Draft Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) (Amendment) Order 2018
(5 years, 9 months ago)
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The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) (Amendment) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Davies.
From 1 January 2019, the ring-fencing regime will require the structural separation of core retail banking from investment banking for UK banks with retail deposits of more than £25 billion. Ring-fencing was the central recommendation of the Independent Commission on Banking, chaired by Sir John Vickers, which the Government accepted and legislated for via the Financial Services (Banking Reform) Act 2013. It will support financial stability by insulating retail ring-fenced banks’ core services, whose continuous provision is essential to the economy—retail and small business deposits and payment services—from shocks originating elsewhere in the global financial system. It means that banks that provide those essential services become simpler and more resolvable, so core services can keep running even if a ring-fenced bank or its group fails.
As well as ensuring that UK taxpayers are not on the hook for bank failures, ring-fencing should mean fewer and less severe financial crises in future, which will benefit the whole economy. Details of the regime are set out in secondary legislation passed in 2014. As part of restructuring to comply with the ring-fencing regime, banking groups may be required to move some accounts from one legal entity to another—for example, they may need to move a retail depositor’s account into a new ring-fenced bank. However, some of the holders of those bank accounts are subject to financial sanctions that prohibit the movement of any funds that said account holders own, hold or control. The conflict with financial sanctions regimes means that at present some banking groups are unable to comply fully with the ring-fencing legislation.
The order resolves the otherwise conflicting requirements between a ring-fencing regime and financial sanction regimes by amending the Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014. It amends the definition of a “core deposit” so that accounts whose account holders are or have been subject to financial sanctions, as defined in section 143(4) of the Policing and Crime Act 2017, at any time in the past six months, are no longer included in the definition. That means that banking groups will not be required to move retail accounts whose holders are subject to financial sanctions into ring-fenced banks. Banking groups will have six months from the removal of sanctions to remove retail accounts of those account holders previously subject to sanctions inside the ring fence.
The order will ensure that banking groups that cannot otherwise comply fully with the ring-fencing regime owing to sanctions legislation are not deemed non-compliant under the ring-fencing legislation. The amendment does not alter the location and height of the ring fence and nor does it alter the timetable for ring-fencing: banks in scope must be ring-fenced by 1 January 2019. Together with the Prudential Regulation Authority and the Financial Conduct Authority, we are monitoring their progress closely.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to see you in the Chair, Mr Davies.
As we approach the 10th anniversary of the financial crisis, this order is a timely reminder that the regulatory effort to ensure that we have a safer, more robust banking system is still a work in progress. Creating safeguards to prevent a repeat of the events of 2008 are of the highest priority, given the devastating impact of that crisis on people’s lives and the wider British economy, the legacy of which is still felt by many families today.
Few would disagree that there is still significant work to be done to rebuild trust in the banking sector and to create a framework of institutions that serve both customers and market participants fairly and effectively. Ring-fencing is a central part of that project. Given its scale and complexity, it is perhaps understandable that areas have arisen during the implementation phase that require further amendments to the statute book. Banks should clearly not be put in the position where it seems that there is a conflict between complying with the letter of the law on ring-fencing and with the rules on financial sanctions, so the Opposition support the measure.
Significant sums of money may be involved. According to the Government’s written statement in February 2018, up to £1.4 billion flowed through the UK in breach of financial sanctions in 2017. Worryingly, that figure is a correction to a previous parliamentary statement that wildly underestimated the figure at just £117 million. Given the geopolitical environment, which the Minister knows only too well from events in his constituency, the Government must do better to instil confidence that they can clamp down on dirty money coming into our financial system.
I have two questions for the Minister about the order. First, it dictates that banks will have up to six months to move accounts over after sanctions have been lifted. Can he shed some light on how that timeframe was decided on, as it seems rather generous? Secondly, the explanatory memorandum states that the Treasury will consult with affected banks, in tandem with the regulators, on their implementation plans. Can the Minister provide further information about how the order will be monitored for compliance purposes, to ensure that the affected banks have moved accounts in the allotted time?
