people today. I am told that a survey was recently conducted in Jamaica to discover whether young people knew who is in charge of the Commonwealth. Some 25% said it was Barack Obama. Perhaps it is a blessing they did not say Donald Trump. When the pollsters asked what the Commonwealth actually did, most young Jamaicans said its only task was running the Commonwealth games. We have a lot to do. Somehow the CPA has to spread the word far more effectively and seek to win the practical support of the young. Under-30s now represent a majority of all Commonwealth citizens, so we have to find ways of making our work visible and relevant to them.
I am pleased to say that things are beginning to move. The CPA has launched a popular roadshow designed to engage with schools and universities right across the Commonwealth. We are trying to prove that we are not just about motherhood and apple pie and highlighting parts of our work that could capture the imagination of young people. We are showing how we can help to tackle corruption by using the rule of law. There is a lot more to it than roadshows, of course, which is why the CPA is getting on top of the digital world, tweeting its message, gaining “likes” on Facebook and hosting its own YouTube channel.
We are also doing a great deal to promote gender equality—I pay tribute again to my friend the hon. Member for City of Durham (Dr Blackman-Woods). It is work that desperately needs doing because women are still badly under-represented in Parliaments across the Commonwealth. The CPA has an effective and influential chairwoman, Shirin Chaudhury, Speaker of the Parliament of Bangladesh, who has been an incredible champion for women, the CPA and everybody else. I hope she is smiling at the moment, because she has a lot to smile about. She is a remarkable person. In addition, the CPA keenly promotes female involvement through the Commonwealth women’s parliamentary group. It is also very positive news that a woman has been appointed as the new secretary-general of the Commonwealth itself.
Slowly but surely, the shape of the CPA is changing for the better. A glance at my CPA diary for this week alone is enough to prove that we are not sitting back and letting the world go by—and nor will we ever. The UK branch is hosting a delegation from the new Canadian Parliament and is also running a unique international conference on sustainability.
Dr Blackman-Woods
I just want to pay tribute to the hon. Gentleman for all the work he has done in supporting Commonwealth Women Parliamentarians and its international chairperson. That is really important because she is bringing about enormous changes in the CPA, as is the new secretary-general, Akbar Khan, who I also think we should welcome to his post. We expect great things from them both.
I pay tribute to the right hon. Member for Saffron Walden. Both he and the hon. Member for Bridgwater and West Somerset have led and are leading the CPA to some very good things. We look forward to seeing enormous progress being made across a whole range of areas to do with enhancing our systems of governance and accountability, as well as tackling corruption throughout the Commonwealth.
Mr Liddell-Grainger
I could not work out the waving, so I apologise again, but it is very nice to be waved at. I thank the hon. Lady once again, but I think we all know that this is a huge team effort. I know that our secretary-general and many others take a keen interest in what we do as a body. It is important that we support each other. The work that has been done, even since he has been here, has been truly remarkable. I pay tribute to Andrew Tuggey and the entire team in the CPA. Without them, we would not be able to do what we do today. Andrew stands in for me. I made of a mess of something earlier and he had to step in and save me—and I am very grateful for being saved by him on a regular basis.
The hon. Member for City of Durham is right that there is a lot of work to do so far as women and many other issues are concerned. We are realistic about the challenges; we know what they are; we know what we have to do to change things; we will continue always to strive for that because that is our ethos—gender balance and gender understanding. I pay tribute to the hon. Lady for the work she has done in this area, and I am very grateful to her.
Richard Graham
The critical issue, as my hon. Friend rightly highlighted earlier, is the way in which the younger generation of people in the Commonwealth around the world can be excited, motivated and inspired by an ideal that inspired an earlier generation. Will my hon. Friend provide some examples of things he believes we can all do in the Commonwealth to help that process along?
Mr Liddell-Grainger
I hesitate to go on all night, but that is a lovely, pertinent question. What is the Commonwealth? It is about understanding, tolerance, governance, law, order, non-corruption and standing up for your fellow man or woman—it does not matter what someone’s creed, colour, background or religion is; they do not make any difference. We are a family of nations that are bound together by one common cause, which is working together to make sure we achieve the ideals that were set out all those years ago. It is also about bringing the very best of human nature to bear at all stages. That is what it is all about. I meet the most remarkable and incredible people, and I know we all do. We have had our ups and downs, but at the end of the day all parliamentarians are interesting, and none more than those of the Commonwealth—and that is to be celebrated.
Patrick Grady
Mention was made of the Commonwealth games, the most recent of which were held in my great city of Glasgow. As well as being a celebration of sporting endeavour and peaceful competition between nations, the games bring people from all over the world, and particularly from all over the Commonwealth to share their cultures in one place. The Commonwealth games are very much a manifestation of the practical implications and benefits of the Commonwealth and should be recognised as such. Scotland is a member of the CPA, if not yet a fully fledged member of the Commonwealth.
Mr Liddell-Grainger
The very first Commonwealth games I ever went to as a boy many years ago were in Edinburgh. The Glasgow Commonwealth games were exemplary. They were handled beautifully. It was the family enjoying itself in many ways. The sport was incredible and remarkable—there were no Sepp Blatters or anything like that in sight. A very good organisation runs it. It is always a credit. Glasgow did an incredible job, and nobody can ever take it away from the city. I am most grateful for all it did. It showed the Commonwealth at its very best, as a group of nations that are very good at what they do. What other organisation could arrange a games free from all the other things we see so many sports tainted with?
Richard Graham
My hon. Friend is quite right to highlight the success of the Commonwealth games in Glasgow and, indeed, in many other cities of different countries. How about a Commonwealth music festival? We know that sports and music are the two things that most powerfully involve the younger generation.
Mr Liddell-Grainger
I think the entire world plays football, but I think music from across the Commonwealth would be absolutely incredible. So many times we have been to conferences where we have been entertained beautifully by local bands—sometimes tribes, even—that are quite incredible. The richness of music crosses all boundaries. It does not matter whether we can understand the words; it is the beat and the rhythm, and all the rest of it, so that is a wonderful idea. I hesitate to say to Andrew Tuggey, “Perhaps tomorrow we should arrange a music conference for the whole of the Commonwealth” —he would probably have a heart attack—but it is a lovely idea. I think the rules of football were set in this country—I may be wrong about that, but I think they were—and, again, it is a great leveller.
Last week we were involved in celebrating International Women’s Day, and Mr Speaker very kindly let us have his apartments for a drinks party to end it. We are so grateful for that: it was so well attended and so fascinating. Again, it was a lovely day, and next week there is so much in the pipeline. We are helping out in one of Latin America’s poorest countries, Guyana. The aim is to assist the new multi-racial coalition Government to build effective democratic systems. We are also working alongside the Home Office to develop a legal framework to combat modern slavery. The idea is to enable parliamentary clerks from Commonwealth countries to come on secondment to Westminster and learn how to adapt slavery legislation for use back home. We are also trying to get some innovative new projects off the ground, such as an international parliamentary seminar on electoral reform and a cyber-security workshop for Commonwealth Ministers. There is even a project to open our doors outside the Commonwealth and allow representatives from target countries such as Iraq and Afghanistan to attend our seminars.
Dr Blackman-Woods
I am so grateful to the hon. Gentleman for giving way; he is being most generous. The list he is reading out is quite extraordinary and shows the huge diversity of issues that the Commonwealth Parliamentary Association is trying to tackle and to get serious discussion and sharing of good practice on. I would like to use this opportunity to thank Andrew Tuggey and all his staff, because they have been extremely busy putting all these important programmes together, hopefully with good outcomes in improving our governance.
Mr Liddell-Grainger
I can echo that. In some cases the staff had very few days to put the bids together. They have done a remarkable job. We have superb staff and they are so willing. If anybody has a chance and wants to go into the CPA room, it is worth looking at just how many people are there and the work they do. It is truly remarkable. That is the future: taking workshops and encouraging people to do things, and if we do it, others will follow. We want to make sure that people understand that we are proactive in the 21st century and leading the charge of proactive democracy throughout the world. That is something we can only aspire to, so I thank to the hon. Lady for her intervention. She is absolutely right.
We are going to help to boost and change the Commonwealth and the new outcrops of democracy outside it. As ever, we rely on patience and an awful lot of dialogue, but that is what the Commonwealth is really all about. As Her Majesty puts it,
“through dialogue we protect ourselves against the dangers that can so easily arise from a failure to talk or to see the other person’s point of view.”
Sir Alan Haselhurst (Saffron Walden) (Con)
I am grateful for the opportunity to contribute to the debate on the Commonwealth. I am delighted that my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) has been able to secure a slot on the Floor of the House and has been blessed with the good fortune of an extended debate, beyond the half-hour that it might otherwise have been, which has given other hon. Friends and colleagues an opportunity to take part.
I think it is a pity that there is not an annual debate on a Commonwealth theme in Government time, to demonstrate symbolically that we are taking the Commonwealth seriously. It would be an opportunity for all Members of the House to make a contribution on some particular aspect of Commonwealth matters that are of concern to them. However, I was grateful in my time to the Backbench Business Committee for giving us such opportunities, and my hon. Friend has also managed to ensure that the flame continues to burn.
One of the messages I tried to put across was that in every part of the Commonwealth we should have a debate about the Commonwealth, from whatever angle, in each Parliament. That is the way to give prominence to the fact that we are all members of that association, and that we believe in it.
Today I received a message from Commonwealth Youth New Zealand. I do not know whether I was alone in that, but the message was addressed to me. It said:
“Today in Wellington, 60 young people from around New Zealand will take part in the Common Leaders Day programme. This will bring together a range of inspiring young leaders in community, government, national and international fields and shows senior high school students that everyday people can become outstanding leaders. This is also an opportunity to promote understanding on global issues, international co-operation and, most importantly, the values embodied in the Commonwealth Charter that we all seek to uphold.”
I should like to think that 60 young people in every part of the Commonwealth were being encouraged to come together with that purpose in mind. We should be talking about the values of the Commonwealth, and continuing to put the message across.
As my hon. Friend said, one of the fundamental roles of the CPA is to encourage parliamentary strengthening. Our Parliament was a place to which people believed they could come for the airing of grievances. When we look around the world now, we see that a great many young people in the Commonwealth countries—and 60% of the Commonwealth’s population are under the age of 30—have grievances, which often stem from dire poverty How can those young people be expected to continue to believe in the democratic system unless there is advancement—unless they have confidence in the Governments whom they elect and the work that they do? My point is not just that our Parliament is a fount of wisdom. All Parliaments in the Commonwealth should come together regularly, learn from each other, and identify common interests and practices that help to strengthen government. That will help to give young people confidence, in the future, that the Commonwealth itself has a meaning, and that they have hope within their own countries.
Jim Shannon
The right hon. Gentleman kindly mentioned New Zealand. Obviously, many of us in the home countries, particularly Northern Ireland, have a special relationship with New Zealand, to which our ancestors emigrated. Indeed, there is a special relationship between the United Kingdom and New Zealand. Does the right hon. Gentleman agree with me that we should have more such relationships in the Commonwealth?
Sir Alan Haselhurst
None of the other countries in the Commonwealth thought to send me a message, which is why I quoted from the one from New Zealand. However, I think that we should be more conscious—day by day, week by week, month by month—of our membership of the Commonwealth, and be more willing to stretch out the hand of friendship and encourage the development of more links between us. That happens in all sorts of different ways outside the parliamentary sphere—about 90 organisations are brought together to discuss a range of matters because of the Commonwealth link—but we need to do more at the political and parliamentary level, and the key to that is involving more young people. At least a Commonwealth Youth Parliament is now established annually. However, whether we call it an assembly, a council or a Parliament, I should like to see young people being persuaded to come together to do something very much like what those 60 young New Zealanders were doing today.
I agree with much of what has been said in the debate, but I should add that, in the next few weeks, we will at last achieve connectivity with one of the smallest branches of the CPA, that of St Helena. The then Member of Parliament for Birmingham, Northfield and I recommended that an airstrip should be built after we visited the island in 1972. It is very encouraging that, clearly, so powerful was our oratory that that is to happen at last, after 46 years. It will mean that we can bind St Helena closer to us and welcome its people much more actively, in the hope that they will gain benefit and that we too will gain benefit from an understanding of their way of life on that remote island.
I again congratulate my hon. Friend the Member for Bridgwater and West Somerset on initiating the debate. Let us keep on beating the drum for the Commonwealth, and bear in mind that there is much more to do. We look to our colleagues, as well as our staff, to continue to contribute in the magnificent way that they do now.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
I congratulate my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) on securing this evening’s debate and on his relatively new role as chairman of the UK branch of the Commonwealth Parliamentary Association, following in the distinguished footsteps of my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), from whom we have just heard. I also thank other Members across the House for their contributions to the debate.
I should like to begin by paying a warm tribute on this Commonwealth day to Her Majesty the Queen, who has helped to shape the Commonwealth not for 30, 40 or 55 years—in this auction—but for almost 65 years. As head of the Commonwealth, Her Majesty has given tireless support and played a leading role in creating a family of nations that spans every continent, all major religions and almost a third of the world’s population. It was particularly gratifying and appropriate at this afternoon’s service at Westminster Abbey to witness Her Majesty, in her 90th year, being loyally supported as usual by His Royal Highness the Duke of Edinburgh, as well as by Their Royal Highnesses the Duke and Duchess of Cambridge, His Royal Highness Prince Harry and His Royal Highness the Duke of York.
Like the hon. Member for Walsall South (Valerie Vaz), I should like to pay tribute to the work of the Commonwealth Parliamentary Association and of Andrew Tuggey—who, for all we know, might even be following this debate tonight—and his colleagues who have done so much to promote and strengthen the institution of Parliament and the commitment to the rule of law. I shall say more about them later.
I should also like to join in the tributes and thanks for the work of Kamalesh Sharma as he steps down as secretary-general after eight years. I joined my right hon. Friend the Prime Minister at No. 10 last week to thank Mr Sharma personally for his efforts. He has helped to guide the Commonwealth through a period of significant challenges and he can be rightly proud of the important developments that have taken place under his leadership, such as the introduction of the Commonwealth charter. At the Commonwealth Heads of Government Meeting in Malta last November, we welcomed the appointment of his successor, the noble and learned Baroness Scotland. We wish her every success as she takes up this position on 1 April. We believe that she will ensure that the Commonwealth has a strong voice and makes a greater impact, and that its members will show greater unity and purpose in upholding the Commonwealth’s values. In answer to the point made by the hon. Member for City of Durham (Dr Blackman-Woods), it is right and appropriate—and good news, says the father of two daughters—that the Commonwealth is headed by a woman, that the secretariat is to be headed by a woman and that the international chairman of the CPA is a woman. That is a pretty good start.
This Government recognise the great potential of the Commonwealth. In 2010, the then Foreign Secretary, my right hon. Friend Lord Hague of Richmond, said that he wanted to put the C back into the Foreign and Commonwealth Office, and I believe that we have done that. This Government remain determined to ensure that the Commonwealth is re-energised and we support all its members in delivering greater prosperity and security to their citizens. For that reason, in May last year, we made a manifesto commitment to strengthen the Commonwealth’s focus on promoting democratic values and development. In November, the Prime Minister led a strong UK delegation to the CHOGM in Malta.
Our ambition for the Commonwealth is clear. Through the programme of initiatives we announced in Malta, we aim to strengthen efforts to counter extremism and radicalisation and to help small island developing states to develop their economies and boost resilience to climate change. These initiatives will strengthen the contribution of the Commonwealth and its member states in tackling global challenges. By positioning itself squarely in the international arena, the Commonwealth yet again demonstrates its relevance in helping to address these important issues that confront us all.
Ian Paisley
The Minister has put his finger on some important issues relating to climate change and addressing global terrorism, and he raised such matters with the President of the Maldives on a recent visit to the country. While there may be some difficulties with the Maldives, which interprets some things differently, talking about such issues, as mentioned by the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger), is positive and helps to better understand each other.
Mr Swire
In answer to the hon. Gentleman’s point about the Maldives, the secretary-general is sending his own representatives. We want the Maldives to stay a committed member of the Commonwealth and to adhere to Commonwealth values, meaning transparency, accountability, democracy—all the things that we accept as the norm. We want the people of the Maldives to be served by a Government that adhere to those principles, so I welcome the work of the Commonwealth secretariat and the Commonwealth ministerial action group.
We will continue to take initiatives forward through to CHOGM, which will be hosted here in the UK in the spring of 2018. We will work with our Commonwealth partners, wider Commonwealth organisations and with the Commonwealth secretariat under Patricia Scotland’s leadership. Hosting the next meeting presents us with the opportunity to build on the progress made in Malta to make the Commonwealth more relevant and more effective and to increase its stock and standing in the world.
The Commonwealth’s shared values of tolerance, respect and understanding are central to this year’s theme, “An Inclusive Commonwealth”, as we look to strengthen the partnership of nations, people and societies right across the Commonwealth. Earlier today, I had the pleasure of experiencing some of the diversity and energy of the Commonwealth in the performances at the multi-faith service at Westminster Abbey. This annual event is an opportunity, like this debate, to celebrate all that is good about the Commonwealth. The presence of Her Majesty and a significant number of dignitaries from across the Commonwealth, including the Prime Minister of Malta, who is the chair-in-office, and Kofi Annan, who spoke so eloquently, showed the warmth and high regard in which the organisation is held. The diversity of those who spoke at the event reflects the Commonwealth’s dynamic population of over 2 billion people.
As chairman of the executive committee of the UK branch of the Commonwealth Parliamentary Association, my hon. Friend the Member for Bridgwater and West Somerset plays a significant role, as did his predecessor, in supporting work to foster co-operation and understanding between Parliaments, to promote good governance and to advance parliamentary democracy. We welcome the work of the association and its secretariat based here in London. Established in 1911, it has made a significant contribution in helping Commonwealth members to uphold democratic values, and its annual international parliamentary conferences offer an opportunity to discuss issues of mutual interest. This week’s visit of parliamentarians from Canada, which I recently visited, is another positive example of the strong relationships across the association. I very much enjoyed meeting members of the Canadian Commonwealth Parliamentary Association during my recent visit to Ottawa, and I welcome their commitment to share values and understanding.
My hon. Friend raised the Commonwealth Parliamentary Association’s conference on sustainability, energy and development. Events such as that are vital if we are to take forward the Commonwealth Heads of Government meeting mandate of implementing the UN sustainable development goals. We welcome the recent appointment of Akbar Khan as secretary-general of the Commonwealth Parliamentary Association. He has an important role to play in taking forward the organisation’s agenda. In particular, I welcome his vision of a strong parliamentary arm of the Commonwealth, working within and across the Commonwealth family. By delivering programmes to Commonwealth parliamentarians that underpin respect for Commonwealth political values, the association aims to strengthen democratic governance of our legislatures and Parliaments.
The hon. Member for Glasgow North (Patrick Grady) referred to the success of the Commonwealth games in Glasgow. I was privileged to be there myself. I saw David Grevemberg, CEO of the Commonwealth Games Federation, today. He was recounting how a survey has been done in Glasgow on the success of the games and whether people felt they were worth while, and the almost universal feedback was that if they could host it all over again, they would, as it was such good news for Glasgow. The games will go to Australia next, where I am sure they will be a success. Hon. Members made a good point about having music as well as sport. At the Glasgow games, the Commonwealth youth orchestra and choir launched the Commonwealth music competition, so we look forward to that again.
Trade is an area where the Commonwealth must have greater ambition, and this must be one of our top priorities for the 2018 Heads of Government meeting. Between now and then we will be developing a broad range of policies relating to the Commonwealth and trade. We are working extremely closely with the Commonwealth Enterprise and Investment Council, which is doing a magnificent job, and we had a good trade meeting in Valetta, which was attended by more than 2,000 delegates. We are going to build on that, and we are also working to bring trade Ministers from across the Commonwealth together more regularly to increase trade between member states.
My hon. Friend the Member for Bridgwater and West Somerset raised the idea of a possible project to inform parliamentarians across the Commonwealth of legislation, including things such as the Modern Slavery Act 2015, and we are also looking at that. Hon. Members also talked about rights and the Commonwealth charter. It is worth saying that despite this being set out clearly in the Commonwealth charter—the outgoing secretary-general can be justifiably proud of that, as I have said—respect for rights and values is not consistent across the Commonwealth, and we have to accept that that is the case. The issue of lesbian, gay, bisexual and transgender rights is a particular challenge. At CHOGM, the Prime Minister was clear about the need for the Commonwealth to seek to narrow its divisions on LGBT issues. In their statement, Commonwealth leaders agreed on the economic potential that can be unlocked by tackling discrimination and exclusion. I accept that these are difficult issues for some Commonwealth countries, but those same countries did sign the Commonwealth charter. Speaking at the Human Rights Council in Geneva last week, the outgoing secretary-general, Kamalesh Sharma, acknowledged that the Commonwealth cannot be truly inclusive if the criminalisation of homosexuality is not addressed.
That remains one of our biggest human rights challenges. We will continue to work with member states to end discrimination of all kinds, to promote tolerance and to build inclusive governance and opportunity for all. Those are all central to creating a truly inclusive Commonwealth and critical to developing stronger, more secure and prosperous societies. I say that because there is huge potential in the Commonwealth. A recent report has highlighted that, on current trends, the value of intra-Commonwealth trade will reach $1 trillion by 2020.
As the Minister responsible for our relationship with the Commonwealth since 2012, I have visited a good number of Commonwealth countries. From Canada to Australia, India to Papua New Guinea, and Sri Lanka to the Solomon Islands, it is clear that there remains a genuine desire across the 53 member states to see the Commonwealth progress on important areas affecting them and the wider world today. The challenges have never been greater, but the rewards could be greater still. It will be up to all of us within the Commonwealth family to ensure that action is taken on the most pressing global issues.
I therefore thank my hon. Friend the Member for Bridgwater and West Somerset and other right hon. and hon. Members for this opportunity to debate this important issue today. We are getting towards the end of Commonwealth day, but this does not end there, as there are more Commonwealth celebrations tomorrow. The Foreign and Commonwealth Office is beefing up the Commonwealth team to make sure that, when we are hosts in the spring of 2018, it will be a memorable event. I look forward to any suggestions from those interested in the Commonwealth as to how we can make the agenda relevant and how we can make the whole Commonwealth conference exciting.
Ian Paisley
I refer the House to my entry in the Register of Members’ Financial Interests in terms of my membership of the CPA and of some of the visits that I have taken part in. In looking forward to 2018, will the Minister ensure that the devolved Assemblies are involved in this and are used to help spread the message of the Commonwealth? When the Northern Ireland Assembly was established in 1998, one of the most unifying things that it did was to create the Commonwealth Room. I know that he chuckled earlier when I made the point about Ireland coming into the Commonwealth, but the fact that the Assembly did that sends a message of hope.
Mr Swire
Let me make it clear that it is not up to me or the British Government who becomes a member of the Commonwealth. There is a perfectly straightforward application process. A country has to fulfil certain criteria. It is not up to the United Kingdom who comes in; it is up to the secretariat and other members, and that is as it should be. Incidentally, there are a significant number of countries that aspire to join the Commonwealth. Talking of clubs, the hon. Member for Walsall South quoted Groucho Marx who said he would not want to join a club that wanted him as a member. The truth of the matter is that one can judge a club by those who want to become members, and there are some significant countries that want to join the Commonwealth. That in itself is a validation of the Commonwealth as being a relevant institution.
In terms of the devolved Administrations having a greater sight of what we are going to discuss at CHOGM, the United Kingdom is the member of the Commonwealth, but I have some sympathy with what the hon. Gentleman says. We do not want the schoolchildren of Ballymena and of West Belfast thinking that Barack Obama is in charge of the Commonwealth.
Question put and agreed to.
Financial Assistance to Industry
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I beg to move,
That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, in respect of compensation of Renewables Obligation and Small Scale Feed in Tariffs (RO / FiT), a sum exceeding £10 million and up to a cumulative total of £371 million maximum.
It is an absolute pleasure to serve under your chairmanship, Mr Brady, in what may be a relatively short debate. That is not to say that the subject is not important, but I think that there will be widespread agreement. The motion was laid before the House on 22 February under the Industrial Development Act 1982.
As a nation, we face the twin demands of meeting our essential energy and decarbonisation targets—rightly so—and, at the same time, maintaining the conditions necessary for our economy to grow. Industries such as steel, oil refining, cement, ceramics, glass and paper—there are many others, and I could go on—are wonderful manufacturing industries, which are vital to our economic health. They contribute more than £50 billion to our economy and provide more than 18% of the nation’s total exports, as well as well-paid jobs, often in areas of economic disadvantage. With few exceptions, the workforce—to whom, as ever, I pay great tribute—are highly skilled.
For all sorts of great reasons, therefore, such industries are important and central parts of the British economy, but they are energy-intensive. Energy accounts for about 10% or more of their costs—for example, 20% of the fixed costs for concrete and cement come from energy use. That is against a manufacturing average of about 3%. Eight sectors, including steel, oil refining, chemicals, glass and cement, are responsible for about two thirds of industrial energy use and two thirds of greenhouse gas emissions. Having recently met with the cement industry and, indeed, the lime industry—I am becoming an expert in all such matters—I should note that 60% of those industries’ carbon emissions come from the process itself, over which there can be no control, because the emissions cannot be reduced. That is an important factor that is sometimes forgotten.
To meet our climate targets, we have implemented a number of policies designed to incentivise generation of energy from renewable resources. The costs of such policies are recovered through levies on suppliers, who pass the costs to end users, usually in their electricity bills. That is sometimes contentious, because businesses that use a lot of energy, such as those in energy-intensive industries, are disproportionately exposed to those costs, which has an impact on their competitiveness and creates a cost differential between the United Kingdom and other countries. All those industries tell me that they want not subsidies, but a level playing field. I absolutely agree with them about that.
As a result of the situation that I have described, the United Kingdom might not be as attractive an investment location as it could be. There is also increased risk of carbon leakage—a terrible expression, which it might not surprise the Committee to know apparently came from the European Union. Normally, in my view, the EU gets things right, but not in this case—the use of “carbon leakage” as an expression is stupid. What does it mean to ordinary people? Absolutely nothing. What it means is that we are in real danger of exporting jobs and importing carbon—in other words, people will stop doing stuff here and industries will not be located here, because they will move to other parts of the world that, frankly, do not have similar policies to ours. That is the “leakage” bit of the expression. It not only erodes the United Kingdom’s manufacturing base but means that emissions are exported to countries with less ambitious decarbonisation regimes.
To address the challenges, we are taking action to reduce the financial burden on our EIIs. In 2013 we started to compensate companies for the cost of carbon, which is passed through in bills. I am not undermining our system, which is a good one, by saying that we will change it in 2017 so that we do not put some of the tariffs on in the first place—that is the best way to do it. At the moment, however, the system simply puts tariffs on to business and industry, and we then have a device to claw back a large part of it, which does not make sense. The better way will be introduced in 2017, but in the meantime, we rightly committed in the 2014 Budget to compensating EIIs for the indirect cost of the renewables obligation in small-scale feed-in tariffs and reconfirmed that we will exempt them from the cost of contracts for difference.
We are going to extend the programme of support. Alongside the autumn statement, the Prime Minister announced that we will transition from compensation for renewables to an exemption, which, as I described, will start in 2017. In order to target limited resources, we are focusing support on the sectors that are the most exposed to electricity price rises—those that are both EIIs and exposed to international competition.
The compensation programme for the renewables obligation and the feed-in tariff opened in January this year. Businesses are already applying for the relief, and we are keen to pay eligible EIIs as soon as possible once their applications have been assessed. In order for us to do that and to pay total compensation of more than £10 million, we are required under the Industrial Development Act to seek agreement from the House of Commons, which is what this motion is all about. As a number of hon. Members know, in the Enterprise Bill we are upping the limit of £10 million to £30 million. That is completely uncontentious and means that in future, we will not have to come to the House if the amount of money to be paid falls under £30 million.
We are also taking action to ensure that energy-intensive industries are well placed to develop greater energy efficiency in the longer term. The Department of Energy and Climate Change and the Department for Business, Innovation and Skills are currently working together with industry on what we call the 2015 industrial decarbonisation and energy efficiency road map, which is another unfortunate expression—what is a road map? Basically, it is a very good plan—a strategy—to help our EIIs reduce their costs in the long term. It has many features, and I commend it to the House.
The project focuses on sectors including iron, steel, paper, chemicals, glass, cement, refining, food and drink, and ceramics. The focus is on identifying the technologies needed for energy efficiency and decarbonisation in those sectors and understanding the major commercial considerations that they face. It is clear that we must do that in a way that maintains the competitiveness of UK manufacturing as we transition to a low-carbon economy.
I am content that the financial assistance outlined in the motion will benefit those industries and the United Kingdom economy, and that section 8 of the 1982 Act is the appropriate means by which to make payments. I pay tribute to my Secretary of State, who has done a great deal in the European Union to advance the scheme, because it was not happening as fast as we wanted it to happen. He made great strides over in Brussels to speed it on, so full credit to him for doing that. I would welcome comments from members of the Committee before I formally seek the Committee’s support for the motion.
Kevin Brennan (Cardiff West) (Lab)
If the Minister is going to praise her Secretary of State, I will praise my shadow Secretary of State, who has put a lot of pressure on the Government to try to get them to do the right thing on this issue. It is only fair—if the Minister mentions him, I have to mention her; that is just the way it is.
Broadly speaking, the motion is very welcome. I thank the Minister for her explanation of what we are doing this afternoon. It was interesting to read through the documentation on the issue, including the guidance for applicants for compensation under the scheme. The Minister gave us a little sample of the industries that may well benefit from compensation, but if hon. Members have not had chance to see the documentation yet, they might be interested to know that it has a long list of industries that may benefit from compensation under the scheme—they will be glad to hear that I am not going to read it out. That is extremely welcome, given the high electricity costs for businesses in this country.
One issue that occurred to me in reading through the guidance for applicants, and also through the further guidance for applicants—there is quite a lot of documentation related to the scheme—is that a business filling in the application form must have certification by an accountant of what its energy bills actually are. Let me quote from BIS’s “Compensation for the indirect costs of the Renewables Obligation and Small Scale Feed-In-Tariffs” guidance for applicants, from February 2016. Paragraph 19 states:
“The accountant’s fees, together with VAT and out-of-pocket expenses, will be agreed with and billed to the Compensation Applicant. BIS is not liable to pay the accountant’s fees.”
That is perfectly understandable. The Minister says that businesses are already applying for the compensation. Are any of those businesses likely to be quite small? If so, will the cost of having to use an accountant in that way, as specified in detail in the guidance for applicants, be likely to have an impact on whether it is worth while for a small business to apply for compensation? It would be useful for us to have a feeling of the likely size of the businesses that might be eligible in the long list of industries outlined in the Government’s documentation. If they are very small businesses, it would be a shame if they missed out because the cost of applying takes up a large amount of the likely compensation.
I have a few other questions for the Minister, although we are perfectly content for the motion to proceed without a Division. Her opening statement answered a number of questions that I will now not ask, but from the applications received so far, or from the Department’s own intelligence, does she have an indication of how the funding is likely to be distributed across the country? I understand that that depends on who applies, but what areas of the country does she expect might benefit from being able to apply for the compensation? Does she think that the funding will be sufficient for all the businesses that are likely to qualify? If it is capped, there may be a bit of a scramble to get it before it runs out. It would be helpful if she could give us a general feeling on that.
Will there be there an upper limit on the level of compensation for which individual businesses can apply? As I understand it, we are authorising up to £371 million of funding today. How exactly was that very precise figure arrived at? Further to that, is there a plan in place to disseminate information to small and medium-sized enterprises? The larger players will be well aware of the compensation scheme, but SMEs that might benefit from it might not come across it unless the Department makes an active effort to market its availability to such companies. Indeed, has the Minister thought about involving Members of Parliament in the dissemination of such information in their constituencies? Members on both sides of the House will be aware of businesses in their constituencies that might well benefit from such compensation, and it would be useful if the Department were able to indicate whether it thinks Members of Parliament might be useful in such dissemination.
I will not ask any further questions, but I hope the Minister will give us some ideas on some of those points.
Anna Soubry
I thank the hon. Gentleman for his questions. I will answer as many as I can and, if I do not complete the list—I counted six questions—I will of course write to him.
I will start at the end. If there is a need to write to all Members of Parliament, I do not have a problem with doing so. In fact, I will go further, because I am keen to ensure that we tell everybody about the procurement rules. I know this is not on topic, Mr Brady, but the hon. Gentleman raised an important point about using Members of Parliament far more as champions. Most of us like to be champions for our local communities, so there is no reason why Members of Parliament cannot play a bigger role in, for example, the procurement rules. We will be writing to a large number of organisations, including all local authorities, to tell them how we have changed the procurement rules, and I undertake to ensure that every Member of Parliament—I do not care what their political party is—gets the details so that they can go and talk to their local authority during the many recesses that seem to be upon us, when Members will be working very hard on behalf of their constituents. That is one way in which we can do this work locally. I am more than happy to advertise the scheme’s availability to EIIs further if we need to do so. Frankly, I would be surprised if we needed to, because the sector is extremely well organised through its various bodies, so I should have thought it would be more than aware of the situation. However, if there is any doubt about that, I am happy to undertake to make sure that everyone knows about it. I honestly do not think that BIS needs to tell people, but if I am wrong I will be happy to be corrected.
As for the geographical distribution of funding throughout the United Kingdom, I do not have information available about whether there will be higher amounts in Scotland, Wales, the north of England, the midlands, the south or whatever. I do not know whether those figures exist, but if they do I am more than happy to share them.
On the question of small and medium-sized businesses, we have engaged already with the CBI, and EEF, the manufacturers’ organisation, which is excellent at disseminating information to its members. I hope that that answers the hon. Gentleman’s question.
The hon. Gentleman’s point about accountants was interesting. Small energy-intensive businesses may not have to seek an accountant’s report, but the cost of those reports is between £1,000 and £3,000. We may have to consider that issue and provide a fuller answer, and I do not have a problem with doing that.
We have forecast expenditure based on data available to the Department, and we consider the overall funding sufficient to compensate EIIs. As might be imagined, when the scheme was being devised, officials and Ministers were keen to see whether we could get really good, accurate data, so that we would know how much the compensation package would cost. That is why we have given the figure of £371 million; we have done a great deal of work on the matter.
I think that I have answered all the hon. Gentleman’s questions, but if not I will of course write to him and fill in the details. What will happen is what the motion says, and I am delighted that it will not be contentious.
Question put and agreed to.
Written Statements
Labour Market and the Economy
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
Today I am announcing the Government’s response to the Low Pay Commission’s 2016 report and recommendations on the National Minimum Wage.
The main recommendations put forward by the Low Pay Commission are about the rates of the National Minimum Wage from October 2016.
The Commission has recommended that the adult hourly rate of the National Minimum Wage (for 21-24 year olds) should increase from £6.70 to £6.95. The Commission has recommended increasing the youth development rate, which covers workers aged 18 to 20 years old, from £5.30 to £5.55 and increasing the rate for 16 to 17-year-olds from £3.87 to £4.00. It recommends that the apprentice rate should increase from £3.30 to £3.40. The Commission recommend that all of these changes take place from 1 October 2016.
The Commission has also recommended that the accommodation offset increases from the current £5.35 to £6.00 from 1 October 2016.
The Government accept all of the rate recommendations.
On the subject of compliance and enforcement of the National Minimum Wage, the Low Pay Commission’s report recommends that the Government consider introducing a requirement on employers that the payslips of hourly-paid staff include a clear statement of hours being paid for, and that the Government introduce a formal, public protocol for HM Revenue & Customs to handle third-party whistleblowing on breaches of the National Minimum Wage.
The Government are committed to the effective enforcement of the National Minimum Wage. As suggested by the Low Pay Commission, we will consider these options in full.
A copy of the Government’s response will be placed in the Libraries of the House.
I am also pleased to announce that the Government have today written to the Low Pay Commission setting out the remit for their 2016/17 report. The Commission is asked to recommend the National Minimum Wage rates and the National Living Wage rate that will apply from April 2017 as well as an indicative rate for the National Living Wage for April 2018.
[HCWS617]
Single Source Contracts
(8 years, 1 month ago)
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The Secretary of State for Defence (Michael Fallon)
I am today announcing that I have set the baseline profit rate for single source defence contracts at 8.95% in line with the rate recommended by the Single Source Regulations Office (SSRO). I am asking the SSRO further to develop the methodology used to calculate the baseline profit rate over the next year.
I am also announcing revised capital servicing rates as recommended by the SSRO at Table 1 below. These rates will come into effect from 1 April 2016.
Element | 2015 Rates | 2016 Rates |
|---|---|---|
Baseline Profit Rate (BPR) (% on contract cost) | 10.6% | 8.95% |
Fixed Capital Servicing Rate (% on Fixed Capital employment) | 5.94% | 5.08% |
Working Capital Servicing Rate (% on positive Working Capital employment) | 1.72% | 1.40% |
Working Capital Servicing Rate (% on negative Working Capital) | 1.03% | 0.74% |
Taxpayers can be confident that we are getting value for money for single source defence contracts as we deliver our £178 billion equipment programme. This profit rate provides a fair return to industry while delivering savings that will be reinvested in defence.
[HCWS618]
Commercial Governance
(8 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
Yesterday the press reported allegations that former employees of the Ministry of Justice have behaved improperly and that knowledge they may have acquired while working for the Department has been used to gain a competitive advantage.
We take all allegations of impropriety extremely seriously. We have launched an immediate investigation to ascertain the facts, which the Cabinet Office’s Proprietary and Ethics team will support.
The rules around former civil servants taking up employment in the private sector are made very clear when they leave. Under no circumstance should they exploit privileged access to Government contracts or sensitive information which could be used to influence the outcome of commercial competitions.
Let me also add, that over the last six months, we have improved our commercial capability, more than doubling the senior commercial experts monitoring work with the private sector. But we know there is still more to do.
I will update the House once our investigation has been completed.
[HCWS619]
Employment, Social Policy, Health and Consumer Affairs Council
(8 years, 1 month ago)
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The Minister for Employment (Priti Patel)
The Employment & Social Affairs (EPSCO) Council met in Brussels on 7 March. Shan Morgan, Deputy Permanent Representative, represented the UK.
The Council discussed the implementation of country specific recommendations (CSRs) as part of the European semester. Member states, including the UK, agreed that CSRs should be specific but should take into account the national context, aiming for outcomes not outputs.
As part of the European semester process, Ministers adopted the 2016 Joint Employment report and Council conclusions on the 2016 Annual Growth Survey Council also reached general agreement on the 2016 employment guidelines but the UK maintained a parliamentary scrutiny reservation.
The Commission provided an update on progress following the launch of the New Start for Social Dialogue in March 2015 and the Dutch presidency confirmed that the Tripartite Social summit on 16 March would focus on job creation and inclusive growth.
The Council endorsed the Employment Committee’s key messages on the implementation of the Youth Guarantee.
On the labour mobility package, the Commission confirmed that it would publish its proposal for a revision of the 1996 Posting of Workers directive on 8 March. Proposals on changes to social security co- ordination (regulation 883/04) would not be published until after the UK referendum.
Ministers also had an orientation debate to inform the European Commission’s proposed new agenda for skills.
The presidency presented draft Council conclusions on gender and LGBT equality as a package. Despite strong support from many member states, including the UK Council was unable to reach agreement on the conclusions. The Commission confirmed that it would launch its consultation on a European pillar of social rights on 8 March. The pillar would be targeted at the Eurozone but it would be open to all member states to join voluntarily.
Finally, under any other business, the Commission presented briefly to the Council the energy union, the Istanbul convention and gave an update on the state of play on European social fund and youth employment initiative implementation. The chairs of the Employment and Social Protection Committees also presented their work programmes for 2016.
[HCWS616]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Henig) (Lab)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Companies (Address of Registered Office) Regulations 2016
The Earl of Courtown
That the Grand Committee do consider the Companies (Address of Registered Office) Regulations 2016.
The Earl of Courtown (Con)
My Lords, I shall also speak to the draft Register of Companies and Applications for Striking Off (Amendment) Regulations 2016. The aim of both sets of regulations is to provide new procedures to protect innocent parties where information on the public register about a company’s registered office address, or about the appointment of a director of a company, is inaccurate.
First, I shall deal with the regulations about registered office addresses. The Companies Act 2006 requires every company to have a registered office to which all communications and notices may be addressed. The registered office acts as the company’s address for service. It is not necessary for the company actually to carry on business from the registered office; it can use the address of a third party, such as a firm of solicitors, as its registered office.
The Registrar of Companies receives complaints that some companies use as their registered office the address of another business or private individual which they are not authorised to use. If someone finds that their address is being misused in this way, the impact can be significant and distressing. In the worst cases, bailiffs could be sent to the address in the false belief that it is linked to the company.
The Companies Act 2006 allows the Registrar of Companies to remove factually inaccurate, invalid or ineffective material from the public register, either through an administrative process or by order of the court. However, there is a slight oddity in the Companies Act provisions on registered office addresses. What makes an address a company’s registered office address is the fact that it is recorded on the public register as such. As a result, it cannot be removed under the existing provisions. A new mechanism is needed to stop a company from continuing to use an address where it is not authorised to do so. This is what the regulations do.
Under the new system, a person will be able to apply to the registrar for the company’s registered office address to be changed on the grounds that the company is not authorised to use it. The registrar will send a notice to the company directing it to either change its registered office address or provide evidence that it is authorised to use the address. Where the registrar is satisfied that the company is not authorised to use the address, the registrar will change the registered office to a temporary default address. The intention is for the registrar to operate an address at Companies House for this purpose.
I turn now to the regulations on director appointments. Companies must inform the registrar when a director is appointed or removed or when a director’s details change. At present, a person appearing on the public register as a director of a company can apply to have their name taken off on the grounds that they did not agree to the appointment. However, the company can stop an application merely by objecting, without having to provide any evidence to support its objection. The regulations change this by requiring the company to provide evidence that the person consented to become a director. If the company supplies this information, the person’s name will stay on the public register; if the company does not, the person’s name will be removed from the public register.
These regulations share the same aim of providing a more effective way of correcting information on the public register. They will enable the registrar to quickly change addresses to protect innocent third parties and make it easier to resolve cases where people have been appointed as directors without their agreement. I commend both sets of regulations to the Committee.
Lord Stevenson of Balmacara (Lab)
My Lords, I am grateful to the noble Earl for his introduction. These are not contentious issues and I do not intend to hold up the debate for long, particularly as we are ready to go on to the next debate, my noble friend Lady Sherlock having arrived—she was worried that we would finish even before she could arrive.
My general point is that these seem to fall into the category of sledge-hammer and nut issues. I am a little more concerned about the address of registered office regulations than about the striking-off regulations, but it is true that, in both cases, the regulations have been brought forward because there is a defect in the original legislation and it is right and proper that at the appropriate time these are corrected—I am singing the same tune as the noble Earl did in his introduction. My points are therefore rather lightweight, but they are made for the purposes of scrutiny.
First, on a factual point, in both sets of regulations it is clear that a review will be required not only before December 2020 but every five years thereafter. However, it does not say that in the Explanatory Memorandum, although it does say it in the regulations and, in one case, in the Explanatory Note. When these things are brought before the Committee, it would be helpful if such things were all along the same lines. I assume that the substantive position in the regulations is correct and that these provisions will be subject to periodic review. Having said that, these changes are so trivial that, given their nature, I wonder whether it was necessary to make them in quite such a gold-plated way. The statement is fairly clear that not only is there to be a review within five years and every five years thereafter, but that there is also provision for a review should there be any unexpected responses to the regulations, so the Government are well covered on this. I certainly would not be shouting from the rooftops were this to be watered down a little, but it may be too late for that.
My second, slightly more substantial, point applies to both sets of regulations, but primarily to the registered office address regulations. The regulations seem to give the registrar a quasi-judicial authority. In a sense, this is entirely in line with the broad approach that is taken to the Registrar of Companies, because there are points on which the registrar must make a determination. However, I worry slightly about the extent to which these are going to be treated as judicial events when and if there are complaints about them, as opposed to their being done administratively with any subsequent actions to be taken up through the courts. Just before I came in, I was looking at the Explanatory Memorandum for the registered office regulations, in which there are some references. For example, regulation 9 provides:
“For the purposes of determining the application, the registrar may … refer the application, or any question relating to the application, for determination by the court”.
However, the regulation does not explain which court and under what basis.
If one were to take rather a cynical view, one could see this undermining the whole basis of the costings. If you are talking about bringing in expensive lawyers and fancy courts at a high level, then costs will be a lot more than the very small sum of £180,000 that is currently estimated. I assume that is not the case and I am not asking for a detailed response at this stage, but perhaps in a moment of greater leisure the noble Earl could write to me or put the position on the record and in the Library. Is this an issue related to the interpretation of statute, or are these matters of fact that need to be determined by the court, or is it because we are concerned generally that the registrar should not become too judicial so, where the decision is tricky, it goes to the courts? These are matters of judgment and there may not be a specific line on them, but the regulations are a little vague. I can imagine myself in a company position not being quite clear where I might end up and therefore being a little confused about it. I should like a little more clarity.
This question may not be particularly well dealt with in the response because—it does not need to be said again—we are talking about a very small sample of companies likely to be affected. This will not have a major impact on the way in which the economy operates, but there is a default position that this is largely a nuisance issue where people discover that the house which they have just bought, or the rooms which they occupy, have an office with a registered address there, so they get flooded with letters and, if things go really badly, bailiffs will be forcing their way into their accommodation. I suspect that it is a rather rare occurrence and do not imagine that it is what we are talking about. However, the impact assessment says that this facility might be of value in cases of fraud. I could see no figures given in the impact assessment on whether we are talking about substantial numbers of companies here, which are in fact required to be affected because they are engaging in fraudulent activity. If we are talking about a significant number of fraudulent companies, then clearly that is slightly different from the irritation of having your previously private address taken over by another company. Again, I am not looking for a full response today. I just wondered whether the fraud element which creeps into the impact assessment but is not mentioned in the Explanatory Memorandum is a significant issue. If it is, perhaps the Minister could write to me at some point to explain that.
The Earl of Courtown
My Lords, I thank the noble Lord, Lord Stevenson, for his contribution.
On the issue of companies referring applications to the courts, I can say that in the vast majority of cases the registrar will be able to make a decision quickly and easily. The regulations allow the registrar to rely on certain evidence without further inquiries about the address that the company is authorised to use as its registered address—for example, evidence that the company has a property interest at that address. However, there may be exceptional cases—for example, those which are particularly complex—where the court is better placed to make a decision. I note carefully what the noble Lord said about the other use of courts and where that use can go, but in those circumstances where the courts are better placed to make a decision, the registrar should be able to refer the dispute to the court to determine the matter. The aim is that it will be concerned solely with issues of fact.
The noble Lord also referred to the instances of this raised in the consultation. The consultation involved a relatively small number of people, but I think that about 80% to 85% of the people who responded—it was in the region of 120 to 130 people on both regulations—thought that these provisions would be of use, because they would prevent people using their home address for nefarious deeds.
The noble Lord also asked a number of other points, and I will ensure that I write to him with a little more detail than I can give now.
These regulations will provide a more effective way of correcting information on the public register. I therefore commend both sets of regulations to the Committee.
Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016
The Earl of Courtown
That the Grand Committee do consider the Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016.
Child Support (Deduction Orders and Fees) (Amendment and Modification) Regulations 2016
(8 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Altmann
That the Grand Committee do consider the Child Support (Deduction Orders and Fees) (Amendment and Modification) Regulations 2016.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, these regulations were laid before both Houses on 8 February 2016. They enable the department to waive collection and enforcement fees on the 2012 child maintenance scheme for a specific group of cases for a limited period of time. This is to support a process that provides a safety net for parents with care. It will require non-resident parents with a poor history of meeting their child maintenance obligations to demonstrate a change in behaviour and prove that they could reliably be allowed to access the direct pay service on the 2012 scheme rather than having to pay collection fees in the new scheme. We will also introduce minor technical amendments to the existing powers to improve the effectiveness of regular deduction orders and lump sum deduction orders.
A comprehensive reform of the child maintenance system began in 2012 which aims to incentivise parents to collaborate in the best interests of their children and move us away from the idea that state intervention via a statutory child maintenance scheme should be the default option for separated parents. To achieve these aims, a programme to close all existing Child Support Agency cases began in June 2014. Closing cases gives parents the chance to consider which arrangement best suits their circumstances for the future, while access to Child Maintenance Options, a free and impartial service, ensures that they have relevant information available to help inform this important decision.
Where parents believe a statutory solution would be best for them, they can apply to the new 2012 scheme, which is operated by the Child Maintenance Service. New, simplified calculation rules and improved IT systems are delivering better outcomes for parents and children. At the same time, fees and charges are helping to incentivise parents to consider closer collaboration and use a direct pay service, while also providing a contribution towards the cost of running the service. This policy change is predicated on the view that encouraging parents to co-operate when arranging child maintenance payments is likely to lead to less confrontation between parents, and this is ultimately normally in the best interests of the children.
When approaching case closure, we are of course mindful of the need to take careful steps to reduce the risks of child maintenance payments being disrupted, particularly for those cases where money is flowing only as a result of enforcement action being undertaken on the old CSA cases. We want to address concerns raised by stakeholders following the public consultation on case closure undertaken in 2012.
The last segment of cases that we will close—segment 5 —will include those cases where money is flowing as a result of enforcement action. But to try to give clients an opportunity to avoid charges, as well as giving a chance for future co-operation between parents who may have been in conflict previously, we want to introduce a new positive test of compliant behaviour for these previously recalcitrant non-resident parents. This is known as a compliance opportunity. The compliance opportunity will take place during the first six months of the 2012 scheme case for this group. During that time, the non-resident parent is required to pay half of their maintenance liability via the collection service by a non-enforced method of payment such as direct debit.
In order to ensure that the parent with care is protected, we will issue a deduction from earnings order to the non-resident parent’s employer to collect the other half of the ongoing maintenance liability directly from the non-resident parent’s wages, wherever this is possible. This payment safeguard aims to minimise disruption for the parent with care during the compliance opportunity. Where the non-resident parent misses even one payment, they will fail the compliance opportunity and prompt action will be taken to resume collection of the full amount of maintenance by the enforced method of payment already in place, with the collection and enforcement charges applied. Only in circumstances where the non-resident parent is not at fault will an exception be made.
If all payments are made, the non-resident parent will pass the compliance opportunity and have a chance to continue paying child maintenance directly to the parent with care in future. So the outcome of the compliance opportunity will inform a decision over whether a 2012 scheme case should be a direct pay arrangement, which does not attract collection fees, or a collect and pay arrangement, where CMS manages collections and the usual fees are charged.
The initial proposal, outlined by the previous Government, was to offer the compliance opportunity in the final six months of the closing CSA case. It would be offered to all clients regardless of whether they intended to apply to the new 2012 scheme. This would have meant expending resources unnecessarily, including significant investment in the CSA computer systems close to their retirement date. However, it is now our intent to move the compliance opportunity to the first six months of the new case. It will then be offered to those who choose to apply to the 2012 scheme before their CSA case closes and cannot agree between themselves on whether their new case should be managed on the direct pay service or the collect and pay service. We have consulted with stakeholders and they are supportive of this approach.
We will administer cases on the collect and pay service type for the duration of the compliance opportunity, which will allow us to use an enforced method of payment as a payment safeguard. Ordinarily these actions would attract collection and enforcement fees on the 2012 scheme, but we are committed to delivering a compliance opportunity as it protects the interests of the parent with care and can help to maximise the number of effective arrangements on the new 2012 scheme. The fee waiver that will be introduced under this instrument is required in order to be fair to both parents while testing the reliability of the non-enforced payments. That is considered necessary for the successful delivery of this essential measure.
The instrument will also make some technical amendments to clarify the existing rules governing regular deduction orders and lump sum deduction orders to allow them to include collection and enforcement charges. RDOs and LSDOs are enforced orders that are used to secure child maintenance liabilities by deducting money directly from non-resident parents’ bank accounts. The provisions in these regulations will put beyond doubt that we are able to collect the fees and charges associated with the new 2012 scheme, as well as the maintenance liability, and collect CSA arrears that have been moved to the 2012 system. This is in line with existing policy, and these provisions aim to put the legal position beyond doubt.
I am satisfied that the instrument is compatible with the European Convention on Human Rights, and I commend it to the Grand Committee.
Baroness Manzoor (LD)
My Lords, I have a couple of questions for the Minister. First, there is no mention of CSA arrears in the new compliance opportunity in these 2016 regulations. Will the Minister expand on how those cases will be dealt with? Secondly, what does the Government’s analysis show about subsequent child maintenance outcomes where cases involving children have closed, particularly as the Minister has mentioned that IT systems were providing much better outcomes?
Baroness Sherlock (Lab)
My Lords, I thank the Minister for her explanation of the draft order. I remind the Committee of my historic interest as a former non-executive member of the board of the Child Maintenance and Enforcement Commission, and my decidedly historic interest as a long-distant chief executive of the National Council for One Parent Families. I am going to raise points very similar to those raised by the noble Baroness, Lady Manzoor, although, I fear, in rather less concise a manner, so the Minister is warned now.
As I understand it from what the Minister said, these regulations are aimed at non-resident parents in segment 5—people whose cases are facing closure on a legacy system but who are the subject of some CSA enforcement action. The idea is that they will get this compliance opportunity, or chance to show willing. These are people for whom, in the past, we have had to use enforcement, but they will now be able to show that they will do it. Their success in doing so will decide whether or not they end up on direct pay or on what is known as collect and pay under the CMS. I can see the Minister nodding, so I know that I have got that much right. I gather this came about because concerns were expressed about the Government’s original plans to move people on to direct pay; this is a way of testing it out. That seems a sensible idea and we have no objections in principle. However, I do have a number of questions.
The first is a really simple question. I found it impossible from the draft regulations or the memorandum to understand what regulation 2 does. It may be that the last paragraph of the Minister’s opening remarks told me that, but I wonder whether she could clarify it. The EM says of regulation 2 that,
“These provisions are likely to attract minimal public interest”.
That may well be because nobody, myself included, has the slightest idea what the regulations are doing, so it would be helpful if the Minister could clarify that. In particular, will the Minister set out for the record what powers the regulation will give the Government that they do not have now and in what circumstances they envisage using them? If the answer is in her last paragraph, she can point to that. Secondly, will the Minister confirm that all the cases covered by these regulations will still have statutory maintenance arrangements, not voluntary or family-based arrangements?
Next, I want to pick up the point raised by the noble Baroness, Lady Manzoor, about arrears under the legacy system. I understand that there is going to be a cleansing process to make sure that any arrears liability that is transferred across to the CMS is solid and accurately recorded. The intention is to move the ongoing liability across first and then to cleanse the arrears; once they have been verified, the arrears will follow. However, the Minister mentioned that the Government have decided to delay the compliance opportunity until the end of the process rather than have it at the start. Therefore, I am worried about whether the Government have considered what will happen. Under the compliance opportunity, the non-resident parent who has previously shown him or herself not to be able to pay without enforcement action will be tested only on their ability and willingness to pay ongoing maintenance liability as determined by the CMS system. Therefore, they will not have been tested on their ability and willingness to pay arrears, which they may or may not be happy to do. Why did the Government make that decision in the light of that? Would it not have been better to leave it right until the end so that, by the time the compliance opportunity came along, the arrears would have gone across and it could then be applied to both? Can the Minister explain that some more?
Will the Minister tell the Committee whether any arrears still within the CSA which are awaiting transfer across at the end of the cleansing process will continue to be collected by the same enforcement method, whatever may be going on with the compliance opportunity? In other words, will that be enforced in the way that it was under the CSA?
If an NRP passed the compliance test, it seems that they could opt to use direct pay to pay any arrears, as well as any CMS maintenance due. Is that correct? However, given that we do not know that they would be willing to pay CMS, would it not have made more sense, when the arrears do come across, for them simply to carry on with the same enforcement mechanism in the new system as was there in the old system? Since there are no fees for the parent with care for arrears collection anyway, that would not have had any implications for him or her.
On a separate point, will the Minister explain what enforcement methods will be used during the compliance opportunity for the bit that is being enforced alongside the voluntary partial payments? She mentioned using deduction from earnings orders, but there would be cases, such as self-employed non-resident parents, where a DEO was not appropriate. What other tools will be used for the enforcement part of that payment if a DEO is not appropriate? For example, will deduction orders or freezing orders or setting aside of disposition orders be available during the compliance period?
This is the first opportunity we have had to question the Minister about the progress of transition to the new system, so I would like to ask her some questions about how that is going. Can she tell the Committee how many cases have been closed in each segment so far? When does she expect to complete the bulk closure of segments 3 and 4? Can she tell us when the programme of closing all the CSA live cases is now expected to finish?
To come on to the point raised by the noble Baroness, Lady Manzoor, about child maintenance outcomes, will the Minister tell us how many parents affected by CSA case closure have transferred to CMS or made a private family-based arrangement or made no arrangement? This is crucial information. We want to be sure not only that people have decided not to move across but that they have some maintenance being paid. The figures in the public domain suggest that, up until the end of December 2015, around a quarter of a million CSA cases had received final notice of the ending of their CSA case. However, figures between January 2015—when the case closure started—to August 2015 showed that during that time only 22,000 applications had been made to the CMS from cases affected by proactive case closure, plus another 6,800 from reactive closure. That means that only 28,800 CMS cases had been started from January to August, when around a quarter of a million had had notice of the ending of their CSA case. I hope very much that does not mean that hardly anybody is using the new service, but the noble Baroness will understand why we would like to know that.
Baroness Altmann
My Lords, I thank the noble Baronesses, Lady Manzoor and Lady Sherlock, for their questions. I will try to offer reassurance and some responses.
Both noble Baronesses mentioned the issue of arrears. The aim of this compliance opportunity is to test behaviour. Once the compliance opportunity has been either passed or not passed, if the case moves on to direct pay, the parents will be able to agree among themselves how to deal with the arrears; if the compliance opportunity is failed, it is clear that we will need the collect and pay service to collect arrears as well. We are moving the segment 5 cases on to the new scheme before the arrears have been cleansed, so the arrears relating to such cases will still be being assessed and cleansed in order to be accurate while the parents are moved on to the 2012 scheme.
We are not offering the compliance opportunity on the previous scheme, as the previous Government originally suggested, partly because that would mean that we would be offering every parent the compliance opportunity, while not all parents will transfer to the 2012 scheme. From an efficiency point of view, that would not be optimal. Also, the cost of upgrading the old IT systems and the amendments that would need to be made to them to accommodate the compliance opportunity on the old system would be significant, so moving everyone on to the 2012 scheme is much more efficient and cost-effective from the taxpayer or funding perspective. We will also focus on those parents who will use the 2012 scheme rather than include all those who may have no intention of doing so.
I welcome the fact that the noble Baroness, Lady Sherlock, has no objection in principle to these changes. I will just refer to her question of clarification about the RDOs and the LSDOs, which I specifically tried to answer in the last part of my opening speech. It is not a policy change; this is merely to try to ensure beyond doubt that there is the ability to collect not just the maintenance and the arrears on the 2012 scheme but the fees and charges that are associated with the 2012 scheme. Obviously, I apologise if that was not clear, but I hope that I have now made it clear.
The 2012 scheme will still be statutory. If people are on the 2012 scheme, it is no longer merely a voluntary scheme—they will have paid their fee to be on it and it will be statutory.
As regards the tools for enforcement for self-employed people, which is an important issue, the vast majority of cases have earnings, but for those where there is self-employment the compliance opportunity will consist of allowing the non-resident parent to pay 100%, rather than 50%, by a non-enforced method. However, after any payment is missed, the usual enforcement action will be taken. Part of the issue here is that we are moving people on to the 2012 scheme—it is not reactive, where they have requested to come across. As I understand it, we are trying to make sure, in response to stakeholder representations, that we do not impose collection charges before giving people at least some chance to prove that they can be trusted to make the payments reliably.
On the question of the numbers and the timings, which the noble Baroness, Lady Sherlock, requested, given the range of data that the noble Baroness has asked for, I will write to her to confirm these points.
As regards the collection of arrears and why the compliance opportunity does not include payment towards the legacy arrears, as I have said, this compliance opportunity is primarily a measure of behaviour and is designed to give the non-resident parent the chance to show that they can proactively manage their child maintenance obligations. This is based on the belief that, the more parents we can encourage to agree among themselves arrangements such as maintenance, the better this is in the interests of the children.
So it is not a question of trying to force people, or cajole them against their will, with no purpose. The purpose of the exercise is to try to encourage more parents not to rely on a statutory scheme to enforce the collection of child maintenance but to have the ability to agree among themselves, while obviously, as the noble Baroness says, giving them this behavioural nudge and indeed the financial incentive to do more to come together, in the interests of their children, to arrange child maintenance. The noble Baroness is right that the Government are committed to this scheme in the interests of the children. That is the overriding and most important element of our efforts in this area.
I was asked how successful the new scheme is. It is too early to provide that analysis, but we will be completing the 30-month review by the end of 2016, and we are currently testing, assessing and investigating what is happening on the scheme. We have commissioned research that is being undertaken to identify the kinds of questions that the noble Baroness has rightly asked. The noble Baroness, Lady Manzoor, also asked for that assurance. I assure both noble Baronesses that we are investigating how the system is working and what is happening to the families who do not come across to the 2012 scheme, as well as what is happening to the families who do. However, it is early days.
On the question of the number of cases that are coming across, the migration of cases on to the 2012 scheme is being very carefully managed and assessed. Cases do not move over in large numbers until we are satisfied that the particular segment that is being moved over is doing so successfully. That is really important, given the experiences that we had with previous schemes, where there was perhaps a little too much hurry in managing large numbers of cases without ensuring that all the underlying systems and processes were in place to make sure that they would be handled successfully.
That is where we currently are. We are moving across and, so far as we can tell, the programme is going very successfully. It is being carefully handled and managed. We are also ensuring, as much as we can, that the order in which we are transferring cases across also helps to ensure that those who move on to the 2012 scheme are likely to have a more positive experience. That certainly seems to be the case: the number of complaints and queries is much lower than we might have expected.
The Child Maintenance Options service seems to be helping families to come together in the interests of their children and to understand more what needs to happen in order for them to be able to make a successful agreement. Child Maintenance Options has a calculator to help parents to work out how much maintenance needs to be paid; previously, they would often have been unaware of that, or would have had to have gone to court or have gone through some other procedure in order to assess it, but they can now do that themselves. Two out of three parents using the new Child Maintenance Service are already opting not to rely on the state to collect and pay maintenance on their behalf, so again the new system’s aim of significantly reducing the numbers of parents for whose child maintenance the state is responsible seems to be being achieved.
Baroness Sherlock
I thank the Minister for answering some of my questions but I confess to disappointment that she was not able to provide any figures at all, given that I gave her office a few hours’ notice that I would be asking for that information, which ought to be in the public domain. However, I shall look forward to the letter expressing the figures in detail.
There are two questions which either the Minister did not answer or I expressed poorly—I take full responsibility for her answering a different question from the one I asked. The first question was on the timing of the compliance opportunity. I was not trying to ask her—I apologise if I did—why she was not doing the compliance opportunity on the existing scheme, as opposed to the CMS. What I was asking was: why did the Government not delay the compliance opportunity until the arrears had been moved across as well as the ongoing maintenance, so that the compliance opportunity could then be done on the entire liability of both ongoing maintenance and arrears? She said that it was testing behaviour, but that tests only the willingness to pay a small amount of that, and the arrears may be significant.
As to the second question, I did not quite understand what the Minister said about why the Government did not want to use the compliance tools available to them on self-employed non-resident parents. What is the reason for assuming that they do not need enforcement in the way that employed parents do? She could, I presume, use deduction orders as they are used now. She did not explain why that would not be the case.
Baroness Altmann
I will try to be a little more forthcoming with some figures, but, as I say, I will write to the noble Baroness with a more detailed reply. So far, 700,000 to 800,000 segment 3 and 4 cases have been moved across. When all cases are finished, there will be 800,000 to 900,000 cases expected to come over on to the 2012 scheme. I apologise to the noble Baroness that I may have omitted to answer the two specific questions that she asked me. It is not that she was not clear; it is that I was unable to keep up with all the questions.
The timing of the compliance opportunity is partly to ensure that we can successfully complete the migration of the old cases on to the new system in time to be able to close the existing IT systems before they run out of their usable life. There is a timing issue of requiring to get on with the compliance opportunity for segment 5 so that we can meet the end deadline for closing the 1993 and 2003 IT systems without incurring significant extra cost. If we were to delay until all the arrears had been cleansed on the old system, that might well take us beyond the period. By moving segment 5 across slowly now, we are trying to test how this compliance opportunity is working in a small number of cases, as I described earlier, and how the new system is working for those cases before we ramp up with these significant additional thousands of cases that still need to come across and meet the end deadline. This migration and the new system are being very carefully managed. It is a massive undertaking. We know the problems we have had with IT systems in the past, and we do not want those to happen with the new system.
Also, we would have had to either let everyone have direct pay or charge everyone for their ongoing maintenance. That is why we have not used the tools for the self-employed people. We are giving them the opportunity that we believe we have to give them. We cannot collect arrears until they have not paid. As I understand it, the deduction orders and the lump sum deduction orders will help us collect arrears but we cannot consider arrears from the old scheme as arrears in the new scheme, so we would either have to deem all the self-employed as unreliable payers, and therefore we could then enforce collection and charges, or give them the opportunity to prove that they are unreliable before we then take the fees for the collection and charges.
If further clarification is required, I will write to the noble Baroness. However, as I understand it, those are the bare bones of the issue. We can expand on that.
I thank noble Lords for their contributions to the debate and for their constructive approach to today’s proceedings. This Government are committed to ensuring that those parents who choose to apply to the statutory 2012 child maintenance scheme benefit from a successful and stable arrangement for payments in the interests of their children. Introducing a compliance opportunity will ensure that non-resident parents with a history of non-compliance should not access the direct pay service unless they have demonstrated a change of behaviour. This aims to help parents with care have confidence that their new arrangement will suit their circumstances and work in the best interests of supporting their children. I commend this instrument to the Grand Committee.
Occupational Pension Schemes (Scheme Administration) (Amendment) Regulations 2016
(8 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Altmann
That the Grand Committee do consider the Occupational Pension Schemes (Scheme Administration) (Amendment) Regulations 2016.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, in my view, the provisions in these regulations are compatible with the European Convention on Human Rights. By way of these draft regulations, we have responded to concerns raised by stakeholders by making some changes to ensure that occupational pension scheme governance requirements work as intended.
We already have over 6 million workers automatically enrolled into pension saving. We expect this to rise to around 10 million by 2018. Therefore, it is vital that pension schemes are well governed, particularly as most workers will not have made an active choice about their scheme or investments. With this in mind, we introduced new governance requirements from April 2015 in the Occupational Pension Schemes (Charges and Governance) Regulations. These cover occupational pension schemes providing money purchase benefits. They include annual statements regarding governance, certain requirements for processing financial transactions, appointing a chair of trustees responsible for signing the annual statement, and further requirements relating to the default arrangement. We also wanted to strengthen the independent oversight of schemes used by multiple employers, so in those regulations we introduced additional governance requirements for relevant multi- employer schemes. Under these requirements, relevant multiemployer schemes must have at least three trustees, and the majority of all trustees, including the chair, must be independent of providers of services to the scheme. These independent trustees must be appointed for limited terms and by open and transparent recruitment processes. The trustees must also make arrangements to encourage members or their representatives to make their views on matters relating to the scheme known to them. This could be done through members’ panels, annual general meetings or similar.
These additional governance requirements do not apply where the employers are part of the same corporate group, as we considered these schemes to be closer in nature to single employer schemes and thus less likely to require these additional member protections. These regulations amend the definition of “relevant multiemployer schemes” to ensure that it captures both commercial and industry-wide schemes that promote themselves to unconnected employers. Under these new regulations, a corporate group scheme may consist of one or more holding companies and subsidiaries of such companies.
We also made a temporary exemption from these additional requirements, until April 2016, for schemes set up by statute. This was because we wanted to carry out further work on their current governance arrangements before deciding whether this exemption should continue. I should also add that the National Employment Savings Trust is exempt from these additional requirements, as it already has rigorous governance requirements set out in law.
These governance measures cover occupational schemes offering money purchase benefits regardless of whether they are used for automatic enrolment or not. In addition, they exclude schemes where the only money purchase benefits offered are from additional voluntary contributions.
I recognise that pension law is complex and technical, and sometimes we need to change it to ensure that it does the job we want it to do. Since last April, some stakeholders have told us that the way in which we currently define a relevant multiemployer scheme has the unintended consequence of bringing corporate group schemes, which may undergo mergers, acquisitions or disposals, within the additional governance requirements, thereby causing an employer to become unconnected from the group. We have addressed these concerns by way of these draft regulations, which will amend the definition of a multiemployer scheme to ensure that such corporate activity does not bring a corporate group scheme within the additional requirements unless it promotes itself as open to unconnected employers.
I appreciate that the pre-existing governance arrangements for schemes set up by statute may be a good reason to continue their exemption from the additional governance arrangements. However, as I am sure the Committee will agree, we need to have better regulatory safeguards in place for the future across the pensions landscape. These draft regulations will not extend the temporary exemption for multi- employer schemes set up by statute. On balance, we considered that there was no significant reason to provide a further exemption from good governance standards. However, we will give such schemes up to six months to comply with the requirements for the appointment of independent, non-affiliated trustees.
Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Altmann, for introducing these regulations in such a clear manner. We share the commitment to the importance of schemes being well governed. It is accepted that these regulations are generally focused on several technical amendments following on from governance requirements that were introduced last year, driven in part by the requirement to ensure that the growth of money-purchase schemes flowing from auto-enrolment is fit for purpose.
As we have heard, the thrust of these amendments seeks: to put beyond doubt that multiemployer group schemes are excluded from the additional governance requirements; to remove the chair of NEST from the required appointment timescale, because this is otherwise dealt with in statute; to allow a deputy to sign the chair’s statement when the latter is not in place; to enable a statutory override where scheme rules are in conflict with the trust deed requirements; and to let those schemes established by statute have a limited period to comply with the trustee appointments so that the current exclusion can expire—as well as some other tidying up.
We have no quarrel with those amendments, but seek clarification on just one aspect. In regulation 4, the substituted sub-paragraph (2ZA)(a)(ii), participating employers are “connected” if, inter alia, they are,
“are or have been partnerships, each having the same persons as at least half of its partners”.
The test seems to be a head count rather than being a sufficient commonality of shares of partnership activities. Is this what was intended?
That having been said, I should like to return to some points that my colleague, Angela Rayner MP, raised when these matters were debated in another place, particularly as they received scant response from the Minister in the Commons. Of course, we know that our Lords Minister, particularly being forewarned, will be able to do better. These issues concerned the growth of multiemployer schemes or master trusts. It was said that there is no official list of master trust providers although as many as 70 or 80 could be operating at the moment. What is the Minister’s understanding? My honourable friend cited two pieces of evidence given to the Work and Pensions Select Committee, one from the ABI and the other from the Pensions Regulator. The former pointed out that:
“Trust-based … schemes (including master trusts) … are not currently subject to the same stringent regulatory standards as contract-based schemes, which are regulated by the FCA”.
The latter pointed out that:
“Due to their scale, commercial purpose and design for use by multiple employers, master trusts represent different risks to members and consumer protection … master trusts themselves are not authorised prior to market entry and the regulatory framework is not designed for similar levels of ongoing supervision”,
unlike providers regulated by the FCA.
Does the Minister share these concerns? To what extent if at all has the position been ameliorated by the governance arrangements that we are discussing today? Is it satisfactory that the take-up of the voluntary master trust assurance framework seems to be so low? Does the Minister have an update on the previous figure of just five schemes? Is the Minister satisfied that the fit and proper persons test is being applied rigorously? Is it the case that master trusts are not protected either by the Financial Services Compensation Scheme or the Pension Protection Fund and is this an acceptable position?
The Minister will have read the Hansard record of other concerns expressed in the debate. I will not go over them all. It is understood that the Minister is on record as asserting that legislation is needed, particularly to deal with master trusts given their proliferation and the ongoing progress of auto-enrolment. We will have to wait and see what is in the Queen’s Speech in a few weeks’ time but one way or another, there are substantial issues here that need to be addressed.
Baroness Altmann
My Lords, I thank the noble Lord, Lord McKenzie, for his remarks. I am grateful that he shares our commitment that schemes should be well governed and welcome that he has no quarrel with our proposed regulations on these measures. I shall try to respond to some of his questions.
The noble Lord asked if the Minister shares the concerns that have been raised, and I can tell him that the Minister does share those concerns. It is true that trust-based schemes are not subject to the same regulatory controls. The authorisation of master trusts and trust-based schemes is the responsibility of HMRC. There is a “fit and proper persons” test now, but clearly even if that is applied rigorously more protection may be required. That is under active consideration. Such schemes are not, unless they are defined benefit, protected by the Pension Protection Fund, and even if the assets are protected by the FSCS, it is true that the costs of winding up the scheme could be deducted from the protected assets. Therefore, there is still a requirement for us to make sure that we protect as many people as possible in auto-enrolment and protect their pensions. These regulations, however, will ensure that there are improvements in governance standards. They will ensure that multiemployer schemes are better run and will clarify the governance requirements, which of course are such an important part of our pension system, to ensure that trustees are in place who can protect the interests of members.
With regard to the figures, over 90% of members who automatically enrolled into master trusts have been enrolled into those schemes that had signed up to the master trust assurance framework, which ensures that some quality features apply but is not, in and of itself, sufficient as a guarantee. It is a good indication of well-run schemes. There are a number of large master trusts available for auto-enrolment, and the Pensions Regulator is obviously trying to signal to employers that they have been through some quality assurance testing. Again, that is important because the worker who is auto-enrolled into a pension scheme has no control over the scheme chosen for them by their employer. It is therefore essential that we help employers to know how to choose a good pension scheme for their staff that is safe and secure, and indeed that they do so.
Well-run master trusts can and do offer good value for consumers and their employers, and of course we are keen that this market develops in the right way. We are aware that there are some potential issues and, as I am sure the noble Lord is aware, we are working with the Pensions Regulator to improve protection and ensure that the right protection is in place, which is likely to require legislation. We will come back to the noble Lord when the measures can be further elaborated upon.
There are a number of governance requirements that master trusts already have to meet under the current law, and I believe that the voluntary master trust framework covers seven schemes—is that right? I understand that it covers five at the moment, but others are in the pipeline. Still, we need to be sure that we are exploring, and will succeed in achieving, other protections in addition to those that already exist as auto-enrolment moves forward. Currently the contribution levels are extremely low, but numbers will increase—contribution levels will be quadrupling by 2019—so we must ensure that we have protections in place for those who enter auto-enrolment in the coming years.
On the noble Lord’s question about the head-count issue in partnerships, the purpose of the definition of “connectedness” is to help schemes to establish the degree of connection within a corporate group or partnership. If they are sufficiently connected, it can be exempted from the requirements. The partnerships definition is designed to ensure that two employers that are partners share a sufficient number of partners—that is, at least half—in order to be connected. This is about not just numbers but connection. As long as the multiemployer scheme is multiowner only because of connected employers, it is treated more like a single-employer scheme, but if a scheme promotes itself to bring in other employers rather than just being within the group then it is a multiemployer scheme, and we are trying to clarify that with these regulations. We hope that that will be clear.
Lord McKenzie of Luton
I will perhaps expand a little on the question, although maybe we should follow it up outside this session. I understand the thrust of employers needing to be “connected” for these purposes and, so far as partnerships are concerned, connection looks to be driven by a certain commonality of numbers of partners. However, numbers of partners may not tell you very much about where the weight and financial interest of any particular partner is. It would have been quite easy to construct something where you had a sufficient number of partners but all the clout and financial substance was with just one or two partners. I wonder how the “connected” rules would operate in those circumstances. I am afraid that this is a bit of a nerdy issue, and maybe we should deal with it outside this session if the Minister is not able to cover it fully today.
Baroness Altmann
I am happy to try to cover it if the answers that I have given are not sufficient. One of the crucial tests here is whether a scheme is promoting itself to outside employers rather than being part of a group. If a company is being taken over or if shares are changing hands, but it is all within the same group, same company and same partners, it is likely to be considered a connected scheme rather than a multiemployer scheme and therefore exempt. However, if there are other issues that the noble Lord would like me to elaborate on outside this debate, I am happy to explore those.
Baroness Drake (Lab)
I was not going to come in on this regulation but the Minister’s comments have prompted a question in my mind. If a company is in the corporate group and participating in a pension scheme—so it does not come under the definition of a multiemployer scheme—and that company then leaves the corporate group but continues to participate in that pension scheme, would that automatically transfer it to the status of a multiemployer scheme?
Baroness Altmann
The noble Baroness raises an interesting point, which I myself have explored. It is the case that if an employer leaves a previous group but the employees are still part of that scheme, it will be considered a connected scheme because the members are still part of the same group. The group stays in the scheme, so in that circumstance it would still be part of the group rather than becoming a multiemployer scheme, as long as it is not then opening itself to promotion to attract other employees and employers. I hope that that answers the noble Baroness’s question.
Baroness Drake
I do not want to labour the point but I am still not clear in my mind: if you have a corporate group of companies and one of them literally is divested in some way, and it continues to use that pension scheme but is no longer part of the corporate group, what status does that trigger? I am happy to pursue this question offline.
Baroness Altmann
Regarding these regulations, as I have just described, if employers that are outside the group can fit within these corporate scenarios—that will include where an employer was part of the corporate group but has now left the group and continues to participate in the scheme—they are considered a corporate group scheme.
Lord McKenzie of Luton
If that is the end of the exchange, I thank the Minister for a very full and quite frank response. It is very helpful to get that on the record.
Baroness Altmann
I thank the noble Lord. I am grateful for noble Lords’ careful attention and scrutiny of these draft regulations. We believe that good governance is fundamental to securing good member outcomes and these draft regulations will help ensure that schemes are better run, in members’ interests. The regulations that we have put forward today will make amendments that will help to clarify the scope of the governance provisions. I am grateful for Members’ contributions to this debate. I hope I have set out the need for these regulations, and have responded as best as I can to the matters raised. If necessary, I will continue to answer any further questions that noble Lords may have. I commend these draft regulations to the Committee.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2016
(8 years, 1 month ago)
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Baroness Altmann
That the Grand Committee do consider the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2016.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, this order, which was laid before the House on 8 February 2016, reflects the conclusions of this year’s annual review—required by the Pensions Act 2008—of the automatic enrolment earnings thresholds. The review considered both the automatic enrolment earnings trigger, which determines the point when someone becomes eligible to be automatically enrolled into a workplace pension, and the qualifying earnings band, which determines the earnings levels in relation to which the enrolled employee and their employer have to pay contributions into a workplace pension.
The order sets a new upper limit for the qualifying earnings band and is effective from 6 April 2016. The earnings trigger and the lower earnings limit are not changed within this order. The lower earnings limit remains as set in the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2015. The earnings trigger also remains that set in the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2014.
Automatic enrolment continues to make workplace pension saving the “new normal”. The proportion of those enrolled who later choose to opt out remains low, at 9%, according to the Employers’ Pension Provision Survey 2015, which is well below the original programme assumption of 28%. Our new awareness campaign, launched in October 2015, Don’t Ignore the Workplace Pension, builds on previous campaigns that sought to normalise pension saving among individuals and is designed to prompt employers—small and large—to find out about their duties and the process of automatic enrolment.
Automatic enrolment continues to bring into its target group those least likely to save for retirement. Low-paid workers and women, who are often likely to be low earners, have traditionally been underrepresented within workplace pension savings. Since 2011 the private sector has seen a 24-percentage-point increase in eligible female participation in workplace pensions, and in 2014 there was no gender gap in participation, with 63% of both eligible men and women participating.
This positive trend is expected to continue as we enter automatic enrolment’s most significant stage: the phased rollout to small and micro employers from now on. Last year saw the successful staging of the first tranche of small and micro employers. Over the next 12 months, more than 700,000 small or micro employers are projected to have started enrolling their employees into a workplace pension. Many tasked with this legal duty are not commercial enterprises but individuals who employ single members of staff, such as nannies, home helps or personal care assistants. At this crucial stage of implementation, it is therefore more important than ever that when deciding the thresholds for joining and contributing to a workplace pension we strike the correct balance between minimising the administrative burden on employers and ensuring that as many people as possible save in a workplace pension.
To describe the impact of the order, I turn first to the qualifying earnings band. This sets the earnings levels within which an automatically enrolled employee and their employer have to pay a proportion of the employee’s income into a workplace pension. Past reviews have generally linked this to the national insurance bands and this has been uncontroversial. As I signalled in my Written Ministerial Statement on 15 December 2015, the lower limit for the qualifying earnings band will remain unchanged and aligned with the national insurance lower earnings limit of £5,824. This order will align the qualifying earnings band upper limit with the new national insurance upper earnings limit of £43,000. By maintaining the alignment with the national insurance thresholds, both at the point where contributions start for low earners and are capped for higher earners, the overall changes to existing payroll systems are kept to a minimum. This decision therefore both ensures simplicity and minimises the administrative burden of compliance for employers in 2016-17.
The order does not change the earnings trigger. This remains at the value set in the 2014-15 order. This trigger is the earnings level at which individuals are eligible to be automatically enrolled into a workplace pension scheme by their employer. We have decided to maintain the existing automatic enrolment earnings trigger for 2016-17, so it will remain at £10,000. Due to anticipated wage growth, and with maintenance of the earnings trigger, we expect that an additional 130,000 individuals will now meet the earnings criteria and be brought into the automatic enrolment population. Of these, we estimate that 71%, or around 91,000, will be women. Individuals earning below the £10,000 earnings trigger but above the lower earnings threshold will still have the option to opt into a workplace pension and benefit from their employer contributions, should they wish.
In conclusion, the decision to maintain the earnings trigger at £10,000 will increase the number of low earners and women who meet the earnings criteria, and who are therefore automatically enrolled into a workplace pension. This decision will increase the total numbers saving into a pension and total savings. It is expected to further increase the number of women eligible to enrol, or be re-enrolled, into a workplace pension.
The decision to maintain the alignment of the lower and upper earnings qualifying bands with national insurance contributions thresholds maintains simplicity, and ensures that there are no new potential administrative burdens on employers at a crucial stage of the programme’s wider rollout. The order therefore ensures that automatic enrolment will continue to provide greater access and opportunity for more individuals to save into a workplace pension with the help of their employer, and those enrolled will have a chance to build up meaningful pension savings. I commend the order to the Committee.
Baroness Drake (Lab)
My Lords, these regulations provide an annual event for me. While I consistently recognise the success of the department in rolling out auto-enrolment, and we have all been pleased by the power of inertia to sustain low levels of opt-out, in previous years I have been increasingly frustrated by the number of women being excluded from auto-enrolment because of the rather aggressive way in which the earnings trigger was increased. Last year I came with a little more humility and was pleased to see that the earnings trigger was being maintained at £10,000 rather than tracing the tax threshold, and of course I am pleased that it is being maintained at £10,000 again. Those are the positives, and I am a “half full” person, but even a “half full” person still wants the extra half-glass that remains empty. I continue to remain concerned that only 38% of the eligible auto-enrolment population are women. In my view, that is still too low. A core principle in designing the new private pension system was that it should work for women, and I do not think that that principle is being met with in that percentage level.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing this order. We support the progress which has been made on auto-enrolment and we should take this opportunity to pay tribute to those who helped to create it. My noble friend Lady Drake was there at the start, or indeed before it, and she has expressed her concerns that the system still does not seem to be dealing adequately with the concerns and needs of low-paid women. It will be interesting to hear the Minister’s response to all that.
In her introduction, the Minister referred to the fact that those between the LEL and qualifying earnings can opt into the system. Do we have any data about how many actually do that? I think she cited that there was equality in 2014, in so far as 63% of eligible men and 63% of women opted in. The trouble is that the numbers of men and women were not equal, which meant that many more men opted in, so her statistic was a bit unfortunate.
As my noble friend Lady Drake has recognised, freezing the earnings trigger for a second year has a modest impact in drawing more people in and will help women, who are of course disproportionately represented among the lower paid and have missed out on auto-enrolment previously. One of the effects of freezing the trigger at £10,000 is a widening gap between the contributions and the income tax threshold, which means that, as a practical matter, those who are on the net pay tax relief arrangements are not actually getting effective tax relief. There are, of course, two ways in which you can get your tax relief: one is through the net pay arrangement and the other, the name of which escapes me—
Lord McKenzie of Luton
It is indeed relief at source. I am grateful to the Minister. What is happening to try to ensure that those people who are subject to the net pay arrangements are getting their tax relief? I am not quite sure what the arrangement with NEST is. I think that relief at source, which generally operates for NEST, will obviously cover a good many people, but how many people are missing out? These are people at the low end of the income scale who are not getting their tax relief, which was an important ingredient of the overall arithmetic.
Has there been any progress on aggregating mini-jobs for the purposes of the trigger and qualifying earnings band? If our noble friend Lady Hollis were here rather than in the debate on the Housing and Planning Bill, she would be on her feet extensively.
Lord McKenzie of Luton
It was about people with mini-jobs being able to aggregate to reach the thresholds. We understand some of the practicalities, but has any progress been made on that?
I have another question to which I genuinely do not know the answer, about the impact of zero- hours contracts and fluctuating earnings on take-up arrangements. Looking at the varying pay periods, how does this work when somebody is within a pay period and above the threshold for one month but not for the subsequent period, so that they fluctuate in and out of the system? I think those were all the questions that I had. We will obviously not be opposing these provisions, and I look forward to the Minister’s response.
Baroness Altmann
My Lords, I thank the noble Baroness, Lady Drake, and the noble Lord, Lord McKenzie, for their excellent contributions. I certainly join in the tribute paid to the noble Baroness by the noble Lord for her role in setting up and being responsible for the successful programme of auto-enrolment.
I am delighted and welcome the fact that the noble Baroness welcomes the decision to freeze the earnings trigger. I am also delighted that she is as pleased as we are with the low opt-out rate and that, so far, this programme has indeed been a real success. All the points raised by the noble Baroness are valid, and are ones that I have raised in the past. However, there is a further reason why we have to be mindful of where we set the earnings trigger, and be very careful as we move forward with this policy not to derail what is already such a success. Part of the reason why it is such a success is that there is widespread consensus among employers as well as the pensions industry that this is the right thing for the country. Employers have accepted—willingly, in many cases—the idea that it is normal, and should be normal, for an employer to be responsible for not only the national insurance and tax of their employees but also a pension for their workforce.
However, as the noble Baroness knows, that consensus was hard won. It was the result of a very long period of negotiation and renegotiation, part of which concerned the costs to the employer. Although the earnings trigger is higher than might have been expected a few years ago, we have put other burdens on employers. Were we to reduce the earnings trigger significantly at this stage, given that we have the rollout of the national living wage, the apprenticeship levy and other elements that will impact on employers’ labour costs, it would be right to be mindful and careful about how quickly we move to include significantly more people in pension saving. However, notwithstanding that, as I said, 130,000 more people will be brought into pension saving—71% of whom are expected to be women—as a result of keeping the earnings trigger at the £10,000 level rather than moving it up, as was one of the considerations.
The noble Lord, Lord McKenzie, also referred to women. I once again confirm that the coverage of pensions for eligible workers is the same for women and men. As most noble Lords are probably aware, I would certainly like to see more women being brought into auto-enrolment. In time, I am sure that we will be able to do that. Of course, they can now opt in anyway if they are earning more than £5,824 a year and receive an employer contribution. That still means that they do not get the same behavioural nudge, but I can report that the latest figures suggest that 5% of those who are not eligible and are earning below the relevant figure are opting into their employers’ pension scheme. It is a start. I hope that, in time, we will go further as we establish this as the norm and as more workers become aware of the fact that this could be effectively free money from their employer, and that a significant extra contribution on top of their own pension savings is on offer if they wish to take it up. Of course, it takes time for those messages to come through.
As the noble Lord may well be aware, the issue of net pay arrangements is something significant that I have raised since I became aware of it a few months ago. Clearly, it is not acceptable that the very lowest earners might be required to pay about 20% to 25% more for the same pension as someone who earns more than them. That is the potential result of their employer choosing to use this net pay arrangement-type of scheme rather than a relief-at-source scheme.
Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016
Lord Ashton of Hyde
That the Grand Committee do consider the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016.
Lord Ashton of Hyde (Con)
My Lords, with the permission of the Committee I will henceforth refer to the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 as “the order”. The order under consideration today makes changes to the respective regulatory frameworks for mortgages and peer-to-peer lending. I will begin by talking about the provisions that relate to the regulatory framework for mortgages before discussing the provisions relating to peer-to-peer lending.
In March 2015, Parliament approved the Mortgage Credit Directive Order, which ensures that the UK implements the EU mortgage credit directive on time and with a limited impact on the UK mortgage market. The Mortgage Credit Directive Order 2015 is due to come into effect on 21 March this year. Since that order was made, the Government have been monitoring the progress of the mortgage industry towards implementation. During the course of this ongoing monitoring, it came to light that there were some areas where the Mortgage Credit Directive Order did not achieve what was intended or where it could be improved on. The Government acted quickly and laid a statutory instrument, which was made in November 2015. This made a small number of amendments to the scope of regulation to ensure that the regulatory framework continued to operate as intended.
The order under consideration makes further changes, which aim to ensure that the legislation delivers on previously agreed policy. This order clarifies the regulatory status of a number of categories of loans entered into before April 2014. Specifically, it clarifies that the regulatory status of these loans depends on their regulatory status under the consumer credit regime, before the transfer of regulatory oversight to the Financial Conduct Authority.
Since the transfer of the consumer credit regime from the Office of Fair Trading to the FCA in 2014, much of industry has assumed that the legislation applied the principle of “once regulated, always regulated” to loans entered into before April 2014. This is a different test from that which is generally applied under the FCA regulatory regime, where regulation is applied to ongoing activities, with the regulatory status of those activities changing over time.
Following engagement with both the industry and the FCA, we have been made aware that there is ambiguity as to which test now applies to some loans entered into before April 2014. This means that there is also ambiguity as to the loans that are to be moved across to the mortgages regime when the mortgage credit directive comes into force on 21 March. This order will remove that ambiguity. Providing clarity as to the regulatory status of these loans will ensure that their holders are able to assess accurately what regulatory permissions they require. Furthermore, it will ensure the continuation of consumer protections, preventing consumers inadvertently losing regulatory protections that they had at the point when they took out a loan.
In 2014, the Government removed English and Scottish housing associations’ new second-charge mortgage lending from the scope of conduct regulation. This order also exempts second-charge mortgage loans made from April 2014 by Northern Irish and Welsh housing associations.
Turning to the peer-to-peer amendments included within this order, it will extend the scope of the regulated activities relating to the operation of peer-to-peer lending platforms and the provision of advice on lending through such platforms. I shall begin by addressing the changes to providing advice on peer-to-peer loans. The Government want to support savers and to increase the choice available to ISA savers. To support this aim, the Government announced at Budget 2014 that loans made through peer-to-peer platforms will become ISA-qualifying investments. From 6 April, repayments of interest and capital made to lenders on new peer-to-peer loans will qualify for tax advantages where those loans are held in a new type of ISA—the innovative finance ISA. The Government anticipate that this could significantly increase the provision of advice to investors on peer-to-peer lending.
This order will align the treatment of advising on peer-to-peer loans with other ISA-qualifying investments by making the provision of advice to lenders on entering into such a loan a regulated activity. The consultation on these changes identified broad, industry-wide support for this change, which will ensure that the FCA is able to make rules so that firms providing advice to investors on peer-to-peer loans act properly and in the best interests of their customers. This will mitigate the risk of unregulated firms setting up and acting improperly in providing advice to consumers.
The order will also extend the scope of peer-to-peer regulation to ensure that all the relevant activities are included within this framework. In particular, it brings the activity of facilitating the transfer of rights under a peer-to-peer loan between lenders on a secondary market within scope of the Article 36H regulated activity. This means that a peer-to-peer loan brought on the secondary market will be subject to the same regulatory framework as new loans originated by peer-to-peer platforms. The order also clarifies the definition of an Article 36H agreement, or peer-to-peer loan, by changing it so that if the peer-to-peer platform is the lender or the borrower on its own platform, the agreement is not a peer-to-peer loan. This will ensure that peer-to- peer lending remains truly peer-to-peer lending. These amendments are an example of the Government’s proportionate and flexible regime in action, providing the space for peer-to-peer platforms to grow and provide competition to the major banks, while maintaining the right level of protection for consumers.
Finally, the order will make a minor amendment to the Small and Medium Sized Business (Finance Platforms) Regulations 2015. These regulations set out the circumstances in which designated banks must refer unsuccessful SMEs that have applied for finance to online platforms, to assist in finding other sources of finance. The amendment clarifies that where a small business is already using a broker to seek finance on its behalf, unsuccessful applications by that broker do not need to be referred to finance platforms. Taken together, the changes made by the statutory instrument under consideration are another important step in ensuring that the UK’s financial system is resilient, competitive and works for the good of the nation. I commend the order to the Committee.
Lord Tunnicliffe (Lab)
My Lords, it is a pleasure once again to be in Grand Committee responding to a Treasury order so skilfully presented by the noble Lord, Lord Ashton of Hyde. The instrument is composed of three main issues: the first relates to the regulation of peer-to-peer lending; the second to provisions regarding the EU mortgage credit directive; and the third to clarifications surrounding small business finance. We will not be opposing the order today, but there are a number of questions that I would like to put to the Minister. The majority of my comments will be on peer-to-peer lending, particularly in the light of the recent publication of the FCA discussion paper on this issue, as well as the way in which the Government intend to carry out the commitments they made during the consultation process with peer-to-peer lenders and other interested parties.
From next month, the innovative finance ISA will be introduced for certain types of peer-to-peer lending, and advice to lenders entering into peer-to-peer loans will become a regulated activity. This is a welcome move. As the Financial Services Consumer Panel stated:
“It is important that anyone considering saving in a peer-to-peer ISA understands the risks associated with it, and they should be covered by appropriate levels of protection”.
However, there are questions as to whether or not this advice will be in place by April. The Yorkshire Building Society has estimated that more than 400,000 savers are expected to invest in this field. However, there were questions about the readiness of the financial advice sector to advise on the new products.
At the end of February, the Financial Times reported that the UK’s three biggest lending platforms have not yet been granted their status as fully regulated authorities by the Financial Conduct Authority, despite submitting proposals in October 2015. With only a few weeks before the ISA is introduced, will the Minister update us on how many peer-to-peer lenders have been granted authorisation status?
I turn now to the secondary market and the Financial Services Compensation Scheme. In their response to the consultation, the Government stated that:
“Due to the illiquid nature of peer-to-peer loans and the fact that a secondary market for every loan cannot be guaranteed, the government has decided not to require that investors should be able to withdraw any non-cash investments from the Innovative Finance ISA within 30 days. However, this should not preclude platforms that can facilitate withdrawals via their own secondary market from doing so”.
In the light of this decision, Andy Caton, executive director at Yorkshire Building Society, said:
“It is important that those who opt to invest in the new type of P2P Isa realise how different it is from the existing choices and that they will not receive Financial Services Compensation Scheme protection, access to their money could be difficult if required sooner than expected and, in extreme cases, could lose interest and capital”.
The FCA has declared its intention to consider whether the remit of the Financial Services Compensation Scheme should be extended to include peer-to-peer lending in 2016. Given this, will the Minister clarify the Government’s own opinion on covering peer-to-peer investments through the Financial Services Compensation Scheme? Will he clarify when he understands that the FCA will carry out this review and whether the required advice that this order provides will be extended to the secondary market?
Before turning to mortgage lending, I shall address the issue of set-up and ongoing costs in relation to the innovative finance ISA authorisation. The summary of the consultation document sets out clearly that of those respondents who answered question 1 on set-up costs, the majority predicted that they would have costs of £50,000 or more. These costs would include building the necessary technology platforms and legal advice, as well as costs to fund the ongoing operation through additional staffing and platform maintenance. In response, the Government committed that:
“Where available, further details of the potential costs to businesses of including peer-to-peer loans within ISA will be set out in a Tax Information and Impact Note, to be published alongside draft legislation later this year”.
I note that the only costs to which the Explanatory Memorandum refers are in paragraph 10.2. The Government estimate that there will be a one-off set-up cost of £1,500 and a £2,545 annual cost. Can the Minister explain why the Government’s predicted costing and the industry’s differ so significantly?
The second aspect of the order relates to the EU mortgage credit directive and is due to come into force next Monday, 21 March. As the Minister implied, this is the second order relating to this directive, it having originally been discussed on 19 March 2015. The directive provides for minimum regulatory requirements to protect consumers taking out credit agreements relating to residential property. It also imposes maximum standards on member states, particularly the provision of information in a standardised format for consumers.
As I said last year, these are entirely sensible provisions. However, the reason why we are returning to this issue is because, following engagement with those in the industry, there are a number of areas where legislative change is necessary in order to ensure that the objectives of the directive are achieved. The Government have decided to create a transitional period until 21 March 2017 before first charge mortgages that were entered into before 31 October 2004 and are currently regulated as consumer credit agreements must be regulated as mortgages. It is worth quoting the Financial Services Consumer Panel, which said last year that ahead of full implementation,
“there are challenges for firms in managing the shift to the new regime because of the relatively long sales process for mortgages”.
At the time it was made clear that the Government would consider whether further steps were necessary to smooth the process, so it is encouraging to see that they have done just that. With whom have the Government been engaging in order to come to this decision? Were the relevant stakeholders consulted in the drafting of this order?
Turning to buy-to-let mortgages, these are not generally subject to conduct regulations. However, the EU directive will introduce a new category of consumer buy-to-let lending that will be subject to regulation. Customer buy-to-let mortgages, as opposed to those taken out for business reasons, will be defined as loans for a property that is rented out but not,
“wholly or predominantly for the purposes of a business”.
This would be a family member living in the property, or intending to live in it in the future. Will the Minister go into more detail about how regulators intend to make this distinction between the two? What information will they ask of consumers in order to make this judgment, and how many mortgages do the Government anticipate will be impacted by this provision?
The third matter covered by this order relates to small business lending. The effect of this instrument is to exempt applications from referral to business platforms that are made by a broker instead of directly by a business. It would therefore be the responsibility of the broker to provide advice. How confident is the Minister that this advice will be provided, and do the Government expect this measure to have any impact on the ability of SMEs to access finance in general? As I said at the beginning, we will not oppose this order and are conscious of the implementation deadlines. However, I would be grateful if the Minister would address the issues that I have raised.
Lord Ashton of Hyde
My Lords, I thank the noble Lord, Lord Tunnicliffe, for his kind words, his questions and for agreeing to support—or, at least, not oppose—this order. He asked a number of very reasonable questions which I will do my best to answer. He asked how many peer-to-peer lending firms had been granted authorisations. The FCA has authorised seven P2P firms to date, so they will be able to offer the innovative finance ISA, should they wish to do so. The FCA is also currently considering a number of applications for authorisations, both from firms that wish to operate peer-to-peer platforms as well as those currently doing so on the basis of interim positions. It is important to stress that the FCA has a responsibility to authorise only those firms that meet its threshold conditions. It is trying to do so as quickly as possible before the implementation date and has increased the number of people working on these applications. However, it is important that the FCA does not lower standards before the implementation date, given that we hope this provision will last for many years. As I say, the relevant figure to date is seven.
The noble Lord asked whether the P2P loans within the ISA would be protected by the Financial Services Compensation Scheme, and asked for our views on that. Peer-to-peer lending is currently not covered by the Financial Services Compensation Scheme. We want the regulatory framework for this new P2P lending to be proportionate, especially when it is young and growing. It would increase regulatory costs if it was included in the scheme, so at the moment it is not currently considered proportionate to do so. However, the FCA is committed to reviewing that framework in 2016, and during that will consider again whether those P2P loans should be within the remit of the FSCS.
There was a question about the cost on the innovative finance ISA of introducing this scheme. The problem is that the relevant figures do not refer to the same costs. The Explanatory Memorandum refers to set-up costs and FCA fees for firms applying for authorisation to undertake the new regulated activity of providing advice, but the consultation estimate refers to firms intending to offer the IF ISA and includes costs such as setting up the IT infrastructure and hiring additional staff who may be required to offer and run the scheme. We expect that firms which incur those extra costs would benefit from doing so but the decision whether to do that is, of course, a commercial decision for them.
The noble Lord asked with whom the Government have been engaging in the lead-up to the implementation date and whether relevant stakeholders were consulted. The changes today—as the noble Lord mentioned, in some cases the second round of changes—are a result of continuing engagement, and one of the benefits of laying the orders well before the implementation date was to allow us to engage with the industry and regulators. In particular, during that time, we have worked closely with the Council of Mortgage Lenders and, obviously, the FCA itself.
Lord Ashton of Hyde
I will have to come back to the noble Lord on that in due course, when I have got some advice myself.
On the number of mortgages that the Government anticipate will be impacted by these new provisions for buy-to-let lending, the introduction of the regulatory regime for consumer buy to let will not affect the vast majority of buy-to-let loans because they are predominantly taken out for business purposes. The impact assessment suggests that 11% of buy-to-let loans will be subject to this new regulatory framework. Based on the level of buy-to-let lending in 2015, this would equate to around 28,000 transactions. My advice is that I will have to write—I could have said that myself.
The last question that the noble Lord asked related to the last item that this order introduced in connection with the Small and Medium Sized Business (Finance Platforms) Regulations, which ensures that an unsuccessful application for finance made by brokers on behalf of small business is out of the scope of the regulations. That means that they do not need to be referred to finance platforms. The point here is that the business that is seeking alternative finance—not just from the big lenders—is already using a broker, who is able to advise on alternative sources of finance. The broker fulfils a role analogous to the finance platform and, of course, is incentivised to provide that advice and seek alternative sources of finance. We feel that nothing would be gained by requiring a bank to refer a failed application to the broker, so the Government do not feel that this will impact the amount of advice on alternative finance available, which they have increased by the finance platforms regulations.
I think that I have answered most of the questions, except whether the regulator provides advice, on which I will write to the noble Lord. Based on his helpful comments, I ask the Committee to join me in supporting this statutory instrument today.