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. The SNP cautiously welcomes the order, but feels that it could go further. As the powers to tackle tax evasion and avoidance largely lie here, we do not feel that the UK Government are being proactive enough to gather those funds into the public purse. As the hon. Member for Stalybridge and Hyde said, the funds represent a significant amount of money that all our constituents should see the benefit of.
It is positive that banks will be able to effectively comply with the ring-fencing regime and provide crucial regulatory protection for consumers, but we are concerned that the UK Government need to improve the sanctions regime. That cannot wait until 2021 when public services are being cut. Why will the Minister wait until 2021, which is quite some time from now, to review the measure? We may learn lessons more quickly than that. It would make sense to review it and ensure that we are learning, rather than to wait and pick up the pieces afterwards.
In the context of the legislation, which has territorial extent in Scotland, what consultation has been done with the Scottish Government? Our robust anti-avoidance rules on devolved taxes where we have control are among the toughest in the world. We would like the UK Government to follow our lead and crack down on some of the current tax avoidance. We are serious about doing that in the areas that we control, and we would like there to be a consistent approach that uses best practice.
Although the measure is a welcome step in the right direction, the UK Government must take more action and accept the criticisms of the sanctions regime that were raised some months ago in the Committee of the Sanctions and Anti-Money Laundering Act 2018—a much colder room than this one. They should also tackle dirty money as well as tax avoidance and evasion, because huge sums of money are still being laundered through Scottish limited partnerships. I appreciate that that consultation closes on 23 July, but it would be useful to hear anything that the Minister can tell us about when action will be taken following the conclusion of that review.
John Glen
I am grateful for the opportunity to discuss the order, and for the points made by the hon. Members for Stalybridge and Hyde and for Glasgow Central. We have engaged with the Prudential Regulation Authority and the Financial Conduct Authority on the wording and the extent of the order, which proposes to amend the ring-fencing legislation, and feedback has been positive.
The six-month timeframe was chosen to ensure that banks have enough time to make the necessary transfer; it was the result of a practical conversation with the regulators. The hon. Member for Glasgow Central asked why we are waiting until 2021 to review the instrument. That leaves enough time for the PRA and the Treasury to identify potential issues and consult on any changes.
Some wider points were raised when we were in Committee in this room previously. I acknowledge that there are ongoing concerns about various aspects of the sanctions and anti-money-laundering regime. They are without the scope of this conversation, but I am happy to address any specific concerns by letter; that would be more appropriate than to try to answer them conclusively now. I hope I have satisfied Opposition Members, and I commend the order to the Committee.
Question put and agreed to.
Draft Immigration (Provision of Physical Data) (Amendment) (EU Exit) Regulations 2018
(5 years, 9 months ago)
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The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Minister for Immigration (Caroline Nokes)
I beg to move,
That the Committee has considered the draft Immigration (Provision of Physical Data) (Amendment) (EU Exit) Regulations 2018.
It is a pleasure to serve under your chairmanship, Sir Christopher. This draft statutory instrument was laid before Parliament on 2 July. On 21 June we published a statement of intent and I made a statement to the House on the European Union settlement scheme. The statement of intent sets out details of how EU citizens and their family members will be able to obtain settled status in the UK. It also sets out how the process will be straightforward and streamlined, and that we will support applicants to get the right outcome.
EU citizens will need to meet three core criteria to be granted status under the EU settlement scheme: proving their identity, showing that they are resident in the UK, and declaring whether they have any criminal convictions. The draft regulations form part of the legislative underpinning for that scheme.
As is currently the case with applications for documents under EU law, the draft regulations will enable us to require EU citizens and their family members to provide a facial photograph as part of their application for status under the settlement scheme. We need that to check their identity and to confirm that the passport or ID card that they have provided belongs to that person, which will help us to identify and to deter any fraudulent application, and to process applications as quickly as possible.
As is also currently the case in the immigration system, non-EU family members applying under the scheme will be required to enrol their fingerprints, unless they already hold a biometric residence card. Recording biometric data and biographical information is important because we can confirm a person’s biographical details and fix them to their unique biometric identifiers, establishing a reliable link between holders and their status. That also allows us to check against existing records to ensure that the person who applies is not known to the police by another identity.