Disabled Persons’ Parking Badges (Scotland) Act 2014 (Consequential Provisions) Order 2016
(8 years, 1 month ago)
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Lord Keen of Elie
That the Grand Committee do consider the Disabled Persons’ Parking Badges (Scotland) Act 2014 (Consequential Provisions) Order 2016.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I beg to move that the draft order laid before the House on 22 February 2016 now be considered. The statutory instrument before us is made under Section 104 of the Scotland Act 1998 and in consequence of the Disabled Persons’ Parking Badges (Scotland) Act 2014, which I shall refer to as the 2014 Act and which makes provision about badges for display on motor vehicles used by disabled persons. These are commonly referred to as blue badges.
One of the main aims of the 2014 Act is to help tackle blue badge misuse by providing additional powers to local authorities and the police to enforce the blue badge scheme in Scotland. The 2014 Act strengthens enforcement powers, including the ability to cancel or confiscate a badge in certain circumstances, and provides for security features of the blue badge format to be approved administratively by the Scottish Ministers. While eligibility for badges, scheme administration and enforcement measures vary between Scotland, England and Wales, there is overall agreement between each of the Administrations and their respective local authorities to work together on the common parts of the blue badge scheme. This has seen the creation of a shared database, used by local authorities for the production of badges, which allows local authorities to enforce the scheme across Great Britain.
The Disabled Persons’ Parking Badges (Scotland) Act 2014 (Consequential Provisions) Order 2016, which I shall refer to as the draft Section 104 order, will ensure consistency throughout Great Britain with regard to the validity of blue badges issued in Scotland and give full effect to the 2014 Act. This will produce certain practical results so that, for example, a badge issued by a local authority in Scotland will, for the purposes of the law in England and Wales, be in valid form if it meets the new requirements being provided for in Section 1 of the Act. This will also ensure that enforcement officers are able to confiscate badges which are being misused and have been cancelled by a local authority in another area of Great Britain.
I will now seek to set out for the Committee what the order seeks to achieve and why it is felt to be an appropriate and sensible use of the powers under the Scotland Act 1998. Section 104 of the 1998 Act provides for subordinate legislation to be made by the UK Government which contains provisions that are necessary or expedient in consequence of any provision made by, or under, an Act of the Scottish Parliament. In this case, provision is required in consequence of provision made by the 2014 Act, which received Royal Assent on 24 September 2014.
The order extends to the law of England and Wales the effect of certain amendments made in Scots law by the 2014 Act. The amendments in question are amendments to Section 21 of the Chronically Sick and Disabled Persons Act 1970, which provides for disabled people and their carers to be issued with badges entitling them to certain parking concessions. Section 1 of the 2014 Act changes the rules about the form that a badge issued in Scotland must take if it is to be recognised as a valid badge. Badges issued in Scotland are recognised in England and Wales. Article 3 of the order therefore reproduces in the law of England and Wales the effect of Section 1 of the 2014 Act, so that on both sides of the Scottish-English border the same rules will apply for the purpose of determining whether a badge issued in Scotland is in valid form. I should add that the same applies in respect of Wales.
By virtue of Section 2 of the 2014 Act, Scottish local authorities are able to cancel badges which they have issued in certain circumstances. A badge which has been cancelled by the Scottish local authority that issued it should not be recognised as a valid badge in England and Wales. Accordingly, Article 3(3) of the order extends the effect of Section 2 of the 2014 Act so that the cancellation of a badge by a Scottish local authority is effective in the law of England and Wales.
Article 4 of the order fixes a cross-reference in subsection (8C) of Section 21 of the 1970 Act. That subsection glosses references to local authorities elsewhere in Section 21 so that they fall to be read as including the Secretary of State. The gloss is stated not to apply in relation to specified subsections. One of the subsections specified is subsection (4BB) which, in the law of England and Wales, was inserted by Section 94 of the Traffic Management Act 2004 and defines the expression “enforcement officer”. This is the subsection (4BB) to which subsection (8C) is intended to refer. As a matter of Scots law, however, a different subsection (4BB) was inserted by Section 73 of the Transport (Scotland) Act 2001. It does not define the expression “enforcement officer” for the purposes of Scots law. Instead, the Scottish definition of “enforcement officer” is to be found in the version of subsection (8A) inserted by Section 5(4) of the 2014 Act. Article 4 of the order amends subsection (8A) so that it does not gloss the reference to a local authority which appears in the definition of “enforcement officer” in both the law of Scotland and of England and Wales.
The need for and content of the draft Section 104 order has been agreed between the United Kingdom and Scottish Governments. The Department for Transport, which has responsibility for the legislation which this order affects, has been consulted throughout the drafting of the order. All provisions contained in this order have the approval of the Department for Transport and of the Scottish Government.
The statutory instrument before the Committee demonstrates this Government’s continued commitment to working with the Scottish Government to make the devolution settlement work. I hope that your Lordships agree that the order is an appropriate and sensible use of the powers in the Scotland Act 1998, and in particular of Section 104. I commend the order to the Committee.
Lord McAvoy (Lab)
My Lords, I thank the noble and learned Lord, Lord Keen of Elie. He showed off his legal skills in presenting the order. I think that I got left behind at the fifth subsection of the seventh Act that he mentioned, but I think that I managed to catch up. If I were a suspicious person, I would think that he was trying to lead me up the highways and byways, but I have studied this order carefully and I do not think that even he is up to mischief with it.
As the Minister has explained, the Scottish Parliament passed a Disabled Persons’ Parking Badges (Scotland) Act and the order will ensure that there is consistency across Great Britain for the badges issued in Scotland. It will mean that the badges issued by Scottish local authorities are recognised in England and Wales. We supported the objectives of the Act when it went through the Holyrood Parliament and we support this measure today. We are committed to making towns and cities more accessible for the disabled in Scotland and more widely, as was shown recently by our amendment in relation to parking on pavements made to the current Scotland Bill. We know that this issue causes real problems for those with disabilities. We again record our gratitude to the Government for accepting our argument and bringing forward the changes necessary to ensure that the Scottish Parliament can act on this issue.
This order tries to establish consistency throughout the three countries. The noble and learned Lord mentioned that, on the common parts of the legislation, the three countries were working together. Are there any differing parts of the legislation left? To get consistency would need careful wording to make sure that there are no discrepancies or loopholes left.
Paragraph 8.6 of the Explanatory Memorandum points to the Scottish Government’s engagement with multiagency groups,
“to bring forward new and focussed ways to educate badge holders”.
My colleagues in the Scottish Parliament have raised this issue and I will ask the Minister about it today. Do the UK Government intend to carry out the same multiagency work and will they be issuing guidance to local authorities in England and Wales about this order?
There is nothing minor about legislation affecting people in the disabled community, and this order did not have any real public consultation. I wonder if the assumption there was that it had broad support; let me hasten to add that it would be a reasonable assumption. On the other hand, it is known that the Great British public, and the Scottish public, can always offer up something. Can the Minister say who was consulted by the Department for Transport and what advice they offered? Perhaps the Minister would consider committing to placing a copy of the evidence in both Libraries.
However, in the great scheme of things these are minor quibbles. We support the order, but I would be grateful if the noble and learned Lord could address some of my specific points. If there is anything new there that has not been covered, it would of course be acceptable to receive that in writing.
Lord Keen of Elie
I am obliged to the noble Lord, Lord McAvoy, for his observations with regard to the order.
As regards the commonality of the scheme, the only differences which would potentially exist would be on entitlement to badges, which is a matter for each jurisdiction to determine, and the form of the badges themselves, which may differ. What the order will ensure, by way of the 2014 Act, is the enforceability of orders made with respect to those badges. That is what I have to say on commonality.
On the matter of consultation and guidance, I am advised that the UK and Scottish Governments worked closely together with regard to the provisions in the order. It is intended that the department—well, something is intended. Perhaps the noble Lord would allow me a moment.
I am advised that steps will be taken to ensure that the Department for Communities and Local Government is properly sighted on the order so that it may then make an appropriate decision as to whether guidance should be issued. I apologise for the delay on that point.
I am also advised that, as with all Section 104 orders, relevant departments and Ministers were consulted and gave their consent to the making of the order. I do not have further detail as to what was said by or on behalf of the Department for Transport, but perhaps I can arrange to write on that point.
Unless there is any further point that I have not covered, I will leave the matter there.
House of Lords
Severn Crossings: Tolls
(8 years, 1 month ago)
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Lord German
To ask Her Majesty’s Government what are their intentions regarding the tolls on the Severn Crossings when the bridges return to public ownership.
The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the Government have previously said that we would look at all options and consider the views of others before making any firm decisions. Our intention is to continue tolling after the projected end of the concession in 2018 to recover costs that have been incurred and fall outside the concession agreement.
Lord German (LD)
I am slightly disappointed by that Answer, especially as I was rather hoping that the Government might announce that they were going to abolish this tax on business in Wales and on entering Wales. Given that we do not pay a toll when we travel on the raised parts of the M5 and M6 around Birmingham, that the Thurrock-Dartford bridge is not a motorway but an A road and that the M6 toll road is an alternative route, can the Minister tell me any other structures, tunnels, bridges or roads on the motorway network for which a charge is made; or do the Government believe—as they seem to—that these motorway links into Wales should be the only through routes on our motorway network for which we must pay a toll?
Lord Ahmad of Wimbledon
My Lords, there are other areas of the United Kingdom where tolls are charged—through tunnels and on bridges from the Mersey to areas of Scotland, and around other areas of England as well. The important thing is that there is a concessionary scheme in place. As I have already said, we will look at this at the end of that concessionary period, towards the early part of 2018, and I assure the noble Lord that we are working very closely with the Welsh Government in this regard.
Lord Anderson of Swansea (Lab)
My Lords, the blunt truth is that Wales is at or near of the bottom of the indices of deprivation in this country. Surely if the Government were serious about tackling the deprivation in Wales this tax on Wales and the Welsh people should be abolished.
Lord Ahmad of Wimbledon
This is not a tax on Wales. As the noble Lord is well aware, it goes towards the running and maintenance of the bridge. As I have already indicated, at the end of the concessionary period the Government will review their position to ensure that, as the noble Lord rightly points out, this is a gateway to Wales. My right honourable friend the Chancellor indicated at last year’s Budget that, at the end of the concessionary period, for example, VAT will no longer apply and vans helping small and medium-sized enterprises will be charged the same toll as cars. That is an indication of the Government’s belief in encouraging the gateway to Wales.
Baroness Randerson (LD)
My Lords, Owens Logistics is a distribution business and a major employer in Llanelli. It spends £380,000 a year on tolls at £20 a time just for crossing the Severn Bridge. Can the Minister tell us what message this sends to similar businesses looking to do business in Wales?
Lord Ahmad of Wimbledon
My Lords, I have just said—I am sure that the noble Baroness heard my previous answer—that the Government are looking to assist small and medium-sized enterprises in that regard. When the concessionary period comes to end, we will review the tolling procedure and will work hand in glove with the Welsh Government to ensure that an effective tolling regime applies on the bridge. However, I remind noble Lords that, even at the end of the concessionary period, £63 million will still be owing to the UK taxpayer, and it is therefore right that we look to ensure that we recover that cost.
Lord Watts (Lab)
My Lords, the Minister will be aware that there is already a toll on the Mersey tunnel and that there is a proposal to charge on the second crossing to Runcorn. Can he set out the criteria for deciding whether something is charged for? The charging system seems somewhat confused.
Lord Ahmad of Wimbledon
I will write to the noble Lord on that scheme and provide details of what lies behind that decision.
Lord Harris of Haringey (Lab)
My Lords, does the fact that the M6 toll road is so successful demonstrate that people are prepared to pay good money not to go to Birmingham?
Lord Ahmad of Wimbledon
I am sure that that is just the noble Lord’s view; it is certainly not my view. Just to put this matter into perspective and to get back to the nature of the Question, people who choose to use the Severn Bridge crossing save, on average, up to 50 minutes on their journey time, so there is a cost benefit. There is also a time benefit for businesses and individual travellers to Wales.
Lord German
My Lords, just to be absolutely certain about what the Minister said in response to my first Question, is it definitely the Government’s intention to continue with the toll once the concession has ended and the cost of the bridge has been paid off?
Lord Ahmad of Wimbledon
As I have already said, there is a cost to the bridge. As the noble Lord knows, a concessionary scheme is in place but at the end of the concessionary period money will still be owing to the UK taxpayer for the cost of the bridge, and that needs to be recovered. As I am sure the noble Lord is aware, we estimate that the toll will continue for two years, as there is a need to recoup the—on current forecasts—£63 million which is currently outstanding.
NHS: Mental Health Services
(8 years, 1 month ago)
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Baroness Tyler of Enfield
To ask Her Majesty’s Government what plans they have to publish data regularly on the availability and quality of NHS-funded mental health services across the country.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, data on mental health have been a bit like a black hole. We are working with the Mental Health Data and Information Board to improve the data, as recommended by the Mental Health Taskforce. A new mental health dataset will be online by April this year. Starting with early intervention in psychosis, it will comprise data on waiting times, availability and outcomes. We will expand the dataset to other pathways once data become more robust.
Baroness Tyler of Enfield (LD)
I thank the Minister for his Answer. The Mental Health Taskforce which he alluded to called for a data and transparency revolution in mental health services, specifically in their availability and the spending on mental health. Its actual words were “absolute transparency on spending”. What steps are the Government taking to ensure that the data on spending come into the public domain and how quickly will that happen? Specifically, how does the department intend to respond to the call last week from the Mental Health Commissioners Network for money for children and young people’s services to be ring-fenced so that it is not siphoned off elsewhere?
Lord Prior of Brampton
We agree entirely with the recommendations in the task force report regarding the need for a revolution in transparency of information about mental health, and that will include spending. Even when adjusted for need, I think that there is almost a twofold variation in the spending on mental health from one CCG to another, so we entirely accept the recommendations.
Lord Patel of Bradford (Lab)
My Lords, going back to the noble Baroness’s comment about children and young people, given that one in 10 six to 15 year-olds suffers from a diagnosable mental health condition but that only 25% to 35% access the support they need, can the Minister provide assurances that there are no plans to change the funding for the training of psychotherapists, who do valuable work with these children in the NHS?
Lord Prior of Brampton
My Lords, I can give the noble Lord the assurance he wants. There are no plans to change the way in which funding for the training of psychotherapists is done at the moment.
Baroness Hollins (CB)
My Lords, given that people with learning disabilities and autism are at high risk of mental health problems, what specific support, and clarification of that support, will the Government commit to giving to address their needs?
Lord Prior of Brampton
My Lords, our strategy for this area was set out in Transforming Care, a paper produced by NHS England some six weeks ago. It shows that we are absolutely committed to treating more and more of these people outside institutional settings and back in the community.
Lord Bradley (Lab)
My Lords, I declare my health interests. As we have heard, the collection of financial data on the investment in mental health services is crucial. I am grateful to the Minister for writing to me recently to confirm the Government’s support for the Mental Health Task Force’s priority recommendations at an additional cost of £1 billion a year by 2021, with investment beginning in 2016-17. How much additional investment will be expected each year between 2016 and 2021? What financial reports will be available for each quarter over these four years to ensure that clinical commissioning groups make the additional investment in local mental health services?
Lord Prior of Brampton
My Lords, the noble Lord is right: we have committed to support the request of the task force to spend an extra £1 billion by 2021. Perhaps I may write to him about the phasing of that money over the next five years; I have seen it but I cannot recall the exact figures at the moment.
Baroness Browning (Con)
My Lords, can my noble friend outline the Government’s position on future in-patient services for children with mental health issues? Given that these are the most severe cases and that a lack of facilities in geographic proximity to where the children live has an effect on the immediate family, particularly parents, how will the Government resolve the problem of children as in-patients miles from home?
Lord Prior of Brampton
My noble friend raises a problem which is most acute for children and a serious issue for anyone who requires in-patient facilities. We are committed to reducing the number of children and older people who have to go a long way from home to receive in-patient treatment. We have committed to support the task force’s recommendation to spend a great deal more money on providing crisis resolution closer to home. This should obviate the need for people to go into in-patient facilities.
Baroness Brinton (LD)
My Lords, last week there was a well-publicised case of a young autistic man being held in secure mental health accommodation because there were no spaces in the appropriate autistic support facility. It transpires that the principal cause was that there was nowhere for the young people in the other unit to move to. Can the Minister explain what is happening with mental health services to avoid bed-blocking, in the same way as is happening with other social care?
Lord Prior of Brampton
On the particular case raised by the noble Baroness, the person involved will now come out of that accommodation. I think he has been an in-patient for six months but he is now due to come out of that place fairly soon. This issue is not confined to mental health. There are too many people who, if the right resources were available outside hospital, would be much better off being treated outside an institution than they are at the moment. We are doing our best to address this general concern, raised by Paul Farmer and his task force.
Lord Ramsbotham (CB)
My Lords, can the Minister tell the House whether the data to be published will include the provision of services in prisons and other places of detention, including immigration removal centres?
Lord Prior of Brampton
My Lords, it certainly is our intention to include information about people suffering from mental health problems in prison. I will have to check into the immigration removal centres and write to the noble Lord.
Baroness Afshar (CB)
My Lords, is there a guarantee that there will be not only no change in funding but a continuation in the training of personnel dealing with children’s psychological problems in particular, and in the number of such personnel? Many minority communities have a tendency to ignore such problems or put them aside, and it is therefore essential to have someone from within the community who is familiar with the process and who can pass on their training. So, will the number of personnel be maintained, as well as the quality of expertise?
Lord Prior of Brampton
I agree with my noble friend that it is essential that we have people who come from the communities of those who are suffering and who are receiving mental health care facilities. I cannot give her a specific answer, but I agree entirely with what she is saying.
Baroness Farrington of Ribbleton (Lab)
In looking at provision in the community, where people, quite rightly, can be treated for mental health conditions, will the Minister please have regard to the fact that, while the person who is ill may be behaving in an unusual, difficult or even frightening way, those concerned with the patient’s care sometimes disregard the problem of children in the family who are trying to cope 24/7 with this difficulty? Will he ensure that, in looking at services at home, due regard is paid to young people who become carers—in a way that, sometimes, other adults in the family have avoided?
Lord Prior of Brampton
The noble Baroness raises a broader point, which is that mental illness and mental health problems can cause chaos in families. Often, those who suffer most are the children of people who are going through a very difficult time, and due regard must of course be given to those children.
Children: Sexual Abuse
(8 years, 1 month ago)
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Lord Lexden
To ask Her Majesty’s Government what steps they are taking to ensure that the police, social services and other agencies work together effectively to protect vulnerable children from sexual abuse.
The Minister of State, Home Office (Lord Bates) (Con)
My Lords, nothing is more important than keeping children safe from harm, including sexual abuse. How different agencies work together is key to improving outcomes for our most vulnerable children. We have commissioned Alan Wood to review the role and function of local safeguarding children boards in order to improve multiagency working. The Government have made a commitment, through the tackling sexual exploitation action plan, to improve multiagency responses to child sexual abuse.
Lord Lexden (Con)
My Lords, is it not essential that all agencies involved in protecting children investigate allegations of sexual abuse fully, fairly and openly? Will my noble friend agree that the more stringent procedures now required of bodies such as our school inspectorates and the Church of England authorities represent real progress? However, are we yet in a position to place total confidence in the church authorities? They failed to give an adequate account of the process which led them to accept last October the veracity of a single uncorroborated complaint of child sexual abuse made against one of our greatest, most venerated bishops, George Bell, Bishop of Chichester, who died in 1958. He was a man held in the highest regard in this House during his 20 years of service to it and the nation.
Lord Bates
On the first point, we have encouraged—in fact, published and put on a statutory footing—legal requirements to work together to safeguard children in order to restore public confidence in these very serious areas. That is also why Justice Goddard is undertaking her inquiry. The last issue which the noble Lord raised is pertinent in the sense that Justice Goddard identified that claims of abuse within the Anglican Church were a line for her to investigate in her inquiry. The inquiry will cover that topic when it meets this week, on Wednesday, and of course that inquiry will be held in public.
Baroness Howarth of Breckland (CB)
My Lords, turning to the broader issue of child sexual abuse and child protection, is the Minister aware that a large number of different models of co-operation between the police, social services and other agencies are being trialled across the country? Indeed, my own county of Norfolk is attempting to put services closer together. I am grateful for the investigation into the local boards, but what are the Government doing to ensure that the practice is pulled together and that the best practice is promulgated right across the country? Does he not think that it is as important to do that for children now as it is to investigate historical abuse, with all the resources that we are putting into that?
Lord Bates
One thing we are trialling to get just the type of feedback that the noble Baroness referred to is joint inspections of safeguarding boards by HMIC, the probation inspectorate, Ofsted and the Care Quality Commission. Alan Wood’s review will report back into the process. It is taking time, but it is such a vital area that we need to get it right. Learning the lessons of the past is part of what Justice Goddard’s inquiry is seeking to do, to make sure that we can establish a body of learning to prevent such abuse in the future.
Lord Scriven (LD)
My Lords, will the Minister seriously consider direct intervention by the Government in South Yorkshire Police’s performance in dealing with child sexual exploitation? This has been highlighted by the recent report from Her Majesty’s Inspectorate of Constabulary, which said that South Yorkshire Police still needs to make major improvements. Following freedom of information requests to 10 forces across the country, a BBC report on Friday showed that, nationally, one in five cases reported is charged, but that in South Yorkshire the figure is one in 16.
Lord Bates
They are very serious claims. The HMIC report at least pointed to some improvement. We have Professor John Drew looking independently into this and will carefully follow his responses. It is very important to have the confidence of the public in that particular area, which has been at the centre of so many cases, so we will be watching very carefully indeed.
Lord Rosser (Lab)
The Question makes reference to the police. Is it for a chief constable of a force to decide as an operational matter on the level and extent of a police force’s involvement in working together with social services and other agencies to protect vulnerable children from sexual abuse, or is that level of involvement ultimately a decision for the police and crime commissioner to make as a strategic policy matter?
Lord Bates
That is a very good question. I shall write to the noble Lord, because these are very important matters that we have to get right. We have put guidance on individuals’ responsibilities on a statutory footing, and that guidance has been published. Operations are matters for chief constables but setting the overall strategies and priorities for the budget are matters for the police and crime commissioner in consultation. I will set out in a letter to the noble Lord where the guidance fits with his question.
The Lord Bishop of Durham
My Lords, I declare my interests in relation to safeguarding for the Church of England, in which connection I shall be at the Goddard inquiry on Wednesday morning. Will the Minister agree that prevention must stay at the top of the agenda for all agencies, both statutory and voluntary, in responding to the crime of child sexual abuse and, in so doing, recognise that potentially every single child is vulnerable and that grooming must be one area of concern?
Lord Bates
That is absolutely right, and it is why we have identified in the National Policing Plan that child sexual abuse is a national threat and should be regarded as a priority. That is so for the Government and, in my view, it should be the same for local government and all organisations and groups within our society until we tackle this issue at cause.
Lord Young of Norwood Green (Lab)
My Lords, does the Minister agree that, in the age of the internet, potentially all children are vulnerable to grooming and sexual abuse? Does this not stress the importance of sex education in schools?
Lord Bates
It stresses the importance of sex education and we totally agree that PSHE has a vital role to play. Ofsted inspects PSHE. As to whether it should be a compulsory part of the curriculum, the Secretary of State has said that that matter is out for review. What is not out for review is the fact that schools will be held to account on the quality of that teaching. One of the most disturbing things is that the Ofsted report found that 40% of PSHE teaching was less than good. That is an area where some immediate improvement could improve the safety of our children.
Taxpayer Confidentiality
Lord Ashton of Hyde (Con)
My Lords, taxpayer confidentiality is key to the effective operation of the tax system. Taxpayers have confidence that the sensitive information that they give to HMRC will be protected and this trust underpins the high levels of voluntary tax compliance that the UK enjoys. The public benefit of taxpayer confidentiality lies in the overall effectiveness of the tax administration that it significantly supports.
Lord Dubs (Lab)
My Lords, with all due respect, I cannot for the life of me understand the Minister’s Answer. Surely we have to seek the right balance between confidentiality and integrity in our tax system. Transparency in our tax returns would add to the integrity of the tax system and ensure that HMRC had an easier job to do. I suspect that most Members of this House pay more in income tax than Facebook does.
Lord Ashton of Hyde
My Lords, I agree with the noble Lord that there is a debate to be had about greater transparency, whether on the part of HMRC or on the part of large businesses. The Government have signalled this by recently proposing to take forward a system of country-by-country reporting for large businesses on a multilateral basis. But we think that there are good reasons for having confidentiality within which transparency can work. It promotes trust and voluntary compliance and it encourages businesses to be more open and to share proprietary information with the tax authorities.
Lord Campbell-Savours (Lab)
My Lords, how can the Minister possibly say that when Clause 88 of the Housing and Planning Bill will make it possible for HMRC to reveal information to people who are not in the government department? There is an inconsistency in the Government’s position. I am sure that the Minister sitting next to him will explain that what I am saying is correct; I have the Bill here.
Lord Ashton of Hyde
I do not need the Minister who is sitting next to me to believe that what the noble Lord has said is correct. The fact is that HMRC has a principle of confidentiality. It is obliged under a law passed by the Labour Government in 2005 to respect confidentiality. The only time that it is able to divulge information is when it has statutory authority to do so as passed by Parliament.
Lord Davies of Oldham (Lab)
My Lords, is it not incumbent on the Government to recognise that the public are losing patience with the fact that large companies, in particular multinationals, are getting away with paying minuscule amounts of tax in relation to their turnover in the United Kingdom? This issue needs to be tackled. Surely the Government should be addressing why HMRC was unable to get more than £130 million out of Google over a decade when the company had a turnover of more than £4 billion in any one year. As we know, Google is not the only case. Starbucks and of course Amazon were brought to book by public response, when the public set about boycotting those businesses as they were being so unfair. The Government must recognise that just hiding behind the doctrine of confidentiality will not do and that the tax authorities have to be much more efficient than they have been in the past.
Lord Ashton of Hyde
I do not think that it is true to say that the tax authorities are hiding behind the doctrine. The doctrine of confidentiality that the noble Lord mentioned was passed by a Labour Government under the 2005 Act. As for Google, which is not the subject of this Question, the noble Lord should know, if he does not know already, that the tax that Google paid was based on taxable profits, not on turnover.
Baroness Kramer (LD)
My Lords, I find transparency very attractive, but does the Minister agree that a company’s tax should not be determined by the attitude of its PR department or even by its charitable ethos and that HMRC needs to put in place tough standards? Will the Government review the structure of business taxes so that global businesses cannot use tax manipulation as a way to outcompete domestic businesses and small businesses as they do today?
Lord Ashton of Hyde
My Lords, the Budget is on Wednesday. I am not going to talk about tax policy.
The Countess of Mar (CB)
My Lords, the noble Lord said in response to a previous question that confidentiality engenders trust. Is it not the case that the current furore has been caused by the fact that the public do not trust those companies?
Lord Ashton of Hyde
My Lords, the question is whether the public trust HMRC. It has a system of challenge. It is challenged by Parliament and the Public Accounts Committee, and the National Audit Office is entitled to look at all the records of HMRC, which it has done in the past.
Baroness O’Cathain (Con)
My Lords, poor old HMRC comes in for a bashing the whole time. Is it not a fact that it is trying very hard to get this tax and that it is improving year by year? I received my form for the next tax due at the weekend and, for the first time in my life, I was able to understand it—and it is not that I have been to Specsavers.
Lord Ashton of Hyde
My Lords, I am very pleased to answer my noble friend’s point. It is a good opportunity to pay tribute to the people who work in HMRC, who do a fine job. In fact, last year HMRC raised more tax than it has ever done in its history.
Lord Ashton of Hyde
My Lords, as I think I said earlier, we agree that there is a debate to be had about transparency. That is why the Government have already proposed to take forward a system of country-by-country reporting on tax payments from multinationals. The Chancellor asked that that should be made public. We are publishing details of avoidance schemes and of deliberate tax defaulters. Following consultation last year, large businesses will be required this year to publish details of their tax strategy.
Housing and Planning Bill
“( ) it is not in a rural area.( ) A rural area is defined as—( ) any settlement with a population of fewer than 3,000 people at the most recent national census, or( ) any settlement with a population of between 3,000 and 10,000 people at the most recent national census, and designated as a rural area by the Secretary of State following representations from the relevant local authority.”
Lord Cameron of Dillington (CB)
My Lords, I rise to speak to all of the amendments in the group, for two of which I am the lead name and two of which I am an also-ran.
I must apologise, first, because the ground we are covering in this group is very similar to the ground we covered on Thursday, except that in this context we are dealing with the rural perspective. I controlled myself and bit my tongue several times on Thursday waiting for this moment. In fact, there was a moment at about quarter past 2 when I was nearly chewing my tongue for lack of lunch. Anyway, I apologise for covering much of the same ground.
I realise that increased home ownership, including the right to buy, is a manifesto commitment, but the most important need for the average voter in the countryside, as has been said so often in our discussions over the last week or so, is to ensure that there remains adequate affordable housing for their children—or even themselves if they are young adults who could not possibly afford to buy a house or even a local starter home. This is why in previous debates I and others sought, if possible, to ensure a good mix of different sorts of affordable housing on rural Section 106 sites; to protect exception sites from the transience of starter homes; and even to use the right-to-buy clauses to provide more homes in the countryside, because we desperately need more homes—above all, more affordable homes—in the countryside.
So, it is absolutely no good at all if the discount being provided by the Government for the right to buy comes from a reduction of affordable housing in our countryside, owing to both rural and, more particularly, mixed urban and rural local authorities being forced to sell their most valuable houses, which, inevitably, will be those in desirable rural England. This, as was said many times on Thursday, is robbing Peter to pay Paul. It will seriously not help the provision of more affordable houses in the countryside, and do not forget that we are already hard done by when it comes to affordable rural homes, compared with our urban counterparts. Some 8% of our homes are affordable, compared with 19% in towns. The Treasury seems intent on making that situation worse. I say the Treasury because I detect its dead hand and lack of social awareness in all this: as long as more people own their own homes, which might be good for the nation’s overall economy, and the public debt is simultaneously unharmed or even reduced, that is all that matters; but the fact that it is adding greatly to rural housing problems and possibly to the number of rural homeless seems to be of no consequence to it.
I know that the noble Lord, Lord Carrington, said last Thursday that he believed that London was a special case because it has “intractable housing problems”, but we have intractable problems in rural England, too. For years and years we have needed thousands of homes per annum and for years and years we have had them only in hundreds. There is now a huge backlog. It therefore really would be best if these local authorities, as set out in Amendment 66D, did not have to include their rural housing stock in the sums involved in Clause 67(2), and that they were thus discouraged from selling these houses.
If it is not possible totally to exclude such sales as of right in the Bill, the alternative is that they certainly must be excluded where it is not possible to replace them in the same parish or adjoining parishes, as proposed in Amendment 67A. If the manifesto commitment is actually about building more homes, as interpreted by various Peers on the government Benches, then that amendment should be totally acceptable to the Government. It goes without saying—others have already said this more eloquently and in more detail—that these sales must include a one-for-one replacement requirement in rural areas if we are not to go backwards in the provision of affordable homes in the countryside, which, as I have already said, we really must not do. We cannot afford to.
The situation is already desperate in rural England, hence my Amendment 68D. I do not wish to give the Minister a hard time, but if the Government want to fund their right-to-buy manifesto promises they really must put some of their money where their mouth is, or look very carefully at the equity loan scheme of the noble Lord, Lord Kerslake, or at some possible variation of it, as proposed by the noble Lord, Lord Horam. If two-for-one is right for London, the countryside deserves at least one-for-one. That means leaving the local authorities enough money to pay for the new houses by whatever means possible, including, possibly, raising their cap, although I recognise that that affects the PSBR; or better still—this seems the simplest of all solutions and therefore the best—just allowing them to retain more of the proceeds of sale. In other words, the right-to-buy promise in the manifesto should be paid for not only by the local authorities, but to some extent by central government.
I am tempted to wish that we had a Conservative rural mayor to be elected; if so, I am sure we would solve the problem in a jiffy. Actually, on second thoughts, one should be careful what one asks for. I speak, of course, as an ex rural tsar, or rural advocate—one of those funny titles—without wishing in any way to see the return of such a post.
On the subject of electoral priorities, the Government should not forget that in the currently clear blue waters of the south-west—where rural housing problems are probably at their most critical throughout the whole of England because of the seeming desirability of living there, and thus the high price of houses, combined with the lower average wages paid there—housing looms particularly large as an issue for voters. I would have thought it to the Government’s advantage to see serious action on housing in the south-west before 2020.
The Lord Speaker (Baroness D'Souza)
If this amendment is agreed to, I cannot call Amendment 66E by reason of pre-emption.
Lord Best (CB)
My Lords, we are coming to the end of the debates on the forced sale of council homes. The Minister has noted that, through regulations, the Government will be excluding certain categories of council housing and, since no decisions have yet been taken, she has welcomed proposals from your Lordships. The amendments in this group address what I maintain is an essential exclusion, namely council properties that become vacant in rural areas, as my noble friend Lord Cameron of Dillington has explained. If vacant council properties in rural areas are removed from the calculation of the new levy that pays for discounts for housing association tenants, there will be no pressure or obligation on councils to sell these valuable homes.
Almost by definition, council housing in villages is likely to be more sought-after than that on council estates in urban areas. These are the properties most likely to be in the higher-value bracket and therefore most vulnerable to the requirement to sell to pay the levy. The circuitous route whereby funds circle round from council house sales to housing association discounts to tenants, to the housing association building programmes, sounds like a new version of the house that Jack built: here is the levy paid by the council, that sells vacant homes, that funds new discounts, that goes to the housing association that pays for the house that Jack built. It is certainly a convoluted process with particular ramifications for rural communities.
The bungalows issue revealed by the recent report of the Joseph Rowntree Foundation is highly pertinent. If the calculation of “high value” for the levy is to be related to the size of the property, the most high-value one-bedroom and two-bedroom homes are likely to be bungalows. Of course, council bungalows, which are important for the downsizers, who can then free up family houses, are prevalent in villages because land was available there in the past.
A lot of attention has been given to the potential loss of rural social housing if housing associations choose to opt in to the right to buy for their rural properties. However, the issue here—the loss of council homes in villages when they become vacant—could be far more damaging to the prospects of local families obtaining an affordable home where they have been brought up or at least are working. First, I suspect that few housing associations will feel it right to sell their rural homes, because they are so difficult to replace. Secondly, the impact of the new right to buy will not be felt until the existing occupiers, the buyers, move out—maybe in several years’ time—but the loss of vacant council housing will be felt immediately as local families needing a home in the village cannot move into properties that become vacant.
The existing council right to buy has led to a much higher proportion of sales—over twice the level—in rural settings compared with urban areas. If, as I believe, the Government recognise the importance of rural communities, I hope that these properties will be taken out of the levy requirements. At the very least—as set out in the amendments in the names of myself, my noble friends Lord Cameron and Lord Kerslake, the noble Lords, Lord Beecham and Lord Stoneham, and the noble Baroness, Lady Bakewell—if these precious homes are sold, steps must be taken to replace them, perhaps through support to a rural housing association, and land must be allocated for this purpose, often no doubt on rural exception sites. Best of all would be the simple removal from the levy system of the virtually irreplaceable affordable homes serving our rural communities.
Lord Campbell-Savours (Lab)
My Lords, last week I mentioned the position in my former constituency, where you have on the west coast of Cumbria council housing that is fairly inexpensive when it is sold and, in the Lake District part of my former constituency, which includes the town of Keswick and a number of villages in that vicinity, council property that is very expensive when it is sold off. In Workington and Maryport, you could buy a former council house today on a subsequent sale—not straight after right to buy—for as little as £50,000 or £60,000. A similar house in the Lake District part of the constituency would now cost between £250,000 and £300,000. The latter group of houses will now fall under the provisions of the Bill in the sense that the local authority will be required to sell them.
The problem is very simple: those houses are irreplaceable. They cannot be replaced, as there is no land. I understand from a letter to my noble friend Lady Hollis today that local authorities will be able to rely on housing associations to replace property lost under right to buy through this one-for-one arrangement. However, that does not deal with the problem if there is no land. You cannot expect the Lake District planning board—or any national park planning board anywhere in the United Kingdom—to compromise all its principles and provide for planning permission on land where otherwise it would not, simply to meet the objectives of the Government and this one-for-one replacement.
I think of villages and small hamlets where there might be only six or a dozen council houses at the moment. If we are required to sell those because of this nonsensical levy, all that will happen is that those properties will be lost to the young people who want to stay in the Lake District National Park—or in any national park in the United Kingdom where young people have been driven out because of high prices already. The properties end up on the second-home market in exactly the same way as the problem has developed over recent years in London.
The noble Lord, Lord Best, referred in speaking to his amendment to there being perhaps some flexibility in the Government’s position. I appeal to Ministers to look favourably on the position in the national parks, exempting them from the levy and from the requirement to sell in the event that they are approached to buy. Let us see some sanity in housing policy.
Baroness McIntosh of Pickering (Con)
When my noble friend sums up in this debate, will she look carefully at national parks? It is a pleasure to follow the noble Lord, Lord Campbell-Savours, who was my first opponent—I never felt confident enough to buy a property, in the national park or otherwise, in the constituency of Workington because he did such a good job there. Housing is a real problem, particularly for younger people who want to remain in rural areas, in or outside a national park. There are situations where planning permission has been granted for a major housing development only on the basis that a proportion of the houses would be given up for affordable social housing, but the developers then renege on that commitment. Will the Minister undertake to look carefully at such situations, to ensure that we are not going to lose, through the levy, that cohort of houses in national parks, or those affordable homes which have been agreed to but which the developers then find that they cannot afford to build?
Lord Taylor of Goss Moor (LD)
My Lords, last week I spoke about the importance of protecting housing association properties in small, rural communities where they are effectively irreplaceable. The exact same point leads me to speak in support of the amendments tabled by the noble Lords, Lord Cameron and Lord Best, with whom I shared work on the rural housing review last year. As well as being president of the National Association of Local Councils, I am extremely aware of the concerns of parish councils about this area of policy. I hope that the Minister will listen seriously to the concerns that are being raised.
The issue here is a combination of two questions that we should ask ourselves. First, are these homes necessary? Secondly, are they replaceable if sold? On the first issue, of necessity, it is clear that in smaller rural communities, particularly in areas of outstanding natural beauty, the national parks and coastline villages, there should not, as a matter of policy, be endless growth of new housing, in order to preserve that which is best in the natural beauty of the environment. There is no question but that the people who work in those communities, in the school, in the pub and on the land—maintaining through farming the wider natural beauty that we are seeking to preserve—must be able to access a home that they can afford. If there are no affordable rented homes, provided either by housing associations or councils, it is simply impossible for people on low incomes to live in these communities. That impossibility gets worse every year. Communities are not sustainable if a wide section of the population, particularly those who work in the countryside, cannot afford to live in them. The necessity is clear.
The second question is replaceability: if they are sold, are they replaceable? It is self-evident that, in many of these communities, they are not. We decide to limit development because of the nature and history of the community, the beauty of the surrounding landscape and its protected designation. We know that they are necessary; they may not be replaceable.
These amendments directly address those two issues, by saying that either we should not make a sale where the homes are necessary and irreplaceable or, at the very least, we should not make the sale unless they are clearly to be replaced within the community where they are needed. The Minister may feel that the particularity of the amendments is not appropriate, but I ask her to go away and think hard about how the Government can address the specific concerns so eloquently raised by my colleagues.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support Amendment 66D. I refer your Lordships to my entry in the register of interests as a vice-president of the LGA and a district councillor. I also support the amendments tabled by the noble Lords, Lord Cameron, Lord Best and Lord Kennedy.
As I expounded last Tuesday—probably for longer than I should have done and I will not repeat myself today because the arguments are on the record—I am passionate about the nature of our English countryside and that it should be preserved, with a true mix of people from all income brackets and all walks of life being able to live there. If social, affordable or other low-cost housing is sold off under the right to buy, that will have a very detrimental effect on rural and smaller communities, as the noble Lord, Lord Cameron, eloquently laid out.
I am grateful to the Minister for listing last Tuesday those types of properties, organisations and locations where right-to-buy exemptions would exist, including the national parks. It is useful to have those in Hansard, but I have to press her on the categories listed in the amendment: rural populations under 3,000 and settlements of between 3,000 and 10,000 people. Many of these, as has been said, will be small but vibrant market towns, essential for serving the small villages and communities around them. This vital lifeline must be protected for all classes of residents, not just the well-off. I support all the amendments in this group.
Lord Beecham (Lab)
My Lords, I, too, support the amendments in this group. The noble Lord, Lord Best, made a very powerful case in relation to the problems that would arise from the right to buy of council housing. Rural areas have commanded and will continue to command a great deal of concern in your Lordships’ House as the Bill progresses.
I confess that I am old enough to recall listening to “The Archers” when Grace Archer was consumed by a fire in, I think, about 1954. I have not been a particularly regular listener since, but I understand that, by chance or otherwise, the question of rural housing has featured rather largely in recent editions. I believe I am right in saying that the Grundy family have encountered enormous difficulties in finding suitable local accommodation and may be driven to palming off their ancient father into some sort of care. Whether this was motivated by concerns over the Housing and Planning Bill is perhaps questionable but nevertheless it illustrates a real concern in those areas.
Of course, there has been right to buy council housing for some considerable time. I wonder whether the Minister can indicate to us the extent to which the right to buy has been exercised and what proportion of houses that have so far gone under the right to buy have ended up as second homes or private lettings, and what the impact generally has been on the provision of council housing in rural areas.
Needless to say, I searched in vain for any reference to this issue in what passes for the impact assessment on the Bill, which makes no reference at all in relation to the relevant clauses that we are debating today to the impact of government policy. Again, the Minister may or may not have the information. Those who drew up the impact assessment clearly were not interested in having it. If the information is not available today, and it may not be, will she take steps to ensure that by the time we get to Report we will have an assessment of what will happen to the existing stock of council housing that will be subject to the right to buy—and, for that matter, to housing association properties that will also be subject to the right to buy—given the unlikelihood of like-for-like replacement being achieved?
I find it very frustrating—and I am afraid it is becoming a constant refrain of Members around the House—not to be able to form a judgment about what the Government’s policies are actually going to lead to. They are leading us, and perhaps themselves, into a blind valley, as it were, without any apparent awareness of the impact of their policies upon communities, where unfortunately there is very little political gain to be made by my party as they are regarded as the natural territory of the Conservative Party. Perhaps they take it for granted. However, they cannot take for granted the needs of young and older people with very little choice of accommodation, a choice likely to be increasingly narrowed if this legislation goes through without the kind of safeguards that the amendments in the group would provide, limited though they are but nevertheless very desirable. I look forward to hearing some kind of explanation from the Minister as to how the aspirations of people in those communities are going to be met if the legislation passes in the form it is presented to us at the moment.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, before responding to the specific amendments on the sale of high-value vacant housing, I will say a few words about more detail on the policy of the Bill as a whole. Last Thursday I undertook to the noble Lords, Lord Beecham and Lord Foster—and I am sure there were several other noble Lords—that I will ensure that your Lordships will have a timetable of secondary legislation in a week or so. Later this week, I shall write to all noble Lords setting out the timetable for laying, and in some cases debating, the secondary legislation.
As I said on Thursday, and as noble Lords have pointed out during our debates, there is a healthy set of regulations to follow, but I hope to provide an overview of what your Lordships can expect and when. The finer grains of details may be subject to change—my senses tell me to expect some debate at Report, for instance—but I hope the general outline will be helpful. In addition, I have asked my officials to provide policy notes in lieu of secondary regulations wherever possible with the ambition that these will be sent to noble Lords before Report. These will build on the policy fact sheets and the information sheets which we have already circulated to noble Lords. The noble Lord, Lord Foster, also asked me to confirm again today our response to the DPRRC report and I can reconfirm that that will be done by Report.
Before responding to the specific amendments, I will respond to a suggestion from my noble friend Lady Hollis—I have just called her my noble friend but I am sure she will not be offended—during the previous Committee discussion about setting up a working group with the LGA, the housing practitioners and others, to ensure that any fraud experienced through right to buy in the local authority sector is not repeated when we extend the right to buy to housing association tenants. I did watch the “Dispatches” programme over the weekend. I am delighted to confirm that I am happy to commit to setting up a working group with the local government sector and others to learn from their experiences in operating right to buy. For example, such a group could gather evidence about what has worked and what has not worked so well. It could also potentially build on the experience of a number of local authorities in tackling fraud more generally.
In extending the right to buy to housing associations, we are keen to ensure that we identify where any potential abuses could arise so that the right to buy goes from strength to strength and helps more people to achieve their dream of home ownership. We would also be interested in exploring whether such a group could usefully input on other related issues, including, for example, the provision of additional homes by local authorities that enter into an agreement with the Secretary of State following the sale of high-value vacant properties. This proposed working group will further extend our extensive engagement with local authorities and other stakeholders on high-value vacant housing. It will also help to inform our consultation with local authorities, representatives of local government and relevant professional bodies on the determination that will set out the payment required from each local authority.
Baroness Hollis of Heigham (Lab)
My Lords, before the noble Baroness moves on, I say thank you for the firm proposal. Whatever our views about the Bill—and they are very divided—the one thing that we all want is, as far as possible, to build abuse out of the system. I am glad that the noble Baroness had the chance to see the “Dispatches” programme, which confirmed some of our worst fears. Many of us have had similar experiences to boot. I am very pleased that the Minister has responded to that, and I hope that with the help of the noble Lord, Lord Porter, she will be getting together a really strong group to do exactly as she suggests.
Lord Campbell-Savours
On that matter, what happens if the working group comes up with conclusions which we are unable to resolve during the course of Committee or Report because the group reports after the Bill becomes law? What happens in those circumstances? That is my first question.
My second question is this. The Minister may recall that we were given an undertaking—two weeks ago now, I think—that we would receive information on starter home demand figures in the various parts of the United Kingdom. Despite repeated references to them in the Chamber by me and others, we have simply not received them yet.
Baroness Williams of Trafford
Before the noble Lord, Lord Kennedy, stands up, that is on the list for the end of the week, definitely.
Lord Kennedy of Southwark (Lab)
I just wanted to thank the noble Baroness for both her announcements; they are very helpful. On the first one, she talked about noble Lords receiving various policy position papers. Would it be possible, when she does that, to sketch out when she thinks—we will not hold her to this, but just some idea of when—we will get the various regulations? That would be very helpful.
Baroness Williams of Trafford
We will endeavour to the best of our abilities, if we know when those dates will be, to bring them to noble Lords. In reply to the noble Lord, Lord Campbell-Savours, I do not want to pre-empt any discussions that the group will have; I go into it with an open and clear mind. I am sure that we will glean information useful not just for the Bill but for housing policy generally.
Lord Shipley (LD)
My Lords, I am very pleased to have the movement that the Minister has announced. Perhaps I can make one further suggestion, because I am still not entirely clear what the timing of all this is, because, as I recall, last Thursday, the Minister said that we would not have further information about regulation on aspects of the Bill until after Royal Assent. To pursue the point made by the noble Lord, Lord Campbell-Savours, there is an issue about the Government’s plan to use the negative procedure, as opposed to the affirmative procedure, in secondary legislation. I draw the Minister’s attention to the two reports by the Delegated Powers and Regulatory Reform Committee, which had a lot to say on that. If the negative procedure is used and if the working group comes up with proposals which post-date Royal Assent, that makes it very difficult for the House to make any changes to the Bill. Therefore, accompanying the proposal to have a working group I hope that the Minister can now at least think with colleagues about how the strong criticisms of the committee about overuse of the negative procedure can be addressed.
Baroness Williams of Trafford
I will bear the noble Lord’s point in mind. It has just come to me that I may have sent that list to the noble Lord, Lord Campbell-Savours, last week, so it may be in his post pile today.
Baroness Williams of Trafford
If the noble Lord cannot find it, I am happy to resend it.
I think noble Lords for their contributions on the amendments. I understand the pressures faced by rural communities, about which we have spoken a lot in your Lordships’ House, which are many and complex. I am pleased that we are taking time to consider them again today. Amendments 66D and 67A propose that housing in a rural area be excluded, or excluded if it would not be reasonable to expect at least one new affordable home to be built in the same or an adjoining parish for each property sold.
Turning to Amendment 68D, we have discussed the need for new homes across the country and the particular pressures in some housing markets in both rural areas and some of the high-value urban centres, including London. However, we have also heard many arguments on the protection of rural areas and the need for Government to continue to ensure that we do not adversely impact rural communities with large amounts of new housing. We come to the conundrum of not being able to have it both ways: we can build more housing across the country, including in rural areas, or we can restrict where housing is built. That is an issue that we need to consider.
Lord Cameron of Dillington
I thank all noble Lords who supported the amendments. I was struck, when listening to the noble Lord, Lord Campbell-Savours, and the noble Baroness, Lady McIntosh, that it is a bit like Morton’s fork. You are offered two unpalatable options—one is to lose the incredibly important affordable housing that we have in the countryside and the other is to lose our countryside, which is also very precious to us, particularly in national parks and AONBs. I do not believe that we can afford to lose what we treasure most, and not just to pay for what I consider to be a fairly rash manifesto promise. I believe that the rash manifesto promise should be paid for by the Government and not, ultimately, using the contorted trail described by the noble Lord, Lord Best, by those desperate for housing in our rural communities.
The Minister has very kindly agreed to meet us before Report to discuss some of our rural housing problems. I give notice to her that this matter will undoubtedly be on the agenda. In the meantime, I beg leave to withdraw my amendment.
Lord Kennedy of Southwark
My Lords, as this is my first detailed contribution during today’s Committee consideration of the Housing and Planning Bill, I draw Members’ attention to my entry in the register of interests and declare that I am an elected councillor in the London Borough of Lewisham. However, I feel bound to repeat the point, notwithstanding the points made by the noble Baroness earlier, about the complete failure of the Government to provide the regulations that enable proper scrutiny of this Bill. I again place on record how unacceptable it is that a Bill as complex and controversial as this is brought before Parliament in such a poor state of preparedness. It is nothing short of an outrage that not only have the Government treated the House of Commons and House of Lords in such a manner, but that local authorities, social housing tenants and others affected by the Bill are being treated in the same way. The consequence is a failure to allow the proposals to be properly considered. The line from the Minister last week that the contributions from noble Lords are helping and informing the consultation just underlines the weakness of the Government’s position. We have also heard a variety of apologies and expressions of frustration, and I am sure that the noble Baroness must be frustrated with the problem, which is entirely of the Government’s own making, and the effect it is having on the proper consideration of the Bill by your Lordships’ House. At the end of the day, the power is in the hands of the Government to make the process considerably more acceptable, but they have not gone far enough as yet.
Of course, the Minister is a Minister in the department responsible for this Bill. Instead, we have heard the manifesto defence deployed in Committee, even though it is more usually deployed when the Government are fearful of an imminent defeat on Report or during ping-pong. I shall not be surprised if I hear it suggested from the government Benches that it is all the fault of the last Labour Government that we have not got the regulations before the end of consideration of this Bill.
I oppose Clause 73 standing part of the Bill because it is totally unnecessary. It really is a bit rich: when a local authority has paid too much money in a particular year, that money should be returned to them immediately. The clause will put it the Government’s back pocket as a deposit for next year’s bill. That is totally unacceptable.
However, it gets worse. In our debate last Thursday the noble Lord, Lord Young of Cookham, told noble Lords that there was a process to return money overpaid by local authorities under Clause 67. Through this clause, that process is totally negated. There is not even a suggestion that a local authority would get any interest from the Government’s holding its money. There is more. The money can also be offset against liabilities owed under Section 11 of the Local Government Act 2003. I am sure we will be told not to worry and that it will be offset only against housing debt, but the fact is that Section 11, on my reading, goes wider than the Government suggest, and that is unacceptable. This clause should not form part of the Bill and should be removed.
I take a similar position regarding Clauses 74, 75, 76 and 77, which I also oppose standing part of the Bill. Clause 75 appears to add in a further matter that could lead to a local authority being refused permission to dispose of an asset: any reduction in the amount the local authority would be liable to pay under Clause 67. By way of belt and braces, the Government propose to add a similar provision to Clause 43(4)(a). In respect of local authorities in Wales, Clause 76 makes sure that the Secretary of State can offset against what they should pay to an authority amounts they believe should be paid by the authority under Clause 67, or the relevant section of the Local Government Act. It is like a Government money-hoovering operation.
Clause 74 sets out the conditions and requirements for a local authority to sell its vacant council houses. We on these Benches believe that that is just wrong. It is an attack on council housing, whether by selling the council house or by paying the levy. It is making the duty of an authority to meet its housing need much harder. It does nothing for large families, who often live in larger properties that are usually of higher value. I have said before that I come from a large family, by modern standards, and grew up in a large council property. Living in such a property improved all our lives and helped us progress as a family. I fail to see what this measure does for families in similar situations today who cannot afford to buy their own home.
Amendment 69A, in my name and that of my noble friend Lord Beecham, seeks to help the Government change this disastrous course of action in future if they will not see reason today. It places a sunset provision on Clause 74, meaning it would expire three years after the Bill is enacted. This should not cause the Government any real problems. I specifically set the expiry at three years because we are in the first year of a fixed-term Parliament which is due to run for five years until 2020, so it is this Conservative Government who would be making the required regulations to prevent the clause being repealed. I do not have a crystal ball but unless there is some unforeseen event, it is not unreasonable to assume that the present Government will be in office in the summer of 2019 and able to take the action they need with the benefit of seeing the policy in action.
That is all I have to say at this stage but I may intervene later, as in Committee, that is permitted. I beg to move.
Lord Stunell (LD)
Does the noble Lord agree that the potential for overpayment by local authorities is made much worse by the capacity of the Government to change the meaning of words and interpretations as they go along? A “new affordable home” means what the Government say it means in Clause 72(7); then Clause 72(9) states:
“The Secretary of State may by regulations amend this section so as to change the meaning of ‘new affordable home’”.
In other words, local authorities are going to be charged under a regime that may change as the period of the agreement goes on, leading inevitably to miscalculation and overpayment.
Lord Kennedy of Southwark
I agree entirely with the noble Lord. I know the Minister is trying to deal with the point I made earlier about regulation, but where we are today really is unacceptable.
Lord Campbell-Savours
My Lords, I want to intervene only briefly on this question of the sunset clause. Members of this House regularly peddle—if I might use that word—the view that we are brilliant at scrutinising legislation; indeed, we claim to be better than the House of Commons on many occasions, although I often doubt that. The problem is the procedures that the Commons introduced in 2001, which made it impossible to consider certain parts of Bills.
However, this Bill cannot be properly considered and mistakes will be made because most of the measures that warrant consideration will be in statutory instruments, which we cannot see. Despite the undertaking the Minister has given us today, we will not see most of the regulations until after Royal Assent. Therefore, if the Bill cannot be fully considered and mistakes are going to be made, and we will not be able to amend the regulations when they are brought forward because that is the way this place works, it seems to me there has to be some kind of contingency arrangement whereby the Government can renew the Bill if they feel it is not fit for purpose after three years’ experience. Perhaps the Minister would have that in mind when she discusses this matter with her officials in the department.
The public should know that the Bill cannot possibly be properly considered. They should know that the great majority of the controversial issues in it cannot be considered by Parliament because we cannot see them and will not see them until the Bill has received Royal Assent.
Baroness Williams of Trafford
My Lords, I hope that I have made clear my intention to bring forward information to your Lordships’ House by the end of this week as a “starter for 10”, and more in due course as the Bill progresses. However, we have debated the principle and the elements of this policy in some detail, and I rise for the last time to make the case for Clauses 73 to 77. I will also respond to Amendment 69A.
As I have previously explained, this chapter, on the sale of vacant high-value local authority housing, is an important contributor to the Government’s aims of increasing home ownership and increasing housing supply. Clause 73 simplifies accounting arrangements by reducing the total number of payments made between the Secretary of State and a local authority. It will apply if a local authority has, for example, made an overpayment through an incorrect data entry as a result of human error. It enables the Secretary of State to offset the amount that needs to be repaid against another payment that the local authority is due to make under this chapter or under Section 11 of the Local Government Act 2003, which concerns capital receipts from the disposal of housing land.
Clause 74 imposes a duty on local housing authorities that keep a housing revenue account to consider selling any vacant high-value housing which they own, recognising the importance of making the most effective use of valuable assets. The Secretary of State may exclude housing from this duty through regulations. The intention is that this will be in line with any exclusions made under Clause 68—that is, if we do not include housing in the calculation of payments, we propose that local authorities will not have a duty to consider selling it under Clause 74.
Lord Beecham
The Minister mentioned high-value properties but, as we have heard before, there is a greater proportion of high-value properties in rural areas. Does that not make the concept more difficult to apply in those areas in terms of the consequences of the policy for that category?
Baroness Williams of Trafford
My Lords, we will see how the mechanism works when it comes out, but I think I have said a couple of times in your Lordships’ House that we do not want to adversely and disproportionately affect one area compared with another, so the calculations will be made by area and by type of property according to the number of bedrooms. Noble Lords will have ample opportunity to scrutinise this through the regulations, and we may have more detail through the Bill as time goes on.
Lord Kennedy of Southwark
Can the noble Baroness tell the Committee how often these payments will be made? Will it be monthly, half-yearly or yearly? If an account overpaid an amount of money, when would that be put right? If a payment was due to be made in April and it was to be paid again the following April, the timing might be an issue.
Baroness Williams of Trafford
I take the noble Lord’s point. A local authority may be disadvantaged for quite a period of time if the payments were not made very often. I shall take that point away and consider it.
Clause 75 seeks to amend Section 34(4A) and Section 43(4A) of the Housing Act 1985 to add to the list of matters to which the Secretary of State may have regard when considering whether to give consent to a local authority wishing to dispose of housing. These amendments will mean that if a disposal of housing by the local authority to another person or body could result in a reduced payment to the Secretary of State under Clause 67, the Secretary of State may choose to take this into account, among other factors, when deciding whether to give consent to the disposal. Making this change will ensure that there is important clarity on the issues that the Secretary of State may choose to take into account when organisations are considering such transfers and that he or she can consider if disposal of housing by the local authority to another person or body could result in a reduced payment.
Clause 76 is a technical amendment to Section 11 of the Local Government Act 2003, existing legislation which concerns the pooling of capital housing receipts. It replaces the existing power in Section 11(5) which enables the Secretary of State to set off payments owed to a local authority under that section against any payments the Secretary of State is liable to make to the local authority, with a more limited power which mirrors the provision in Clause 68 of this chapter. Like Clause 73, this aims to simplify accounting arrangements by reducing the total number of payments made between the Secretary of State and a local authority.
Clause 77 deals with the interpretation of certain terms used in this chapter, the great majority of which are self-explanatory. However, I would like to mention one term in particular. Housing “becomes vacant” for the purposes of this chapter,
“when a tenancy granted by the authority comes to an end and is not renewed expressly or by operation of law”.
We have discussed this previously. There may be some circumstances where a high-value home would become vacant under this definition but we would not want it to be counted in the vacancy rate set out in the determination. The power in subsection (2) will enable such exclusions to be made. Providing this power through regulations will provide flexibility to ensure that if circumstances change over time, or if a need for further exclusions is identified in the future, this can be addressed more quickly.
The department is engaging widely with local authorities and other stakeholders and no decisions have been made yet on the circumstances in which housing that becomes vacant may be excluded from the chapter under subsection (2).
Turning now to the specific amendments, Amendment 69A seeks to end the duty for local authorities to consider selling high-value housing as it becomes vacant three years after the Act is passed. Noble Lords have provided many considered lines of debate today but I do not believe the amendments would have the effect they envisage or be beneficial to local authorities or to people in need of new homes. While they would prevent the duty to consider selling from applying for six months following a vacancy arising and would end the duty after three years, the requirement for payments to the Secretary of State would not be changed. The Secretary of State would still be able to make determinations, which would be based on the sale of high-value housing that is expected to become vacant, but these amendments would mean that local authorities would no longer have to consider selling their vacant housing to make the payments.
This moves away from the intentions outlined in the Government’s manifesto. The legislation is framed to provide local authorities with some flexibility on what housing to sell and how to make payments to the Secretary of State. The duty is an important part of this to ensure the payments are focused on high-value housing, both in the calculation by government and the way they are met by local authorities. These amendments would move away from the aims of the policy. Six months is a very long time for a property to sit vacant before the duty to consider selling arises, particularly given the need for housing across the country. On this basis, I hope the noble Lord will consider withdrawing the amendment. When the question is asked, I hope noble Lords will withdraw their opposition and allow the clauses to stand part of the Bill.
Baroness Hollis of Heigham
Can the Minister help me on a question that we have been pursuing through several Committee days? It is clear that there will be a time gap—even if one accepts the push in policy, which of course I do not—between selling more valuable property and the deployment of the money to fund housing association discounts. Housing association discounts will be required on day three after the Bill gets Royal Assent. The sales to fund it may take a year, two years, three years or four years to come through to fund the presumed demands that will come very quickly in the direction of local authorities.
Therefore, many local authorities will instead be levied in view of their sales. The information I had from my authority, Norwich, this morning was of a housing revenue account of around £50 million facing a loss of £7 million a year on its rental income as a result of the 1% reduction. The levy, in lieu of sales, because of the delay in sales coming through, is likely to cost up to—we do not know yet—£11 million. A quarter of its net housing revenue account will, therefore, be lost to funding housing association discounts until—and if—the sales come through in lieu
Can the Minister tell us when local authorities will have some idea what that levy is likely to be? Will it be governed by the pent-up demand or otherwise of housing association tenants? Will the Minister expect this to be rationed so that it proceeds on an equal path along with the diversion of local authority resources through high-value sales? How exactly will this work? At the moment, it stands to wreck my local authority’s housing revenue account.
Baroness Williams of Trafford
My Lords, that is precisely why we are engaged with local authorities to make sure that we get this policy right. The noble Baroness has given me some figures for Norwich. I do not doubt that she is correct, but could she send me the figures so that I can have a look at them and perhaps comment on them?
Lord Beecham
The noble Baroness has said that there will be time to see how the matter develops. I remind her that Amendment 69A, in my name and that of my noble friend, would allow for that because it is a sunset clause. It would allow a three-year period to see how the process worked. If it did work, it could be renewed by the affirmative procedure, which, as we know, should not take all that long. Why do the Government not accept that amendment and give some reassurance that they will not press ahead with this irrespective of the outcome? The amendment would allow them to affirm the policy, assuming they are still in office, after a three-year period and on the basis of experience. Is that not a more pragmatic way of dealing with a difficult issue?
Baroness Williams of Trafford
My Lords, the amendment moves away from the intentions outlined in the Conservative manifesto, but while the amendment would prevent the duty to consider selling applying for a period of six months following a vacancy, the requirement of payments to the Secretary of State would not be changed. However, we monitor all policy as we go along.
Baroness Blackstone (Lab)
I once again press the Minister on the issue of moving to the affirmative procedure. I have raised this question on other days. It has been raised twice this afternoon. On no occasion has the Minister answered the question of when the Government will let this House know whether they are prepared to move in this direction. That would be a much more satisfactory approach to dealing with the detail of the regulations.
Baroness Williams of Trafford
I do not think the noble Baroness was in her place when I outlined, at the beginning of today’s session, my intention to bring forward that sort of information by the end of the week.
Lord Sutherland of Houndwood (CB)
My Lords, before the noble Baroness finally sits down, perhaps I may indulge myself with a comment on procedure. This is not my patch, which I am here to learn, but we have been here before. There was a very similar procedural wrangle and difficulty over the Childcare Bill. The Bill came forward without sufficient detail to allow the House to debate fully some of the very important issues in it. There was a common mind with the Government and, I think, around the House that two factors could alleviate the problem. One was affirmative resolution, which was agreed for many of the regulations; the other was groups of people convened by the two Ministers responsible to talk through the process of developing regulation and implementation. I think that helped immensely and I hope that something similar could be done here.
Baroness Williams of Trafford
I thank the noble Lord for his information. As I have just said, I will bring forward as much as possible, but I have also undertaken to meet noble Lords to discuss matters for regulations as we go forward.
Lord Kennedy of Southwark
Can the Minister repeat for the Committee what the Government’s problem is with Amendment 69A? It would not stop them doing anything. It is just a sunset clause and would provide them with the ability, if they proceed with the policy and find an issue with it, to stop it. If they wanted to carry on, they would bring forward the affirmative regulations to do so. I do not see what the major problem is. If the Minister could repeat her reasons, it would be very helpful.
Lord Beecham
Before the noble Baroness answers my noble friend, perhaps I may add to his question—it is the same point but viewed from a slightly different angle. If it turns out that the scheme is not working, on the face of it that would require the Government to bring in primary legislation to change the duty. What the amendment offers is a way of dealing with matters, if required, by secondary legislation, where that difficulty is much less—in fact, we complain about it being less much of the time. In this case, it would surely be a better way of dealing with it than imposing a duty to come back with primary legislation if the scheme proved not to be working properly.
Baroness Williams of Trafford
My Lords, it is not usual for a Government to bring forward legislation that they want to end. There have been sunset clauses in certain legislation, but, in this case, we do not particularly want to end it after three years.
Lord Lansley (Con)
I do not know whether the Minister agrees, but Amendment 69A would not only allow, as it would intend, that after three years one might examine the success or otherwise of the policy but risks significantly distorting any potential implementation of that policy, since in the intervening period any local authority which was disinclined to implement the duty to sell vacant high-value housing might well for a substantial part of that three-year period delay such sales in the hope that the duty would repealed under this amendment and not reinstated? Clearly, it would be inappropriate for the Government to pre-empt Parliament’s decision on any such regulation by making it clear that they wanted to extend it indefinitely, so local authorities would be placed in a position which allowed them to frustrate the policy and the Government would not be in a position to insist.
Lord Campbell-Savours
Is there evidence of that from any other legislation which has been subject to a sunset clause?
Baroness Williams of Trafford
My Lords, I think I have said what I can say on this matter. I recall legislation that has gone through this House with a sunset clause for a very specific purpose.
Lord Kennedy of Southwark
My Lords, I thank all noble Lords who have spoken in today’s debate: the noble Lords, Lord Stunell and Lord Campbell-Savours, the noble Baroness, Lady Williams of Trafford, and my noble friend Lady Hollis of Heigham. I was not particularly convinced by the points made by the noble Baroness, Lady Williams, and was struck by the intervention of the noble Lord, Lord Stunell, on the wide powers that this part of the Bill grants to the Secretary of State. I am obviously disappointed that the Government have not taken up my offer of a sunset clause. I thank the noble Baroness for undertaking to take away the issue I raised about when payments would be made.
Baroness Williams of Trafford
I now have an answer for the noble Lord: it is quarterly.
Lord Kennedy of Southwark
I thank the noble Baroness. That is interesting and I will reflect on it.
As I said, I will reflect on the points that have been made in the debate. We may bring this issue back—or some variation of it—on Report after Easter. With that, I beg to withdraw my opposition to Clause 73 standing part of the Bill.
Lord Best
My Lords, my noble friend Lord Kerslake is unable to be with us today, but I am grateful to the noble Lords, Lord Kennedy and Lord Stoneham, for their support. I shall speak also to Amendments 70D and 75C. They all relate to the proposed mandatory rent increases for council tenants. I would guess that all of us who are known to have an interest in this Bill will have been lobbied more vociferously on the issue of “pay to stay” than anything else in the legislation. This is because the potential immediate impact of the measure is more frightening than any of the other ingredients in the Bill.
It threatens to reduce significantly the incomes of some 350,000 tenants. Rumours had suggested that those earning £1 more than the threshold of £30,000 outside London and £40,000 in London could see their rent doubling overnight. As the IFS pointed out, that cliff-edge approach would have a disastrous impact on incentives to work or work harder. I have heard of numerous cases where those who are just over the threshold would have been coerced by the huge rent rise to cut back on their working hours so that they could afford to keep their tenancy.
The good news for these very anxious tenants is that the options which the Government have now published are far less onerous than was feared. We now have the prospect of either a rent rise of 20p for every £1 earned over the limit—which is £4 per week on the rent for every £1,000 over the threshold—or £40 per week for someone earning £10,000 over the threshold, and 10p for every extra £1 earned, which is £20 per week for someone earning £10,000 over the threshold.
Lord Campbell-Savours
I am sorry to intervene on the noble Lord, but I wonder if the Minister could indicate at this stage whether she intends to give us some real figures on the taper today to save us having to guess what they are during the course of the debate.
Lord Best
I have some figures. The Minister has put forward two propositions, one for tenants to pay another 20p for every £1 earned over the limit and the other to pay 10p more in rent for every £1. These are the two propositions and my sums are based on the Government’s suggestions.
Lord Campbell-Savours
We need to know which one it is because it directly affects people’s incomes. Will the Minister not intervene at this stage and give us the information that will help us in the debate?
Baroness Hollis of Heigham
I would suggest that the noble Baroness should do that because otherwise an awful lot of speeches could be made on false assumptions.
Baroness Williams of Trafford
My Lords, all I can confirm at this stage is that, as the noble Lord, Lord Best, said, there are two options on the table.
Lord Best
I hope I am right in thinking that the Government are minded to choose the lower of these two options. It would be cruel to suggest the lower figure and then choose the taper that costs tenants twice as much. For a household with two earners together earning £40,000 per annum outside London, with a 20p taper they would face an extra £40 per week on the rent—a serious loss of income. If the taper was at 10p in the pound, their extra rent would be £20 per week, which seems quite enough of an extra burden for two people both earning well under the national average.
I recognise that such increases will be offset to some extent by the Government’s cut in council rents over the next four years. Of course, for the relatively small number of households—well under 1% of council tenants—where household income is more than £50,000, the increases would require substantial cuts to the household budget. That does sound a painful change. Nevertheless, the headline here, following the letter to Peers from the Minister, is that pay to stay will not be quite as dreadful as it appeared earlier.
The amendments address the underlying problem. They would remove the compulsion on local authorities with council housing to introduce any higher-rents regime dictated by central government. Local authorities may well have their own ideas on schemes that would suit local circumstances, local rent levels and local incomes. Whitehall does not always know best. On top of losing their autonomy over relatively micro decisions on rent setting, local authorities will also lose all the extra rent which the pay to stay arrangements generate.
Since all financial benefits from the new arrangements accrue to the Exchequer, not to the local authority, once again it seems that every avenue is being blocked for councils that want to engage in providing more and better housing. Housing associations, including those where councils have transferred all their housing to a housing association, will be able to decide for themselves whether to adopt a scheme of this kind. I think that many will choose not to do so. If they do increase rents for better-off tenants, the housing associations will keep the extra money, not least to make up for some of the loss of rent they will suffer over the next four years due to the Government’s recent requirement on them to cut rents by 12% in real terms—but not councils.
In earlier sittings of this Committee we heard from noble Lords who are understandably aggrieved about other costs falling on councils but not—in just the same circumstances—on housing associations. Driving a wedge between the two providers of affordable housing is a very unfortunate by-product of the Bill. As a strong supporter of councils doing more not less to ease the nation’s housing problems, and as a very long-standing advocate for the contribution of housing associations, I find it very troubling to see the two set against each other in this way.
Surely councils, like housing associations, should be able both to decide on any rental schemes for higher-income tenants and to retain any extra rental income from tenants with higher earnings just as housing associations can. Many of your Lordships have already argued that councils should be able to retain receipts from sales of vacant properties, as housing associations can, and as councils can today but will be prevented by the Bill from doing tomorrow.
The nation needs all hands on deck—all sectors to join the fight to get more homes built. All of us in the housing world need to pull together and not allow ourselves to be pulled apart. These amendments would let councils continue to decide for themselves on any new rental arrangements and, as with housing associations, keep any rent receipts to help meet housing need. I beg to move.
Lord Shipley
My Lords, I rise to speak to Amendments 69D, 70E, 76A and 79C in this group. I have already declared my vice-presidency of the Local Government Association in Committee, but in view of what I am about to say, I will simply draw attention to it again.
The noble Lord, Lord Best, covered all the key issues on pay to stay, although I will say something further when Amendment 81 in this group has been spoken to. These amendments basically challenge the nature of Clause 78, which is about a mandatory approach to local authorities. They require an element of discretion for local authorities to make decisions that they think are best for their areas. It is difficult to understand why, if it is voluntary for housing associations to do this, it is not voluntary for local authorities. The noble Lord made clear that there is to be a change in the nature of what the Government have been proposing on pay to stay, so the “cliff-edge approach” that he talked about is apparently no more—although we have yet to see the detail. I associate myself with what the noble Lord said about the lower sum being better.
Will the Minister give some further thought to the administrative cost to local authorities and others of pay to stay? I think that the cost will be much higher than the Government currently think. On a later group we will come to the issue of access to HMRC data, but it would be easier to raise the thresholds than simply apply a taper, partly because so much of what is being proposed could relate to levels of household income that exist a number of months before the information is made publicly available under HMRC timescales. The Government need to be very careful about the administration and bureaucracy that will be put in place, particularly relating to the taper, whatever its level—and let us hope that it is the lower one.
My objection to what the Government have been proposing on pay to stay is that it reduces the aspiration to work more and actually encourages people to work less. If they are to lose out with the amount of rent they have to pay it is not worth their while to work, or work as much, so there will be a tendency for people to decrease their hours, with a growth in part-time working. That is particularly dangerous in the public sector, where pay levels are not that high. It might encourage people to work less and take qualified people away from public-facing duties.
I say to the Minister that I hope that it is understood that any extra income deriving from higher rents should be kept for reinvestment in the housing stock locally. I know that there are discussions on that. In the end, the requirement for social housing for rent is such that this cannot be seen as some kind of source of taxation for the Treasury to get its hands on. Actually, money needs to be reinvested by local authorities in providing the right level of housing for their areas.
I hope to come back at a later point on Amendment 81 in this group, which relates to the delegated powers that the Secretary of State will have—but I will wait until a later moment to do that.
Baroness Hollis of Heigham
My Lords, I will speak to this group of amendments, and in particular in support of Amendment 69D, which would make pay to stay voluntary for local authorities.
The government argument for RTB for housing association tenants is the level playing field—or, as the noble Lord, Lord Porter, said, similar treatment of people on either side of the street. The Government have also proposed pay to stay, under which so-called high-earning council tenants outside London on £30,000 a year between them—£15,000 times two—were to pay a full market rent. But whereas for housing associations pay to stay is voluntary, for local authorities it is compulsory. We need the level playing field of the noble Lord, Lord Porter.
As the noble Lord, Lord Best, absolutely rightly said, whereas housing associations can retain any proceeds from this, local authorities must send theirs to the Exchequer. The reason for that, according to page 56 of the impact analysis, is that the policy of sending the proceeds to the Exchequer will help the Government “reduce the deficit”. Will the Minister tell us why council tenants have a special duty to reduce the deficit while housing association tenants do not?
Secondly, how does this interact with the 1% social rent reductions? Let us assume that a local authority family with two children on gross £30,000, net £24,000, income a year might now have a social rent of about £100 a week for a three-bedroom house. Social rents will be coming down 1% a year, while market rents will grow, it says, with overall private-rental inflation. So the gap between the two will therefore widen. With the push to market rents, if that family’s rent rose to £150 a week, they would get housing benefit; if it rose to £250 a week, their housing benefit would be £100 a week. Even the Government think that that is daft.
So the Government are now proposing, as the noble Lord, Lord Best, said, that rent increases should be tapered and should not apply to those on housing benefit. What would be the result? As the noble Lord, Lord Shipley, asked, what family on housing benefit would increase their pay and lose their housing benefit firewall? Work incentives would be badly damaged. Fraud would certainly increase—and, incidentally, contaminate HMRC records. Part-time work would move into the grey economy and couples would come to more informal living and financial arrangements, and so on. In a single-parent household, with an adult son living there, what happens to adult non-dependent deductions? Around 25% of their income is taken into account in determining HB. The son may move out—and then there lurks the threat of the bedroom tax.
And how—I am puzzled by this—will all this interlock with universal credit? If you are on HB, you will not be paying market rent; but what happens if you are on universal credit? The Government say, in their consultation exercise, that they will consider the links to UC “in due course”. That is very odd. DCLG is treating housing benefit and universal credit as two separate streams of benefit. Having sorted HB, they will turn to UC. But of course, as the Minister must know—and I am sure that she does—UC is absorbing HB. UC will be based on monthly real-time information. Pay to stay—ultimately part of UC; whether the Minister or the department are fully aware of this or not, I do not know—will be based on out-of-date tax records, perhaps one year behind. So UC will be based on real-time information on a monthly basis, and housing benefit on the taper will be based on records perhaps a year out of date.
The effect for the tenant of the 20% taper on the move to market rent takes UC withdrawal rates—and there is not a word about this anywhere in the impact analysis, needless to say—from up around 73p in the pound, which is already a high work disincentive, as the noble Lord, Lord Shipley, said, to 93p in the pound. As a result of this, you work for 7p an hour. Would any of your Lordships do that? This really screws UC. There is not much point in rolling out UC—which I very much support and which was based on improving work incentives, which I very much support—if you return to pre-UC deduction rates, keeping just 7p in the pound.
Let us turn away from the effect on tenants to the effect on local authorities—again, as mentioned by the noble Lord, Lord Shipley. At the moment, tenants coming forward for housing benefit know that their finances will be scrutinised—of course they will be; it is an income-related benefit. But in future, as far as I can see, local authorities will need blanket information from HMRC on every adult living in a council home not already on HB, reversing separate taxation and matching it by household and address, in order to increase their rent on an individual, tailored basis. So, if you go down the street mentioned by the noble Lord, Lord Porter, almost every tenant could pay a different rent, personally tailored, for the same kind of property—or worse, based on out-of-date details of their previous year’s income.
At the moment, because rents are standard in local authorities, HB is fixed for the most part for 12 months at a time, apart from major reportable changes of circumstance. Yet even now, local authorities are unable to deliver HB as speedily as they would wish, while losing more and more staff because of their 40% cuts. Given, as we found with tax credits, that income fluctuates quite markedly over the course of the year with overtime, commission, children’s school holidays and periods of sick pay, will the tenants’ pay-to-stay rent fluctuate by the month alongside their income?
If it does not fluctuate, or the Government rely on end-of-year HB adjustments, tenants will find it impossible to avoid debt, arrears, poverty and probably eviction. But if it does fluctuate monthly, the local authority will find—as with tax credits—that the pay-to-stay rent it charges on a monthly basis is always a couple of notifications behind the facts and will never catch up. It will be a nightmare. As local authorities said in response to the very perfunctory consultation exercise as reported by the Government, their systems are not designed to do any of this. The Government breezily say that they can keep their administrative costs. But the system will crash—constantly.
Then, any extra rent goes to the Treasury. Local authorities already have the power to pursue an individual on more than £60,000 a year for a rent rise—what we call the Bob Crow amendment—if they see fit. But the last thing they will want to do is proceed with mass investigations of almost every council tenant—some will be on HB; those who are not will need to be investigated—at huge administration and probity costs. This is almost literally another poll tax. And the sums at the end of all this go not to local authorities but to the Exchequer.
Only local authority tenants, not housing association tenants, are being levied to fund huge discounts under the voluntary deal. Only local authorities, not housing associations, are required to pursue market rents. Only council tenants, not housing association tenants, may see their UC taper rise from 73p to 93p in the pound so that poorer council tenants get less financial support than the housing association tenant on the other side of the street of the noble Lord, Lord Porter, while having an identical property, identical family and identical income. Finally, only local authorities, not housing associations, are required to send the proceeds to HMT. Local authorities have become the whipping boy at every point in the Bill. Yet local authorities are publicly elected, fully accountable and entirely transparent bodies, open to the public and the press. None of that is true of even the best-run housing associations.
Baroness Lister of Burtersett (Lab)
My Lords, I support Clause 78 not standing part of the Bill, although what I have to say applies also to Clause 79.
This policy is perceived by tenants as a punitive policy and one that goes against the Government’s own social policy objectives of promoting security, aspiration and social mobility, mixed communities and reduced bureaucracy. I think that Nottingham City Homes has written to a number of noble Lords—as I live in Nottingham, this is of particular interest to me—saying that it was “overwhelmed” when it organised a meeting on the Bill, with tenants angry and upset, particularly about the pay-to-stay proposals. One of them dubbed it “an assault on ambition”.
Welcome though the confirmation of a taper is, it in no way constitutes a U-turn, as was spun in the media, giving the impression that the Government have somehow climbed down on the policy. After all, a taper has been on the cards ever since the consultation document was first published. The IFS has warned that a taper would still “weaken work incentives”. There are two aspects of this that particularly concern me.
First, no account will be taken of family needs and the costs associated with children, as in a normal means test, nor of the costs associated with disability and caring, which I will talk about in the next group. As the Joseph Rowntree Foundation warns,
“this proposed threshold may be too blunt to accurately reflect the differing needs of households”.
There is no “may” about it. I know that child benefit will be ignored in the income calculation, but according to Professor Donald Hirsch’s calculations of the cost of a child for the CPAG, it covers less than one-fifth of that cost, and that is without taking account of childcare costs, which the most recent survey by the Family and Childcare Trust showed can be astronomical, especially in London. Where is the fairness in treating a childless couple and a couple of two working parents, whose disposable income available for rent is effectively reduced by the costs of children and childcare, in the same way when assessing whether their income is high enough to warrant paying to stay? As the Social Market Foundation has argued, the assessment,
“must relate to equivalised resources”.
My second concern is the likely impact on second earners, mainly women. Despite what I think is now five requests, I still have not received an equality impact assessment for this clause. I can conclude only that one has not been prepared. But, as the Equality and Human Rights Commission has argued:
“To be most effective, Government departments should analyse the equality implications of a policy proposal at a formative stage, so that the assessment can inform policy development and the content of legislation. This will also ensure Parliamentarians have the information they need in order to scrutinise and debate Bills”.
We do not have that information. As I said, I have sent I do not know how many emails, I have made phone calls, I have asked for it in a technical briefing meeting. I still do not have it, even though it is pretty obvious that the policy is likely to act as a particular disincentive to women in couples to stay in or enter paid work. At the same time, it undermines government policy on promoting paid work as the route out of poverty, as all the evidence suggests that the presence of a second earner reduces the risk of child poverty significantly.
Just what such a work disincentive to second earners could mean was brought home to me by a woman who came to see me with the support of TPAS. I think she has also written to a number of noble Lords. She has lived in north Kensington for 35 years and has lived in her current home and worked in a local primary school for 25 years. She kept saying how much she loved her job and the children. She is utterly devastated at the prospect of giving it up but that is what she fears she will have to do if the policy goes ahead because the combined modest earnings of her and her husband take them above the threshold. In her letter to some noble Lords, she wrote: “I have never felt so insecure as I do now and it seems so unfair that I’m being penalised for working”. It was quite clear that by no stretch of the imagination was this a well-off, high-earning couple. It may be that her worst fears will be unfounded when the taper is applied, but how can we know? Until the details are published she will no doubt continue to feel insecure.
We use the term, “the devil is in the detail”. As we have already heard, the crucial devilish detail is still missing. It is totally unclear how the compulsory means test is going to work—in particular, as has already been said, how fluctuating incomes are to be taken into account. Cross-national research, which looked at other countries that had tried something similar, concluded that the administrative burden could well outweigh any supposed efficiency or equity gains. Indeed, I understand they have been discontinued for the most part in Germany, partly because of the bureaucratic costs involved in keeping tabs on incomes. At least the Government have stated that recipients of housing benefit will be exempt, which will be a relief to local authorities and to them, but there remains a big question mark over the interaction with universal credit, which my noble friend Lady Hollis of Heigham underlined with devastating clarity—in so far as one can have clarity in the midst of all this confusion.
The tenants who came to see me about pay to stay said over and over again how bitter they felt. “Punitive” and “punished” are frequently used words because this is how people feel. It is clear that the thought of what might happen is causing acute anxiety. Another tenant from Kensington and Chelsea wrote to say that she and her husband are just about getting by. She said: “I am truly stressing out over this as I don’t want to move away from the area I have known all my life or my family and also leave the job I love”.
On Second Reading, the Minister advised us to keep coming back to the word “home” as we discuss the Bill. This is one of a number of measures that threaten people’s homes. While a taper will mitigate the worst effects of the policy, it does not address the basic fact that people on modest incomes will be affected by a policy spun as aimed at high earners in the name of fairness. There is nothing fair about this.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support all the amendments in this important group. I shall speak particularly to Amendments 69D, 70E, 76A, 79C, and Clauses 78, 84, 85 and 86 stand part. I will try not to repeat previous contributions but I agree with the comments made, especially by the previous speaker.
There is something inherently abhorrent in central government imposing their will on locally elected councils and insisting that they must do the Government’s bidding. In some cases this may be justified, where they are protecting the very vulnerable in our society—children, the frail elderly, and the chronically sick and disabled—but not on housing. The provision of housing has always been, and currently remains, the responsibility of local authorities. They have discharged this duty for decades always with the needs of their local communities in mind, as my noble friend Lord Shipley has already indicated.
We now have a situation where a local authority must charge a high-income tenant a high rent. This might be acceptable if the tenants were, indeed, earning a high income. I welcome the Government’s commitment to introduce a taper and look forward to confirmation of what that taper will actually look like and mean for tenants. However, I would much prefer that we leave the discretion to local authorities, which know their communities, to determine at what point they start charging individual tenants higher rents. The words “may” and “enable” give all those involved the opportunity to assess actual incomes, individual needs and the likelihood of the higher rent being paid.
Absolutely the last desirable outcome is for the tenant to be evicted for non-payment of rent. They will have to move to a cheaper housing area, the wage earners will have further to travel to work or lose their jobs and the children will be forced to change schools. Where is the sense in this?
The Duke of Somerset (CB)
My Lords, I shall comment briefly on this group of amendments on the pay-to-stay extension. There has been a lot of consultation, but only 46% of the housing authorities or local authorities actually replied, and it is a pity that that statistic is not broken down between the two entities; it would have been interesting to have had that result. As usual, regulations will set out the thresholds where the proposed taper will bite. I trust that these will not be set too harshly to disadvantage even more tenants.
As the Government state, it should not be a disincentive to work. A joint income of £30,000 outside London may seem about right where accommodation is being subsidised below market rent levels, but it is not really a very high income for the two highest-earning people in the household. As usual, the devil is in the detail, and we have not yet seen the regulations, so what will happen if a tenant is made redundant or there is a pressing family crisis? Can the Minister give assurances that the authorities will still be able to react swiftly, despite all the funding cuts from which they have been suffering?
The explanatory paper states that the Government do not expect frequent rent adjustments, but I wonder what is meant by “frequent”. Is it going to be monthly or yearly or what? Will every pay rise mean a review or a new assessment? What about the drag that is going to follow on from such an event?
I suggest that the cost to housing associations and to local authorities should not be underestimated in bringing this policy into the Bill, especially where new IT systems are needed. We know the record that public authorities have on IT systems—it is not good. This may make this whole part of the project counterproductive.
As other noble Lords have said, the involvement of HMRC is a very dubious practice that will slow up assessments and—worse still—incite distrust and resentment among the parties involved, let alone disturbing the code of confidentiality that we have heard so much about already today.
I would like to end on a good point: I am pleased that those on housing benefit will be outside the scope of this part of the Bill. I look forward to hearing the Minister’s response with more detail on the taper proposals.
Lord Foster of Bath (LD)
My Lords, I thank the Minister for her earlier remarks, which offered at last to provide us with the information about the state of play regarding secondary legislation, and for her commitment to provide us with a response to the Delegated Powers and Regulatory Reform Committee’s two reports—the 20th and 21st—before Report. I draw noble Lords’ attention to pages 7, 8 and 9 of the 20th report, which give the committee’s response to some of the issues we are discussing.
I genuinely believe that a case can be made for a discretionary, flexible, locally set pay-to-stay arrangement, with the money raised reinvested locally to meet locally identified housing need. It is very difficult to make a case for an imposed, inflexible scheme with no opportunity for the money to be reinvested at the local level and no account taken of individual circumstances or of local conditions. That case is made even more difficult by some of the language that has been used—not by the Minister but, for example, by the Chancellor of the Exchequer, who has talked about the burden of this being placed on other working families by the subsidy made on social rent.
I remind the Chancellor that the taxpayer and those working people make very large subsidies to other forms of tenure, whether it is to the owner-occupiers who attract relief from capital gains tax and are not taxed on the value of their homes, right the way through to the first part of this Bill where we are going to give very large subsidies to those who choose to acquire a starter home. Of course, the right to buy itself is another form of subsidy. The case is not made easy by the language in this part of the Bill about rents for “high income” social tenants. As the noble Lord, Lord Best, has pointed out, a family with two people on the living wage would have an income that puts them only just below the threshold level proposed as a “high income” for the imposition of the right to stay.
It is not as if the right to stay is new. It was introduced in 2012 by the coalition Government when they introduced a voluntary scheme starting for payments over an income of £60,000. During the preparation for that introduction there was another consultation that looked at what people thought of such a scheme. It is quite reflective to look back at some of the things that people said during that consultation—indeed, they said all the very things that people are saying this time round. They said, first, that you had to be very careful about the threshold levels so you did not create a disincentive; secondly, that there had to be locally determined setting of levels because of fluctuating local circumstances; and thirdly, above all, that it should be a discretionary scheme enabling, for example, local authorities to decide whether or not to introduce it and the details of doing that.
That is why I am so supportive of the amendments before us, in whichever combination you choose, because in one way or another they are all basically saying that we should change the compulsory nature, get rid of the imposition of pay to stay and allow a voluntary scheme of one sort or another. But, as I said, we have already had a scheme introduced. I am assuming that the Government would have looked in detail at the operation of the current voluntary scheme in coming forward with a revision of that scheme, which is what is before us in the Bill today. Can the Minister tell us in some detail what information has been gleaned about the scheme introduced in 2012? She will be in some difficulty, because last July, in answer to a Parliamentary Question, the Government admitted that they had collected no data whatever and had no information whatever about whether any local authorities or any other providers of social housing had even introduced such a scheme. But they have had time since July, so—not wishing to embarrass them—I am assuming that they have that information, and we look forward to having it.
Of course, lack of information is the problem that we have had throughout this Bill. I am absolutely delighted that the Government have now said that they are going to introduce a taper scheme. It is amazing that that was not included at the very outset of the Bill, because only a couple of years ago the previous Government made it absolutely clear that a pay-to-stay scheme must not have a built-in disincentive for people to go out and earn more by getting a better job or working longer hours. That was very clear—yet the failure to include a taper at the beginning of this scheme has led to a very large number of people being extremely concerned about what the future may hold.
It is equally bad that we are in a situation whereby, notwithstanding the fact that there is a taper or, as we have heard from the noble Lord, Lord Best, there will be either a 10% or 20% scheme, we do not know which it is—we do not know the details of it or what level of income is going to come in as a result, and we do not know how much local authorities are going to be allowed to keep back to pay for their costs. So we have no idea what the impact of the legislation that we are debating today is going to have either on the people whom it will affect or on the Exchequer of the country. The sooner we get that information, absolutely the better.
Above all, the best thing would be for the Government to do what they have already done and back down in respect of something being compulsory. We know that the Government have backed down in respect of requiring housing associations to impose right to buy, and we hope that on this occasion they might back down on imposing pay to stay on councils. After all, it makes much more sense for a local council to have that discretion and be able to take account of local circumstances and invest the money in providing for local housing need that it has identified. It does not make sense that housing associations are to have that freedom both to decide whether or not to do it or to be able to use the money, if they introduce it, to invest in housing stock to meet what they have identified as housing need.
I have a second question for the Minister, because it is important that we at least have this on record. Could she confirm that one reason why there has not been an imposition on housing associations to introduce pay to stay is because it is part of the package of measures to try yet again to get the ONS to reclassify housing associations so that they are no longer public bodies? If that is the case, we need to know and, if there any other reasons, we need to know. Above all, these amendments would get rid of compulsion, give flexibility and give an opportunity for local determination. That is why I am so keen to support them.
Lord Campbell-Savours
My Lords, the case made by my noble friends Lady Hollis and Lady Lister on this amendment has been utterly devastating. They have totally undermined the Government’s case and one is left wondering, having listened to their contributions, how this section of the Bill managed to clear the officials. They would have had access to the data produced by my noble friends and I simply cannot understand how the Minister will be able to respond to what they have said—in particular to the comments of my noble friend Lady Hollis, who said that information of a private nature, on private incomes, will now, within the law, for the first time ever, be given to private companies acting on behalf of local authorities.
At this end of this debate we need a clear statement from Ministers as to whether they accept that that is the case. We believe that it is the case, but Ministers should be prepared to say at the Dispatch Box whether it is true that information of a private nature on personal incomes can now be handed over to private companies—with all that that implies. It means leakage within communities where people may well find that they are in a position to discuss the private incomes of individuals.
I support the first five amendments in this group and would like to ask some questions that have not been asked during this debate. I do not really want to repeat anything that other noble Lords have said, apart from what my noble friend Lady Hollis said. Clause 78(2) states:
“The regulations may, in particular, require the rent—(a) to be equal to the market rate, (b) to be a proportion of the market rate”.
I think we should at this stage know where. When the people were on the streets of London yesterday—I understand there were thousands of them—demonstrating about the consequences of this Bill for them as individuals and the breach of privacy that it entails, many of them were perhaps unaware that in many parts of the country the full market rate will be the target. It might well be that some of them thought that their properties might be simply covered by the provision of the “proportion of the market rate” in paragraph (b).
That question is relevant because in the Shelter briefing—and Shelter has been one of the main sources of information on this Bill rather than government departments, certainly when it comes to statistics—we find from DCLG tables 702 and 704 that the London average social rent in local authority-owned housing is £455 per month. If that property were in the private sector, according to the private rental market statistics summary of monthly rents recorded between October 2014 and September 2015, that rent would be £1,626 per month for a two bed flat. In other words, the rent nearly quadruples. So if the target is market rents, people in London have to expect that the Government’s ultimate objective is to secure a market rent of £1,626 a month on a property that currently on average costs £455 a month. That is a huge increase.
I move now to Clause 79. Again, we have the problem that we have a skeleton Bill. We are not given the answers. This is a classic example of the problem of this Bill. It says:
“Meaning of ‘high income’ etc … Rent regulations must … define what is meant by ‘high income’ for the purposes of this Chapter”.
We had a debate about that and we broadly know what the figures are—the £30,000 and £40,000 thresholds.
But then Clause 79(2) says:
“The regulations may, in particular … define ‘high income’ in different ways for different areas”.
What will that mean for London, Newcastle or Birmingham? Is a different area going to determine what the high-income level is? Again, that will be in regulations, so we cannot see what it means. The differential in England may well be very controversial but we cannot debate it at this stage of the Bill.
Clause 79(2)(b) says that the regulations may,
“specify things that are, or are not, to be treated as income”.
Will they include unearned income, pensions, all benefits, the benefits of dependants, the unearned income of dependants, or the unearned income or benefits of relatives who might stay in the property? Once again, a whole area is excluded from consideration by this House. My noble friends Lady Hollis and Lady Lister at least tried to put wings on it but we still do not know the detail.
Clause 79(2)(c) then says that the regulations may,
“make provision about the period by reference to which a person’s income is to be calculated”.
Is it to be weekly, monthly, annually or biannually? Again, we are not told.
Paragraph (d) says that the regulations may,
“make provision about how a person’s income is to be verified”.
Noble Lords should remember that my noble friend Lady Hollis said that everyone who lives in a council house and is not on housing benefit could be subject to an inquiry about their income by their local authority. Can we presume that if you live in a council house in the United Kingdom and your total household income exceeds £30,000 a year, the local authority will be able to ring up your employer or anybody they want—for example, your pension provider, your private pension provider or any other organisation that might be paying someone an income—to ask how much you are being paid? We know that that already exists in law for means-testing systems, but now we are talking about people who are outside the benefits system and will suddenly be brought into the whole world of means testing. I believe that that is fundamentally wrong.
That brings me to my final objection. This Bill will fail for the reasons that have been given by my noble friends. If the annual income for your household outside London is over £30,000 a year, you are going to be very tempted to go on the fiddle. There will be hundreds of thousands of people who say, “I’m not going to declare that income. I’m going to take a little job here and get a bit of extra money there. I’ll go and work in a hotel and do a few little jobs here and there”. They will find all sorts of ways to get round these rules.
I do not normally attack officials but I cannot understand how even officials do not realise what is going on in the real world. Parliament has become unwieldy—it just does not understand what is going on in the population. People calculate how they can maximise their income, and if they are going to be caught by the £30,000 threshold, as a lot of people in the United Kingdom will be, they will find ways of getting round it. There will be an army of people trying to track down people’s incomes, and people will get very upset. As my noble friend Lady Hollis said, this will turn into another poll tax. We have warned the Government: there will be abuse and massive fiddling. I think that, even at this late stage, the Government should take stock of the nonsense provisions in this stupid Bill.
Lord Beecham
My Lords, as we have heard, this group deals with the Government’s extraordinary assumption of powers to determine for every local housing authority the rent they must charge to high-income tenants—an even greater trespass on their right to manage their own affairs than those we have previously discussed in relation to this Bill. We support the amendments in this group, which would leave councils with discretion in this area and would transform government prescription to responses better determined at a local level, taking into account but not being bound by the Government’s views.
Later as we proceed with the Bill we will debate permission in principle in relation to planning. In the clauses in Chapter 3 we have legislation in principle. The rent regulations which the Bill requires councils to apply are potentially wide ranging as they may require the rent to be equal to the market rate; or a proportion, needless to say unspecified in the Bill, of the market rate; or to be determined by other equally unspecified reference to other factors; while Clause 8(3), as my noble friend has said, provides different rents for people with different incomes or for different areas.
Clause 79(2) extends the scope of these regulations to define what constitutes high income, how it is to be calculated—including different ways for different areas—and specifying what is and is not income, the period to be taken into account for the purpose of the calculation, and how a person’s income or a person’s household income is to be calculated, and requires the housing authority to have regard to guidance when calculating or verifying a person’s income. All this, of course, will come in regulations we have yet to see but hope to see—we have an assurance—before we finally reach Report. However, even they are only possibilities. They will not be prescriptive but what councils and housing authorities may do. It is unclear whether they will be binding.
Clause 80 deals with information about income. Again it sets out a series of regulations which may require housing authorities to do things and may, in particular, make provision about the kind of information or evidence that may be required. Interestingly, subsection (4) defines a tenant as including a prospective tenant. That rather concerns me and perhaps other noble Lords. There is a suggestion there that, if a tenant’s income is found to be rather low in relation to the property, that will affect the granting of a tenancy. It opens up the possibility that tenants will be picked from those who can, on the Bill’s definition, afford a particular property and that it will not be let to tenants who cannot. If that is not the case—if I am being unduly suspicious—perhaps the Minister can tell the House why subsection (4) is in Clause 80 at all.
This complex bureaucratic exercise will have to be undertaken up and down the country. What is the Government’s estimate of the cost of this cumbersome system and how will it be met? Will it be met by the Government or by the Housing Revenue Account and, therefore, by the tenants themselves, effectively, in the end—and tenants not only of these properties but, presumably, across the housing range?
We will encounter in later groups other aspects of this extraordinary example of naked centralism, but can the Minister tell the House how far the drafting of regulations has got? She has indicated today that we will be seeing regulations—she is nodding her head—so it looks as though these particular regulations will be included, for which we will be grateful. However, when she replies to this debate, can she say who has been consulted in the matter and with what outcomes? In particular, have the Government consulted representatives of tenants? Tenants’ federations and tenants’ associations exist in many places. Have they discussed the matter with them or has their conversation been confined to the housing authorities themselves?
If this approach is appropriate for this area of public policy, can the Minister say which other areas of public provision by local authorities can be certain of avoiding the imposition of similar manifestations of democratic centralism that would have made Stalin, Nicola Sturgeon or even Eric Pickles blush?
Lord Shipley
My Lords, I said earlier that I wanted to comment on Amendment 81 when it had been spoken to. It is part of Clause 84, and therefore Clause 84 stand part is relevant. This is a very important issue. The noble Lord, Lord Foster of Bath, referred to pages seven, eight and nine of the Delegated Powers and Regulatory Reform Committee’s report. I do not seek to repeat what the noble Lord, Lord Beecham, has said, but I hope that the Minister will have a clear reply because, as the Delegated Powers and Regulatory Reform Committee says in paragraph 37:
“It could be viewed as a form of taxation because it enables the regulations to require local housing authorities to make payments to the Secretary of State in respect of ‘any estimated increase in rental income because of the regulations’”.
It goes on to say that the memorandum of explanation that it received,
“gives only the barest explanation or justification for this power; indeed, it seeks to dismiss this highly important provision as ‘quasi-technical’.… The intended meaning of that expression wholly eludes us, and the House may wish to ask the Minister for an explanation”.
We have asked for this. Given that this has been available since 5 February, clearly the Government have time now to respond through the Minister’s reply as to how they plan to deal with that matter.
In paragraph 38, the Delegated Powers and Regulatory Reform Committee says:
“The Henry VIII power in Clause 83(4) will be subject to the affirmative procedure. Otherwise, the negative procedure applies to regulations made under all the other powers in this group of clauses. The justification in the memorandum is that the negative procedure follows ‘a clear policy framework that has been set in Clause 78 and the related clauses of the primary legislation’….We strongly disagree with the suggestion that the clauses in question offer anything like a clear enough statement of discernible policy to justify the delegation, far less the negative procedure”.
I want it to be clearly understood by the Minister that this is a very serious matter. I hope and anticipate that she will be able to give a full explanation of why this clause has been worded in this way.
Baroness Williams of Trafford
My Lords, before I turn to the amendments I want to outline the Government’s latest position on the policy for high-income social tenants, which I outlined in a letter late last week. I hope this will address some of the concerns from noble Lords, particularly those who have stated their opposition to the policy and the clauses in the Bill.
I recognise and share the concern about the level of detail that has been brought forward with regard to our policy for high-income social tenants. My priority over the past few weeks has been to finalise key aspects in order to give that detail. This is particularly important, as the greater part of the policy will be set out in secondary legislation. Although I do not have regulations to share with noble Lords today, I am able to set out a significant amount of detail about what will be included in those regulations.
I am clear that secondary legislation is necessary for this policy, as we need the ability to keep the policy under review and bring forward changes in future based on a thorough review of the effectiveness of the policy and its impact. I am sure that that will be supported.