I would like to take this opportunity to reiterate that the EU settlement scheme will deliver on our commitments to administer a straightforward process. We are designing the online application form so that it is short, simple and user-friendly. It will be accessible by computer, tablet or smartphone, with clear guidance every step of the way. EU citizens’ facial photographs will therefore be captured digitally as part of the application process. Those non-EU family members who do not already hold a biometric residence card will need to attend one of our application centres to enrol their fingerprints and facial image.
Approval of the draft regulations is an important step in getting the EU settlement scheme up and running. I commend the regulations to the Committee.
Afzal Khan (Manchester, Gorton) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher.
The Labour party opposes this draft statutory instrument. Significant powers to collect biometric data have been too widely defined and the regulations have been drawn up without regard to vulnerable groups, adequate consultation or the Brexit negotiations.
Our first area of concern is the scope of the powers in the draft regulations. Will the Minister clarify what data the Home Office will collect, and from whom, under this statutory instrument? The EU settlement scheme says that EU citizens will be required to provide a facial image, but does not mention other biometric data. Will she confirm that EU citizens applying for settled status will not be required to supply, beyond a facial photograph, fingerprints or other biometric data? Will she also confirm that the draft regulations do not allow any changes to those requirements without coming back to Parliament? Will she confirm that the Home Office will not have the power to collect biometric data beyond fingerprints for non-EU family members of EU citizens?
The Home Office has repeatedly emphasised that the application process will be streamlined, user-friendly and entirely digital. Will the Minister confirm that requiring applicants to provide biometric data, including fingerprints, means that an application cannot be completed online? That will place further barriers to registering this large population before the end of the implementation period, and increase the likelihood that we will have a large undocumented population, come the end of the transition period.
The draft regulations deal with family members of EU citizens, but do not specify to which family members they refer. That leaves open the possibility that British-born children, or children who have spent most of their life in the UK, may be required to pay to provide biometric data. Can the Minister confirm that special consideration will be made for children, so that they do not have to go through the lengthy and expensive process of providing biometric data? The Migration Observatory has highlighted the children of parents who either do not apply for settled status or do not know that their children need to apply as being particularly at risk. How is the Minister further protecting children who are dependent on their parents for a settled status application?
Secondly, we are concerned that not enough is being done to mitigate the impact of this measure on vulnerable groups. Not enough has been done to reduce the costs for citizens with lower income. In the case of a family of five, regardless of their financial situation, they will need to pay £227.50 to apply for a status that they did not need before. This is a significant cost for individuals and families to bear, and might even deter them from applying for settled status, which would leave them vulnerable, as they might become undocumented in the country. What financial assistance will the Government provide to low-income people who need to apply for settled status?
Can the Minister also confirm whether providing biometric data to the Home Office will be an additional cost, and therefore an additional barrier, to applicants? The former Immigration Minister spoke to the Lords EU Select Committee in December and assured it that we could forgo health insurance for students and those who are economically inactive. There is no mention of that in the statutory instrument, so can the Minister confirm those comments?
Although it is welcome that, to some extent, advice and support for applicants will be provided, it is not clear what the scope of that assistance will be, or how many caseworkers there will be and what training they will receive. The Minister has talked before about a customer contact centre. Can she provide any further information about who will staff the centre and whether information disclosed to it will be passed to immigration enforcement officials?
The question of how employers, landlords or banks have been consulted on the settled status scheme remains ambiguous. Applicants need to prove their status to these people or bodies in order to obtain a work contract, bank account or rental agreement. There is already evidence that EU citizens are being discriminated against in the rental and employment markets. What specific consultation has taken place with employers, landlords and bank groups on the settled status scheme and how has their advice been incorporated thus far?
We are concerned that successful applicants will not be given any physical document that evidences their status, as current biometric residence card holders are. This is a serious problem for the digitally illiterate. For example, there are particular concerns among the Gypsy, Traveller and Roma communities that this decision will effectively amount to exclusion of their communities, so will the Minister consider introducing physical proof of status?