It is fair to ask how the legislation will be used in the first place. Before I turn to that, I remind the Committee of the Government’s reasons for introducing the policy. The 2015 Budget set out that households in social housing on incomes of £30,000 or above nationally and £40,000 or above in London would be required to pay a higher amount of rent if their current rent was below the market value. It is simply not right that social tenants continue to benefit from lower rates of rent as their income rises when households in the private sector on comparable income levels do not have this luxury. Households in the private sector on those kinds of incomes would, in many cases, be expected to pay the market rent. This is fundamentally unfair when it is those same taxpayers who are contributing to the lower rents enjoyed by tenants on similar incomes in the social sector. The position cannot continue.
Many taxpayers will be surprised to learn that there are more than 40,000 households in the social sector on annual household incomes of over £50,000 a year who are continuing to benefit from taxpayer-funded lower rents. Of course, that figure is at the top end of the household income scale, and we recognise that there are far more social households in receipt of incomes between £30,000 and £40,000 a year. We have always recognised that we must not damage the incentive to keep and find work, as the noble Lord, Lord Foster, says, and I know this important aim will be shared by many in the Committee. Households earning above £30,000 should be able to contribute a little more towards their housing costs, and it is on that basis that we consulted in October 2015 on a proposal for a taper to ensure that rents would increase gradually above the proposed income thresholds.
There was a strong level of support for the proposed taper, with just under 90% of respondents to the question supporting the proposal. I am pleased to be able to confirm to the Committee that the Government will be introducing a taper, and we will use regulations to set out the design of the taper. There are a number of ways in which this could be done. For example, a taper set at 20% would mean an extra 20% in rent for every £1 earned above the income threshold. A taper set at 10% would mean an extra 10% in rent for every £1 earned above the threshold. Both examples would mean that, for households just above the starting income thresholds, the rent rise would be a few pounds each week, not the doubling of rental payments that has been a prominent accusation in recent weeks. I am sure the Government’s confirmation of the taper will provide some reassurance to members of those households who have been worried that rents will jump straight to market rental values.
Baroness Williams of Trafford
My Lords, perhaps I may finish this statement and then the noble Lord can intervene.
The noble Baroness, Lady Bakewell, mentioned a lady who wrote to her who was a housing association tenant. Of course, this measure would not apply to her.
Of course, for those households earning far more than the proposed starting thresholds, the rent increases would be greater. However, the taper will reflect what we consider to be the best balance between ensuring fairness between the social and private rented markets, and protecting the incentive to find and keep work.
I should take the opportunity to remind the Committee about the Government’s home ownership offer to social tenants, particularly those on the kind of incomes we are talking about. If a social tenant were to make the move into home ownership, via either Right to Buy, shared ownership or Rent to Buy, the policy for higher rents simply would not apply to them. This is an important message.
The consultation also asked for views on how the administrative costs for local authorities should be dealt with. The proposal was to allow local authorities to retain a reasonable amount of admin costs, and I can confirm today that the Government will honour this proposal—the noble Lord, Lord Shipley, asked about this. Further work with local government is necessary to understand what the actual costs will be, and we will explore in detail how to implement a policy that minimises the burden on local authorities.
Moving forward over the next few months, the priority for my department is engagement with local authorities and housing associations. The work will inform much of the rest of the regulations and will be focused on three key areas: how “income” is defined for the purposes of the policy; how market rents should be established; and the process for returning money raised from local authorities to the Exchequer. I assure noble Lords that we want a policy that is workable, and this is why the engagement work is so important. I will pick up on these areas in more detail as we move through the amendments.
I hope that these opening remarks have been helpful to noble Lords and that some reassurance has been provided on key aspects of the policy on the taper and the treatment of admin costs.
Lord Lansley
Just for the avoidance of doubt, when my noble friend referred to the two illustrations on the taper, she referred to 10% and 20%. I understood that we are in fact talking about 10 pence and 20 pence in the pound.
Baroness Williams of Trafford
My noble friend is absolutely right. I had not realised that I had made that error. At this point, I shall let the noble Lord, Lord Campbell-Savours, intervene.
Lord Campbell-Savours
I think that the noble Lord, Lord Best, said that he thought that the Government were minded towards the lower taper. If he thought that, he must have had some indication, either from officials or from within the department. Has any discussion gone on and who is privy to it?
Baroness Williams of Trafford
My Lords, I think that the noble Lord spoke in hope rather than anything else. I have not had private conversations with him about what those figures would look like. I am sure he will speak for himself if he wishes to do so.
The amendments would give local authorities the option to adopt a voluntary policy for high-income social tenants. While I understand why this may seem an attractive way forward, particularly for local authorities, a voluntary approach does not help achieve our aim of a consistent and fair approach for all local authority tenants.
Amendment 69C, tabled by the noble Lords, Lord Kerslake, Lord Best, Lord Kennedy and Lord Stoneham, would give local authorities the choice about whether to raise rents for high-income social tenants. As I have explained, the policy will be mandatory for local authorities to ensure fairness and a consistent approach.
It may be that noble Lords have in mind that the policy will still be voluntary for housing associations, and it may help if I provide more detail on that decision—this goes to the point raised by the noble Lord, Lord Foster. I am sure that noble Lords are all aware that following the reclassification of the housing association sector as public by the Office for National Statistics, the Government have taken the necessary steps to persuade the ONS to reverse that decision. This means not putting in place controls over the sector, and there are clauses elsewhere in the Bill that aim to deregulate it. Part of this approach is to make sure that we do not tell housing associations how to run their business and, on that basis, we cannot force them to operate a pay-to-stay policy. However, we want as many housing associations as possible to operate a voluntary policy, and my department is taking forward discussions with the National Housing Federation and housing associations to ensure that the majority do so. Early indications are that housing associations are interested in adopting a voluntary policy and, as these conversations develop, I will bring forward more detail.
The noble Lord, Lord Foster, asked about the data from the right to stay—I think he called it—in 2012. We did not collect those data because so few housing associations and local authorities operated it, and that is still the case today.
Baroness Williams of Trafford
No, I am afraid not.
Amendments 69D and 76A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, would have the same effect as the previous amendment: they would make the policy voluntary for local authorities. I have explained why that is not our preference.
The noble Baroness, Lady Hollis, asked how pay to stay would work with taxable years. We have not yet decided how it will work. We have not decided whether it will be calculated by looking at taxable income and we are also considering whether it should be based on previous income or current income.
Baroness Hollis of Heigham
Can the Minister help me on this? Under UC and so on, we are dealing with real-time information, where people’s income fluctuates month by month. Does this mean that the Minister will not be interested in that fluctuation month by month in terms of the taper? As far as local authorities are concerned, and as far as I can see, they will be required to have personally tailored rents, probably revisited every month, and a different rent for every house in the street. The Minister may go on to answer that, but as far as I can see, almost no thought has been given in all the papers that I have read to the interaction between what is proposed for local authorities and what a fellow department, DWP, is seeking to achieve.
Baroness Williams of Trafford
My Lords, on the interaction between UC and the policy, we are doing as a priority a piece of work to explore that relationship, but there will obviously be an exemption for those on housing benefit. Officials and I have given some thought to that very point about fluctuations from month to month—for example, for someone who is on a zero-hours contract. That is the very type of thing we are looking at in terms of making this policy fair, because there will be many situations where that is the case.
Baroness Hollis of Heigham
Does the Minister therefore not accept that the path that she appears to be going down is individually tailored rents which will fluctuate month by month, which local authorities will be expected to determine and collect?
Baroness Williams of Trafford
My Lords, I may not have articulated it properly, but that is the very sort of issue that we are looking into. I hope that in due course we will see an equitable conclusion.
The noble Baroness, Lady Lister, asked about the equality impact assessment. As if by magic, by the end of this week—in fact, as we speak—I believe that it is going on the Bill website, and I have asked for a copy to be sent directly to her. If by Thursday it is not with her she knows where to come.
Baroness Lister of Burtersett
I am very grateful, but I remind the Minister that the Equality and Human Rights Commission said that the whole point of the assessment is that it is done while policy is being made, not in the middle of Committee, when we are discussing it.
Baroness Williams of Trafford
I take the point made by the noble Baroness. I can give her that confirmation today.
The noble Baroness, Lady Hollis, talked about the problems relating to data sharing. We will come on to this issue in a later group. Suffice it to say for now that HMRC will not collect any new information. The landlords collect it and confirm it with HMRC. It is a criminal offence to disclose HMRC data unlawfully, but as I say, we will come on to this matter in a later group.
Lord Campbell-Savours
Will the Minister answer the direct question I asked of her? Is it true that private companies will have access to information on the incomes of council tenants where the total income of the household exceeds £30,000 a year? The answer to that is yes or no.
Baroness Williams of Trafford
The answer is yes. The landlord will collect the information and confirm it with HMRC, which is slightly the other way around, if that makes sense. As I say, perhaps we should leave the discussion about HMRC—
Lord Campbell-Savours
Having agreed that that is the case, will the noble Baroness confirm that this is the first time in history that that has happened?
Baroness Williams of Trafford
My Lords, landlords collect the information and they send it to HMRC. It is not a question of HMRC collecting any new information; HMRC will not be doing that. Perhaps we should park the HMRC issue because we will come on to it in a later group.
I turn to Amendment 70D tabled by among others the noble Lords, Lord Best and Lord Beecham. This would give local authorities a choice about how to set rents for high income social tenants. Taken together with previous amendments that seek to make the policy voluntary, this would mean that a number of different approaches would be taken up and down the country. As I have said, that is not our preferred route as we want a consistent approach for all local authority tenants. This is best achieved by the introduction of a taper, which I hope I have covered thoroughly already. Regulations under this clause will be used to confirm the taper.
Housing associations will be free to decide on the most appropriate level of rent, although we hope that the majority will copy the approach of the taper that will apply to local authority tenants. The housing associations we have spoken to have suggested that this will be the most likely scenario.
Amendment 70E would enable local authorities to decide how rents should be set, presumably after they had taken the decision on whether to adopt a policy. I refer the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, back to the previous discussions and the commitments I have given on rents by way of a taper. This will apply to all local authority tenants and will link rent rises to increases in household income.
Amendment 75C, tabled by among others the noble Lords, Lord Best and Lord Kennedy, would change the status of the guidance issued by the Secretary of State. Local authorities will be very clear that if they are to be required to operate the policy, they need guidance about the steps they should take. The purpose of guidance will not be to prescribe exactly the processes and technical support needed to operate the policy within an authority but it may set out, for example, how income has been defined under the policy and the types of evidence that may be acceptable to help to verify declarations made by tenants. I am sure that noble Lords will be interested in any guidance that we intend to issue, and I will certainly share it when it becomes available.
Amendment 79C is concerned with the approach for non-declaration of rents by social households. I thank the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, for the amendment and I will turn to the reasons for the power in a separate part of the debate. This amendment seeks to make the power voluntary for local authorities, but we believe that where action is needed for tenants who do not declare, the approach should apply consistently across the country. We are considering how this power could also be used by housing associations in discussion with them, and I am clear that there should be a fair and consistent use of the approach for non-declaration.
Finally, Amendment 81, tabled by the noble Lords, Lord Kennedy and Lord Beecham, would mean that payments made to the Government under the policy could not be based on an estimate of the rental income increase or on a formula approach based on a set of assumptions. We have not taken a decision on the approach as further engagement with local authorities is necessary. I think that also answers the point put by the noble Baroness, Lady Hollis. However, there needs to be flexibility in the power to ensure that the most appropriate approach can be taken. I will carefully consider both the benefits and the drawbacks to an approach based on actual receipts and one based on estimates. Engagement with local authorities will continue over the next month, and the issue of how to return money will be at the top of the agenda. We will listen carefully to the arguments before making a decision.
As I have said, I recognise why there is a desire for local authorities to operate this policy voluntarily, but I hope I have done enough to persuade noble Lords why that would not be the best way forward. The Government have a clearly stated policy that high income social tenants should pay a fairer level of rent. On that basis, it is only fair that it should apply consistently across local authority tenants. I have outlined why we cannot do the same for housing associations, but that we are working closely with them to ensure they take up the policy. Alongside this, I have provided confirmation of our commitment to a taper that will meet a reasonable level of the costs of operating the scheme for local authorities. On that basis, I ask that the amendment be withdrawn.
Lord Kennedy of Southwark
I think I heard the noble Baroness correctly, but I might be wrong, when she said earlier that council tenants receive a taxpayer-funded subsidy. If that is the case, will she say a bit more about it?
Baroness Williams of Trafford
My Lords, I talked about council tenants on higher incomes benefiting from a taxpayer subsidy when many people in the private rented sector who are on lower incomes would not be able to avail themselves of such a subsidy.
Baroness Hollis of Heigham
Could the noble Baroness specify what form that subsidy takes? Certainly in the local authorities I am familiar with, the rents charged cover maintenance, repairs, collection, administration and the like, and receive no taxpayer subsidy—unless the Minister is saying that anything below market rent is a subsidy by definition, which I think is an absurd position. As far as I am aware, there is no subsidy. Perhaps the Minister can specify in what ways the taxpayer subsidises council tenants.
Baroness Williams of Trafford
As the noble Baroness says, the rents are below the market rent.
Baroness Hollis of Heigham
What the noble Baroness is saying is that every time private landlords’ rents go up, the subsidy to council tenants from the taxpayer is increased. That is Orwellian.
Baroness Williams of Trafford
My Lords, I think that we will have to agree to differ. I recognise that there are different opinions across the Committee on this, but I have made the point because social rents are lower than market rent.
Lord Beecham
Market rents are artificial. There is nothing God-given about market rents because they are determined by landlords, largely on the basis of a shortage of affordable housing anyway. In so far as there is a subsidy, surely it is the subsidy that is paid in the form of housing benefit for private tenants, about which the Government propose to do nothing at all.
In addition to that, the noble Baroness referred to the need for consistency across all local authorities. She has not made an argument for that, she has merely stated it as a given. The Government do not take the same view about council tax. They did in a sense when they introduced the poll tax, and they seem to be making the equivalent mistake here with local authority rents. It is an absurd proposition that the same system should apply across all local authorities irrespective, for example, of the value of the housing and average local incomes. Where is the justification for the simple assertion that that must be the basis of the scheme?
Baroness Williams of Trafford
I am sorry, I thought that the noble Lord was going on to make a speech. The fact is that generally social rents are cheaper than market rents, although they have been going up at a higher rate than rents in the private sector. I do not think we can compare this proposal with council tax because different areas have different needs in terms of the services they provide.
Lord Best
My Lords, I am grateful to all noble Lords who have joined in this debate. As has been the pattern in other parts of the Bill, we have started with a lengthy session which has looked at the full policy implications in this area. There are a lot of amendments yet to come on pay to stay, but I think we have already aired some of the broader policy issues.
The noble Lord, Lord Shipley, commented on the administrative costs of handling this scheme, to which many other noble Lords drew attention. We will come to Amendment 75A and have another go at that issue, which is clearly very important if the scheme will cost an awful lot of the money raised just to administer. That is money just going round in circles and achieving nothing at all.
“(1A) Any regulations made by the Secretary of State shall not apply—(a) to people aged over 65;(b) to people who have a registered disability;(c) to people on zero hours contracts;(d) to people with seasonal contracts of employment;(e) to households where one or more members is in receipt of employment and support allowance (ESA);(f) where a household member is in receipt of care;(g) where a member of the household is a carer for another household member;(h) to those living in supported housing; and(i) to households in receipt of housing benefit.”
Baroness Lister of Burtersett
My Lords, I rise to move Amendment 70, in my name and that of my noble friend Lord Kennedy of Southwark, to give my noble friend a bit of a rest. The amendment would exempt a number of particularly at-risk groups from pay to stay, but I will speak solely in relation to disabled people and carers for whom there is a particularly strong case for exemption. My noble friend will address the other groups included in the amendment later.
In the Public Bill Committee, the Minister, Marcus Jones, assured MPs that,
“exemptions can be made and we will consider carers carefully. We recognise that, in certain circumstances, exemptions may well be needed, and we are thinking through that process carefully”.—[Official Report, Commons, Housing and Planning Bill Committee, 3/12/15; col. 482.]
That is welcome. I particularly welcome the fact that the Government are considering exempting carers, not least because the means test, as I said earlier, will take no account of the cost of caring or disability. Carers UK has summarised what these costs are, based on the findings of its Caring & Family Finances Inquiry. They include higher utility bills, not just in winter when there is more prolonged and intensive use of energy, but when the weather is warmer. Many disabled and older people are unable to regulate their body temperature. The use of specialist equipment, such as electric wheelchairs and hoists, as well as greater use of appliances, such as washing machines, takes its toll in energy bills. Other costs include higher transport costs and higher than average expenditure on food and cleaning products, with some having to pay for incontinence pads. Carers UK points out that because such costs can take up a high proportion of income, even if the household’s taxable income is above the threshold, their disposable income could be well below it. Increased housing costs could well push them into debt. In such a situation, even a few additional pounds under a taper could prove the straw that breaks the proverbial carer’s back.
A related issue is that of disabled people themselves—notably disabled people in adapted homes. In its response to the consultation, Habinteg, a housing association with long-standing experience of providing homes for both disabled and non-disabled tenants, echoed the point about additional costs associated with disability, and pointed out that these are not necessarily covered by disability benefits. They are even less likely to be covered by disability benefits, given what we have heard in the media over the last day or so about further savage cuts to personal independence payments. Habinteg suggests that the result could be discriminatory, and I here note my thanks to Jenny Morris for drawing my attention to Habinteg’s response. Once again, an equalities impact assessment would have been helpful. I appreciate that it is going on the website as we speak and that I will receive a personal copy, but it suggests that the likely impact on disabled people, carers and other protected groups has not been taken into account in the drawing up of the policy.
Aspire, an organisation supporting people with spinal cord injuries, sent me recently published research undertaken by researchers at Loughborough University—I declare an interest as an emeritus professor there—that studied people with spinal cord injuries living in adapted and non-adapted accommodation. The report cites the UN convention on the rights of disabled people, which emphasises the vital role that suitable housing plays for disabled people, as does the Government’s Office for Disability Issues. To summarise the findings:
“Living in an adapted house had a positive impact on the health and wellbeing”,
of people with spinal cord injuries and the family. The report continues:
“It created the conditions and an environment for people to have a good quality life, to manage their physical health well, to be happy, and to sustain meaningful relationships. In contrast, for those who lived in an unadapted house, health and wellbeing was negatively impacted on and, over time, deteriorated substantially”.
It damaged physical and psychological health, with potentially very damaging consequences.
Last November, Stacie Lewis, a mother of a severely disabled daughter who has cancer herself, wrote a piece for the Guardian website. After years of struggle the family had recently moved into an accessible, new-build house, which will, nevertheless, require extensive adaptations. Her husband’s income is above the threshold and she is now understandably worried about what this might mean for them. She pointed out how little suitable housing there is available for disabled people and that they therefore rely heavily on social housing. Her family waited three years for that home. She asked,
“what kind of economic sense does it make for the government to spend thousands to adapt our home and then throw that investment away by forcing us out?”.
Let us hope that it does not come to that, but it is a highly pertinent question.
I cannot believe that the Government would want this policy to lead to some disabled people having to give up their adapted home because they can no longer afford to live there. A similar point on high-value sales was raised by my noble friend Lord Beecham on Thursday. I suspect we are talking about a relatively small group, but the impact on the well-being of disabled people and their families could be huge. It would make no sense, from the point of view of housing stock, not to exempt those in adapted accommodation.
Following a similar logic, will the Government undertake to consider exempting victims of domestic violence whose homes have been adapted under the sanctuary scheme? Although they are not covered by the amendment, I am sure that my noble friend would be happy to include this group. Again, probably very few of them would be affected, but if that is the case, what is to be lost by exempting them?
Given that Mr Jones’s statement about considering exemptions was made on 3 December, is the Minister in the position, three months on, to tell us what the outcome of that “careful thinking” has been? If she is not minded to accept these exemptions, will she undertake to consult disability and carers’ organisations, such as Carers UK, as requested by, for example, Habinteg in its response to the consultation, preferably before Report? I beg to move.
Lord Kerslake (CB)
My Lords, I shall speak on Amendments 70B and 75B, and in support of the other amendments in the group. I apologise for not being able to be here for the debate on the first group, due to other long-standing personal commitments. I also declare my interest as chair of Peabody and president of the Local Government Association.
The amendments before us seek to address the issues of feasibility and deliverability, and propose phasing in the changes over time, starting from April 2017. They also suggest that we have a pilot scheme before we move to full operation of the policy. Of all the parts of the Bill—there are some very contested parts of it—this is without doubt the part on which I have had most correspondence. It comes not just from organisations, but from a greater number of individual tenants. These tenants are people who have typically worked hard and got on in their life, and now are genuinely worried about their future security. This part of the Bill introduces in the name of fairness a proposition that is, in many ways, deeply unfair, bureaucratic and centralist in its nature. It departs very substantially from the original intent of the policy, developed during the coalition, which was to tackle those on very high incomes of more than £60,000, developed in response to one person: the trade union leader Bob Crow. The proposition that went in then was flexible and voluntary, and local authorities got to keep the proceeds.
Baroness Pitkeathley (Lab)
My Lords, I have not been participating in this Bill, but I have presided a few times in my role as Deputy Chairman. I know that the very last thing that your Lordships need is new people coming in and making speeches on it, so I will be very brief in supporting my noble friend Lady Lister’s proposals concerning carers and people with disabilities. I declare my interest as vice-president of Carers UK.
Your Lordships will have heard from my noble friend about the associated costs of caring and disability. There are costs associated with higher utility bills, higher transport bills, buying products providing personal care and so on, but I also want to mention the question of savings. That these households sometimes look as though they have reasonably high incomes does not take any account not only of the extra purchases that they have to make and the extra bills that they have to pay, but of their efforts to save for a time when their caring needs and responsibilities will become more acute. With 55% of carers in the Carers UK family and finances inquiry stating that they used their savings to meet everyday living costs, the ability to save is very important for them. Carers do try to plan in this very responsible way for how they will meet those needs as the caring needs become greater. Four in 10 carers end up in debt as a result of caring, but this rises to 69% if they have used up their savings or had no savings to begin with. While the Bill allows these new regulations to specify things that are or are not to be treated as income, it would be highly impractical to include all the expenditure on the extra-cost items associated with caring and disability. A much clearer definition is needed to ensure that carers, and those households with a disabled member, are not unfairly affected. I hope that the Minister can tell the House what plans are being developed to ensure that carers and households with a disabled member are not perversely affected by the new regulations.
Lord Best
My Lords, I will be brief. There are a couple of amendments in this group in my name and in those of my noble friends Lord Kerslake and Lord Low of Dalston, and the noble Lords, Lord Kennedy and Lord Beecham. I also entirely support the amendment on rent to buy in the names of the noble Lords, Lord Lansley and Lord Young of Cookham. The amendments in my name go together: the first would mean that only new tenancies after April 2017 would attract higher rents for higher-earning tenants, and the second would mean that any existing tenant—unaffected, therefore, by the new measure— would not face the higher rents if they transferred for downsizing or overcrowding reasons. The deterrent effect on people moving to make better use of social housing would be avoided.
Clearly, for the 350,000 tenants facing an uplift in their rents, this would bring a sigh of relief if government applied the new regime only to those who could make a decision about accepting a tenancy on the basis of knowledge of what their rent was going to be. However, I fear that this amendment—however fair and reasonable—may not get much traction with government, at least until we come to that later group of amendments and consider the administrative costs of pay to stay if applied to all existing tenants, with all the hassle involved, as opposed to their being relatively straightforward if applied when councils are considering allocating a new tenancy.
I also support my noble friend Lord Kerslake with Amendment 75B, which proposes the piloting of the pay-to-stay arrangements in a number of areas before the scheme is rolled out to the whole country. The Government are piloting the voluntary right to buy for housing association tenants in five areas. I know that all parties are gaining invaluable insights from that exercise, which has already started. Pay to stay is at least as complex and has at least as many imponderables. What works in Maidstone may not work in Middlesbrough; what works in Brighton may not work in Burnley. A pilot in several places would shed light on the kinds of variations most appropriate in different circumstances. I would obviously prefer local authorities to make their own decisions locally.
Lord Lansley
My Lords, very briefly I will speak to Amendment 82A, in my name and that of my noble friend Lord Young of Cookham. I was encouraged by what my noble friend the Minister said in her statement on the previous group to believe that it is the Government’s understanding that those in rent-to-buy agreements would not be considered as high-income social tenants to whom a higher rent would apply. The purpose of our amendment was to ensure that that is the case in relation to housing associations that publish a policy. Clearly, the amendment would not be needed if the Government could put on record that housing associations with such a policy would not be able to include rent-to-buy agreements in the scope of such a policy as intermediate rents are excluded.
Lord Kennedy of Southwark
My Lords, this group of amendments largely looks at conditions of exemption to the pay-to-stay provisions proposed by the Government. All the amendments in the group bear the names of either myself or my noble friend Lord Beecham, with the exception of Amendment 82A put down by the noble Lords, Lord Lansley and Lord Young of Cookham. Their amendment identifies an omission and seeks to correct it. It is welcome but, as the noble Lord, Lord Lansley, said, the Government seemed to confirm that it is not necessary.
Amendment 70 is in my name and that of my noble friend Lady Lister. It seeks to put in the Bill a number of exemptions to which any regulation made by the Secretary of State under Clause 78 would not apply. My noble friend Lady Lister moved the amendment, which is at this stage only a probing one that seeks to highlight a number of problems with the across-the-board application of these regulations, making people pay to stay in their council property.
The noble Baroness, Lady Williams, may shortly tell your Lordships’ House that none of these exemptions are necessary. Maybe when we hear the Government’s response, we on these Benches will come to the conclusion that some of them are not. However, senior citizens who have worked all their lives, people with registered disabilities, or households with people in receipt of care or where a member of the household is a carer for another person living there are such exemptions: the Government should seek to protect such people from this unfair policy that will make life difficult for people on quite modest incomes.
Could the noble Baroness respond to the comments made by my noble friend, apparently attributed to Marcus Jones MP in the Bill Committee in the other place? That would be very helpful. If not, could she write to us about that? It would also be helpful if she provided more information about the work the department is doing in this respect.
I recently saw a job advertisement, I think in the Evening Standard, from a London borough recruiting parking enforcement officers. The pay was about £21,000 or £22,000 a year. I thought, “Two parking enforcement officers living in the same property in London would be deemed high-income social tenants”. That is ridiculous. I agree with the noble Lord, Lord Kerslake, who said that this policy evolved under the coalition and today, under the Conservative Government, has been pitched at a much lower level to catch a lot more people, many of whom can in no way be regarded as high-income earners. Couples earning more than £30,000 outside London are not high-income earners in any respect. If would be helpful if the noble Baroness explained how this policy has evolved since last year’s election.
Amendment 70B in the names of the noble Lords, Lord Best, Lord Kerslake and Lord Low of Dalston, and my noble friend Lord Beecham, seeks to make these regulations effective only for new tenancies granted after April next year, again as a mechanism not to penalise those presently holding a tenancy.
Amendment 70C seeks to afford some protection for a tenant following a mutual exchange or transfer. I signed up to it, along with the noble Lords, Lord Best and Lord Low of Dalston. It raises a particular issue regarding mutual transfers and could even encourage people to undertake such a transfer, perhaps releasing a larger property to a family. It may not be quite right but I hope the noble Baroness can see the problems that will be created and the issues that regulations will have to tackle to avoid some real injustices coming out of this ill-thought-out policy.
Amendment 74, in my name and that of my noble friend Lord Beecham, seeks to provide some protection for affected tenants by building in a process of external valuation of high-income rents. Even with the much talked about taper the Government have said they will introduce, some external valuation of the rent must be of benefit to tenants and would help to bring some element of fairness to this most unpopular policy.
Amendment 75, in my name and that of my noble friend Lord Beecham, seeks to bring in the higher rents over a period of time: first, a notice period of one year before the new rents become payable; then some transitional protection as the tenant moves to the higher rent. This, in effect, is the taper the Government talked about and on which we will need to see much more information.
Amendment 75B seeks to pilot these proposals, as the noble Lord, Lord Kerslake, referred to them, in a number of areas before rolling them out across all local authorities. Of course, this was used in respect of the new requirements in the Immigration Bill for landlords to check tenants’ documents to satisfy them that they are able lawfully to rent a property. I know the noble Lord, Lord Best, was involved in the evaluation process in that respect. He spoke about how well the pilots had gone. It would be beneficial for the Government to adopt a similar pilot approach here.
Amendment 76 is similar in its intention to Amendment 70B. This is an interesting group of amendments, raising real, practical difficulties. As with previous groups, I may have some further questions for the noble Baroness as she responds to the debate.
Baroness Williams of Trafford
My Lords, this second group of amendments is concerned mainly with exemptions from the policy and seeks to put a substantial amount of detail into the Bill about who the policy should apply to. Of course, it is important that where there is a strong justification for an exemption, we consider it carefully. We are doing just that, and putting the detail in the Bill would prevent us thinking through the pros and cons of potential exemptions carefully. We need some flexibility to conclude our work and put detail in regulations.
I will start with Amendment 70, tabled by the noble Lord, Lord Kennedy, and the noble Baroness, Lady Lister. It specifies a wide range of groups that the policy should not apply to. As I have explained, we do not want to put this detail in the Bill but I will outline my position on each of these groups. First, while I do not immediately see why someone on a zero-hour or seasonal contract whose household income is above £30,000 should be exempted, I recognise entirely that it will be important to build in some flexibility for households where income fluctuates, as I mentioned earlier. I will return to that issue later.
I am also not attracted to an exemption for people over 65. Income from pensions can be considerable and it would not be right to exempt a group of people who are mainly retired but where the annual income is greater than that of people in work. That strikes me as quite unfair. Having said that, we are of course giving careful thought to the issues of different pension incomes, including the treatment of Armed Forces pensions.
I am very sympathetic to the suggestion that we should consider how to protect those with a registered disability or who have significant caring responsibilities. However, we must recognise that even in these scenarios the household income may, in certain circumstances, be high. It would not be right on that basis simply to provide an exemption for whole groups. A better approach may be to design the policy to ensure that income from certain state benefits is not included in the eventual definition of income.
I will turn to the definition of income more generally in a later grouping but it is worth highlighting now that the disability living allowance is not a taxable benefit. It is unlikely that we would include income from this in the final definition of income. Carer’s allowance is a taxable benefit but this does not automatically mean we must include such income in our eventual definition. We will give this careful thought, and I welcome the views of noble Lords on it. The noble Baroness also mentioned the impact on certain protected groups. The data from the Family Resources Survey have been analysed to consider the impact on different household types. This is set out in the—now infamous—impact assessment.
I hope this section of the debate has persuaded the Committee that we are giving the issue of exemptions careful thought. I am happy to meet noble Lords privately on this issue, as I recognise how important it is.
Amendments 70B and 76, tabled by the noble Lords, Lord Kerslake, Lord Best, Lord Kennedy, Lord Stoneham, and Lord Beecham, seek to restrict the policy to new tenants only. In most circumstances, new tenancies of social properties should be given to those in most housing need, where they are below the income thresholds that we have set. Those in the greatest need of social housing are therefore more likely to be new tenants with an income under the proposed thresholds. It is existing tenants who are more likely to be on higher incomes, and the policy should apply to those currently living in social housing.
I have already outlined the Government’s significant home ownership offer to existing tenants, particularly those on higher incomes, and I would encourage all tenants to look at the opportunities that are available, but it would not be right to exclude existing tenants from the policy.
Lord Beecham
Would the effect of encouraging people on higher incomes to buy their houses not be, ultimately, to diminish the number of houses for those who cannot afford it and who, apparently, the Government want to help?
Baroness Williams of Trafford
Would the noble Lord please repeat what he has just said?
Lord Beecham
The Minister has just said that the object of the scheme is to get people with higher incomes to pay the full rent, move out of the property or perhaps buy it—she was talking about Help to Buy. The effect of that, ultimately, is to diminish the pool of houses available for rent by the people whom she thinks need support.
Baroness Williams of Trafford
My Lords, that is why we have right to buy and why we have a programme in place to build so many houses, of different tenures, in the course of this Parliament. It is not undermining it; it is making sure that there is a more level playing field for both tenants on higher incomes and the new tenants, whom I referred to as being in genuine housing need. That is not to say that the other tenants are not also in genuine need.
Amendment 70C seeks to exempt households which exchange their property for another social home. I thank the noble Lords, Lord Best, Lord Kerslake, Lord Kennedy, and Lord Low, for this amendment, but I do not see the rationale for it. If a household is on a higher income, then the rules should apply equally, regardless of whether they exchanged their property voluntarily or not. Those households would be subject to the taper arrangements that I have set out at length. I am also reluctant to provide an exemption for homes that have transferred as part of a large scale voluntary transfer. For example, for homes that have transferred to a housing association, the policy should apply if the housing association has a voluntary policy in place. We want housing associations to adopt voluntary policies, and so my instinct is that there should not be an exception for properties transferred.
Amendment 74, brought forward by the noble Lords, Lord Kennedy and Lord Beecham, seeks external valuation of high-income rents. I do not believe this is necessary. An external valuation is not only unnecessary but would add bureaucracy, cost and delay. I have confirmed that we will be introducing a taper, which will be the basis of rent setting. It will also be important for the Government to articulate how the process of establishing a market rent value for properties should work. The powers in the Bill can also provide tenants with an appeal mechanism if they feel that their rent levels are wrong. This is an important protection and we intend to use regulations to give tenants this right of appeal.
Amendment 75, also tabled by the noble Lords opposite, would provide for a notice period of one year before the rent becomes payable and transitional protection as the tenant moves to the higher rent. I am not sure how this would work, because rent setting is usually done around three months before a new rent year. Providing for a notice period of a year before the new rent comes in would mean that the rental amount would not be consistent with changes in household income over the notice period. As I have already said, we are giving careful thought to how income and implementation would work.
Baroness Hollis of Heigham
Would the Minister please repeat her statement about the difficulties caused by rents changing as a result of this policy, particularly in the period between notification and payment? The whole push of our previous two hours’ discussion has been that she is producing a system in which every tenant will pay a different rent—probably month by month—according to what is happening to their earnings.
Baroness Williams of Trafford
I will repeat my statement. Rent setting is usually done around three months before a new rent year. Providing for a notice period of a year before the new rent comes in would mean that the rental amount would not be consistent with changes in household income over the notice period. However, I will return to rent reviews shortly.
Amendment 75B, tabled by the noble Lords, Lords Kerslake, Lord Beecham and Lord Stoneham, seeks to pilot the policy before full implementation. I recognise that pilots have some benefits in certain circumstances, but it would not be workable here as it would be unfair on tenants in those areas. The policy must apply nationally from April 2017. Although we will not be piloting the policy, I recognise that we need a strong approach to implementation. Local authorities have told us that they need time to put in place the arrangements for implementing the policy. That is a fair request. My department is pushing forward with engagement, and the next few months will be critical. We intend to issue guidance to ensure that authorities are ready to operate the policy, engage with tenants, and set correct rents from April 2017.
I will also take this opportunity to update the Committee on engagement with tenants. We need to make sure that they have the best source of information and advice. Our engagement strategy includes a plan to talk to tenant representative groups and Citizens Advice. For example, it will be important for them fully to understand the commitment I have given to bring forward a taper to ensure that rent rises are affordable.
Finally, Amendment 82A seeks an exemption for rent-to-buy schemes. I can confirm to the noble Lords, Lord Lansley and Lord Young, who tabled the amendment, as well as to the rest of the Committee, that the policy will not apply to tenants in a rent-to-buy or shared ownership property. I have already reinforced the point that the home ownership offer to tenants, particularly those on higher incomes, is very important. I would rather see those households taking up the offer of home ownership than facing higher rents under the policy for high income social tenants. I hope noble Lords will feel able to withdraw their amendments.
Lord Kennedy of Southwark
Many of the amendments in this group are probing ones and these matters would be better left to regulations. However, we come back to the problem: we have not got any regulations so scrutiny is extremely difficult. That leaves us having to put down amendments on these issues to try to drag out the Government’s thinking. At the end of the day, the amendments are on the Order Paper today only because the Government have sought to push the Bill through at such a pace and not wait for the regulations to be made.
Baroness Hollis of Heigham
My Lords, the Minister has now said twice that, under her proposals, any household paying a higher rent under pay to stay should, instead, be thinking about right to buy, and that she would prefer them to do that. If they are local authority tenants, can afford to do so, and wish to, they will already have taken this up. Why does she think they have not? One reason is that, with renting, changes in housing benefit and UC can be made in the course of the year if income fluctuates and circumstances change—the very situation which tax credits were devised to adjust. If you commit yourself to buying a property, no such consideration takes place of whether you can, or cannot, afford your mortgage repayments. If you are struggling with your income, your zero-hour contract has collapsed, or your partner has gone somewhere else, you are still stuck with it. Tenants may, therefore, have very good reasons—this obsession with pushing those who have chosen not to buy into right to buy, and whipping them there by virtue of the pay-to-stay rent policy, is disgraceful.
Lord Kerslake
Perhaps I could add one further point. It is perfectly possible to pilot this in a way that would not be inequitable to tenants. What you would be piloting is the information-gathering on income and how the different exemptions and changes might work on the ground. You do not need to change the rental position. What we really need to know is: does the system work in a way that is effective and fair? It would be perfectly possible to do that, modelling the system at local level without disadvantaging those tenants who were part of the pilot.
Lord Beecham
I have a final final question for the Minister. She said that the Government are going to discuss matters with Citizens Advice and tenants groups. I very much welcome that. But are we to infer from that that until now they have not discussed the scheme and how it might work—that they will be discussing the final scheme, as it were, and how both groups might advise residents, as opposed to involving them in the first place in designing this scheme?
Lord Kennedy of Southwark
Perhaps I might make one final comment—it will be my last on this group. Will the Minister agree to reflect on some of the comments made in this debate and the previous debate, particularly the comments of my noble friend Lady Hollis? In the previous debate we were talking about income levels and rent levels changing almost weekly or monthly, but here the Government want a consistent level. For me, the two debates highlight some inconsistency and we need to look at that. Again, we do not want to get ourselves into difficulties in the future.
Baroness Williams of Trafford
My Lords, the noble Baroness, Lady Hollis, said that I said that higher-income tenants should think about buying. It was not a direction for higher-income tenants to think about buying but, going forward, they may well think about buying—86% of people aspire to own their own home. This may be the opportunity for them.
The noble Lord, Lord Kerslake, said that the pilots need not be inequitable because they do not need to introduce the new rents. I would have thought that the reason for the pilots would be to see how the new rents actually work.
The noble Lord, Lord Beecham, asked about the CAB and whether conversations were going on. We are in continued engagement with the CAB and other—
Lord Beecham
With respect, I welcome the fact that discussions are going on. My question was: were there discussions with those organisations about the whole policy before the Government settled it?
Baroness Williams of Trafford
I will have to get back to the noble Lord on that precise detail. Somebody asked me a fourth question—I think it might have been the noble Baroness, Lady Hollis—but I did not write it down fully.
Baroness Lister of Burtersett
My Lords, a number of different points have been raised in what we call a wide-ranging debate, albeit a relatively short one. I was particularly struck by what the noble Lord, Lord Kerslake, said—it was echoed by the noble Lord, Lord Best—about the need for a pilot; otherwise, it is a leap in the dark. It is disappointing that there is resistance to the idea of a pilot—although I have to say, after the pilot we had under the Immigration Bill on the right to rent, my enthusiasm for pilots has rather waned given how that one has panned out.
I am grateful for what the Minister said in response to Amendment 70 in so far as she said that the Government are sympathetic to the position of severely disabled people and people with caring responsibilities. But then she pointed out that household income may be high. As in our previous debate, she did not really address the point about how you cannot look just at income, you have to look at needs—what is being met by income. Yes, needs would be partly met by exempting certain benefits: but, as Habinteg points out, even if people are receiving those benefits, they go only part of the way towards meeting the needs associated with disability and caring.
I am not asking her to come back now but I would be grateful if she could address in any subsequent letter the specific point about people in adapted accommodation. It is a really important point and, as I said, a similar point applies to victims of domestic violence under the sanctuary scheme. For the record, the Minister appears to be nodding—I think in acceptance that this is an issue.
I thank the Minister for what she said about the possibility of a meeting. But it would be important to bring in those who work directly with carers and disabled people because they can bring an expertise to that meeting that I cannot, and I would want to know what they felt about different approaches to exemptions that would best meet the needs of carers and disabled people, in the spirit of the kind of engagement that she was talking about. Again, I detect a slight nod, so I hope that might be possible.
Going back to some of the issues that have just been raised about the right to buy, I was very struck by some of the people who wrote to me and came to see me, who either said that they had deliberately, as an act of principle, not bought their home or said that there was no way they could even countenance buying their home on their income—so it really is not any kind of answer.
Can the Minister say when we will have the information about what the regulations will say with regard to exemptions? Will it be before Report? If it is not before Report, we will just be working in the dark again on Report.
Baroness Williams of Trafford
My Lords, as I said earlier, I will get information about regulations in so far as I can by the end of the week. I cannot undertake to get information on exemptions by Report, but by the end of the week I will have as much detail as possible on some of the regulations that are coming forward and, most importantly, the timeline for them as well.
Baroness Hollis of Heigham
My Lords, I think we recognise that the Minister is doing her best to be helpful but does she not think that this is a little odd? She had a firm view about pensioners—that they should not be exempt from pay to stay—but she did not really have a clear view on whether any of the other groups mentioned in the amendment would be entitled to some consideration or exemption from pay to stay. We are in Committee, the Bill having gone through the other House, and the Minister still cannot help us—I am sure she would like to—as to who will be caught by this policy.
Baroness Lister of Burtersett
I am grateful to the Minister. She is clearly trying to be as helpful as she can be, but if we really are not going to have this information by Report, we will just go through all this again, which is in nobody’s interest. We are not asking for the actual draft regulations but the information about which groups will and will not be exempt. That is the least we can expect by Report. But on the basis that we are not going to get anything more now, I beg leave to withdraw the amendment.
“( ) These regulations shall not provide for an increase in rent chargeable to a tenant by a local authority greater than 5% per annum or the Consumer Price Index plus 2%, whichever is the lesser.”
Lord Best
My Lords, Amendment 70A is in my name and those of my noble friends Lord Cameron of Dillington and Lord Kerslake, and the noble Lord, Lord Kennedy of Southwark.
The amendment would limit annual rent increases to a maximum of 5% or to inflation measured by the consumer prices index plus 2%, whichever is the lesser. Obviously, this would moderate rent increases in any one year for higher earners. If the weekly rent is currently £100, the increase would be no more than £5. A household with earnings of £5,000 over the threshold seems likely to face an increase in rent of £500 per annum, or £1,000 if the Government, very unkindly, choose the higher rate set out in the Minister’s letter to us.
This amendment would stage the £10 a week increase over two years or over four years for the higher taper rate. The Government still get their extra income but the increases are phased. Those who are on still relatively low incomes—just £5,000 per annum above the somewhat arbitrary limits of £30,000 outside and £40,000 inside London—will certainly feel the pinch from a significant hike in their rent. Giving people time to readjust their household budgets by phasing the increase seems the right thing to do. Set alongside the 1% rent reduction for four consecutive years, this measure would certainly ease the transition. I beg to move.
Lord Cameron of Dillington
My Lords, I support my noble friend in his Amendment 70A and I echo his words about easing the transition, but I speak mostly to my Amendment 77A in the group. It concerns income variability in the context of pay to stay, which is something I raised at Second Reading. I realise that it has already been mentioned in both the previous groups by the noble Baroness, Lady Hollis, the noble Lord, Lord Kerslake, and others, and also that the Minister indicated when she replied to the first group that the Government are looking at “an equitable conclusion” to the issue. Nevertheless, I would, as usual, like to put a rural slant to add to and help the much-needed thinking on this issue, and perhaps put some rural flesh on the bones of the problem.
It is very much a feature of rural life that many, both young and old, are self-employed. Indeed, I have always been proud of the fact that of those who are below the poverty line in rural areas, statistics show that 22% are self-employed, while of those below the poverty line in urban areas only 8% are self-employed. In other words—and this is what makes me proud—we in rural England, when in economic difficulties, have a greater tendency to get off our backsides and turn our hand to whatever comes along in order to resolve our problems. In Cornwall I believe the self-employed figure is as high as 28%, but that probably just exemplifies the nature of the local economy there—a high summer tourist trade and only odd jobs available during the winter months.
The point I am making is that these sorts of people can, in some years, be very successful. The whole family can all find themselves with work. Although there is probably only one member of the household with a regular job on a living wage, the others could all get lucky and push the total household income up well over the £30,000 figure stipulated in this section of the Bill, for a brief period of time. Therefore, it is really important that the Government are aware of these quirks of fortune in rural families and, for that matter, in many urban families too, especially those on zero-hour contracts, as the noble Baroness, Lady Hollis, pointed out. The point being that after a good year of combined family incomes of sometimes well over £30,000, the same family might find themselves back down to £20,000 or less the following year.
Therefore, my amendment is designed to encourage the Government to think very hard about that sort of variability and put in place some sort of long-term averaging system—I stress long-term—to iron out the highs and lows of rural and urban life. This whole scheme makes some limited sense in principle: those in assisted rental accommodation who greatly increase their income should perhaps move to pay a market rent. However, the scheme itself is so full of pitfalls, and what my children call heffalump traps, that it needs either withdrawing or serious wholesale amendment, perhaps after some of the preliminary pilots mentioned by the noble Lord, Lord Kerslake, and particularly across a whole range of areas, which should include a rural area.
Lord Kerslake
My Lords, I shall speak briefly to the amendment as the arguments have been well made by the noble Lords, Lord Best and Lord Cameron of Dillington. The key issue is the difficulty of implementation and potential sources of injustice to individuals who face sharp rent increases. To the extent that it is possible to phase in those rent increases, the impact on individuals is likely to be less. This is, indeed, consistent with the approach taken in the past when there have been movements of rent towards more comparable rents—the so-called convergence policy that worked across individual organisations. Therefore, it is applying the same principles to individuals in relation to their rent movements as are applied to organisations which have moved towards rent convergence. This is more consistent with the implied contract to the tenant, who took on the property at a given rent and had a reasonable expectation that their rent would not be subject to sharp movements as a consequence of government policy. That is why this is an amendment worthy of the Minister’s consideration.
Lord Deben
My Lords, I support the comments of the noble Lord, Lord Cameron of Dillington. The rural situation is different from the urban situation and it demands a degree of care to put this proposal into operation. I am not sure the noble Lord’s proposal is the right answer but the question is one that has properly to be asked. Again, it emphasises the problem we have when we do not know the regulations or the details, because the Government may well have thought about all these things and we are going to have regulations and details that will cover it. However, until we have those it is very difficult not to talk about all the possible computations that may arise. There is no other way we can do it.
One of the difficulties of employment in rural areas is simply that it is extremely volatile and families can have very different incomes at different times. It is difficult for families to think other than that. Of course, the reason they are living together in one of these houses is that there is no alternative. In rural areas the moment that a house becomes available, it is sold at a price that cannot be reached by these people. I make the point to my noble friend that the number of second homes in the village of Walberswick in my former constituency has now risen to four in ten. Any house for sale is sold to somebody from outside. That is why homes provided by the local authority or others are so important in the rural economy. That is why so many families have a number of wage earners within the family living in the same house. However, their wages are not easily computed one year to another. If we have a system that does not take that into account, then it will bear more unfairly on rural areas than elsewhere.
Any of us who have represented or live in rural areas recognise it is very often true that as a nation we do not take rural areas as seriously as we ought because they do not have the megaphone of the city, or the metropolitan voice—most journalists come from towns. I beg again that the Government take this situation seriously and arrange for an answer—it may not be this one—that recognises the volatility in rural wages.
Lord Berkeley of Knighton (CB)
My Lords, I agree with everything that has just been said. One other point might complicate matters. Should we leave the EEC, the effect on subsidies to farming would make this whole area even more volatile.
Lord Shipley
My Lords, my name is attached to Amendment 79A in this group, along with that of my noble friend Lady Bakewell of Hardington Mandeville. However, I also support Amendment 70A and other probing amendments.
Amendment 79A is our attempt to consider the threshold, which the Government had defined as £30,000 outside London and £40,000 inside London, and which the amendment increases to £40,000 outside London and £60,000 in London. It is a probing amendment. However, our view is that the taper starts too low at the figures that the Government originally decided on. Therefore, I hope there is an opportunity for them to look carefully at whether there is a good case, as we think there is, for the minimum threshold to be much higher. That would save a great deal of administration and associated costs. Be that as it may, I hope the Minister will explain why those figures are deemed too high, because I suspect they are more reasonable than the ones on which the Government have decided.
Baroness Lister of Burtersett
My Lords, I raised a number of questions at Second Reading which never got a reply and, as they are relevant to this group of amendments, I thought I would have another go.
The first follows directly from what the noble Lord, Lord Shipley, just said: why was it decided to reduce the earnings threshold from that in the existing voluntary scheme? Am I correct in thinking that there is no intention to increase the threshold in line with average earnings, thereby pulling more and more tenants into the net of pay to stay? If so, why? What protection might there be for vulnerable tenants unable to provide the necessary documentation? Crisis has raised concerns that they could be liable for the full market rent, regardless of their actual income. We can think of a lot of situations where there may be good reason why someone has not provided that information, but it would be totally unfair for them to have to pay the full market rent.
Finally—I did not raise this at Second Reading, but I raised it two groups of amendments ago and the Minister did not come back to me—there is the whole question of the lack of equivalisation. There will be such a crude means test that takes no account whatever of family needs. We are not treating like with like; we are treating the same income to meet rent, regardless of how many mouths have to be fed from that income.
Lord McKenzie of Luton (Lab)
My Lords, I start by apologising for not having participated in debate earlier, but I was on duty in the Moses Room. I support Amendment 77A. I may have missed some of the issues raised in previous debate, but there is variability not only because someone’s income may be derived from self-employment. It could be because they are employed but subject to a zero-hours contract. It could also be because the household changes.
I do not know whether we yet have a clear definition from the Minister of what will constitute the household for this purpose. Under the voluntary scheme, it was the tenant and the spouse, although there is also reference to the two highest earners. It would be helpful to have the intent clarified. Clearly, if it is the whole household, or all of the adults in the household, that can change. In many ways, that is more likely to change in an urban than a rural area. However, that is a key issue, as is the basis of the income. Will the Government try to use real-time information, which is fraught with challenges, or work on a preceding-year basis, around which the voluntary scheme was structured? If the latter, there are more likely to be variations between the base year and the year to which the rent levels are to be applied.
This whole approach is fraught with difficulties, but until we have clear definitions of household income and the basis of that income, we will struggle with the outcome.
Lord Campbell-Savours
My Lords, Amendment 79, which was tabled by my noble friend on the Front Bench, took my eye. It provides that the definition of,
“high income cannot be set at a level lower than median incomes”.
As I understand it, the effect of that would be to raise the threshold by from about £30,000 to £40,000 on properties outside London and from £40,000 to more than £50,000 in London.
Baroness Williams of Trafford
My Lords, could the noble Lord repeat that? I could not quite hear the beginning of what he said.
Lord Campbell-Savours
Amendment 79 states that the definition of high income cannot be set at a level lower than median incomes. That would raise the thresholds, would it not? I do not like the system at all, but that at least raises the level at which people would start to pay a higher rent. Will Ministers seriously consider that amendment?
I really want to talk about Amendment 72, which provides that the amount of rent to be charged to high-income tenants is,
“to take into account the need to promote socially cohesive and mixed communities”.
That is a very important issue. The other night, I was talking about what happened in west Cumberland, when I was minded to support right to buy early in the 1980s. Some of the estates in my area had a high density of renting populations, and I did not believe that was particularly good for social cohesion. I believed at the time that the introduction of the right to buy in areas such as mine in the north of England would help social cohesion by widening aspiration within communities.
The provisions of the Bill make me worry that as property is subsequently sold, which is what will happen, there will be pressure due to higher rents being demanded. In employment law, I think it is called constructive dismissal; in this field, I would call it constructive eviction. That is what people will feel: they will be all but evicted by the requirement to pay higher rents.
I am losing my train of thought. Perhaps I should give in at this stage. I will retake my seat and gather my thoughts. I am very sorry.
Lord Beecham
My noble friend is not the only one in danger of losing his train of thought as the Bill goes on and on and on.
Last Monday, I asked the Minister a question about affordability. I cited the case of the son of a friend living in Hackney on a modest income. He has since been in touch with me again and emailed the Minister—I do not know whether she has received that or whether it is lost in the deluge of emails that may be descending on her as the Bill goes forward. His case exemplified the problems occasioned by the proposed pay-to-stay provisions. He and his partner live in a three-bed council house in London Fields in Hackney. They have a nine year-old child. He also has two children by a previous marriage—I was in error in saying that there was only one; actually there are two—who are in the house from time to time. He is financially supporting them. The current rent is £720 a month, whereas the cheapest equivalent private rented property would cost about £2,300 a month, with the average costing about £2,500. He earns roughly £21,500 per year before tax and his partner earns £19,000, so they would be just over the limit. Clearly, they could not afford the private sector accommodation. He says,
“the thought of renting in the private sector in and around London with a family and being on a fairly low income is scary. The current housing situation … is scary. The fact that we are lucky enough to have a council house and pay a truly affordable rent is the reason we can survive”.
He points out that because of the pay-to-stay dynamics he would be in a position of not wanting a pay rise, and perhaps even asking for a reduction of hours.
In fairness, that was before what we are beginning to hear about the taper had come to light. The noble Lord, Lord Best, earlier referred to a letter, which he implied had information about the level of taper and how it might apply. Neither my noble friend nor I—nor, as far as I am aware, my colleagues on these Benches—have yet received that letter. Maybe it was just directed to the noble Lord, or maybe the letter is in the post—it would be helpful to see something in writing—but when the Minister replies it would be helpful if she could explain how she envisages the scheme working on the basis that there would be a taper.
Originally, London Councils estimated that 28,000 households would be affected, with rents rising more than threefold. That now seems to be unlikely in terms of the level of increase given that there is to be a taper, but perhaps the Minister could give an indication—again, it may not be immediately available—as to how many households would be affected in London, where I guess the pressure is likely to be most acute, on the basis of the new taper.
Interestingly, reference has already been made by, I believe, the noble Lord, Lord Foster, to the DCLG’s consultation in 2012 on a pay-to-stay proposal. Then the threshold was going to be £60,000—actually, they started off looking at £100,000 a year income triggering this. So I ask the Minister, on what basis was the revised figure of £60,000 reduced to the proposed £40,000 in London and £30,000 elsewhere, assuming that in the letter that we have not yet seen, those basic figures remain the same? I take it that it is the taper that is the subject of clarification, rather than the starting point.
The Chartered Institute of Housing in its response to that consultation warned of the risk of perverse outcomes of the policy, including tipping households on the margins into housing benefit, discouraging tenants from working or increasing their earnings, making communities less balanced—the point made repeatedly by Members and recently by my noble friend Lord Campbell-Savours—as low to middle-income families move out, and causing major problems in costs to councils and housing association in administering the scheme. The institute asserted that it thought that the income levels were too low—they may have been raised but the implication at the moment is that they have not. It points to the different treatment of local councils and housing associations, which has been mentioned—the former will have to pay income recovered to the Treasury, while housing associations will be allowed to keep the increased rents to invest in new homes. That anomaly needs some explanation.
The institute suggested a household earning threshold of £50,000 per year, annually uprated. It pointed out that with the £30,000 threshold outside London, two adults with two children in a three-bed house in the more expensive parts of the country would be eligible for housing benefit, as matters stand, in 53% of council areas, rising to 96% for those paying an affordable rent, and 100% paying the market rent. So there is a distinct impact even on that lower threshold of families still in receipt of benefit. As for the definition of household income which does not require HMRC to disclose information for non-dependent adults—we will be looking at the HMRC role in a subsequent group—if the HMRC is not enabled to make that information available, there is a question about how robust the information will be in assessing the household income where there are such non-dependent adults.
Overall, the institute predicted that the poverty trap would widen and a couple with two children paying £75 in rent per week would effectively face a marginal rate of tax of 90%. Presumably that would vary now because of the taper, so the effect would not perhaps be as drastic as it suggested, but it is still likely to be significant. The LGA research showed that on the initial basis 214,000 households would be affected and it thought—but again this is probably overtaken by the taper—that 60,000 families would probably have to leave their homes. It would be interesting to see whether the Government have made any estimate of the situation, as it now appears to be shaping up, compared to what the LGA had thought would be the case, both in terms of the total number of households and those who might have to leave their homes. I assume that some work has been done on that. Of course, nothing of this kind is shown in the impact assessment.
In my own authority of Newcastle, a small sample indicated—again, this may be lessened by the introduction of the taper—rent rises of between £45 and £69 per week for as many as 1,500 houses. I am not clear about how the taper will operate over the period of time. If it is to be a flat 10% increase, that is one thing, but if it is to go up by 10% per year cumulatively over time there will still potentially be a significant number. Again, it may not be possible for the Minister to clarify that tonight, but that would be helpful.
Amendment 71, which is in my name and that of my noble friend, would insert a requirement for regulations to take into account affordability. Amendment 72 adds the need to promote socially cohesive and mixed communities—the very matter referred to by my noble friend Lord Campbell-Savours. Crucially, at the time, Amendment 73 would introduce a taper relating to income and rent charged. Now we know that the taper will come in, and so to that extent Amendment 73 becomes redundant—or, to put it another way, the Government are accepting that and we await the detail.
There has been much speculation about this taper and until last Wednesday it was all rumour—it had been in the previous weekend’s press. Last Wednesday night, in the hours before Thursday’s sitting, the noble Baroness wrote to Members indicating that the taper would be introduced and she enclosed a consultation document, which comprised all of five pages of text and the Government’s response of equal length. However, the effect of the latter was merely to report that a taper would be applied; no details of the scheme were available at all. Perhaps there has now been a subsequent letter, which we now await with interest. This comes five months after the consultation closed; it could hardly have been a very elaborate consultation on the basis of the five pages that were sent to interested parties. One has to ask what on earth took so long to produce a response that is so empty of content. This looks to me rather like legislation on instalment plan. It has certainly taken a very long time. Even now, most of us are not aware of what is pending.
Moreover—I need to refer to this matter because it is constantly being iterated in the media—the Minister’s letter repeats the entirely incorrect claim that there are 40,000 households of incomes of more than £50,000 a year receiving a taxpayer subsidy to remain. There is no taxpayer subsidy. On the other hand, the taxpayer is subsidising private landlords charging ever-higher rents through the ever-higher rise in housing benefit. Nothing at all is being done about rents in the private sector—as opposed to what is happening in the public sector, where they are going to be pushed up. It seems to me a remarkably strange position for the Government to get into, even on purely financial grounds.
Amendments 78 and 79 flesh out the proposals for a taper and require high income to be set by reference to incomes in the area as opposed to a national figure and defined as income in the top quartile of that area rather than some one-size-fits-all formula applied to severally to London and the rest of England. Amendment 79 prevents high income being set at a level lower than median incomes, as my noble friend said.
These and other amendments seek to provide flexibility and a realistic scheme under which people on what can be described only as modest incomes are not hit by unreasonably large increases, especially when it suits the Government to cut rents for all council and housing association tenants with adverse consequences in both sectors for investment in their stock. That is incompatible with everything that has been said about improving the stock and the need for new and better housing.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have debated these amendments. I should say to the noble Lord, Lord Beecham, first, that I think that his letter may be in the post, just as the noble Lord, Lord Campbell-Savours, may have two letters in the post—this one and the one to which I referred earlier. I turn to the noble Lord’s various questions. He asked how many people in London were affected; there are around 46,000 social tenant households with incomes of over £40,000 who could be affected in London. That includes both local authority and housing association tenants, should the housing association wish to implement this.
I turn to the large group of amendments on income and rent setting. I start by reiterating the commitment I have given to introduce a taper, which will see rents rise gradually as income rises. I give advance warning that this commitment will be the basis of my response to most of these amendments.
I remind noble Lords of the purpose of the clauses to which the amendments relate. Clause 79 will set out a definition of high income and say how this will be calculated. It should be made clear that, in the context of the policy, the income threshold will apply only to the tenants or joint tenants and their spouses or partners. Clause 79 also allows that regulations can specify certain important aspects of that calculation, including the definition of high income for different areas, such as is the case with London; the clause also allows Government to specify what should, or should not, be treated as income for the purposes of the policy. As I mentioned earlier, when we are looking at possible exceptions of groups from the policy, Clause 79 would allow us to make sure they are not adversely impacted.
Clause 80 will make sure that landlords have the power to require the necessary information of households and that reasonable timeframes are provided for the submission of this information to the landlord. In the event that households fail to provide this information, Clause 80 would sanction that rents would automatically rise to a higher level than they may normally pay. This increase in rent should encourage prompt declarations, in a proportionate way. Protections under Clause 82 will ensure that rents will return to their normal levels once the necessary information is declared. This also applies to those tenants whose income falls below the high income threshold following a change of circumstances.
The noble Baroness, Lady Lister, asked me—I think in this group, although time blurs the groups into each other—about particularly vulnerable people who have had a crisis and are not able to provide information. As we work through this aspect of things, that will become clearer, but I am mindful of when that might provide a real problem, particularly for people in crisis.
Clause 83 will give local authorities the power to change tenancy agreements to apply the policy. This clause, most importantly, would give tenants the right to appeal the calculation of their income should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation, and that a proper process is in place should they wish to do so.
Baroness Hollis of Heigham
I thank the Minister for giving way. We know that appeals procedures usually take several months; we also know from experience that people’s income fluctuates very widely. How would the Minister protect local authorities from having to recalibrate the rents to be charged each and every month to their tenants? How will the local authority ever stay on top of that information when the tenant is going to appeal continually and reiteratively, I suspect, on the basis of the misinformation of the local authority in imposing the last rent increase, which was based on information sent into them four, five or six months before? Surely, this is the point made by the noble Lord, Lord Kerslake—that the administration of this should have been piloted; then there would be a learning loop as to the problems. I would hate to have to do this, if I were in charge of housing in a local authority. The Minister is passing a nightmare over to local government with monthly, individually tailored rents as income monthly fluctuates.
Baroness Williams of Trafford
The intention is certainly not that tenants would pay different levels of rent every month. That is precisely what we want to get right—to reduce the administrative burden and reduce the anxiety for tenants, particularly those with varying incomes, either month to month or week to week. That is the type of thing that we will work through with this.
Baroness Williams of Trafford
My Lords, I am not going to give way.
Most importantly, Clause 83 will give tenants the right to appeal the calculation of their income, should they believe that they are incorrect. Clause 83 is fundamental in ensuring that tenants have the opportunity to challenge a calculation.
I will start with Amendment 70A, tabled by the noble Lords, Lord Best, Lord Cameron, Lord Kerslake, and Lord Kennedy. This amendment seeks to restrict the amount by which rent is increased within this policy. I have already outlined in some detail our commitment to introduce a taper to ensure that increases in rent are more closely linked to increases in income. This will ensure that rent rises are affordable and protect the incentive to find and keep work.
Amendment 71 seeks to establish a test of local affordability in rent setting. I thank the noble Lords, Lord Kennedy and Lord Beecham, for this amendment. The Government believe that this is best achieved through a correct setting of market rents within areas, and I have confirmed already that we are considering how this will work. We need to find an approach that can be easily implemented by local authorities but that is a fair representation of the market rental rate. This issue forms a key part of our engagement work with local authorities.
Noble Lords opposite have also tabled Amendments 72 and 77. Amendment 72 asks us to take into account the need to promote socially cohesive and mixed communities. I find this a slightly odd amendment, as I would have thought that the issue of low rents for households on high incomes is actually a divisive issue for communities. Social housing should be aimed squarely at those in real housing need, and it is absolutely right that when families need support they benefit from being in a mixed community. This is our policy.
However, there are more than 40,000 households with incomes of £50,000 or more who are benefiting from lower rents than their neighbours in the private rented sector. Far from being an issue, our policy aims to establish a level playing field across communities. It is worth pausing again here to consider the home ownership offer that the Government have for tenants of social housing, which they may wish to take up—but I am certainly not directing them to take it up.
Amendment 77 seeks to define high income in relation to average incomes in an area. Currently, the median household income figure is £26,000, which I should point out includes both working and non-working households. It is important to recognise that there are working households in the private sector on or below this median amount who are expected to find rents higher than that enjoyed by social tenants on similar incomes. On that basis, our starting threshold of £30,000 nationally is a fair point at which higher rents should become payable. I have already outlined our commitment to a taper to ensure that rent rises are gradual beyond this income threshold.
The noble Lord, Lord McKenzie, who is not in his seat, asked what constituted a household. There is a definition in the voluntary scheme; it includes tenants, joint tenants, spouses, partners and civil partners. That is the kind of thing that we are looking at.
The noble Lord, Lord Cameron, tabled Amendment 77A, which seeks to include a provision to take into account the variability of household income within the definition of high income. The amendment is unnecessary as we already have the power set out in regulations to treat variations in income within a year. That goes back to the point made by the noble Baroness, Lady Hollis. We certainly intend to cover this in regulations. There will be circumstances that are obvious candidates for inclusion, such as the death of a household member or a sudden and significant drop in income, but beyond that we must strike a balance between allowing a review of rent and minimising the burdens on landlords. We cannot have landlords constantly reviewing rents, for example, as the noble Baroness, Lady Hollis, suggested. There must be a sensible approach.
Amendment 79A, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, seeks to put higher income thresholds in the Bill. We are not doing this as it would prevent us from bringing forward changes to the thresholds if the evidence supported a change. Our intention is to keep the policy under review and I am sure that that will be supported. I am sure—the noble Lord, Lord Shipley, confirmed this—that the purpose behind the amendment is to question the starting thresholds that were set at the Budget. We have said that rents should rise where household income is more than £30,000—£40,000 in London—but I once again draw attention to my commitment to put in place a taper. It will ensure that for those households on £30,000 the rental increase will be limited to a few pounds each week. While the starting incomes for thresholds are right, we have accepted that there is a need to protect work incentives and this is the purpose of the taper.
Amendments 79B and 79D concern the ability to raise rents where income information has not been provided by tenants. I thank the noble Lords, Lord Kerslake, Lord Beecham, Lord Kennedy, and Lord Low, for tabling these amendments as this is an important part of the Bill. I recognise why there are concerns about the power to raise rents for non-declaration. I will spend some time outlining how we see this power working. Tenants may be required to declare their household income and I have already outlined that we are thinking through the options for defining “income”. We are also considering what evidence is needed to support a declaration. It will be important for tenants to have plenty of time to gather this evidence and I have set out our intention to communicate this policy effectively to landlords and tenants groups.
It is, however, inevitable that there will be some households who, for whatever reason, do not declare details of their income. In these circumstances the Government face a choice. Do we make it a criminal offence or do we take a different approach? My preference is for the latter as a criminal offence seems entirely disproportionate. The power that we have taken therefore would give landlords the ability to set rents at the highest available in that area if there is a consistent failure to declare details of income. When I say “consistent”, I mean that there will be clear guidance for landlords on the amount of effort that they should put in to trying to contact tenants, and only when all of these approaches have failed should rents be raised.
I also make it clear that we do not see higher rental rates applying for the whole of the rental year. If raising rents for non-declaration spurs a household to take action to declare details of income at a later point in the year, the Bill allows for the rent to be set back to the correct level and regulations will set out this approach. I also give a firm commitment that we will clearly communicate this area of policy to landlords. Guidance will require them to set out the impact right from the start in all communications to tenants.
On Amendments 80B and 80C, tabled by the noble Viscount, Lord Hanworth, I refer back to some of the discussion on how reviews of rent could be treated. There will be certain circumstances in which a review of rent would be appropriate: for example, the death of a household member or a sudden loss of income. The power in question, however, deals primarily with circumstances when the income level of the household drops below the threshold for a high-income rent. In those circumstances we intend to use regulations to state that the rent levels should revert to the original level. This will include circumstances where rent has been raised as a result of non-declaration and it is subsequently determined that the rent level should remain as it is currently.
Finally, Amendment 82AA, tabled by the noble Lord, Lord Bassam, seeks a published review into the effect that the policy would have on community cohesion within all local authority areas. I have already expressed our intention to keep the policy under review and also explained my views regarding the detrimental effect that low rents for households on high incomes can have on communities.
Lord Campbell-Savours
What is the latest estimate of the number of households above the £30,000 and £40,000 thresholds? There must be a government estimate. If there is an estimate, does that not suggest that the work has already been done on the exemptions; otherwise, they would not have been able to produce an estimate?
Baroness Williams of Trafford
My Lords, I have the figure for London, as the noble Lord, Lord Beecham, asked for it. There are around 46,000 social tenant households with incomes of over £40,000 in London, but that does not presume exemptions.
Baroness Williams of Trafford
I do not know. I will get that figure to the noble Lord.
Lord Kennedy of Southwark
The Minister just referred to the amendment from the noble Lord, Lord Bassam; does that not come in a much later group?
Baroness Williams of Trafford
I did wonder, given that the noble Lord, Lord Bassam, was not in his place. I will just refer to the Marshalled List. The noble Lord is absolutely right, so if noble Lords could just ignore what I have said on Amendment 82AA.
I ask the noble Lord to withdraw the amendment.
Baroness Hollis of Heigham
I still have not got the faintest understanding of how pay-to-stay rents will connect with people’s incomes and UC. Clearly, universal credit is established on a monthly basis on real-time information and in due course will include housing benefit, if that is a flow of income. How often does the Minister expect pay-to-stay rents to be adjusted by the local authority over the course of the year in the light of changing incomes as reflected in UC—monthly, quarterly, yearly? Every answer has a distinct downside.
Baroness Williams of Trafford
As I think I have said to noble Lords on several occasions, this will be laid out in due course. Clearly, we would not want to be adjusting rents month in, month out for people. That is the sort of detail we will be working through, and it brings my thoughts back to a different policy brought in under the Labour Government—tax credits. You had to let the authorities know if your pay changed. The detail will be laid out in due course, as I think I have explained several times.
Baroness Hollis of Heigham
It is not a detail—it is at the core of local authorities’ ability to handle this scheme.
Baroness Williams of Trafford
As I said, details on regulations and timelines will be with noble Lords before the end of the week.
Lord Campbell-Savours
Does it not mean that in effect, there will be year-end rent bills for tenants?
Lord Kennedy of Southwark
I am sure the Minister has picked up from the debates on this group and the previous couple of groups that, the more we drill into this, the more and more complicated it is getting. She and her ministerial colleagues have some job to get this right. I am sure it will get worse. It is very difficult to get this right and, in some ways, I wish her all the best.
On another point, I think I heard the Minister give the number of people on incomes of more than £50,000. If she is using that figure in her arguments, why are we setting the rates for higher rents to start at £30,000 and £40,000?
Baroness Williams of Trafford
My Lords, I was simply making the point that there are a high number of households with incomes of more than £50,000.
Lord Kennedy of Southwark
I get that point, but it is a bit odd that the Bill before us refers to incomes of £30,000 and £40,000, but in her argument the Minister uses an income of £50,000.
Baroness Lister of Burtersett
The Minister may be coming to this but I asked—as I did at Second Reading and am still waiting for the answer—why the threshold has been reduced from that used in the voluntary scheme.
Baroness Williams of Trafford
My Lords, I cannot speak for the Government back in 2012 and say how they arrived at their figures, as I simply was not here to be part of those discussions. However, I will try to provide some background for the noble Baroness.
Baroness Lister of Burtersett
Can the Minister also let us know what will happen to the threshold in the future? I know that average wages are not going up by very much at present but they will gradually go up and surely the threshold should reflect that.
Baroness Williams of Trafford
I answered that in responding to a question from the noble Lord, Lord Shipley, about not putting the thresholds in the Bill because they might change.
Lord Best
My Lords, I apologise for my delay in rising to speak. I did indeed lead on this amendment, although I spoke to it very briefly compared with the debate that has followed. The rather modest recommendation in my amendment that these rent increases should be limited on the basis of 5% or inflation plus 2% is one of very many ways in which one could make a significant difference to people’s lives with the disruption that is still coming down the road, even with the tapers that we have heard about.
It may be that others have not read into the mysterious letter, which has gone to a number of noble Lords, what I have: that we have a choice of two levels of taper—10p in the pound or 20p in the pound. I hope very much that the Government will go for the 10p. Those are the options the Government are now seriously considering, and we have to accept that. It is a very much better deal than people had feared. Now, you would have to have an income approaching £100,000 in order to pay the market rent in Camden for some of the highest-value properties. The gap is so wide that at 10p in the pound or 20p in the pound, it will take a long time to fill it.
I shall not detain the Committee any longer. I apologise for being slow to get to my feet, and I beg leave to withdraw the amendment.
Battle of the Somme: Centenary
Lord Lexden
To ask Her Majesty’s Government whether they have plans to mark the centenary of the Battle of the Somme in 2016.
Lord Lexden (Con)
My Lords, I should like to draw the attention of the House to the centenary of the Battle of the Somme, which falls in a few months’ time. The battle took place at almost exactly the halfway point of the First World War. More lives were lost on the Western Front in 1916 than in any other year of that terrible conflict. The allies in 1916 sought victory in all theatres of war. Intense fighting also took place in eastern Europe, where the Russians launched massive attacks against the forces of Austro-Hungary and its allies. Strategy in the West was devised in the hope of assisting progress in the East.
There is certain to be widespread public interest in the official programme of commemorative events to mark the centenary of the Somme. That programme needs to be substantial and impressive, for it has to give heartfelt expression to the deep feeling that this bloodiest of battles never ceases to evoke.
A hundred years on, the Somme continues to haunt the collective memory of our nation. It is unforgotten in the Republic of Ireland and in the countries of our former empire, which sent gallant troops to fight and die alongside ours. It is unforgotten too in Germany, whose soldiers, like ours, displayed great courage. They also showed immense skill in the construction of defensive positions, many of which proved impregnable during the four and a half months of fighting. It all began on 1 July—that terrible, vividly remembered day of bloodshed—and finally ended on 18 November, when the two sides at last withdrew from their sea of mud, filth and gore.
The Somme brought together the largest armies that western Europe had ever seen for the longest and costliest battle ever fought there, apart from Verdun, which was fought alongside it, beginning in February 1916 and continuing until December. The total death toll at the Somme was over 300,000, and twice that number were wounded. On the British side, 51 VCs were awarded.
The Somme is synonymous with suffering and grief, just as Waterloo, fought a little over a century earlier, is synonymous with glory and hope. So many died at the Somme, their bodies torn, broken and often defiled. So many limped home, their bodies permanently maimed, without adequate welfare services to help sustain them during the remainder of their lives.
Whole communities were deeply scarred because Kitchener’s New Army of over 1 million volunteers amassed since 1914 contained many regiments composed of friends, relatives, neighbours and workmates, beginning with the Grimsby Chums, who were followed by the Hull Pals, the first of over 50 pals battalions to be raised and invested with intense local pride. The whole of Wales followed the fortunes of the Swansea Pals intently. In Scotland, the sportmen’s or football battalion, composed of players and fans, became the focus of great enthusiasm.
There were other elements of the Army which represented close-knit communities. The 36th (Ulster) Division was conspicuous among them. Five thousand five hundred Ulstermen died on the ferocious first day—more than a quarter of total British deaths. Sir Frank Fox, who had been a staff officer at allied headquarters, wrote:
“The losses of that day made mourning in many Ulster homes, but with the mourning there was pride that the Province had once again proved the steadfastness of its loyal courage”.
A service will be held in St Anne’s Cathedral, Belfast, on 1 July, attended by the Lord Lieutenant, to remember Ulster’s sacrifice. There and in many other places church services will remind us of the fine young musicians and composers who died.
A century later, the search for answers still goes on. Were the allies’ strategy and tactics misconceived? Were the allied commanders incompetent? Was Sir Douglas Haig a callous butcher of men? Many fine works of scholarship have been written—and more will follow—discussing and analysing the great, recurrent issues of the Somme. Unlike the meretricious Alan Clark, serious historians today do not deride Haig and his senior officers as donkeys, although it is clear that they had their limitations. The Somme lacked what it needed most: a man of the stature and genius of Wellington.
At the Somme, Haig sought a decisive victory by breaking through the formidable German trenches. Under his carefully laid plans, the greatest artillery bombardment ever seen would be followed by massive infantry attacks, clearing a route for the cavalry regiments, which would sweep the Germans from the villages and towns of northern France. Historians debate the extent to which grave tactical errors on the British side on the one hand, and the sheer strength of the German defences on the other, thwarted Haig’s ambitions.
Historians are united in recognising the importance of the Somme in enabling the French to survive an even greater struggle at Verdun by diverting German troops from it. Defeat there would have spelled disaster for the allies by opening the road to Paris to the forces of the Kaiser.
Above all, detailed scholarly studies of the Somme today tend to be sympathetic to the strategy on which both it and ultimate victory in 1918 were based. As Andrew Roberts puts it in his recent book Elegy: The First Day on the Somme:
“If there was a way of fighting the First World War that did not involve trying to smash frontally through formidable enemy defences, neither side discovered one”.
The words of historians, however eloquent, reach comparatively few people. The Somme lives on in the hearts of our nation mainly through the words left to us by those who took part in it—men of all ranks whose letters, diaries and poetry speak to us across the century so movingly. Some tell us of the strengthening of their belief in God and the hope of salvation; others of the collapse of faith amid the horrors of the battle. Many were sustained by high ideals. Tom Kettle, an Irish Nationalist MP, wrote a few weeks before he was killed on 5 September:
“I want to live to use all my powers of thinking and working, to drive out this foul thing called war and to put in its place understanding and comradeship”.
Others looked confidently to a better future for mankind. At the end of a poem entitled “Optimism”, the 29 year-old Lieutenant Alfred Ratcliffe wrote:
“Fell year unpitiful, slow days of scorn
Your kind shall die, and sweeter days be born”.
He was killed on the first day of the battle. What, I wonder, would he and his gallant comrades have thought of our conduct in the “sweeter days” that we are so fortunate to enjoy?
When the war was over, there were many more words. They were inscribed on the tombstones visible today from every road and every vista on the approaches to the Somme. The Commonwealth War Graves Commission maintains more than 60 cemeteries of haunting beauty on the Somme battlefield. Above them tower the great memorials dominated by the Thiepval Memorial to the Missing, the largest war memorial ever built, recording the names of 73,335 soldiers who have no known grave.
Those who have planned the forthcoming Somme centenary commemoration will have been conscious of how much was expected of them. I look forward to hearing from the Minister how they have fulfilled their task. I look forward, too, to listening to the speeches of noble Lords on all sides of the House who are joining me this evening in recalling this never to be forgotten battle a hundred years ago.
Lord Watson of Invergowrie (Lab)
My Lords, I pay tribute to the noble Lord, Lord Lexden, for introducing this debate and for his knowledgeable introduction of it. It is no more than we would have expected from such an eminent historian. I do not intend to follow him in that sense but I would like to invoke some of the events of that dreadful battle and how they have affected me two generations later.
I do not wish to steal the Minister’s thunder either and so I will congratulate the Government now on marking the battle appropriately. It is also appropriate that organisations such as the Commonwealth War Graves Commission, the Imperial War Museum and the BBC are doing a fine job, with a wide range of events that will mark and commemorate the centenary.
I shall be on the Somme on 1 July this year, as I have been every 10 years since 1976. Initially, I was not sure why I did so. I happened to be studying at school on the 50th anniversary of the battle of the Somme and I had a grandfather who fought in the war with the Argyll and Sutherland Highlanders. He was not on the Somme on that day but he was on the Western Front. He would never say a word about the war—he was too traumatised. That made an impression on me and I decided to go to the commemoration of the first day of the Somme in 1976.
What struck me that day as I stood on the Somme—as I will be this year on the Albert-Bapaume road—was the massive Lochnagar crater which, 100 years later, is still a huge testament to the horror and brutality of the war. It was exploded seconds before 7.30 am on 1 July 1916. It ought to have presaged greater advances on that day than it did. I am not going to enter into the culpability aspect of the battle but it ought to have been foreseen that the German defences were much stronger than the British Army had anticipated. I invite noble Lords to consider what a seven-day barrage, day and night, must be like. It went on 24 hours a day for seven days, so the men who went over from the trenches could not have had any sleep for seven days before they entered into the awful field of machine-gun fire that mowed down so many of them.
It is important, when we pay tribute to the men who gave their lives, to remember that many were Commonwealth soldiers. They were not only from Newfoundland, which was separate from Canada at the time, New Zealand and Australia but there was also the Second Indian Cavalry and the British West Indies Regiment. Sadly, when we studied the subject at school—certainly in my time—they were not mentioned. However, I am glad to see that in the commemoration of the war 100 years on, their sacrifices are being recognised.
There will be many opportunities for us to mark the occasion in a sombre way. We should remember the dead of all sides and all countries—something like 300,000 in that battle. On the first day, 19,240 British soldiers died, the worst date in the history of the British Army. That gives pause for thought. Much more could be said but, as time is limited, I shall leave it there and we will all pay our own respects on 1 July.
Lord Addington (LD)
My Lords, I was drawn to this debate having read much of what has recently been written about the Battle of the Somme and the First World War generally which tends to sit badly with some of the myths with which I was brought up—as the noble Lord, Lord Lexden, suggested, the idea of lions led by donkeys marching forward.
As in all modern wars in Europe and the American Civil War, ranked men marching forward across fields into rifle fire—and particularly fire from a rapid-firing weapon—led to massive casualties. Effectively, given the First World War’s structures, hideous casualties were inevitable. It was always going to be that type of war, regardless of what people thought. Indeed, looking at what our rifles and weapons had done to some of our opponents in colonial warfare before might have given us a hint. There was always going to be a dreadful carnage caused by intensive manoeuvres of infantry for an assault on a position which would be met by massive force. The noble Lord is quite right to hit that myth hard. We should remember the way in which the history has evolved.
When the commemorations for World War I were being held, in an attempt to educate my daughter I asked her, “What can we do that tells you about World War I?”, and I got a copy of “Oh! What a Lovely War”. If ever something looked incredibly dated and like something written by someone who had taken on board the lions and donkeys attitude, it is that document. I will not comment any more about it other than to say that, after an hour, my daughter said, “This is boring. They all seem to be saying the same thing all the time”.
I urge the Minister to ensure that everyone continues to study this subject and to look at its history again and again. World War I is different because it is the first war from which we have a good, first-hand record from the people who fought it on the ground in massed ranks. We should largely thank the BBC, for making those recordings a while ago. We should be studying it and reminding ourselves what a pan-European war looks like.
Lord Rogan (UUP)
My Lords, I thank the noble Lord, Lord Lexden, for initiating this debate. In both Northern Ireland and southern Ireland we look back to historic events and historic dates. The year 1916 is especially in our minds. Events in Dublin at Easter of that year and the Somme in July are embedded in our collective memories. These episodes in history helped in many ways to shape the politics and the creation of our two countries.
In Ulster, the Somme is in our DNA. Thousands and thousands from all nine Ulster counties—including Donegal, Cavan and Monaghan—went to war. Sadly, many thousands never returned. Three of my uncles left home to go to the Somme. Only one returned—I am told, a broken man. This was typical of so many Ulster families. It is said that there was not a town, a village or a hamlet that did not suffer with the loss of loved ones.
Let us not forget that men from the rest of Ireland also volunteered: men of the 10th Irish Division, who, with the Australians and New Zealanders, suffered at Suvla Bay; and men of the 16th Irish Division, who fought so gallantly alongside the 36th Ulster Division at the Somme and then at Passchendaele and Ypres. Then there were those men from England who have been mentioned, the pals battalions; men from Wales and Scotland; and the thousands and thousands of Commonwealth soldiers who fought and died for king and country in Flanders and elsewhere.
In southern Ireland, the Government are officially remembering and commemorating the Easter rebellion, with the President, Ministers and military personnel attending the ceremonies. At home in Ulster, as has been mentioned, several events are being orchestrated to remember and commemorate the service and sacrifice of our fellow Ulstermen in the 36th Ulster Division.
It would be entirely appropriate for our Government to organise an official event or events to do likewise for all who fought and died and suffered. It is a long, long way from the drumlins of County Armagh, from where Willie McBride, a young lad of 19, of the Ninth Royal Irish Fusiliers, left home to go to the green fields of France.
“For the sorrow, the suffering,
The glory and pain
The killing and dying were all done in vain.
Did they beat the drum slowly?
Did they play the fife lowly?
Did they sound the death march as they lowered you down?
Did the band play ‘The Last Post’ and chorus?
Did the pipes play ‘The Flowers of the Forest’?”
Lord True (Con)
My Lords, I, too, thank my noble friend Lord Lexden for initiating this debate so movingly. No one can be immune to the horror and sacrifice of the Somme campaign. Standing on a bleak autumn evening watching the sun go down behind the Thiepval memorial was one of the most moving episodes of my life. Lutyens in stone captured the immensity of the thing but also the dignity and the space for contemplation that should inform remembrance this summer. I must say in passing how different from the shameful display in Whitehall with the Cenotaph enveloped in fumes as a prop for tawdry stunts for BBC’s “Top Gear”.
As my noble friend said, the Somme offensive followed agreement by the Allied powers to launch co-ordinated offensives in 1916, a need made ever more pressing in French eyes by the German assault on Verdun. As he said, on June 4, just three weeks before the Somme bombardment, our Russian allies, under General Brusilov, made what was to be the most striking breakthrough in the war before 1918—not by a massive, week-long artillery barrage followed by a formal human-wave advance on a relatively narrow front at the enemy’s strong point but instead by surprise, careful sapping and entrenchment, concealment of reserves, a brief if intense artillery bombardment probing the enemy’s weakest points and attacking at 20 points along a very broad front.
More than 400,000 Austrian troops were captured. Austria-Hungary suffered nearly 1 million casualties in that battle, and, arguably, neither the empire nor its army were ever the same again. The failure of other Russian commanders to support the offensive cost Russia dearly, but it is sad that neither those lessons nor ideas being advanced of infiltration came soon enough to be applied on the Somme.
Although the Somme has unique national resonance for us, it is as well to remember sacrifices made in the same cause by hundreds of thousands of young men of other nations that bloody summer. The bugles called from sad shires under the Urals as well as the Chilterns. I was sorry about the boycott of the Russian commemoration last year of the end of World War II. Surely honouring those who died in what was then our common cause should know no boundary of regime or politics.
The Somme was not an Italian or a Russian or a Romanian show. None the less, I hope that this spirit of openness and reconciliation will apply to former allies as well as to former enemies as we recall the cataclysmic events of 1916 in the Great War, which, on the Somme and elsewhere, left Europe bled white and exhausted, opened the way to revolution and changed its future forever.
Lord Faulkner of Worcester (Lab)
My Lords, judging from the large number of speakers in this debate, the noble Lord, Lord Lexden, has certainly caught the interest of the House. I congratulate him on his initiative for the debate and on his very moving and inspirational speech.
I declare three unpaid interests. I am co-chair of the War Heritage All-Party Parliamentary Group, a member of the Government’s World War I Centenary Advisory Board and patron of the Guild of Battlefield Guides.
I start with the warmest of compliments to everyone who has so far been involved with the centenary programme. The range of events that since 2014 have already taken place in the United Kingdom and on the battlefields involving the general public, the inclusiveness of groups participating—particularly the large number of schoolchildren, the solemn programme of commemorations in churches and cathedrals, and the depictions of what life was like on the home front during those terrible times—have all been inspirational and demonstrated that the public’s imagination has been captured. The mood and tone of those events have been exactly right—something that many of us were worried about at the beginning of the programme but are now completely satisfied by.
As time is so limited in this debate, I shall leave it to the Minister to speak in detail about the programme surrounding the Somme centenary, particularly the events in Manchester on 1 July and the visit to Thiepval, in which I hope to take part.
I want to commend the Commonwealth War Graves Commission’s Somme Community Initiative, which we shall be launching here in the House on 11 April. Its aim is to reconnect the British public with the 300,000 war graves in the UK. Over the years, these graves have effectively become invisible to the public. A CWGC pilot study has encouraged community groups, schools, old people’s groups, veterans’ groups, football clubs and so on to visit their local CWGC site, do some research on the men, have a small event to remember them, and ultimately continue to champion the sites. It complements the programme of visits by MPs and Peers which we in the all-party group helped to get under way in 2014 and which has proved so successful that it is being repeated.
Now the CWGC has funding from DCMS and the Department for Communities and Local Government to undertake a much larger project from July to November this year which involves 141 community events linked to the 141 days of the Somme. In addition, the commission tells me that it would welcome many more visitors at its 230 cemeteries on the Somme, as some are visited only rarely. I hope that we will hear more detail from the Minister when he replies.
Lord Bew (CB)
My Lords, I, too, thank the noble Lord, Lord Lexden, for his role in initiating this debate and for his excellent and striking opening speech. On 1 July 1916, the Ulster Division went over the top at the Somme, with dramatic, painful and horrifying effect. Two days later, Captain Wilfred Spender, an Englishman and Harrovian, wrote in the Times:
“I am not an Ulsterman but yesterday … as I followed their amazing attack, I felt that I would rather be an Ulsterman than anything else in the world”.
It is true that very few families in Northern Ireland were untouched by the tragedy of the Somme. Harold Cox, a former Liberal MP, spoke in Belfast after the war. His home was in Kent and,
“when the wind was from the south, at night they could hear the noise of guns booming on the Somme. Ulstermen on the Somme were fighting for the defence of Kent”.
When I draw attention to these things I do not want us to forget—far from it—the role of the Irish nationalists. The noble Lord, Lord Lexden, has already referred to the death a few weeks later of Tom Kettle, a nationalist MP. If one looks in the Great Hall, it is remarkable to find recorded there the deaths not just of nationalist MPs but of their sons. The losses were proportionate to those of the mainstream English parties. It gives an indication of the scale of the tragedy at that time.
One of the most remarkable things to happen in Ireland in recent years, and one of the signs of a real change of public mood and a move towards greater reconciliation between north and south, is the way in which, 10 years ago, the Irish Republic for the first time held a major commemoration for those who died at the Somme from both main traditions.
It has already been mentioned that the Prime Minister has an advisory committee on the First World War. I was delighted to speak to that committee on the subject of 1916. While the rising of 1916 in Dublin was not a political project I support or particularly admire, none the less I have no difficulty in explaining the proud motivation and bravery that led into it. I was very happy to talk to the committee on that subject. I would be very happy if the Minister was able to say to me that he will refer to the advisory committee chaired by his ministerial colleague in another place the content of the speeches that are made in this House tonight.
The Earl of Shrewsbury (Con)
My Lords, I, too, congratulate my noble friend on securing this timely debate. My points will be very brief. As a small boy living with my father in Switzerland, every year he took me to visit many of the countless war cemeteries from the Great War, and in particular the Somme. These days I return often, and I have taken my children and my friends to experience these special places that are so beautifully tended by the War Graves Commission.
At the memorial to those who fell at the battle of Loos and many others, I find grave after grave and inscription after inscription to those from the North and South Staffords who made the ultimate sacrifice. I would guess that the reason my father was so keen to visit these wonderful graveyards with me was because his head forester, George Greatholder, lost four of his brothers on the first day of the battle of the Somme—and George himself was awarded a military medal and bar.
Staffordshire is my mother county and it is the home of the National Memorial Arboretum at Alrewas. Is my noble friend the Minister able to tell me what plans that excellent establishment has to commemorate this special centenary on behalf of the nation? Bearing in mind the sacrifice made by a great number of animals in the service of man during the Somme—in the main horses and dogs which were used for transport and communications—is any lasting memorial planned to commemorate them?
Finally, Staffordshire is also home to a large German war cemetery on Cannock Chase. We must never forget the sacrifice made by our enemies in that appalling conflict.
Lord Empey (UUP)
My Lords, my noble friend Lord Lexden as usual has done us all a great service by drawing our attention to one of the most significant events of the First World War. Mention has been made of the 36th Ulster Division and the 16th Irish Division. It is true to say that there is virtually not a school, town or village hall that does not have a memorial, some of them very substantial in size.
Let me put the thing into perspective. We have an Army today which I think is planned to reach something like 85,000. In proportionate terms, the losses incurred by the 36th Ulster Division on 1 and 2 July 1916 were equivalent in population terms to the obliteration of the entire British Army in one 24-hour period. That is the scale of the losses; they are almost inconceivable and unimaginable. It is akin to something like Hiroshima taking place in one day. But that did not include those who came back from the conflict as broken men—and, indeed, the brave women who served them in the tents and on the battlefields suffered greatly as well from what they had seen.
To follow what was said by my noble friend Lord Bew, however dreadful the conflict was, many of the soldiers fighting on those battlefields were from Ireland and came from opposing traditions. For a long time afterwards, and indeed until comparatively recently, the sacrifice of the men who came from the Irish Republic was barely recognised. But I am pleased to say that things have changed. Something that was a most horrible and divisive issue has gradually become a source of some form of reconciliation. Irish Ministers now come to Belfast City Hall on 1 July to join the rest of us in the commemoration ceremony there. An Irish Prime Minister now attends the Enniskillen memorial on Remembrance Sunday. Recognition is taking place on both sides of the border, and this is a small crumb of comfort that has come from such a dreadful set of circumstances. I hope and pray that in all our endeavours, in our foreign policy and in other areas as we go forward, never again will we allow the circumstances to arise that demand such a terrible sacrifice.
Lord Black of Brentwood (Con)
My Lords, I join others in congratulating my noble friend on so powerfully introducing this important debate, in which I declare an interest as a trustee of the Imperial War Museum Foundation. Between them, the Imperial War Museum, 14-18 NOW and the wider First World War Centenary Partnership have formidable plans to commemorate the centenary, perhaps most strikingly through the restoration of the UNESCO-listed film, “The Battle of the Somme”. And through the ambitious Lives of the First World War project, these organisations will build a permanent digital memorial to those who died at the Somme, bringing new meaning to our exhortation that, “We will remember them”.
In his extraordinary account of Europe from 1914 to 1949, Ian Kershaw said of the two great battles that dominated the middle years of the war that while for the French Verdun came to symbolise the saving of their country, for the British the Somme symbolised,
“the pointlessness of such immense loss of life”.
Perhaps the most tragic aspect of the Somme, the most pointless of all, was the way in which it robbed us of so much bright young creative talent that was mown down in the flower of youth.
In his director’s address shortly after the outbreak of war to students at the Royal College of Music, on whose council I sit, Sir Hubert Parry had this to say:
“One thing which concerns us deeply is that quite a lot of our happy family … have been honourably inspired to go and chance the risks of a military life; and among them are some very distinguished young musicians. We feel a thrill of regard for them ... But then we must also face the facts with open minds. Our pupils ... are gifted and rare in a special way. Some of them are so gifted that their loss could hardly be made good”.
Among the young musicians who died during the war were Ernest Farrar, Willie Manson, Cecil Coles and, at the Somme itself, perhaps the most talented of them all, George Butterworth, whose early works such as “A Shropshire Lad” and “The Banks of Green Willow” foretold a life of great musical genius that was not to be.
At the outbreak of war, Butterworth joined the British Army and accepted a commission in the 13th battalion Durham Light Infantry. Soon after the start of the Somme, he and his men were sent in to capture a series of trenches near Pozières on 16 July. For his role in doing so, Butterworth was awarded the Military Cross. He did not live to receive it as he was shot through the head by a sniper during the desperate battle to hold Munster Alley on 5 August. Hastily buried that day, his body was one of the hundreds of thousands never recovered. His remains lie there still today, perhaps the most obvious case of “what if?” that is left to us in the earth of the battlefields of northern France. He joins the Frenchman Albéric Magnard, the Spaniard Enrique Granados and the German Rudi Stephan as losses from the First World War to the world of music who, as Parry said, can, “hardly be made good”. As we commemorate the battle this year, I hope we will find time to think of the “what if?” generation of composers, poets, authors and artists whose talents would have so enriched our lives had they not had to make the ultimate sacrifice.
Lord Browne of Belmont (DUP)
My Lords, I thank the noble Lord, Lord Lexden, for giving such an excellent account of the historical significance of the Battle of the Somme and for highlighting the importance of commemorating the bravery and sacrifice of 100 years ago.
I shall not attempt to analyse these tragic events in depth in the short time available to me, but it is impossible to overestimate the extent of the suffering and sacrifice of those who took part in the battle and, indeed, of their next of kin. However, I should like to congratulate the Government and all the other organisations involved in drawing up the excellent and extensive programme of commemorative events, which will enable full participation by all sections of the community at the national, regional and local level.
In particular, I should like to outline the outstanding work of the Somme Association of Northern Ireland, a registered charity formed in 1990 to co-ordinate research and educate the community on the role played by Irishmen in the First World War and to commemorate their heroism and sacrifice. Before proceeding further, perhaps I should declare an interest in the association, as I have been a board member for many years. On behalf of the Government, we manage the Ulster Memorial Tower at the site of the Somme battlefield which was the first official memorial to be erected on the Western Front, and was dedicated on 19 November 1921 to the memory of the officers and men of the 36 Ulster Division and all other forces who laid down their lives on the opening day of the offensive.
In 2003, the Secretary of State for Northern Ireland secured a grant which enabled us to purchase the nearby Thiepval Wood, the location from which the attack on the German lines on 1 July 1916 was initiated. In addition, in April 1994, we opened a fully accredited independent museum on the edge of the Clandeboye Estate in County Down, where the 36 Ulster Division trained before departing for war.
The Somme Association will naturally play a leading role in all the commemorative events to be held this year in the British Isles and in France and Belgium. We regard our future mission to improve community relations through the elucidation of the important role played by soldiers from all parts of Ireland in the First World War in defence of freedom as of great significance. The whole community of Northern Ireland will benefit through the development of a common understanding of the commitment and sacrifices of individuals from both unionist and nationalist backgrounds as they stood and fought together on the Western Front. A key aim of the Somme Association is also to work closely with the education sector in developing material to support schools’ curriculum requirements and to expand our education and outreach facilities. It is indeed encouraging that last year a record number of school students from both communities in Northern Ireland visited our museum. The Government’s initiative to send two student ambassadors and a teacher from every state school in the United Kingdom to visit the First World War battlefields and take part in remembrance ceremonies is very welcome. I hope that these events will provide a lasting legacy and a fitting tribute to the sacrifices of the brave men who gave their lives at the Somme in 1916.
Lord Lingfield (Con)
My Lords, I, too, thank my noble friend Lord Lexden for his sombre but first-class introduction to this debate.
On the 60th anniversary of the Somme, a lady called Rose Coombs wrote a book detailing its memorials and graveyards, which my noble friend mentioned. She called it Before Endeavours Fade. Now, on its 100th anniversary, we know that, alas, when this year is over the stories of the endeavours of those thousands of young men and women who served and died in the First World War will indeed inevitably fade, unless we can pass the responsibility of remembering them to the next generation. Therefore, it is extremely important that today’s young, this year particularly, can be helped to do so in their schools and colleges, and, indeed, in the cadet units of the three services. Last week, while giving awards to some sea cadets, I was reminded that youngsters of the same age as some of those I met served and died in the Royal Naval Division on the Somme. A 12 year-old from Tooting in south London, Sidney Lewis, fought at Delville Wood before his mother demanded his safe return home.
One school that I know set its students a task of investigating the names on its local war memorials and unlocked the stories of many of those commemorated. Some pupils found that they were related to those who had died, and, with the help of the marvellous Commonwealth War Graves Commission website, located their gravestones on the Western Front. Diligent research at another school revealed a Somme Victoria Cross winner who had been a pupil there, and a subsequent visit to a military museum enabled the pupils to see the medal and to learn more of his life and the courageous act that ended it. Experiences such as this are useful introductions in the classroom to the concepts of community, patriotism, bravery and duty.
I remember well my grandfather and his brothers, who, to the end of their lives, often told me of ordeals and dangers in the trenches and at sea, of comradeship and of the loss of their four cousins. These were very real to me when I was young. Many of your Lordships will have had the same advantage that I did. My noble friend Lord Shrewsbury mentioned that. Our grandchildren, however, do not have that privilege. I very much hope that our schools and youth organisations will this year ensure that the stories of those who fought at the Somme are passed on to those who come after us, for remembering tomorrow.
Lord Stevenson of Balmacara (Lab)
My Lords, like others, I thank the noble Lord, Lord Lexden, for securing the debate and for his fine, balanced and very moving speech.
We have begun to see the Great War as more than just the industrialisation of death that it brought, and recognise the profound impact it had on the political, social, and cultural aspects of Britain. As we have heard, the Battle of the Somme is, for many people, the symbol of the horrors of warfare, but it is important that the commemorations also extend our understanding of the impact these battles had on our national outlook.
Today is Commonwealth Day, and it is right that we acknowledge that the British and Empire Army that fought the First World War a century ago had more in common demographically with the Britain of 2016 than it did with that of 1916. This does more than just explain the facts of our imperial past; it speaks to a powerful shared history that can help us understand why modern Britain functions as well as it does.
Many noble Lords drew attention to the contribution made by men of Ireland. Of course, the way the two communities can now come together is important, perhaps helped by the events of May 2011, when Her Majesty the Queen honoured the Irish war dead as she laid her wreath in the Garden of Remembrance in Dublin.
At home, the First World War led to changes in the role of the state, with the Government having to take previously unparalleled action on food, rents and wages. It affected the franchise, too: a reform of the electoral system was deemed necessary after the First World War as millions of returning soldiers were not entitled to the vote. The 1918 Act saw the size of the electorate triple from 7.7 million to 21.4 million, with women making up 43% of the electorate.
Indeed, the war brought many changes in the lives of British women. It is often represented as having had a wholly positive impact, opening up new opportunities in the world of work. Indeed, it is true that the number of women in the workforce rose to more than 1 million. But, as a forthcoming exhibition, “From Corsets to Bras”, will show, it also presaged changes in other ways, such as clothing, when female workers threw off the confines of their tight Edwardian clothing to adopt shorter skirts, looser shirts and even, in some cases, trousers. As we dig deeper into their lives, we recognise, of course, that the reality was more complex. Women’s wages, although routinely portrayed in the wartime press as high, remained significantly lower than those of their male counterparts—a battle that continues to this day. It took until 1928 for women to get an equal electoral franchise.
Such complexity will be found in every component of the First World War, but it is through commemoration that we understand it more completely. I pay tribute to what has been planned for July 2016 by the BBC, 14-18 NOW, and the AHRC, as well as in situ, and look forward to these events throwing new light on these issues.