Our third area of concern is around the lack of consultation. Paragraph 10 of the explanatory memorandum says:
“The Home Office has not undertaken a full public consultation, but the policy has been discussed with its internal and external stakeholders, such as groups representing EU citizens in the UK”
and other groups. What specific groups have been consulted to represent EU citizens in the UK, and how have their assessments of the amendments been incorporated in the draft? Also, what further details can be provided about the future full public consultation that will take place?
Paragraph 5 of the explanatory memorandum says that the Minister for Immigration believes this statutory instrument is compatible with the European Convention on Human Rights. However, as this statutory instrument deals with collecting biometric data, we do not believe that it is enough for the Minister to make that judgement on her own. Will she carry out a full and thorough consultation on the instrument’s compatibility with the European Convention on Human Rights?
Paragraph 12 of the explanatory memorandum says that the impact on the public sector
“is expected to be minimal as these Regulations only affect individuals.”
Tens of thousands of EU nationals work in our NHS and public sector. The Scottish Government are paying for all public sector workers’ settled status applications. Will the Minister consider doing that for other parts of the UK too?
Finally, we are concerned about the potential impact on negotiations with the EU. The statutory instrument has been drafted without regard for the Brexit negotiations or the EU law that still applies to the UK while we are a member of the EU. The Government have consistently neglected the negotiations. The previous Secretary of State for the Brexit Department hardly visited Europe for negotiations, and the new Secretary of State has decided to take an evening off rather than attend the first day of the first round of negotiations since he got the job.
Richard Graham (Gloucester) (Con)
The shadow Minister is making a number of points. Clearly there is a pay-off between full and maximum consultation and having something that is implemented in a timely way, so that it is available for people as soon as possible. On his second point—which is beginning to deviate into personal criticism of the politicians involved—does he accept that, for those of us on the Brexit Select Committee, this is an incredibly important development that is absolutely in kilter with the tone of the negotiations, which is to resolve problems for citizens, whether European or British?
Afzal Khan
I thank the hon. Gentleman for his question. I do not disagree that it is important; that is precisely why I am asking the questions. It is vital that we get this right.
What discussions has the Minister had with the EU to establish whether it will accept the provisions in the instrument, and what evaluation has she carried out to establish that the powers are legal while we are still members of the EU, given that we are not requiring UK citizens to submit the same kinds of data? There are serious concerns that the EU settlement scheme will cause an explosion of bad advice from phoney solicitors, exploiting vulnerable applicants. With vital protections stripped away in the recent Data Protection Act 2018, there is an even greater need for good advice. What is the Minister doing to make legal advice available for those who need it among the 3.6 million?
I have outlined the serious concerns that the Labour party has about the statutory instrument. The powers have been insufficiently defined, there has been no thorough consultation, and there has been too little regard for our negotiations with the EU. The EU settled status scheme is being introduced in the context of the “hostile environment”. Ministers have claimed that the process will be straightforward and streamlined, and that caseworkers will be given the benefit of the doubt. However, such an approach would require a total overhaul of the culture and training in the Home Office. I do not believe that that can be achieved in 18 months, so it is essential that we protect all the safeguards, checks and balances that we can.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship, Sir Christopher. I can be very brief, because I share most of the concerns that the shadow Minister has expressed.
I will briefly focus on the scope of the instrument. As long ago as September 2017, there were Home Office assurances that EU citizens would not be fingerprinted after Brexit. In the light of those assurance, the 3 million subsequently issued a statement—with the Home Office’s agreement, as I understand it—that said:
“The Home Office has confirmed in accordance with the Policy Paper (of 26th June 2017) and subsequent negotiations with the Commission on Citizens’ Rights its position that EU citizens…will not have to submit fingerprints”.
The Government then repeated those reassurances in their technical note “Citizens’ rights—administrative procedures in the UK”, published on 8 November 2017. Paragraph 12 said:
“We will verify identity and are considering digital ways to do this in order to make it both secure and user-friendly. We intend to ask applicants to submit a photograph. We will not ask EU citizens for other biometric data such as fingerprints.”
My simple question is: why is the Home Office seeking to help itself to a broader power to do something that it has previously said expressly that it would not do? Are we not in danger of undermining reassurances that have been given to EU citizens, and drawing back on them?