The Earl of Courtown (Con)
My Lords, I join with other noble Lords in congratulating my noble friend Lord Lexden on his speech and his choice of debate. A hundred years ago, our country was preparing for what was to become our bloodiest battle. For many in Britain, the Battle of the Somme was the most remembered episode of the First World War. As my noble friend said, there are few communities across the country that were not affected by the Somme.
At this point, I think it would be useful to illustrate how those at the front felt by reading an extract from my grandfather’s diaries of the day. This is from Friday, 15 September 1916:
“A day of very great things. A very fine day. Advance has been made satisfactorily in most cases. So far as one can hear the objectives have been reached. The new caterpillar things have done wonders and fairly put the wind up the enemy. Went to Mametz this afternoon and walked towards Montauban. Wonderful night—masses of troops and very large bodies of cavalry”.
The Somme centenary comes at the midway point in the Government’s First World War commemorative programme, as set out by the Prime Minister in 2012, which has already included marking our entry to war on 4 August 2014 and the start of the Gallipoli campaign in April 2015. On 31 May this year, we will be commemorating the Battle of Jutland, along with our German friends, and the wider war at sea.
There will be a number of events taking place to commemorate this important centenary of the Battle of the Somme. This is our opportunity to commemorate the courage and sacrifice of all those who gave their lives at the Somme and to ensure that their legacy lives on. Plans to commemorate the Somme are our most ambitious yet. Several events are planned. On 30 June, the eve of the battle, there will be a service at Westminster Abbey, attended by Her Majesty the Queen, followed by an all-night vigil around the Grave of the Unknown Warrior. Also on 30 June there will be a military vigil at the Thiepval Memorial to the Missing, in France. The memorial will be fully restored and lit for the first time, thanks to government funding. Vigils will also take place in Scotland, Wales and Northern Ireland. They will be held at the Scottish National War Memorial in Edinburgh Castle, the National War Memorial in Cardiff and Clandeboye and Helen’s Tower, in County Down.
On 1 July, the centenary of the first day of the Battle of the Somme, a national commemorative service will be held at the Thiepval Memorial in France, along with our French comrades. The service will reflect the story of the whole battle, capturing the scale and reach of the conflict, and the impact it had on all the lives of all communities in the United Kingdom and France. This event will be attended by around 10,000 guests, including members of the royal family; heads of state, senior politicians and representatives from all the nations involved, and around 8,000 members of the public.
Here in the United Kingdom, there will be a Somme parade through Manchester, featuring military bands and representatives of the battalions that were present at the Somme; a commemorative service will then take place at Manchester Cathedral. In keeping with Government's key themes for the centenary—remembrance, youth and education— there will also be cultural and educational events at the city’s Heaton Park, featuring an experience field, a national children’s choir, film, dance, and the Hallé Orchestra performing works of George Butterworth, the young English composer who died at the Somme who was mentioned by my noble friend Lord Black. Manchester is a highly suitable location, northern England having been the heart of the Pals Battalions and the country’s huge industrial effort for the Somme. Many of the commemorative events in London, France and Manchester will be televised, which will ensure that the whole nation has a chance to remember. The Government will also encourage communities across the UK to hold acts of remembrance on 1 July in a way that feels appropriate to them. Further details will be published in April.
The battle itself lasted 141 days, up to 18 November. There will be a daily service of remembrance at the Thiepval Memorial hosted by the Royal British Legion and the Commonwealth War Graves Commission throughout the 141-day duration. A range of events will also take place at Commonwealth War Graves Commission cemeteries across the region throughout this period. This will allow regimental associations, communities and descendants to participate on a day of particular significance to them.
The Government are also funding a series of regional debates for schools, a project that will enable pupils to debate the causes, conduct and consequences of the war, including the Battle of the Somme, with a panel of experts. The first of these is due to begin in June. As well as the national commemorative events, government partners will be involved in Somme-related activities. The 14-18 NOW culture programme recently announced its arts events for this year, which focus on the Somme and the home front. Remembrance, youth and education are key government themes. They are at the heart of the culture programme and will engage young people and new diverse audiences.
The Imperial War Museum will open to the public overnight on 30 June and “The Battle of the Somme” film will be made available to centenary partnership members to show in public venues. Around 200 organisations have so far signed up to screen the film. The Heritage Lottery Fund has funding available for local communities to explore their First World War heritage and I encourage them to apply.
My noble friend Lord Shrewsbury drew attention to the Staffordshires and their losses. The noble Lords, Lord Bew, Lord Rogan, Lord Empey and Lord Browne, also mentioned the losses from Northern Ireland. I remember from my youth the losses in the memorials further south, where my family were at the time.
Many noble Lords also mentioned the Commonwealth and the sacrifice of those countries. It is Commonwealth Day today, as the noble Lord, Lord Stevenson, said, so it is only right and proper that we remember that sacrifice and the enormous contribution from what is now the Commonwealth. We could not have prevailed without them. Representatives from all Commonwealth countries are invited to all our commemorative events. My noble friend Lord True drew attention to other countries and their losses.
There have been more announcements in the last week to 10 days. Her Majesty’s Government announced further plans to mark the centenary of the Battle of the Somme in Manchester on 1 July. These include the Somme 100 parade throughout the city and the remembrance service in Manchester Cathedral. Nearly 3,000 people have applied for free tickets to attend the concert. There will also be an experience field, as I mentioned before. I am delighted that the Heritage Lottery Fund awarded almost £100,000 to this experience field, which will explore what life was like for people serving at the Somme as well as those left at home.
Of course, we should also not forget the role of women in the First World War, as touched on by the noble Lord, Lord Stevenson. I emphasise that all UK Government commemorative events for the Somme will recognise the important role that women played in the war effort, be it as factory workers, nurses on the western front and at home, or as loved ones sending letters to the battlefield. My noble friend Lord Lingfield referred to the role of young people. As I said earlier, children and young people are at the centre of our First World War centenary programme and will play a key role in all our commemorative events.
It is entirely appropriate that this House should take a moment to honour this centenary. One hundred years on, our thoughts and gratitude are with all those who were affected by this battle.
Housing and Planning Bill
“( ) The regulations shall not apply if the Secretary of State determines that the cost for a local authority of assessing the incomes of its tenants would be disproportionate to the additional rental income achievable from this provision.”
Lord Best (CB)
My Lords, Amendment 75A would enable the Secretary of State to exempt a local authority from the requirement to raise rents for those earning over £30,000 outside London, or £40,000 in London, if the administrative costs of collecting the extra money would absorb a disproportionate amount of the extra cash. What would be disproportionate in terms of the cost of assessing incomes and collecting the extra rent? I accept that this is subjective but surely if more than one-third or more than 40% of what is obtained in additional rent goes on securing that additional rent, a line must have been crossed. If charities spend 40% of the donations they raise on raising the money in the first place, they come in for huge criticism. High earners could rightly protest if so much of the extra rent serves no useful purpose at all.
Is it likely that admin costs really could absorb up to 40%—or more—of the extra income raised? We have heard just how much work is likely to be involved in obtaining these higher rents. If the same cost as for housing benefit claims was possible, using the housing benefit team to do the job, it seems from the evidence we have had from a number of local authorities that the cost would be between £30 and £40 for each household investigated. Around one-third of tenants, on average, would have to be assessed as these are the tenants not receiving housing benefit. That is a smaller number than the numbers for housing benefit, so there would be fewer economies of scale and higher costs than for administering HB. With universal credit comes the change to the councils’ role, with councils having a smaller role in its administration, and piggybacking on the housing benefit process will no longer be possible, quite apart from the complications of the interaction between universal credit and housing benefit, as set out by the noble Baroness, Lady Hollis. So the admin costs for the higher rent regime will rise.
Let us take the figure as being somewhere between £30 and £40 a throw, not forgetting that there are set-up costs, such as the new computer program, and the costs of the appeals system, as well as the costs of returning overpayments of rent and compensation when mistakes have been made. The £30 to £40 per tenant not on housing benefit looks tight. Now let us consider the circumstances of an individual local authority. In an area of relatively high incomes for council tenants and a big gap between council rents and market rents—that sounds like central London—there may be some serious money to be raised. Conversely, in an area of low incomes for almost all council tenants and only a narrow gap between council rents and market—private rented sector—rents, there will be very little extra money to collect from higher earners.
I will try an example. In an unnamed local authority in the northern half of England, market rents are only £20 per week above council rents, and never more. The most that could be gained here from a higher earner is £1,000 per annum, which would be payable by any tenant earning more than £40,000, on the basis of the 10p in the pound taper. No tenant would be paying more than this, however high their income goes. We know that an average one-third of tenants will need to be assessed because they are not claiming housing benefit but we also know that nationally only 7% will actually be earning above the £30,000 threshold—£40,000 in London.
In my example, a smaller proportion than nationally will be in the higher earners category, perhaps 3% instead of the national figure of 7%. So for every 100 tenants, assessments will be necessary for 33— one-third—and extra rent will be collectable from seven, perhaps in this case only three because the area has fewer high earners. The 33 being assessed will cost, say, £1,200 per annum. The three will contribute, not the maximum of £1,000 per annum—£20 per week—but, perhaps, £300 per annum, yielding £900 per annum for the three of them, which is less a return in extra rent than the administration costs in my—possibly fairly extreme—northern local authority example.
Lord Kerslake
My Lords, I support the amendment of the noble Lord, Lord Best. I will also speak to Amendment 81A, which I supported, and 81B, which I put forward and lead on. These amendments go to the fundamental question for local authorities of whether the costs they will incur will be properly recognised within the arrangements. As has been well put by the noble Lord, Lord Best, in some instances the costs may make the whole policy not worth putting in. In fact, we may find—depending on the outcome of all this—that the costs will raise a question about the whole policy. However, at the very least, in different housing markets it most certainly will raise questions. Therefore, it is absolutely right to say that in circumstances where it clearly does not make sense to implement the policy in terms of costs and benefits, there is provision to not proceed with it.
The other two amendments seek to be very clear that administrative costs will be covered. I speak specifically to Amendment 81B. Within the draft Bill, it says the Minister “may provide for deductions” to cover costs. In other words, it is a permissive choice for Ministers whether or not they make these deductions. It seems inconsistent with the intent of Government and therefore the amendment does something very simple, which is to change the “may” to a “must”, to put it beyond doubt that, as this is a government policy which local authorities are being asked to implement, they must properly provide for the costs of implementing that policy.
This is the key. First, in order to access the information about incomes, the net has to be cast wide—effectively ask all tenants to secure information about less than 10% of the tenants. That is the first point. Secondly, if this is operated in a fair way there will be complexity. There is no doubt about that. The noble Baroness, Lady Hollis, very precisely pointed to one of the issues of fairness: if people’s income changes, in the interest of administrative simplicity you might say, “We won’t change the rent”, but that would be extraordinarily unfair if people have lost jobs or changed roles and their income has changed significantly.
As we know, in the labour market that we work in, people can see their incomes as householders change very rapidly indeed—from one week to the next, as I said earlier. Therefore, you have complexity. You have complexity about the different benefits within the system, about the makeup of families, and about how you assess who the higher earners are within those families. With that complexity comes cost. It is an absolutely logical consequence of seeking to introduce a fair system.
Lord Stunell (LD)
Does the noble Lord agree that with complexity also comes error? Some of us who, when at the other end of the building, spent a lot of time helping constituents deal with housing benefit queries and difficulties are well aware of the delays and problems in that system and foresee something at least comparable when this system is brought into play.
Lord Kerslake
The noble Lord makes a very powerful point. With any new system—or indeed with very mature systems, such as housing benefit—there are huge risks of error and cost in correcting it. I have run a housing benefit system and know just how easy it is to run into difficulties with it. I also know how costly it is to run because of the complexity of individual circumstances. We are here creating a whole new parallel system of assessment that sits alongside those for universal credit, housing benefit and so on. It will be new, and we will not establish a lot of the detail until we have run it. That, by the way, is why I still feel strongly that a pilot to test the operation of the system would be very valuable, not least because it would tell us how much cost is involved and what are the potential error rates.
It is essential, first, that we recognise that this may not be worth doing nationally, and certainly not locally. Secondly, we must give comfort in the Bill to local authorities that their costs will be covered. Thirdly, we must recognise that if this is to be a genuinely fair system, it will come with complexity and significant cost.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support Amendment 75A, to which my noble friend Lord Stoneham has added his name, and Amendment 81A, to which I have added my name. Earlier, we debated at great length the cost to local authorities of administering pay to stay. The system appears disproportionately bureaucratic and, as we are uncertain how implementation will work, it will be extremely costly to sort out.
Housing, revenue and benefits officers are already working to full capacity. I have yet to ask the officers on my council just how many more of them they think they will need to administer this system. As we have heard, the absence of any detail means that no one can be sure that the additional rental income will cover the cost of administration. Local authorities should not be out of pocket. There is very little detail on the scheme and no transparency, and it seems that the Government are just transferring costs to local authorities.
On market rents, we have heard that there will be a flat rate of income. When tenants reach that rate, they will be assessed to pay market rents on a sliding scale. However, we have not heard anything about whether the taper will stop at a lower or higher level of rent. Will the market rent be assessed local authority by local authority, or will it be a flat rate? The Secretary of State has yet to tell us. Will tenants paying additional rent on the taper in the north stop paying at a lower level than those in the south-east, where the taper may carry on for some time, because market rents are much higher?
It is not surprising that local authorities are gaining the impression that the Government do not value them or the contribution that they make to their areas. I am very disappointed that we have so little detail at this stage on this very important clause, and I support the amendments.
Lord Stunell
My noble friend has raised an extremely important point relating to market value assessment. I wonder whether the Minister would like to comment on the fact that the DWP has market rents determined for housing benefit purposes, which is a hotly contested topic in many areas. Perhaps she would let us know whether that is indeed the benchmark that is intended to be used.
Lord Campbell-Savours
My Lords, the noble Lord, Lord Best, referred to an authority—I did not know whether it was a mythical authority or a real one that he was not prepared to identify. I can tell him that in the county of Cumbria, there are a number of authorities that would fall within the basic case that he was making: certainly Carlisle District Council; Barrow-in-Furness; probably Copeland, which is in Whitehaven; and, apart from the lakeland part of the districts concerned, certainly Allerdale.
When I asked councillors in Cumbria the other day what the level of rent was in the private sector of houses that had been sold off, I was told that there was very little difference—a marginal difference—maybe a fiver or a tenner on a property. So what are the costs to be incurred? The Bristol brief, which I assume everyone has received, goes into a little more detail. It says that even though very little detail is given in the Housing and Planning Bill, as a minimum the scheme would have to include income verification, data matching, measures to discourage and combat fraud, dealing with inquiries, market rent setting, rent accounting, audit processes for the additional rent raised and processes for internal and external review. That does not include appeals and overpayment recovery. There is an additional factor: investigation. We know that the departments concerned with the benefits system have investigators, which cost money. I am presuming that local authorities, particularly where they have substantial housing stock, if they are to meet the Government’s targets on these matters, will have to employ people to carry out this work. These all add to the administrative costs of implementing the scheme in areas where the differences between the private sector rent of a former local authority property and the local authority rent are only marginal.
That leads me to the view that the Minister should very seriously consider Amendment 75A, because it at least allows local authorities to have in mind what those costs would be and whether they should not proceed to pursue people in the circumstances that will arise.
Lord Kennedy of Southwark
My Lords, this group of amendments, as we have heard, concerns the payment of rental income to the Secretary of State and seeks to deal with issues for both tenants and local authorities that the blanket application of the policy may create. Amendment 75A, which was moved by the noble Lord, Lord Best, and supported by me and the noble Lords, Lord Kerslake and Lord Stoneham of Droxford, seeks to give the Secretary of State the power to disapply the policy if it becomes clear that the costs of assessing the incomes of local authority tenants would be disproportionate to the additional rental income achievable from this provision. From what we have heard already, in many low-wage areas this assessment would be a complete waste of time and money, and achieve next to nothing. This would give the Secretary of State an easy and convenient way out of the mess that has been created.
Amendment 81A in the name of the noble Lord, Lord Kerslake, the noble Baroness, Lady Bakewell of Hardington Mandeville, and my noble friend Lord Beecham, seeks to ensure that the full administrative cost of undertaking this exercise for the Government will be taken into account and deducted from any payment made to the Government. Again, I cannot see how the Government can really resist this; otherwise they are expecting local authorities to do all the work for them, pay them the money and bear all the costs. That does not strike me as very fair at all.
In Clause 84(3), the Government have given themselves in effect a get-out-of-jail-free card by saying that the regulations may provide for deductions to be made to reflect the administrative costs of local authorities. That is just not fair. Amendment 81B proposed by the noble Lord, Lord Kerslake, and myself, would change “may” to “must”. This is an important change which needs to be made.
When I was looking at the Bill, I spotted Clause 84(5), and we tabled Amendment 82. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
That is utterly ridiculous—a kind of “think of a number and double it” clause. It is absolutely ridiculous that that is in a Bill before your Lordships’ House. If it was not so serious, it would make you laugh. When you think back to Clause 73, no wonder the Government are seeking to keep the money collected, even though they may have taken too much, because they may have made totally ridiculous assumptions in arriving at the figure in the first place and may have collected too little. They are seeking protection through this clause, and it has to go.
I shall draw my remarks to a close but, as this is Committee, I may intervene further during the response from the noble Baroness, Lady Evans of Bowes Park.
Baroness Evans of Bowes Park (Con)
My Lords, this group of amendments primarily concerns the treatment of administrative costs for local authorities. We have already given a firm commitment to allowing local authorities to recover a reasonable amount of the costs of operating the policy, and hope that commitment is welcome.
I begin with Amendment 75A, on the assessment of household income and the costs involved, which seeks an exemption for local authorities when the cost of doing the assessment is more than the rental income likely to be received. Under the policy, tenants are likely to be asked to declare their household incomes. We do not want this to be a time-consuming process. The department is working with local authorities on the options for how income is defined, building on the experience of other departments in bringing forward income-based assessments, such as tax credits, universal credit and housing benefit. Our consultation response confirms that tenants on housing benefit would be excluded from the policy, which will significantly reduce the caseload of local authorities. We are working through the options in relation to universal credit, and engagement with local authorities is important here. We will think through carefully the issues that noble Lords raised about areas in which the additional income would be less than operating the cost of the policy, because we agree that that is an important consideration, although details could be set out in regulations if necessary.
Amendment 81A asks for administrative costs to be met. We have given a reassurance on this, subject to an assessment of the actual costs of operating the policy, and will provide an update following the conclusion of engagement work with local authorities. Officials have a regular working group with local authority offices to test the implementation plans and costings; as noble Lords have said, there will be different issues in different parts of the country. That will directly inform the secondary legislation. We are absolutely committed to having front-line experience inform policy, for the very reasons that noble Lords have raised.
To conclude this group, Amendment 82 deals with the approach to returning money to government. The options, as we have outlined, are to do so based either on actuals or on a formula. We need the flexibility to put in place the most appropriate approach, and are dealing with local authorities in this matter; that will be part of the discussions with the implementation group. I hope that the commitment to provide local authorities with a reasonable amount of admin costs and the engagement that we are having with local authorities to make sure that they are involved in forming policy will encourage the noble Lord to withdraw his amendment. But of course we welcome further discussion on any of these points and are happy to meet noble Lords who would like further information or discussion on these matters.
Baroness Hollis of Heigham (Lab)
Why on earth should we be pleased that the Government will allow local authorities a reasonable proportion of their costs to be reimbursed? The whole of any profit will go to central government. Yet apparently the costs of raising that money may be divvied up in whatever proportion the Secretary of State judges reasonable. That is unacceptable. If we are supposed to be raising money for the Chancellor of the Exchequer, he should pay the full costs of so doing.
Lord Kerslake
I am grateful for the Minister’s assurance on covering the costs. I would have thought, therefore, that putting “must” in rather than “may” would not of itself cause any particular issues, given that that is the Government’s intent here. What would be helpful is if we could, when the Government firms up the taper, have a clear analysis of the potential income that is likely to be raised and the likely costs of collecting that income.
Lord Kennedy of Southwark
As my noble friend Lady Hollis has said, can the Minister when she responds say why it is reasonable costs and not all the costs that have been incurred? It is totally unfair if local authorities have to bear some of the costs and all the profit—as my noble friend said—goes to the Government.
Can the Minister also comment on Clause 84(5)? It is an absolutely ridiculous clause the way it is written. It needs to be improved, rewritten or taken out.
Baroness Evans of Bowes Park
I thank noble Lords for their questions. As I have said, the Government are committed to helping cover reasonable costs. We will work with local authorities to make sure that their thoughts are fed into this process; that is the position we are taking.
Lord Kennedy of Southwark
Yes, I know that is the position, but can the Minister tell us why it is not full costs? That is the question we are asking.
Baroness Evans of Bowes Park
There are many things to be taken into consideration and, as I have said, we will discuss with local authorities how best to implement this.
Lord Kennedy of Southwark
Okay. We are clearly not going to get an answer from the Government Front Bench on that. I think it is totally unreasonable not to reimburse councils for their costs.
What is the Government’s response on Clause 84(5)? It is a ridiculous clause the way it is written. What is going to happen there?
Baroness Evans of Bowes Park
I will have to take that away and write to the noble Lord.
Lord Stunell
I thank the noble Baroness for what she said about taking serious note of the possibility that in some areas there is not a viable level of market rent to support action, and I urge her to take that back to the department and think it through carefully. Clearly quite an important consideration is the calculation of the market rent in a particular area. As I mentioned in my attempted intervention a few minutes ago, at the moment there is a Department for Work and Pensions assessment of market rent for the purposes of the payment of housing benefit, which I believe is something like the lowest quartile of the property available in the local reference area. Certainly, that causes real difficulties in some areas such as my own in Greater Manchester that have higher local market rents. That illustrates a problem I think the department will have in assessing this. If the ceiling were taken at the DWP level it would mean that plenty of areas would not be as viable as they might be if a higher level were taken. Correspondingly, if a higher level is taken you will have the paradox of those on housing benefit being limited to one market value in the area and those who are paying higher rents as a result of this being judged by a different market level in the same area. I just want to alert the Minister to some of the problems that could lie ahead, certainly in my own borough of Stockport and, no doubt, in many other places as well.
Baroness Hollis of Heigham
I want to follow up my noble friend’s well-spotted point that I had not picked up on. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
Likely to be borne out by events? Can I just ask the Minister a very simple question which I think might allay our fears? If the Government have got it wrong, do they reimburse local authorities?
Baroness Evans of Bowes Park
I have already given the answer to the noble Lord. I will write to him.
Baroness Hollis of Heigham
I am sorry but this is a subsection of Clause 84 and we do not know what it means and what the implications are. This Bill has gone through the House of Commons at great length and Ministers cannot tell us what it means?
Baroness Evans of Bowes Park
We fully intend to reimburse local authorities for reasonable costs and need to establish which costs are relevant. We would not expect the Government to write a blank cheque. We expect that some local authorities may be more efficient than others. To reiterate, we will reimburse all reasonable costs.
Lord Best
My Lords, I thank all noble Lords who have joined in the debate. I thank the noble Lord, Lord Kerslake, who reminded us of his earlier amendment asking for a pilot scheme. If ever I saw a case for a pilot, this is it. Surely we need to test this out on the ground in a few places to see what the costs and the realities are.
I am grateful to the noble Baroness, Lady Bakewell, and to the noble Lord, Lord Campbell-Savours, who listed all the things that have to go into the administration of the scheme—processes for verification, data matching, combating fraud, market-rent setting and the rest. I am grateful for the support of the noble Lord, Lord Kennedy of Southwark, and I am also grateful to the noble Lord, Lord Stunell, who made the point that an artist rather than a scientist may be behind the definition of “market” in the context of market rent. However, the Minister has given us some reassurances and I want to pin a good deal of hope on them.
The recovery of reasonable costs leaves the matter open. I was a bit alarmed by the impact statement coming up with a figure which I calculated to be about £15 per case, which is about half what is currently spent on housing benefit cases. I think that we will see a higher figure for these cases than for housing benefit cases. The figure of £15 given in the impact statement looked rather low, but no doubt that is all to play for and it is the Government’s intention that costs will be fully reimbursed. Possibly more important is the recognition by government that there will probably be some cases where it is not worth going out and collecting the money because the administration costs will exceed, match or be very close to the amount that will be raised. I am sure that the Local Government Association will have a good deal to say about this and that there will be some tough negotiations there, but I think that we are left with some hope that, where the administration costs are disproportionately high, the Government will not proceed with the scheme. I beg leave to withdraw the amendment.
Lord Beecham
Lord Beecham (Lab)
My Lords, this group deals with the supply of information by HMRC in respect of the income of tenant households, as enshrined in Clause 81. The clause states that HMRC may disclose such information for the purpose of enabling a housing authority to determine whether it is obliged to charge a tenant a specific rent level and for determining what that level should be.
Subsection (2) provides, reasonably enough, that the information may be disclosed only to a local housing authority, the Secretary of State or a body with which the Secretary of State makes arrangements for the information to be passed between HMRC and local housing authorities, but it also, somewhat mysteriously, provides that it may be disclosed to,
“a public body that has been given the function of passing information between HMRC and local housing authorities”.
It is one thing for HMRC to supply details to a local housing authority but quite another for it to do so to some as yet undefined organisation—in the words of the Explanatory Notes,
“a single body nominated by the Secretary of State to act as the ‘gatekeeper’ for this purpose”,
albeit that HMRC has agreed to this procedure. Perhaps the Minister will indicate whether there was a proper consultation with HMRC or whether it was simply asked to frank the proposal.
Lord Campbell-Savours
My Lords, I am very worried about this amendment and wish to speak briefly to it. I foresee some junior employee in one of these private companies sitting there with, on his or her desk, the most personal information about individual council tenants and their incomes. I find that utterly deplorable. I am astonished that Conservative Members of this House and the other place did not object to this. Historically, certainly when I was in the Commons, whenever there was an argument about the revealing by the Inland Revenue, as it was at the time, of information outside the government department, there was always a storm of protest. But people seem to presume that this is acceptable on this occasion. I wait to hear the Conservative Members of this House and government supporters challenge all the implications that lie behind this clause.
This is wrong. I would also like to know the detail. Will there be a regulation—I am sorry to have to ask for a regulation now—which defines precisely the nature of the details to be provided by HMRC? Where subsection (2)(d) refers to,
“a body with which the Secretary of State has made arrangements for the passing of information between HMRC and local housing authorities”,
are those bodies to be defined somewhere? We presume that they will be private companies, but are there other organisations which have not been mentioned which we might wish to consider when we come to Report?
Lord Shipley (LD)
My Lords, my name is attached to Amendment 80A, but I fully subscribe to the points that have been made so far about Amendment 80. A range of issues is involved and the Government would do well to think very carefully about that. I will come back to that in a moment.
On the assumption that HMRC has a role, Amendment 80A simply says that,
“an arms-length management organisation, tenant management organisation or local housing company wholly owned by its local authority which is managing social housing”
should also be counted in terms of being bodies which can receive information from HMRC. It is not clear in the Bill so far that that is the case. I suspect that is an oversight, but I look forward to the Minister’s confirmation that that indeed is the case.
There is, however, a broader issue about the role of HMRC. There is the role of third parties getting access to private information and the control of that. That has been very well put by noble Lords in this grouping so far. However, there is another one which I think has to be looked at very carefully. That is how the information flows from HMRC in the first place, the reason being that with tax returns, for example, it may be straightforward for many individuals but for some, perhaps self-employed people, it may not be, and people have to file tax returns months after the tax year, so there could be significant levels of fluctuation in people’s income.
We have heard all the arguments around this, of peaks and troughs during the year and so on. A lot of thought needs to be given to this issue about the security of data and the bureaucracy that is being created. We heard in the last group about reimbursement of costs to local authorities for the work they have to undertake. Of course, there are ways of getting round this—a number have been suggested. I hope the Minister will take very seriously the fact that we do not want to create an enormous bureaucratic structure to deal with this when there are simpler methods to achieve the objective.
Baroness Williams of Trafford (Con)
My Lords, I am sure that all noble Lords will be pleased that this is a smaller group than those we debated earlier. It concerns the role of HMRC in relation to data sharing on income.
The noble Lord, Lord Beecham, asked if we had consulted with HMRC and the Information Commission. I can confirm that we have.
I will start by outlining the purpose of Clause 81. The power has been taken to enable data sharing between Her Majesty’s Revenue and Customs and local authorities if it is necessary to verify the income details provided by tenants. This could be achieved directly between HMRC and local authorities, or the Government could choose to set up a body to make the transfer of data simpler. Noble Lords have raised concerns about private companies using income from tenants for purposes other than verification. I can reassure noble Lords that there is no intention to share the details of tenants directly between Government and private companies.
Baroness Williams of Trafford
I hope I will give further comfort to the noble Lord.
The HMRC data-sharing powers allow a sharing of income information for the landlord’s purposes under this policy only. If the landlord shares the information with anyone else, powers in the Bill could see criminal proceedings brought against them.
It may be that noble Lords have in mind that local authorities already contract their services out to private companies to collect personal information on income, and that they may do the same for the operation of this policy. Those authorities which contracted out services would have very clear rules in place about that function. The powers in the Bill do not cover that function. I therefore assure noble Lords that we take data security very seriously.
Amendment 80 would remove the subsection which allows HMRC to disclose information to a public body which has been given an intermediary function between HMRC and local housing authorities. I thank the noble Lords, Lord Kennedy and Lord Beecham, for this amendment, as it gives me an opportunity to provide greater clarity over the subsection’s purpose. The intention is to enable data sharing by HMRC and local authorities for the purpose of income verification in the most appropriate way. The clause enables the function to be passed to a public body to act as a gatekeeper of information.
We are developing our thinking around how this function would operate in practice if it is needed. We want to retain flexibility in the Bill so that we can put processes in place to help local housing authorities implement the policy in a streamlined and efficient way. This may involve the creation of a public body to carry out that function on behalf of others.
The aim of this provision is to make the process as simple as possible to implement if HMRC needs to share information. I hope that noble Lords will understand that, should it be necessary to do it via a public body, that option should be available.
Lord Beecham
How does the possibility of a private organisation being involved fit with the requirements of the 2005 Act? Is a private organisation somehow to be made into a public body to carry out the function? I do not see how that works.
Baroness Williams of Trafford
My understanding, my Lords, is that it will be private data to a public body.
Lord Campbell-Savours
If Capita were appointed by the local authority, could it in any circumstances learn of the income of a council tenant?
Baroness Williams of Trafford
It could, but it could not share it. Anyone who holds data on another person is obviously restricted by certain rules. In this case, I have made it very clear that it is a criminal offence for that body to share data about the tenant to anyone other than, let us say, HMRC.
Lord Campbell-Savours
Just to clarify this a step further: would a young lad or young lass in the office have access to documents on the income of a council tenant if they worked for Capita?
Baroness Williams of Trafford
My Lords, I do not know whether the name would be available. I can certainly provide—
Baroness Williams of Trafford
They might know the address of the property. I do not know whether data protection rules would allow all the detail on that person to be shared or only the relevant detail relating to their income.
Baroness Hollis of Heigham
My Lords, Serco, Capita or Liberata, the companies that I was citing earlier, are currently administering housing benefit. That is because, to some extent, the tenants seek housing benefit. But the Minister seems to be saying that, when it comes to pay to stay, they cannot have that information and that only local authorities can. Yet, as we know, particularly where household income is dependent on the second earner, tenants will move from a position of claiming HB, which protects them from pay to stay, to not needing HB, whereupon they may be exposed to it.
Secondly, it will produce huge problems in the role of universal credit. Some people on UC will be claiming HB, and that information from the local authority side may be run by Serco. Other people will be claiming UC but not claiming HB, but that information will have to come presumably only from the local authority back to DWP. I really cannot see how that can work.
Baroness Williams of Trafford
The noble Baroness will accept that if someone is in receipt of housing benefit, this will not apply to them anyway, so I am not quite sure what she is driving at.
Baroness Hollis of Heigham
My Lords, tenants on housing benefit may have that benefit administered by Capita, Serco or Liberata. When those tenants seek housing benefit, they know that their finances will be scrutinised. I have never known it to happen that HMRC information is needed to do that. But when instead you are dealing with pay to stay, you have got to go to HMRC to get reliable information. What that means is that people who move between HB and pay to stay or those who are claiming UC with HB at some points and at other points not will be moving between both the private companies collecting information and local authorities which, as the Minister has said, will exclusively hold HMRC data. It cannot work.
Baroness Williams of Trafford
My Lords, I am not sure that I entirely follow the noble Baroness, but that may be my deficiency rather than hers. Local authorities hold vast swathes of data about various things. I know also that the holding of data is tightly controlled, particularly in terms of sharing. I would say therefore to noble Lords that to share data more broadly than is allowed is already a criminal offence.
Lord Campbell-Savours
My noble friend is talking about people who are not in the benefits system at all, and yet their salaries or earnings can be scrutinised by a private employer.
Baroness Williams of Trafford
My Lords, I do not know how their information could possibly be scrutinised by a private employer because it is shared between HMRC and the public body.
Lord Beecham
Perhaps I may interrupt the Minister in order to ask the Bill team or someone to check on the applicability or otherwise of the Commissioners for Revenue and Customs Act 2005 in relation to this matter because I do not think that any of us are really in a position to confirm what the position is. I think that this needs proper legal advice.
Baroness Williams of Trafford
I most certainly will do that, and I now know what the 2005 Act is; I defer to the noble Lord’s knowledge in that.
Amendment 80A seeks to put into the Bill a reference to arm’s-length management organisations; that is, tenant management organisations and local housing companies, in relation to the bodies that HMRC information can be passed to. I understand the intention behind the amendment, but I believe it to be unnecessary. Local housing authorities which have outsourced part or all of their housing management functions to another body such as an ALMO will have done so under powers in the Housing Act 1985. The Act provides that any function performed under such an agreement shall be treated as if it were done by the local housing authority. Therefore, when that housing management function includes functions related to implementing the policy for high-income social tenants, such as determining and setting rents, an ALMO or other body would be treated as if it were the local housing authority. In short, the reference to “a local housing authority” in Clause 81 already includes a body carrying out that housing management function on behalf of the council.
Once again, I hope that my reassurances—although I am not sure they have—have been enough to persuade the noble Lord to withdraw his amendment.
Lord Bassam of Brighton
“Community cohesion
(1) Upon the coming into force of this Act, the Secretary of State must undertake a review into the effect that Chapters 3 and 6 of Part 4 will have on community cohesion within all local authority areas.(2) A report on the review must be published, and laid before each House of Parliament, no later than six months after the coming into force of this Act.”
Lord Bassam of Brighton (Lab)
My Lords, these amendments would require the Secretary of State to give consideration to the issue of community cohesion—something that has come up several times in the debate on pay to stay this evening—and to consider family life when considering the measures in this Bill on rents for so-called high-income tenants and the ending of secure tenancies. They would require consideration to be given at the end of a fixed-term secure tenancy to the effect of not granting another tenancy, and the effect that that would have on family life—for example, whether a child is forced to move school and whether the family has to move away from local amenities they rely on or a family support network. They also require the Government to undertake a review into the effect that the pay to stay and ending of secure tenancies provisions in the Bill will have on community cohesion.
A council home does not simply provide a roof over one’s head. It enables a sense of belonging to a community, particularly a community that is inclusive of people from different and diverse backgrounds. My argument is that the measures in this Bill put this severely at risk. There is a risk of bringing this cohesion to an end. Shelter estimates that 113,000 affordable council homes will be lost as a result of this Bill. The Local Government Association analysis suggests that some 80,000 council homes will be lost by 2020. That in itself could drastically change the make-up of many of our communities. Add to that the number of people who will have to leave their homes as a result of the pay to stay provisions, and we are looking at the serious dismantling of communities across our country.
I think it was the Minister who said earlier that some 46,000 households in London would be affected by pay to stay. My guess is that we need to double that to get an estimate of the impact across the country. Put these figures together and the multiple impact of pay to stay and the ending of secure tenancies, and we will see big changes to the make-up of many of the communities that currently benefit from social housing. It will be particularly apparent in areas—many in London—that have extremely high market rents. In these areas council housing is even more vital to maintaining a mixed and cohesive community, providing housing in the area for people who would otherwise be forced out.
I argue that a community can thrive only if there is housing in the area for those who need to work there—the people who work in local shops, post offices and schools. If people have to live miles away to commute in to provide services for those who can afford to live in the area, we lose all sense of balance in the community and it is hollowed out. It is unsustainable. We can see it happening now in many London boroughs as private rents soar and people cannot afford to stay and live there. Council housing is supposed to even out this imbalance and to help those who cannot afford market rent, but also to allow people to live in mixed communities.
Under the Bill, households that reach the Government’s threshold of just £40,000 in London and £30,000 outside London will be forced to pay market rents or to leave. Market rents in boroughs such as Camden are completely out of reach for most working households, so what will happen to those now classed as “high income”? We will see people having to leave the areas that they have lived in for years and places in which they have built their lives and their children’s lives. The cost will be not just social break-up of communities, but a financial cost to the state, because when people are forced to move away from the social support networks that they have built up—away from families and friends, those who look after children or share caring—it becomes a cost. They will have to rely more heavily on local authority services.
To bring it down to individual households, just think of the potential damage that these provisions can do: parents unable to plan for their children’s schooling; friendships broken off every few years; few friendship groups and poorer community support networks, which currently thrive. I wonder whether the Government have given any thought at all to the impact on schools. What if a council decides on setting secure tenancies at three years at a time? Parents with children face the prospect of moving three, perhaps four times during the schooling of a child. It does not take much imagination to see how disruptive that can be for a family. Think, too, how disruptive it will be for the school, with a constantly revolving door of pupils and families, never knowing who or how many will be on the school roll from one year to the next. I ask this simple question: has the DCLG thought to talk to the Department for Education? If it has, what has the department said in response? Was this consideration ever factored into an impact assessment?
The Bill is a series of unintended consequences piled up as a cover for action designed to solve problems caused simply by lack of low-cost housing. The very least we can do is invite the Secretary of State to think about this measure and its impact on community cohesion, in particular on schools and families. The Bill, with its emphasis on reinforcing social housing as a tenure of last resort, runs the risk of taking us back to a world of rigid divisions in society. Worse than that, it would entrench them. Surely we should be encouraging mixed communities, full of people with different talents. Pay to stay, mixed in with short-term tenancies, will lead to social housing for just the very poorest. It will further stigmatise a form of tenure and, combined with short-term tenancies, create perpetually insecure families facing a series of costly moves.
I do not think the Government have thought through the long-term impact of the legislation, nor the multiple impacts of different changes that the Bill will bring in. If we are serious about community cohesion—something that the Prime Minister in particular has laid great store by in the past, with his plans for the big society—the very least we can do is begin to understand the long-term impact and the consequences of divisive and socially damaging legislation of this sort. I beg to move.
Lord Kennedy of Southwark
My Lords, two amendments in the group are proposed by my noble friend Lord Bassam of Brighton. As we heard in his contribution, they concern community cohesion and the effects of the pay-to-stay policies on it. Amendment 82AA would require the Secretary of State to undertake a review into the effect that the ending of secure tenancies and the pay-to-stay policies will have on community cohesion. Amendment 82GAB would require the landlord, at the end of the fixed-term tenancy, to consider the effect that a decision not to grant another tenancy would have on family life and community cohesion.
These seem very sensible amendments and should be of no concern to the Government. In fact, they should be fully in tune with the Government’s thinking. We might all have our own definitions of community cohesion; for me, it is as set out by my noble friend Lord Bassam of Brighton. It is where there is a common vision and a sense of belonging—family life and a role for everybody in the local community. It is where we have rights and responsibilities, a breaking down of barriers, a building of trust and the creation of a community.
Baroness Hollis of Heigham
My Lords, I also support my noble friend’s amendments. Like him and many others in this House, I have been a local authority leader. Many of us have been housing chairs, possibly on the way to becoming local authority leaders. Whenever we went round on what we used to call site visits, we could tell the stable community estates. They were the ones with no graffiti and no litter; in which people had carved out gardens around the base of flats or had put carpeting down on the public stairways. In those flats, there was no petty level of criminality; there were no rent arrears and no yobbing youths setting fire to mattresses in the garages. The community policed itself, and that was because there were people of a wide age range, a wide income span and a wide set of occupations and retirement. Those estates worked, and were the core—the heartbeat—of my city. As Nye Bevan said, they were part of the,
“living tapestry of a mixed community”.
That is what we all want.
I, and perhaps the Minister and other people in this House, have been around the inner-city estates in Detroit, the outskirts of Washington and so on. I saw areas there where, if you get a job, you leave your home; so nobody gets a job except recycling the drugs economy or working on the streets. In these estates, children are in families that are broken and damaged in all sorts of ways; young men go around in groups and gangs, intimidating those who wish to stay. There is a permanent, transient population of the down-and-out, the derelict, the destitute and those with mental health problems. I have been there and seen it: I did not work in it like Obama, but I have spent time there.
If first you have a bedroom tax that forces tenants with larger homes to move because they cannot pay the rent and have to downsize, and disabled people lose their community networks of support; and if secondly you have pay to stay, so that those who could be an aspiration and an inspiration for the young people in the community, who have the knowledge of where jobs may be, and who could help those young people into the labour market, will have moved on; and, if thirdly, on top of that, we are going to have five-year tenancies—and, as my noble friend said, parents who worry would start planning their move with their children in advance, to ensure that their child goes to school—in the process we will strip out the support networks for disabled, older and frail people, and the support networks where people understand the problems that a family with an autistic teenage daughter or son would have. Either they will be sent on their way or they will voluntarily have to move.
Is this what we want? Behind it, as far as I can tell, the thing that is motivating the Government seems to be that council housing is a scarce resource; it is heavily subsidised by the taxpayer and therefore, if at all possible, we should move people on and out, irrespective of the damage to the communities, to make way for those on the waiting list who might be in even greater need because we are not building enough social housing for those other people to enjoy.
This is the wrong solution to a description of the wrong problem. We need social housing and stable communities. When it suits the Prime Minister he talks about the value of civic society—I congratulate him when he does so—and of communities on our estates. He talks about the value of the knowledge economy of those in work helping people to come into the labour market. As we know, most jobs do not go through the jobcentre at all but through networks of local knowledge. Strip that out and I promise that you will send those estates spiralling down until in a decade or 20 years you will look at our equivalent of Detroit’s inner city. You will wonder how this happened and what we now do about it.
Lord Kennedy of Southwark
My noble friend in the first part of her contribution reminded me of the work done by Lewisham Council. In Crofton Park we have the Ewart Road Housing Co-op. That is just the sort of estate that my noble friend talked about at the start. It is a wonderful place that is well run by the tenants. There are people of different ages living there. People have lived there since they were first moved on, there are new people and there is a long waiting list. It is clean, well run and an absolute pleasure to walk round. It is wonderful—and just the sort of place put at risk by the policy we are debating today.
Lord Campbell-Savours
My Lords, unlike my noble friends Lady Hollis of Heigham and Lord Bassam of Brighton I have not been a housing chairman. The last time I was on a local authority was 40 years ago when I was a mere member of the housing committee. My experience of these matters is more limited than theirs but I want to fix on one word in all this: “review”. What does “review” actually mean here? What will be taken into account by these local authorities? Will they take into account the ability of a tenant to maintain a clean home, their ability to be a good neighbour, ethnic diversity, whether the property is overcrowded, whether there have been complaints by neighbours, or whether they are happy with the employment arrangements for the family involved?
We have some form in this matter. I remember when Lady Porter ran Westminster. She cleared people out of local authority property so that she could sell it off. If I remember rightly, I was one of those who went to the district auditor at the time. The reality is that, exactly as my noble friends said, this will lead to a transient population moving into inner city areas—I have no doubt that in the end they will be crisis areas. At the moment, these areas succeed only because they have a wide social mix. The Government are destroying the social mix that makes these areas work. No doubt the Government will be blamed for that at some stage in the future.
Lord Kennedy of Southwark
My noble friend reminds me of Lady Porter and her activities in Westminster some years ago. Am I correct that her policy was called Building Stable Communities?
Baroness Williams of Trafford
My Lords, Lady Porter—sorry, Dame Shirley Porter—was a bit before my time but I certainly do not think that any of us would want to emulate some of the practices that went on then. No one could want cohesive communities more than I do. It is part of my government brief and the sort of thing I promote every single day, so I certainly agree with the sentiments behind the amendments of the noble Lord, Lord Bassam. I also apologise to him because I started speaking to his amendment in a previous group when he was out of the Chamber and had not even spoken to it.
The noble Lord seeks a published review into the effect that the policies on income and rent setting and restricting lifetime tenancies will have on community cohesion in local authority areas. In the case of income and rent setting, I have already expressed our intention to keep the policy under review and I have also explained my views regarding the detrimental effect that low rents for households on high incomes can have on a community.
The provisions that will restrict lifetime tenancies—to which we will turn in more detail soon—will restore a sense of fairness to social housing, ensuring that it is properly focused on those who really need it for as long as they need it and that those who need long-term support are provided with more appropriate tenancies as their needs change over time. I am convinced that this is a better way to create strong and cohesive communities than continuing to grant tenancies with lifetime security to households which may only have a short-term need. Without these changes, families would continue to be trapped in overcrowded council homes, and older tenants whose children have left home would continue to occupy homes which may no longer be appropriate for their needs, while hundreds of thousands more remain on waiting lists without any hope of ever getting a council house.
The noble Lord has also tabled Amendment 82GAB, which would require local authorities, when they carry out the end-of-tenancy review, to consider the effects that not granting a further social tenancy would have on family life and community cohesion, and whether it would result in a child having to change school. I will say more about the end-of-tenancy review when we discuss the provisions on secure tenancies, but we would definitely expect social landlords to provide longer tenancies to families with children of school age and we will provide guidance to make this absolutely clear.
Lord Bassam of Brighton
Is it the Government’s intention that these blocks of five-year secure tenancies can just carry on being renewed?
Baroness Williams of Trafford
My Lords, that is absolutely correct. If a child was at school, clearly the situation would not have changed.
Lord Bassam of Brighton
What is the purpose of these five-year tenancies if it is the Government’s intention that local authorities continue to allow five-year blocks of tenancy to persist? What does it actually achieve? It is not getting to grips with the problem—which the Minister seems to think is there—of spreading this scarce resource. Rather than having these false dates when tenancies just get renewed, the real answer is surely to build more housing so that the people whom the Minister is concerned about can come off the waiting list into social housing.
Baroness Williams of Trafford
The noble Lord is right: the answer is both to build more housing and to check, at review intervals, whether the housing that is being provided for a family continues to meet their need or whether they need something else. That is the purpose of the review.
Lord Bassam of Brighton
Will the Minister assure me, and the Committee, that no family with children at local schools will ever be asked to leave a council home under one of these secure tenancies?
Baroness Williams of Trafford
The guidance will be absolutely clear on children of school age. We can think of every permutation and combination of family circumstances, but if there were six children, five of them had left and only one was still at home, there might be a conversation about the family downsizing within the local area—but the continuation of the child’s education would be paramount.
Baroness Williams of Trafford
My Lords, that is a very good question. The timeline of the guidance will all be before us by the end of this week.
Lord Bassam of Brighton
I am reassured by some of what the Minister has said, but to be able to test the Government on this, we need to see the guidance. This is a deeply worrying set of provisions for many tenants. The interaction between family life, secure tenancies and people’s aspirations when they live in a local community is very intense. This is creating a sense of insecurity on many of our council estates.
Lord Beecham
It is also a disincentive for people to invest in their homes, which they do now. They not only look after their homes but improve them. If you are not sure of being able to stay on as your child gets to the point of leaving school, or if you are a couple living in a house and your five years is coming up, is that not likely to result in a decline in the investments that people make in their homes which do huge credit to many tenants now?
Baroness Williams of Trafford
My Lords, I have seen many different types of social housing, some of which is incredibly well looked after and some of which is not well looked after at all. Living somewhere for a long time does provide incentives but one of the biggest incentives—I know I will hear a “Boo!” go round the Committee—is when someone buys their home. I can tell when someone has bought their home because those houses are immaculate.
Baroness Hollis of Heigham
They may be immaculate for five years or seven years and then when you go round the estates you can see the houses that were bought by council tenants, which were then sold on into buy to let. So there are two stages, and I can assure the Minister that in many estates the buy-to-let running down of property infuriates not only council tenants who did not buy but council tenants who did and stayed.
Baroness Williams of Trafford
My Lords, I just cannot agree with that point. I believe that people who have bought their own homes take great pride in them. But on that we shall agree to differ because it is 10.15 pm.
Baroness Hollis of Heigham
But the stats are available to the Minister. This is not the progression of a personal view. We know that over 40% of council housing that was sold under right to buy has been cycled into buy to let. We know that, and in some places—
Baroness Williams of Trafford
The point I was making is that I can tell a house that has been bought because generally these are in very good condition. I am not starting to make the argument about houses that are then sold on through subsequent sales, I was just making a comment to the noble Lord, Lord Bassam, about people taking pride in their homes. I am sorry to restrict the noble Baroness but I do not want to be diverted on to that point.
Lord Campbell-Savours
The Minister said before, in reply to an intervention, that the reduced usage of rooms would be a consideration on review if someone left. What other considerations would the local authority have in mind in that review? Is it just reduced usage of rooms?
Baroness Williams of Trafford
My Lords, we will be coming to that, if the noble Lord will bear with me. I have some news for the noble Lord, Lord Bassam: the guidance will be published in time for the commencement of the provisions.
Lord Bassam of Brighton
I am sorry, my Lords, that is absolutely idiotic. The guidance will be published at the time at which the legislation is implemented—does the Minister really mean that? Surely we have to see that guidance before it is implemented.
Baroness Williams of Trafford
My Lords, we will see the guidance before it is implemented but I am just saying that it will be published in time.
Lord Bassam of Brighton
My Lords, I am grateful that it is going to be published.
Baroness Williams of Trafford
I am grateful that the noble Lord is grateful. I do not believe that providing social housing on a long-term basis to households that may experience only temporary need is a good use of scarce social housing, and I do not think it is likely to lead to strong and cohesive communities.
Baroness Williams of Trafford
I am not going to give way. If the noble Baroness wants to come back later, she can, after I have finished.
The noble Baroness, Lady Hollis, talked about protecting the rights of those in most need. Local authorities will be able to provide an appropriate level of stability to those with longer-term needs, such as the disabled and older people, through the granting of further social tenancies, whether in the same or a different, more suitable, social home. I have outlined how the provisions in the Bill will restore a sense of fairness to social housing, ensuring that it is properly focused on those who really need it.
Amendment 82GAE, tabled by the noble Lords, Lord Kennedy and Lord Beecham, seeks a published review of the effect of the policies on income and rent-setting and restricting lifetime tenancies,
“on levels of homelessness and rough sleeping in each local authority area”.
I thank the noble Lords for their amendment and for raising the issue of homelessness. I agree it is important that the Government do all they can to reduce the number of homeless households. The Government have always been clear that we are committed to supporting the most vulnerable people in our society and one person without a home is one too many. That is why we have maintained and increased both central and local government funding over the next four years. However, while I sympathise with the intention behind the amendment, I believe it may be unnecessary because local housing authorities already record and review the incidences of and prevention of homelessness and rough sleeping, and must produce a homelessness strategy.
Baroness Lister of Burtersett
What amendment is the Minister speaking to? I do not think we have got to these amendments yet. The noble Lord, Lord Bassam, has only had his own amendments.
Lord Kennedy of Southwark
I think there is a typo. We are on the wrong clause.
Baroness Williams of Trafford
Can I check if I am yet again speaking to amendments that we have not got to? Amendment 82GAE is in this group. Would noble Lords like to discuss it or withdraw it?
Lord Shipley
Will the Minister be really clear about guidelines? This is about regulations and guidelines. I am now looking at the policy fact sheet, which the department published. It makes it clear that there is going to be a single set of regulations for these measures, that is, the phasing out of lifetime tenancies. However, the regulations will be subject to the affirmative not the negative procedure. Could the Minister confirm that fact? It then says that the regulations will be developed in discussion with local authorities and the regulations and provisions in the Bill will come into force early next year. That, therefore, is early 2017. It is therefore easy to share the guidelines that will be written because there is from now approximately 10 months for those guidelines to be shared.
Lord Kennedy of Southwark
My Lords, to help noble Lords with this Amendment 82GAE, we are going to speak to it in its place, which obviously will not be tonight.
Lord Kennedy of Southwark
This has never been in previous lists. We just noticed it now. When the Minister stared speaking we thought, “What’s this?”, because we had two amendments by the noble Lord, Lord Bassam, which clearly go together, but I now see from the amendment sheet that it has been put in the list.
Baroness Williams of Trafford
It clearly is a mistake and I really apologise if my noble friend has waited all this time.
Lord True
I was trying to say to my noble friend that I had come into the Chamber. I do not particularly wish to intervene, but we have patiently gone through six days in Committee and we have had many opportunities to look at groupings. I think it is a courtesy to the House if noble Lords who have a problem with the groupings—which are published, they are out there, and we pick them all up—make it clear before that they are not happy with the groupings. Otherwise, I think the House is entitled to expect things that are grouped together will be discussed together.
Lord Kennedy of Southwark
If it helps the Minister, I have a Whips sheet from Thursday and the grouping of that amendment is not on there. It is a typo. Thursday’s sheet has the two amendments down in the name of my noble friend Lord Bassam but this paper has been worked on and has appeared today. I do not produce the Government’s Whips sheet for debates but Thursday’s sheet, which we signed up to, has my noble friend’s two amendments and nothing else.
Baroness Williams of Trafford
Would noble Lords like to hear it tonight or on Thursday? I am not going to waste any more time on this; I will finish my comments where I should have finished them and say to the noble Lord, Lord Shipley, that when I have guidance, I will be happy to share it with him.
Lord Shipley
What I am trying to get at is that if the regulations have to come to your Lordships’ House under the affirmative procedure, will she explain the guidelines at that point rather than keeping them separate from the regulations?
Lord Bassam of Brighton
I think that I should probably be withdrawing my amendment. I can see that the noble Baroness is troubled and waiting for something to happen.
I have been very intrigued and quite interested by what the noble Baroness has had to say. I was a little bit reassured, but I sat there thinking about it a bit and I am not as reassured as I was. When I left home to go to university in 1972, I left my poor mother in her council home on her own with a spare bedroom. Had this ridiculous piece of legislation been in place at the time, no doubt she would have had a visit from her local council inviting her to move to yet smaller accommodation. That is not a particularly constructive way to approach things. Nor do I think that it would have been in her interest or that of the local community, because she was a bit of a terrier in her place.
This is a seriously deficient piece of legislation that does not achieve what we really need to do here, which is to create more social housing for people to access, rather than spreading what we have ever more thinly on a recycling basis, forcing people out of their homes and communities. That was really the point behind my amendment. I shall give it further thought before we get to Report, but the Secretary of State ought to think long and hard about the whole issue of community cohesion. It is good that the noble Baroness is the policyholder for that, because I can see that it is something that she cares passionately about. Perhaps she, too, along with the Secretary of State needs to reflect on the issue.
Lord Campbell-Savours
Before my noble friend withdraws his amendment, the Minister has not replied to my question about review, which I have now asked twice. I asked what “review” meant and what considerations would be in the mind of the local authority.
Lord Bassam of Brighton
I should like to help my noble friend here, because I think he has misread my amendment. The review is one that the amendment calls for—from and by the Secretary of State, not the local authority. I beg leave to withdraw the amendment.
“31A_ The Housing and Regeneration Act 2008 is amended as follows.32_ Omit—”
Viscount Younger of Leckie (Con)
My Lords, at this somewhat late hour and after another long day in Committee, I am pleased that I can provide a further break for the Minister, although this is a technical amendment and somewhat brief, so there may not necessarily be time for ice-creams.
This is a consequential amendment relating to the abolition of the disposal proceeds fund, which is one of the deregulatory measures in the Bill. Certain properties developed with public funding are subject to the statutory right to acquire. This consequential amendment maintains that position by defining public funds without referencing the disposal proceeds fund. These amendments to Schedule 4 will ensure that that is the case. As I said, this is a technical amendment resulting from the concerns of the Office for National Statistics about public sector control over housing associations and the deregulatory measures being introduced to address those concerns. I beg to move.
“32A(1) Section 181 (meaning of “publicly funded” for purposes of provisions about right to acquire) is amended as follows.(2) After subsection (2) insert—“(2A) Condition 2 is that— (a) the dwelling was provided wholly or partly by a person using an amount for purposes for which the amount was required to be used by an HCA direction under section 32(4), and(b) before giving the direction the HCA notified the person that any dwelling so provided would be regarded as publicly funded.”(3) In subsection (3), for “2” substitute “3”.(4) After subsection (3) insert—“(3A) In relation to a private registered provider, the reference in subsection (3) to its disposal proceeds fund is to its disposal proceeds fund before the abolition of that fund by Part 3 of Schedule 4 to the Housing and Planning Act 2016.”(5) In subsections (4) and (5), for “3” substitute “4”.(6) In subsection (6), for “4” substitute “5”.”
Lord Kennedy of Southwark
My Lords, I am opposing the proposition that Clause 113 should stand part of the Bill. Clause 113 introduces Schedule 7 and concerns the phasing out of secure tenancies. The effect of the clause and schedule would be to permit councils to grant tenancies only for a fixed term of between two and five years. Local authorities, of course, have the option to issue fixed-term tenancies already, but for some reason the Government are seeking to go further and want to prevent councils from issuing what they call tenancies for life. I just see them as secure tenancies, where, in order to remain in the property, the tenant has to comply with the requirements in the agreement: pay the rent, keep the property in good order, not be a nuisance neighbour, et cetera.
Why do the Government want to dictate to local authorities what sort of tenancies they can issue? As has been said many times before, it does not seem to apply along with the policy of the big trumpeting of localism only a very short time ago in your Lordships’ House. Of course, that is a whole area of policy that the Government seem to have gone very quiet on in this Parliament.
When the noble Baroness, Lady Evans, responds to the debate, it would be helpful if she could outline how the proposals in this section of the Bill would help people on low or modest incomes—the sort of people who are likely not to be able to afford to buy their own home, not to be a beneficiary of the starter-homes plans, and not even to be able to take up the right to buy. All this does is provide greater insecurity for tenants in these circumstances. How does it help tenants, help their children, or enable people to prosper? How is it in any way beneficial to them? I am struggling to think of one reason. I will be grateful if the noble Baroness could help me out in that respect when she responds.
I have told your Lordships’ House many times before that when I was about eight years old we moved into a council property. I am the oldest of four children. I was lucky enough to get my own bedroom. Both my parents worked. My mum was serving school meals and my dad was running a post room. Both my parents worked hard and paid their bills, but we never had the insecurity or worry as a family that our tenancy might expire at some point in the future. How is this policy beneficial for families in social housing on modest incomes today? The amendments in this group seek to improve the proposals from the Government and provide tenants with different possibilities, all of which are better than what is offered by the Government.
Due to the late hour, I will leave it to other noble Lords to speak to their amendments in this group and comment at a later stage when appropriate. As this is Committee, I will of course intervene on the Minister if necessary. I beg to move.
Lord Kerslake
My Lords, I speak in support of this group, and specifically speak to my own amendment 82BA. It is a great shame that we reached this very important issue at this stage of the evening—an issue that will have a profound impact on the future of social rented housing. Why do I say that? At the core of the offer to a new tenant is that this becomes their own home. They do not own the home but it becomes the place they regard as home. The reason they feel that way is that they have a secure tenancy for an indeterminate period. Moving to this model of tenancies will change that experience. It will make it feel not like their own home but—however we wish to dress it up; however much we issue guidance on renewal after two or five years—a temporary home. That is the reality of this. We will overnight have changed the nature of the social contract, if you like, with social tenants.
This is not a small issue. It is a very profound issue, and it has to be seen alongside the other changes that we are making to social rented housing, as I have said in previous debates. Because of the forced sale of high-value assets, the opportunity to move to a bigger home is constrained. Pay to stay will mean, as we have just debated, significantly higher rents for tenants on relatively modest incomes, in reality. We will move to the end of the affordable rented programme by 2018. Then we add this final amendment, which essentially removes mandatorily the right to secure tenancies. How do the Government think that council tenants will see this combination of changes? Will they regard it as a commitment to their future or will they regard it as seeing the end to the form of council tenancy that the noble Lord, Lord Bassam, spoke about earlier? This is a very profound change going on around us.
We have a provision now for the issuing of flexible tenancies. It exists and has existed for a number of years now—three or four years. What is again a dangerous precedent is that, having had a voluntary policy for a relatively short period of time, the Government conclude that the voluntary policy has not been sufficiently actively exercised, so we make it mandatory. Is that now the way we do things? It is voluntary if you do it the way we want you to do it—otherwise we make it mandatory.
Voluntary is the right way to see this issue of tenancy, because I can see that there are circumstances in which individual local authorities will want some flexibility around tenure. There is a perfectly good case for that. I cannot see why we should have a single mandatory policy imposed on every local authority, which then requires a set of regulations and guidance to tell it how to do it. Where in any possible sense does this sit with localism?
Why should there be a variation here? In some low-demand estates, which we have heard about—and there are still some—it makes absolute sense to give people secure tenancies. In other situations there may be a need for choice, because of the nature of the demand and of what is happening. What is absolutely certain is that, whatever guidance and policy the Government produce, it will not be adequate for the different situations up and down the country. We will be creating another layer of bureaucracy and central government control. It is a very retrograde step and something that was not part of the manifesto, to go back to some of our previous debates. Indeed, it came in at a very late stage in the process.
I absolutely get the point about efficient use of stock, but that has to be done in consultation with persuasion of the individual tenants. The Minister spoke about older people, but do we seriously think that an older person who has been in their property on a renewable tenancy for 30 years—that might be the case, in 30 years’ time—is then going to be told, “You’ve finished your five years, off you go”? Do we think that is the position we are going to reach in relation to tenancies? Of course not. It has to be through persuasion and through making an offer to that older person that meets their needs.
The case for removing this provision is strong. As I say, there is already legislation that gives the flexibility to local authorities. But, if the issue is that local authorities are not actively using their potential discretion, I have put an alternative amendment in front of the Committee this evening that would encourage them to do so. It would remain discretionary but they would actively need to exercise that discretion. This should not be needed—I shall be clear about that—but if it is an alternative to a mandatory model, which I think is wrong in how it would operate and completely contrary to the direction of localism, I would hope that the Government would seriously consider it.
Lord Young of Cookham (Con)
My Lords, quarter to 11 is not the right time to have this serious debate about the role of social housing. This set of amendments and the previous debate go to the heart of what social housing is for. Is it, as we heard in the previous debate, to provide stable and balanced communities or is it to provide housing for those in greatest need for—to use the words of my noble friend—as long as they need it? Over the last 30 or 40 years the role of social housing in this country has gradually changed from the first towards the second. It is now much more focused on those in greatest need than it was 30 or 40 years ago, when young couples would put their names on the waiting list and gradually get to the top and no one at that point would ever have asked whether it was right to question their entitlement to a lifetime tenancy.
Now, one really has to balance the legitimate expectations of council tenants for a lifetime tenancy with the needs of those on the waiting list—the two are directly related. I think the time has come to question the lifetime entitlement to a secure tenancy because people are in need of social housing. If one takes the view that the role of social housing has changed it makes sense to have fixed tenancies and a conversation when that tenancy comes to an end to see whether there are other options for that tenant. At that point it will be entirely up to the local authority whether it renews the tenancy or has guidance from the Government.
Lord Kerslake
Does the noble Lord not agree that if this is the change that is happening—I say we should be aiming for both secure communities and flexibility—why not leave that to the discretion of the local authority? Why impose it from central government?
Lord Young of Cookham
As we have heard, the local authority can renew the tenancy at the end of five years if it wants but there will be a conversation and options will be explained to the tenant, such as low-cost home ownership opportunities. I do not accept that the modest increase in mobility that may come from these measures will dramatically change the nature of local authority estates, as we heard from the noble Lord, Lord Bassam. A few people may take up the options when their tenancy is reviewed and move on but, as we heard, many of these estates are very popular, with long waiting lists, and the implication that those who move in will dramatically alter the nature of the estate does not bear examination. We are looking for a balance between the legitimate expectations of those with tenancies to have those tenancies for life with the legitimate aspirations of those on the waiting list living in desperate circumstances to have an opportunity to move on. The local authority will have discretion at the end of the fixed-term tenancy to renew if it wants to but there will have been a break point, an opportunity for conversation, and I think this accurately reflects the changing role of social housing today.
Baroness Hollis of Heigham
My Lords, the noble Lord has described very well the competing pressures on social housing and I do not disagree with his analysis, but does he not accept that the reason he and the Minister are so concerned to ensure that social housing is available for the neediest on the waiting list is a function of the shortage that they have constructed? But for that shortage, whether it is council house sales or the proposed sales that will fund our housing association discounts or whatever, the problem will get worse because nearly half the housing that was in the social rented sector has left it. The noble Lord, Lord Young, accurately describes what is happening but, none the less, the problem lies not in tilting the balance from one to the other but in remedying the underlying problem of the shortage of social housing.
Lord Young of Cookham
As we have heard in earlier debates, every house that is being sold by a local housing association is being replaced and every house that is being sold by a local authority is going to be replaced so I simply reject the thesis the noble Baroness has put forward.
Lord Bassam of Brighton
My Lords, I have an amendment in this group. It follows immediately after the amendment from the noble Lord, Lord Kerslake. I am grateful for the intervention from the noble Lord, Lord Young, because it has widened and opened up a fundamental debate. The noble Lord described social housing now as “residualised housing” because that is what it is. We are getting to the last knockings of social housing. I do not think that that is right or appropriate. The problem that we have is spiralling rents in the public sector, spiralling rents in the private sector and a diminution of supply. The noble Lord says that there will be like-for-like replacement. So far during the Conservatives’ time in government since 2010, we have not had anywhere near like-for-like replacement. I think that the figure is one in 10. That is a great shame, although the aspiration is absolutely right.
When I chaired a housing committee, with the capital receipts that we accrued we had the opportunity to get some of the way towards like-for-like replacement. Now, we are nowhere near it and that is part of the problem. We need to expand public sector housing provision on a massive scale. That will help to drive down rents in both the public and the private sectors, and we can get back to the point where social housing is no longer viewed as residual housing for the poorest in our communities and for those who are struggling to get on to the housing ladder.
Lord Stunell
My Lords, I support the amendment tabled by the noble Lord, Lord Kerslake, and the general trend of the other amendments in this group. On this occasion I speak as the Minister who was at the Dispatch Box at the other end of the building when the Localism Bill was going through the House. The flexibility that the noble Lord, Lord Kerslake, has referred to was introduced in that legislation. I was ready to stand at the Dispatch Box and to support the introduction of that flexibility for local authorities, which up until then had not had it.
In the spirit of localism and of taking at the local level decisions that are relevant to local communities, it is quite right that there should be that flexibility for councils. Something approaching 600,000 social homes are “underoccupied” and 400,000 are “overcrowded”—of course, I put both those in inverted commas—and something like 1.2 million families are on the council house waiting lists in this country, so there is clearly not a very good match between the existing housing stock and the needs placed upon it.
I entirely agree with the point that the noble Lord, Lord Bassam, and the noble Baroness, Lady Hollis, have just made about increasing the numbers but I disagree with their critique. I just draw their attention to the fact that up to 1997 1.5 million council houses had been sold off by the Conservative Administration. Between 1997 and 2010 another 421,000 net were sold off by the Labour Government. During the coalition Government, although I would be the first to agree that not enough new social housing provision was made, the fact is that for the first time in something approaching 25 years the net stock of social housing increased. I agree that it did not increase fast enough but the fact is that it increased.
I am very pleased about at least one provision of the Bill, and that is entrenching more firmly the one-for-one replacement policy, and indeed in London going for two for one. The noble Lord, Lord Kerslake, argued very cogently that the mechanics of delivery are not there but the intention is written in. Let us be clear: the question of supply is fundamental but it is also important to understand that other factors come into this as well.
I want to pick up on the point made by the noble Lord, Lord Young of Cookham, that it is time to rebalance things. That is exactly what the Localism Act did: it gave local housing authorities the opportunity to look at the demands and the needs that they and their communities faced and to decide whether they wanted flexibility in tenancy lengths in order to make its use more efficient and their communities more rounded. I believe that that is right.
It is counterproductive to say that everyone has to have a short tenancy. The noble Lord, Lord Young, is being unrealistic in saying that you can have a conversation with someone. I want to know what kind of conversation you have with a widow of 73 about her tenancy; then you have it when she is 78 and then when she is 83. It is preposterous. Clearly in that situation you make sure that the widow of 73 is in appropriately sized accommodation and not in a four-bedroom house that used to have six children in it, and then you say that it is a lifetime tenancy. This does not allow that to happen. It is a serious mistake which does not take account of the demographics.
The amendment of the noble Lord, Lord Bassam, is better than nothing but, again, it does not take account of the different choices which face people at different points in their life. If you are a young mother with two small children, which is quite a common circumstance in which to be allocated a tenancy at the moment, you will not necessarily need an 11-year tenancy and a short tenancy and a review may well be appropriate. However, as I say, if you are a widow of 73 you want a lifetime tenancy.
Yes, we need to increase supply, and the Bill is positive in stating what should happen. Yes, we need a balance, but we have already struck it. Whatever balance or policy we have has to take account of the demographic make-up of the people going into social housing because the length of tenancy that makes any sense will be different for people at different stages in their life experience and cycle.
Lord Campbell-Savours
My Lords, the noble Lord, Lord Young of Cookham, referred to a conversation. The conversation means the review. I go back to what I have said before. My noble friend intervened on me to say that the review to which he was referring was a review carried out by the Government. The Bill is quite clear that the landlord under a fixed-term secure tenancy of a dwelling house must carry out a review to decide what to do at the end of the term. Again I ask: what is in the review? What matters will the local authority have in mind when it is reviewing the tenancy at the end of five years? If Ministers cannot answer me now they can write to us and let us know precisely what they are. The local authorities will be interested.
On the question of increased supply, I go back to the comments of the noble Lord, Lord Young of Cookham. When we talk about supply we do not have to talk exclusively about social tenancies. We can talk about houses that are purchased on the open market. In the town where he lives, Cookham, and in Maidenhead, where I live, builders tell me that you can build in this country a three-bedroom house for £80,000 to £85,000. That same house in Maidenhead or Cookham would be on the market now probably for £350,000 to £400,000. What is the difference? The difference is in the land value. If we were to address the issue of land values within the United Kingdom and bring them down to what they should be we would not have this problem of having to make increased provision of social housing. We would be able to sell people brand new two or three-bedroom houses at sensible and reasonable prices and this Bill, as I have said before, would be unnecessary. The problem is in land values. So when we deal with supply let us look not only at social housing; let us look at the cost of land.
Lord Best (CB)
Noble Lords will be glad to hear that I am not going to enter a debate on land value taxation. I speak to Amendments 82C and 82D. I am also going to say something about Amendment 82F in my name and in the names of the noble Lords, Lord Beecham and Lord Stoneham.
It is important to note that this provision relates only to future tenancies. That makes it so much better than the pay-to-stay arrangements which cover everybody who is already a tenant and may feel a sense of insecurity as a result. Existing tenants are not affected by this. That means the 4.4 million tenants in social housing should not worry so much about it. The amendment seeks to extend the minimum period of a tenancy from two years to five years and the maximum period from five years to ten years under these arrangements.
My amendment is not a very good one, I have to confess. I do not think it is terribly helpful. It would be better to stay with the Localism Act 2011 which the noble Lord, Lord Stunell, has explained to us. This gave local authorities the power to have short-term tenancies, but most local authorities of all political persuasions have decided that they do not want to go along with this. It is not very helpful. That is fine. They have that power available to them. I think we should probably leave things as they are.
It does not seem helpful, certainly, to the people who live there to be told that there is a mandatory limit on the time that they can stay before a rather nebulous review takes place. The housing associations have the opportunity to have shorter-term lettings of this kind. They also do not make much use of this. I have been chief executive of a housing association. I do not think we ever bothered with fixed terms of this kind. We wanted people to have a home to move in, settle down and stay. That was a service in its own right, getting people who had often had rather insecure lives the security to put down roots, send the kids to school and all the rest of it.
It is also, perhaps slightly surprisingly, the case that the new-look private landlords are the build-to-rent developers who are now building blocks of flats using insurance-company money, pension-fund money, who are coming into this business. They are interested in longer leases than the traditional six-month or 12-month shorthold tenancies. They see the sense of people staying.
Some noble Lords may have visited the build-to-let properties being built at Olympic Village. There are four-year leases, and people are talking about seven-year leases. It is a marketing ploy for them. It distinguishes them from the old-look private landlords. I think, therefore, that the tendency is to try to give people greater security of tenure, time to settle into places.
Amendment 82F is a little more specialist, but it seems important. As I read the schedule to the Bill, this part of the schedule says that the old-style secure tenancies will continue. If somebody moves because the council has required them to move—fair enough, the estate is being demolished or the tenant is being decanted temporarily. They move out but they do not lose their security of tenure. That is fine, but what the schedule says at the moment is that, if you apply to move, if it is your choice to move—perhaps it is an exchange with another tenant or a transfer to a new home—then you would lose your long-term security. This means that you would be ill advised to do so. If I was advising that tenant, I would say, “That is probably not a good idea, to lose your security of tenure”. This goes against the idea that we are extremely interested in stopping under-occupancy in this country. People will be moving very often to downsize, making way for other people who can move in, who may be overcrowded elsewhere. We want people to move and make best use of social housing. We do not want them to be frightened of doing that. It might be the mother fleeing violence—it is her decision; she wants to move elsewhere. It might be the overcrowded family getting the chance to move to somewhere bigger—they do not want to lose the security that they have at the moment. The amendment would delete that requirement. The Minister might explain to me that I am interpreting the provision inaccurately and that we have nothing to fear, but it looks as if the schedule, by removing security of tenure for people who transfer of their own volition, would be a bad move.
There does not seem to be any need for this, other than a kind of inbuilt feeling that people should feel a little bit insecure about their lives, which I do not feel is what those in the world of providing social housing want to happen. I would leave the Localism Act as it stands.
Baroness Lister of Burtersett (Lab)
My Lords, I shall speak in support of Amendments 82G and 82GA in my name, as well as Amendment 82E to which I have added my name. First, I want to explain briefly why Clause 113 and Schedule 7 should not stand part of the Bill. This follows on quite well from what the noble Lord, Lord Best, was saying, because, as I said at Second Reading, the Prime Minister declared in his recent life chances speech:
“This Government is all about security”—
not insecurity. He continued:
“Individuals and families who are in poverty crave security—for them, it’s the most important value of all”.
This is particularly true when it comes to housing, yet these provisions will destroy security for many in poverty or on modest incomes.
Shelter has observed that research shows that security of tenure goes to the heart of people believing they have a real, stable home—again picking up on the Minister’s call for us to keep coming back to that word “home”. More recent research just published by Heriot-Watt University, which interviewed tenants in current fixed-term tenancies, found considerable associated anxiety, especially among older people, people with health or disability issues and parents. As a lone parent with three children said:
“You can’t really sit back and enjoy the place like—because you always feel like you’re on borrowed time, so you’re always on edge”.
I believe that this measure undermines the Prime Minister’s own commitment to promoting security, but, if it goes ahead, it is essential that certain groups at particular risk are exempted and that those exemptions are enshrined in law rather than being left to the discretion of housing providers.
Amendment 82G would exempt those who would give up an old-style secure tenancy because they were fleeing domestic violence, the great majority of whom will be women. Shelter has argued that because social housing is generally allocated on the basis of need, there is a strong possibility that fixed-term tenancies will disproportionately affect people who fall into the equalities categories. I look forward finally to receiving the equality impact assessment on this measure, which I hope is a little more illuminating than the one that I have just received on pay to stay.
The Government have often repeated their welcome commitment to tackling violence against women and girls. The refreshed strategy, published last week, states that it will,
“provide victims and their families with support before a crisis point is reached and their only option is to flee their own homes—frequently with their children”.
That is very welcome, but Women’s Aid and other organisations working in this area fear that loss of genuine security of tenure will trap some victims in an abusive relationship for fear of losing their right to secure housing, not just if they move out but where domestic violence leads to the ending of a joint tenancy and the granting of a new sole tenancy in the name of the victim. As the chair of the Housing Law Practitioners Association comments, for such new tenancies to be fixed tenancies would be to penalise the victim for being a victim. I cannot believe that that is what the Government want.
A three-year longitudinal study carried out by the Child and Woman Abuse Studies Unit followed 100 women and their children as they rebuilt their lives after accessing domestic violence services from Solace Women’s Aid. Among its key messages was:
“Having a home in which women and children can feel and be safe is vital, removing the fear and insecurity which domestic violence creates”.
Housing insecurity interferes with all the processes that enable them to begin undoing the harms of domestic violence.
In a Written Answer on this issue, the Minister, Brandon Lewis MP, stated:
“Where existing lifetime tenants transfer, the provisions in the Bill ensure that local authorities retain a discretion to offer the tenant a further lifetime tenancy in their new home”.
I am afraid that is not sufficient. In the study I have just cited, women report that housing officers are frequently unsympathetic or disbelieving, or seem uninterested in their domestic violence histories. The security of victims of domestic violence cannot be left to the discretion of housing officers who might respond in this way. It needs to be enshrined in the Bill itself.
Similarly, with reference to Amendment 82E, the Government have indicated that regulations prescribing the circumstances in which a local authority may offer a further lifetime tenancy to existing tenants who move home will probably include where a tenant downsizes. But surely where they are downsizing because of the underoccupancy charge, this should be a clear legal entitlement and not reliant on local authority discretion. The Heriot-Watt study found that a number of people who have moved from a permanent to fixed-term tenancy because of the bedroom tax are particularly unhappy. One example was that of an older couple with serious health problems who had not wanted to move and now, after 17 years as secure tenants, had a five-year contract. The wife said, “I don’t think it’s fair at all. My husband is living on his nerves now, thinking about what’s going to happen at the end of the five years. He doesn’t need the stress or the pressure”.
I turn now to disabled people and their carers. Amendment 82GA would ensure that full-time carers and severely disabled people are given a lifetime secure tenancy when granted a social housing tenancy. I am grateful to Carers UK for drawing its concerns about the implications of this clause to my attention. It argues that shorter tenancies could have a very negative impact on carers and those for whom they care, creating additional unnecessary stress and anxiety as they countenance the possibility of having to move, with implications for care packages, availability of informal support networks which we heard about earlier, and suitability of housing, an issue I raised earlier with regard to pay to stay. If they have to move to the private sector, the problems only multiply. In some instances, carers have moved to be nearer a family member or friend for whom they are caring or moved to a suitably adapted property to care for them. If this now means giving up a secure tenancy, it could act as a real disincentive to fulfilling that caring role, at a potential cost to the local authority. Again, I cannot believe that this is what the Government want, so I hope they will consider giving a clear right to a genuine secure tenancy in such circumstances.
Finally, Carers UK has raised a related matter. Current social housing tenants have the right to improve and be compensated for improvements to their property. This can be very important in facilitating care or providing independence for a disabled person. Schedule 7 removes that right for tenants on a new fixed-term secure tenancy. Carers UK is again concerned about the possible impact on disabled people and their carers, making it even more likely than now that carers will suffer injury or ill health as a result of caring. Can the Minister clarify exactly what is intended by paragraphs 12 to 14 of Schedule 7—not necessarily now because I realise that it is late; I would be happy with a letter. Will she consider exempting those with a fixed-term secure tenancy who make improvements to their home to care for or facilitate the independence of a disabled person? Once again, a meeting with some of the organisations representing disabled people and carers could be helpful.
The Duke of Somerset (CB)
My Lords, I rise briefly to support the thrust of this group of amendments. The provision to limit tenancies to five years seems an odd idea, implying as it does bad effects on social cohesion and localism. At a stroke it will remove any incentive to care for, improve or decorate a council house, or even to tend the garden. The noble Lord, Lord Best, told us eloquently about where opportunities for short-term tenancies already exist and the fact that they have not been taken up. It will also inhibit the putting down of any roots in the community. People who feel attached to a community are much more willing to invest in social togetherness by contributing to voluntary and social activities.
The Minister, in a previous grouping, described how she recognises an owned property when she visits because it is in such good order. Surely the reverse principle applies here, where the shorter the tenancy the less incentive there is for the tenant to be houseproud. The ending of secure tenancies after five years could recreate in council housing the problems we see nowadays in short-term private renting, where tenants often move on very quickly. This includes the landlord’s extra costs of redecorating or possibly refurbishment. Equally, extra administration costs are bound to be involved.
Turning briefly to schools, we know that many schoolchildren are not getting into their parents’ first choice of school. The Minister gave reassurance to the noble Lord, Lord Bassam, recently about school-age children and their families not being required to move on at the end of the five-year period. However, what about families whose children have not yet reached school age? Surely this will cause huge difficulties for them in their planning. It will contribute to stress and anxiety in the family. Where indeed would families be expected to go after their five years?
The greatest effect will be on those people on council housing waiting lists, adding enormously to their uncertainty. I support the amendments.
Lord Foster of Bath (LD)
My Lords, I rise briefly as the hour is late. Notwithstanding the speeches from other noble Lords, we have heard two particularly powerful speeches—one from my noble friend Lord Stunell who reminded us of the importance of the Localism Act. Certainly, flowing from that Act, we have seen a very large number of quite remarkable things occurring in communities where local people have been given greater ability to take control of activities in their area. It is a powerful case for local determination of these issues. The noble Lord, Lord Kerslake, while also reflecting the same sentiments, touched on the importance of home and the impact of people’s feeling of security about home.
I have been pondering why it might be that the Government have brought forward these measures when it is perfectly possible to leave things as they are, with local discretion and determination already available under the Localism Act. The only justification I can see is in the Housing and Planning Bill’s impact assessment at paragraph 4.6.19. It is worth the Committee hearing what is said there. This is deeply worrying. It says:
“However, the guarantee of lifetime security may currently act as a perverse incentive preventing tenants from taking advantage of opportunities to improve their circumstances and leading to sub-optimal choices”.
If noble Lords wanted to find anything more patronising or paternalistic, they would find it very difficult indeed. If this is the justification for the measures before us, we should not be giving them much truck. I certainly believe that we have, in the Localism Act and measures that already exist, the ability to provide the flexibility that many have talked about, but at the same time to provide those people—often those on the lower incomes in society—with the opportunity to continue to have something that they can feel proud of and call their home.
Baroness Evans of Bowes Park
I thank all noble Lords for their amendments. Before I turn to them, it may be helpful if I say a few words about the provisions in the Bill.
Clause 113 introduces Schedule 7. Together, these provide that, in future, with limited exceptions, local authorities will be able to grant only tenancies with a fixed term of between two and five years and will be required to use tenancy review points to support tenants’ move towards home ownership where this is an appropriate option. This delivers on a commitment in last July’s Budget to review lifetime tenancies. We expect that most tenancies will be granted for five years, as now, with two-year tenancies being used in only exceptional circumstances and we intend to provide guidance to this effect.
We are not abolishing lifetime tenancies altogether. We will continue to protect the security of tenure of existing lifetime tenants who remain in their home, as well as that of lifetime tenants who are moved by their landlord—for example, as part of estate regeneration. Where lifetime tenants choose to move to another social home, local authorities will have limited discretion to offer another lifetime tenancy. We will regulate to set out the circumstances in which they may exercise their discretion and we will make sure we work with local authorities in developing these regulations. We expect the circumstances to include where tenants downsize to a smaller property or where they move for work. Outside some limited exceptions, if local authorities try to offer a lifetime tenancy or one that is shorter than two years or longer than five, whether deliberately or by mistake, the tenancy will default to a five-year fixed term.
Local authorities will be required to carry out a review of the tenant’s circumstances between six and nine months before the end of the fixed term to decide whether to grant a new tenancy in the same or another more suitable social home, or to recover possession of the property. Where landlords decide to terminate the tenancy, they will have to provide advice on home ownership or other housing options as appropriate. Regular reviews will ensure that tenants with longer-term needs are moved into more appropriate housing as their needs change over time and that those who can move into home ownership are given appropriate advice to help them do so. Moving into home ownership could mean exercising the right to buy so that tenants can stay in their existing home. Where a tenant’s circumstances are broadly unchanged, the landlord will be able to grant a further tenancy in the same home. We think this is likely to be the outcome in the majority of cases. Local authorities have strong incentives not to allow the review to create future homelessness acceptances.
There are a number of checks and balances in place to ensure that local authorities use fixed tenancies and reviews appropriately. Tenants will be able to challenge the decision on the length of the tenancy and the outcome of the end-of-term review. Where the landlord is still minded not to grant a further tenancy, they will need to notify the tenant in writing of the outcome, setting out the reasons for the decision.
Lord Campbell-Savours
I am preoccupied by the review; let me explain why. You could have in an authority a councillor who makes representations to the chairman of the housing committee—to the housing manager or whatever—and influences a review. That is what worries me: personal interference in those decisions and reviews. That is why we must have something set down quite clearly in criteria so that local authorities know what they have to take into account to avoid unfair influence in that review decision.
Baroness Evans of Bowes Park
The noble Lord is right, which is why we will be producing detailed guidance. Also, other people will be involved in reviews when a tenant appeals, so the situation that he describes should not happen. The tenant will also have the right to challenge the landlord’s right of possession as part of the possession proceedings in the county court. The court will expect the local authority to have behaved reasonably and proportionately.
New fixed-term tenants will have the same rights as most secure and flexible tenants do now. They will usually be able to terminate their tenancy at any stage by giving four weeks’ notice, while also enjoying protection from eviction during the fixed period. The local authority landlord will need to demonstrate to the court that one or more of the grounds for possession are proven and that they are acting reasonably in seeking possession.
Just as now, tenants will be eligible for the right to buy once they have accrued three years as a tenant of public housing, but this does not have to be three years continuously. As with flexible tenants now, they will not have the right to improve or to be compensated for improvements, but landlords will still be able to grant such rights with the tenancy agreement if they choose. The provisions allow for landlords to continue to operate an introductory tenancy regime, to demote fixed-term tenancies, and to provide for fixed-term tenants to be offered a family intervention tenancy.
I now turn to the amendments. The intention of Amendment 82BA is to allow local authorities to continue to grant lifetime tenancies to new, as well as existing, tenants. We are concerned that this would not ensure that we get the best use out of our social housing stock.
Lord Kerslake
I apologise for intervening at this very late hour, but nowhere have we had an explanation of why the Government feel it necessary to move from a discretionary model that has been in place for a very short period of time to a mandatory model on local authorities.
Baroness Evans of Bowes Park
I am just about to come on to some reasons.
Councils are already able to use flexible tenancies, as noble Lords have said, which are tenancies with a fixed term of two years or more. They have been able to do so since April 2012, when the changes introduced by the coalition Government’s Localism Act 2011 came into force, but they are not taking advantage of this flexibility. Instead, the vast majority of local authority tenancies—more than 90%—continue to be granted with lifetime security to people who may have only a short-term need. We do not believe that this is a good use of scarce social housing. As my noble friend Lord Young highlighted, there are 247,000 tenants who are forced to live in overcrowded conditions due to the lack of suitably sized properties, while thousands more occupy homes with more bedrooms then they need. Of course, there are also the 1.2 million households on council waiting lists that are waiting for a social home. We believe that the provisions in the Bill will ensure that social housing is properly focused on those who really need it for as long as they need it.
Amendment 82BB would ensure that new fixed-term tenancies have a longer term of 12 years in all cases. While I recognise that this would introduce consistency, I do not believe that this would be appropriate in all cases, as a household’s circumstances can change considerably in 12 years. The requirement for review points at two to five years will ensure that social housing is provided to those who need it most for the period of their need; that those with longer-term needs can be moved into more appropriate housing as their needs change over time; and that tenants can be supported into home ownership where this is a viable option for them, or offered support towards that in the longer term.
Amendment 82C would extend the minimum tenancy period from two to five years. In fact, most local authority flexible tenancies are currently granted for a five-year period, and we expect that this will continue to be the case, with two years used only in exceptional circumstances as now, and we propose to provide guidance to this effect. However, we recognise that there may be circumstances where shorter tenancies are more appropriate in order to meet short-term needs. Some councils are already using shorter tenancies to support young adults into employment and they could also be used to provide moves into accommodation for those recovering from drug and alcohol abuse. They may be useful for families who need a larger home for a short period only, or to make the best use of properties that are earmarked for demolition which would otherwise lie empty. We think that local authorities will welcome the continuing flexibility to grant shorter tenancies in these types of circumstances.
Amendment 82D would extend the maximum tenancy period to 10 years. As I have already said in relation to the previous amendment, a household’s circumstances can change considerably in five years, whereas the provisions in the Bill that will make five-year tenancies the norm will ensure that local authorities carry out regular reviews of their tenants’ circumstances. Of course, where a tenant’s circumstances are broadly unchanged, then the landlord will of course be able to grant a further tenancy in the same house.
Amendment 82E would guarantee that lifetime tenants of private registered providers—housing associations—as well as local authorities would have their security of tenure protected if they move to a local authority home. This would be the case whether they are moved by their landlord or apply to transfer. It would specifically protect those who have moved as a result of the removal of the spare room subsidy. As I have said, the Bill already gives local authorities discretion to offer tenants a further lifetime tenancy in limited circumstances and we have made it clear that we expect to regulate to ensure that those circumstances will include where tenants move to a smaller property. This would include where they move as a result of the removal of the spare room subsidy. In developing the regulations we will consider the extent to which they should apply to lifetime tenants who move from properties owned by a private registered provider.
Amendment 82F would guarantee all lifetime tenants a further lifetime tenancy if they move to another council home. We recognise that existing lifetime tenants may want to move home for a variety of reasons, and we do not want to stop them doing so. However, with more than 1.2 million households on council waiting lists, it does not make sense to guarantee that everyone who has a lifetime tenancy will always have their security protected if they choose to move.
Amendment 82FA would ensure that where existing lifetime tenants move and they are above pension age, or they are moving to a home which has been or is designed to be adapted for someone who is disabled, they will always get a further lifetime tenancy. Of course, I agree it is important that suitable accommodation is available for older people and those who need adapted accommodation, and that the system should be flexible enough to allow people to move as their needs change over time. Ensuring that tenancies are reviewed every five years will help make this happen. However, we do not wish to restrict mobility in the social rented sector, which is why, as I said, the Bill includes provisions to ensure that local authorities have the discretion to grant existing lifetime tenants a further lifetime tenancy when they move home. We will work with local authorities in considering the circumstances in which lifetime tenancies should continue to be granted and will certainly give serious consideration to the needs of the elderly and those who require adapted accommodation as part of the process.
Amendment 82G would ensure that where existing lifetime tenants move as a result of domestic violence they will be guaranteed a further lifetime tenancy in their new home. I fully appreciate the intention behind this amendment. In developing the regulations that determine when a local authority may grant existing lifetime tenants a further lifetime tenancy when they move home, we will give very careful consideration to whether this should include those who are moving home to escape violence or intimidation of any kind.
The intention of Amendment 82GA is to guarantee that existing lifetime tenants who are severely disabled or have mobility or care needs—as well as those who are full-time carers—will always get a further lifetime tenancy if they choose to move. Again, I certainly appreciate the motivation behind this amendment. It is clearly important that disabled people and those who have other mobility or care needs can move to more suitable accommodation as their needs change over time. As I said, this is one of the drivers of the tenancies. Once again, I can confirm that in considering the circumstances in which lifetime tenants may retain their security when moving to a new council house, we will give consideration to whether the circumstances should include tenants with severe disabilities, mobility issues or significant care needs, as well as those who need to give or receive care.
The provisions in the Bill will ensure that social housing is focused on those who really need it for as long as they need it. It will ensure that local authorities get the best use out of their homes so that more households are able to access social housing and so that social tenants who aspire to own their own home are supported into home ownership where this is a viable option. I hope my responses provide reassurance that the Government are committed to supporting mobility within the social rented sector and, importantly, to protecting the safety and well-being of citizens. I am very happy to have further discussion on these points and to meet any noble Lords who would like further information on these matters. I hope that, with these assurances, noble Lords will not press their amendments and that Clause 113 stands part of the Bill.
Baroness Lister of Burtersett
Could the Minister write to me on the point about Schedule 7—I know she referred to it—particularly in relation to people who have adapted their homes because of disability?
Baroness Evans of Bowes Park
I am sorry. The noble Baroness asked about the intention behind the provisions that govern a tenant’s rights to make improvements. Landlords will be able to grant such rights and officials would be happy to meet with carers’ groups to explore this matter, as the noble Baroness suggested.
Lord Kennedy of Southwark
Can the noble Baroness comment further on the points made by the noble Lord, Lord Stunell, when he talked about the Localism Act, which he obviously helped get through the other place in the last Parliament? How would the proposals here regarding secure tenancy square with that?
Baroness Evans of Bowes Park
As I said, our aim is to make sure that people have access to social housing. We do not want to see thousands of tenants forced to live in overcrowded conditions, or occupying homes with more bedrooms than they need, or 1.2 million households on council waiting lists waiting for a social home. As noble Lords have said, local authorities have not used the provisions much and we also need to think about all the people who need access to homes.
Lord Beecham
“(3A) A review under this section must be carried out in accordance with a clear and accessible policy that outlines—(a) the circumstances in which the landlord may and may not grant another tenancy,(b) the advice and assistance the landlord will give to the tenant in the event they decide not to grant another tenancy,(c) the way the landlord will address the needs of households who would be at risk of homelessness in the event they decide not to grant another tenancy, and(d) the way the landlord will tailor advice and assistance to meet the needs of vulnerable groups.(3B) The Secretary of State shall be responsible for preparing, publishing and updating as necessary the policy under subsection (3A).”
Lord Beecham
My Lords, this amendment relates to Schedule 7 to the Bill, which refers to what is to happen in respect of a landlord’s obligation to deal with the ending of a fixed term of a tenancy. The amendment seeks a review of what will happen in accordance with a “clear and accessible policy” which outlines a series of factors: first, the circumstances in which the landlord may or may not grant another tenancy; secondly, the advice and assistance that can be given to the tenant in the event that it is decided not to grant another tenancy; thirdly, the way the landlord would address the needs of households that would be at risk of homelessness as a result of the failure to renew the secure tenancy; and, finally, the way advice would be tailored and assistance given to meet the needs of vulnerable groups. To back this up, there is a requirement that the Secretary of State should prepare, publish and update as necessary the policy to enshrine these principles.
The object is to offer at least a measure of comfort to those who find their secure tenancy ending, to assist them in relocating in a suitable way, and to ensure that they receive all necessary support from their landlord. It is a perfectly sensible approach and I hope that the Minister will concur. The amendment is meant to be constructive and helpful to both landlord and tenant. It is important that we allay some of the fears and misgivings which may arise in the minds of tenants if it is decided that their security is to end. One would hope that this would not be a frequent occurrence, but when it does occur there is a clear obligation on the landlord to make the best provision possible for alternative accommodation and to support the tenant through that process. I beg to move.
Baroness Evans of Bowes Park
My Lords, I thank noble Lords for this group of amendments, which deal with the review that local authority landlords will be required to carry out towards the end of the fixed term. It is an important new protection that will ensure that those who need long-term support are provided with more appropriate tenancies as their needs change over time, and that households are supported to make the transition into home ownership where they can.
Amendment 82GAA would require the Government to publish a policy that local authorities would need to follow when carrying out the review, including about the advice and assistance that landlords should offer where tenancies are not renewed, and how landlords should address the needs of those at risk of homelessness. I do not believe that this amendment is necessary, for several reasons. Firstly, it is our intention to provide guidance to local authorities on the sort of factors we expect them to consider when carrying out the review and it is therefore not necessary to provide for this on the face of the Bill.
Secondly, while I agree that landlords should provide advice on housing options if they decide not to renew a tenancy, this is already provided for in the Bill. Thirdly, as I have said, local authorities have strong incentives not to allow the end-of-tenancy review to create future homelessness acceptances.
Amendment 82GAC would require local authorities to consider whether a decision not to grant another tenancy could result in homelessness and, if they think it could, would require them to provide the tenant with advice and assistance on finding another home. Where a landlord decides not to renew a tenancy, the provisions in the Bill already ensure that the tenant has the opportunity to challenge the decision, as I explained previously, as well as sufficient time to find alternative accommodation following advice from their landlord on buying a home or other housing options. There are also existing duties under the homelessness legislation that require local authorities to give advice and assistance to those who are homeless and threatened with homelessness. For these reasons, we do not believe that the amendment is necessary.
Amendment 82GAD would mean that whenever the local authority decided on review that it was unrealistic for the tenant to buy a home, it would have to grant a further social tenancy. We want local authorities to use the tenancy review points to support tenants to move towards home ownership where it is appropriate, but of course we recognise that this will not be a viable option in every case. Where families continue to need social housing, of course the local authority will be able to offer a further tenancy at the end of the fixed period. Where tenants’ financial circumstances improve significantly, councils may decide that they are able to move out of the social rented sector into private rented accommodation, or they may decide to offer a further tenancy but on a higher rent.
Lord Campbell-Savours
What is to stop a local authority terminating the tenancy and then moving the tenant—because it has a responsibility, as the Minister has said—on to a sink estate in the same area; in other words, congregating in part of the district problem tenants who have been forced out of their property when their tenancy has been reviewed? These things happen.
Baroness Evans of Bowes Park
It would not say much for the behaviour of the local authority, which has a responsibility. I would hope that that would not happen. Obviously, as I have said, there is an opportunity for the decision to be reviewed and then to go further, to the county court—so there are options available for a prospective tenant.
I hope my responses provide reassurance that within the Bill there are adequate safeguards for tenants. The new review procedure will ensure that landlords make appropriate decisions, based on households’ housing needs, and that where they decide to terminate a tenancy, landlords will need to give ample notice and provide advice to support tenants’ access to alternative accommodation. These changes are about supporting local authorities to make the best use of their social housing stock and supporting tenants into home ownership, not making the vulnerable homeless. With these assurances, I ask the noble Lord to withdraw his amendment.
Lord Beecham
At this time, I am not disposed to prolong the agony. I beg leave to withdraw the amendment.
Lord Beecham
“Incidence and prevention of homelessness
(1) Upon the coming into force of this Act, the Secretary of State must undertake a review of the incidence and prevention of homelessness and rough sleeping.(2) The review should include consideration of the effect that Chapters 3 and 6 of Part 4 will have on levels of homelessness and rough sleeping in each local authority area.(3) A report on the review must be published, and laid before each House of Parliament, no later than six months after the coming into force of this Act.”
Lord Beecham
Perhaps I should just say something. I am not going to make a long speech on this, your Lordships will be pleased to know.
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
The noble Lord needs to move it.
Lord Beecham
I will formally move it. I just think we need a proper debate, not at 11.30 pm, on the growing problem of homelessness and rough sleeping. We will deal with that on Report if the Government are not able to come forward with some assurances in the mean time. But it is too late to get into such an important issue, so I shall move the amendment formally.
Baroness Lister of Burtersett
I will speak to Amendments 82GB and 82GC. They would provide a right to succession and secure tenancy for a carer where there is no spouse or common-law partner. Without this, carers who have given up so much to care for a parent or sibling could be rendered homeless when the person they have cared for dies or moves into residential care, even if they have lived in the property for many years. This is because, as it stands, Schedule 8 to the Bill will standardise all secure council tenancies by removing the automatic right to succession for anyone but a spouse or common-law partner, as with all secure tenancies granted after 2012.
Carers UK demonstrates the potential impact of such a measure through the story of John, who gave up his music career to care for his father who had Alzheimer’s disease and his mother who had severe psychiatric problems, moving back into his parents’ council property to become a full-time carer in 2010. Last year, John’s father had a severe fall and was hospitalised, and later moved permanently to a nursing home due to his care needs. John’s mother has now become impossible to care for and the family are exploring the option of residential care due to her increasing needs. Under the Bill, if John’s mother moves into care, he will have no right to succeed to the tenancy and will be evicted from the family home by the council.
The least we can do for carers such as John, who gave up his career to care for his parents and depleted his savings in doing so, is ensure that they have the ability to stay in their home once their caring role ends. While local authorities will continue to have discretion to grant succession rights in certain cases, the guidance on this is very poor and must be updated to include carers—something I hope the Minister will look at. Better still, their right to succession where there is no spouse or common-law partner, should be enshrined in legislation.
Lastly, it is important to note that these amendments are in line with recommendations put forward by the Law Commission’s review of housing. The Law Commission recommended that in the absence of a spouse or partner a “reserve successor”, such as a carer, should be able to inherit the home if it is their only or principal residence. In fact, until 2012 the government guidance also recognised that those providing care should have the opportunity to inherit the tenancy. However, I understand that this section of the guidance to local authorities was removed in 2012. The Minister very kindly agreed to meet Carers UK to discuss the previous amendment. I suggest that we add this issue to the agenda for such a meeting, especially in the context of the Government’s carer strategy, currently in development, which looks at how we can better support carers across all aspects of their lives.
Baroness Evans of Bowes Park
I thank the noble Baroness for her amendment. While I remember, I will happily extend the discussion with carers’ groups to cover this as well as the previous issue. I know it is late, but before I turn to the amendments perhaps it would be helpful to say a few words about the provisions in the Bill.
Clause 114 introduces Schedule 8, which changes the rules on succession to secure tenancies and makes equivalent changes in relation to introductory and demoted tenancies. Currently, there are significant differences between the succession rights of secure tenancies granted before April 2012 and those granted after that date when changes introduced by the Localism Act 2011 came into force. These provisions will deliver a consistent approach across all local authority tenancies by bringing the succession rights to tenancies granted before April 2012 in line with those granted after that date. They will put common law partners on an equal footing with married couples and civil partners. Other family members of those with secure tenancies granted before April 2012, who may have had an expectation that they would succeed because they had lived with the tenant for at least 12 months, will lose their statutory right to succeed. Instead, local authorities will have discretion to grant whatever additional succession rights they consider appropriate. Where local authorities grant additional succession rights, we expect them to apply the same rules to tenancies granted before and after April 2012. However, we will provide guidelines to assist local authorities to exercise their discretion.
Lord Beecham
I accept the noble Baroness’s invitation and beg leave to withdraw the amendment.