Neil Coyle (Bermondsey and Old Southwark) (Lab)
It is a pleasure to follow the other hon. Members who have spoken, particularly my hon. Friend the Member for Manchester, Gorton.
It is two years since the referendum and 16 months since the Government triggered article 50, and this is it. I have 9,800 constituents who are affected by this issue—non-UK EU nationals living in Bermondsey and Old Southwark. They were hoping for more information. They still have no idea of the cost of registering in the new process. That is meant to be sorted by October. We have three months left, and eight months until we are supposed to leave full stop. The Government said that registering could cost less than a passport, but this was an opportunity to provide more information. If my constituents face a charge of £70 each, they will collectively be charged £686,000 for the new process.
The Government are still not clear about what people are registering for. What rights will it help them to accrue, and are they intractable? If someone has been here for five years and secures permanent residence, but then leaves for five years for work or due to care responsibilities, what are their legal rights? These regulations were an opportunity to address that. Will the Minister clarify whether someone in those circumstances will have lost permanent residence, or whether they will be able to return unfettered?
This issue also affects UK expats living in other EU countries. One of my constituents, Adrian Priestman, gave me a book entitled “In Limbo Too”. He lives in France, and his wife holds dual nationality, lives in the UK and works in the NHS. One of the book’s chapters is called “I have been worried each and every day since the Referendum”, which speaks volumes about the UK Government’s abandonment of that group. What does the Minister expect other EU member states to do for UK nationals living in their countries in response to the regulations? What relationship can those people expect, given the uncertainty that results from the lack of information?
We expected the regulations to outline the process in more detail. The Minister said that much of it will be digital—fingerprints will be done digitally, for instance—but acknowledged that the biometric data cannot be digital. What assurance does that give, given the mess of online information sharing for universal credit and from other Departments? Will the Minister give an assurance that information can be shared safely under any digital process?
The Government were also supposed to use the regulations to clarify health insurance issues. The then Minister said to the House of Lords in December that the requirement to have health insurance might be waived for some EU nationals living here, including students and economically inactive people. Seven months later, there is nothing in the regulations to deliver on that approach. It is a chaotic approach from a Government riddled with division—there has been another resignation today. Will the Minister tell us how EU nationals will be helped to secure health insurance or be made aware of the need to secure it? Who do the Government now expect to be exempt?
The Government were also supposed to show how they will support EU nationals living here. Some 2.9 million people are affected, and there is nothing in the regulations to show how they will be helped through the online process. Will the Minister indicate whether the Home Office or another Department is responsible for that?
Worryingly, the regulations cover many children. Will the Minister outline how many will be affected and what registering means for them? Paragraph 3.2 of the explanatory memorandum says that the scheme is for EU nationals living in the UK, but it also says that some British citizens could be covered. How many, and at what cost? There is so little detail. That will appal the families in my constituency who were expecting the regulations to provide more detail. There is the potential for more British children to be taken into the system, because British children with dual-nationality parents will be affected. Again, how many, and at what cost? Where is that information to be found?
The Government say that the regulations are compatible with the European convention on human rights. How so, if one citizen has rights that another one is expected to pay for? If a family leaves due to the high cost, their right to family life is obviously affected. Human rights are meant to provide a platform of equality. The regulations will provide for unequal UK citizenship and allow for discrimination against some families, which would be against article 14. That follows the Government’s pattern of creating a hostile environment, which affects a lot of my constituents and leaves British parents unable to access child benefit and housing benefit. They are expected to pay £1,000 to the Home Office for an admin process that costs £300. The regulations will potentially take that much further and affect more British children, but very little detail has been provided.
The Government have said that there has been no consultation—we have had two years for a consultation—for significant changes that affect not just EU nationals but many others. They said that other Departments and consulates had sent in responses—there was not a consultation, but some have sent in responses. Will they be published? Why was it only the Department for Work and Pensions that responded, not the Department of Health and Social Care and other Departments? Which consulates responded? What did they ask for? That would be really useful information.
The Government also suggested that the regulations will affect only individuals. That is astonishing. Of course businesses are affected by them, as they may have to cover new costs for employees. There is no demonstration that the Government have understood the impact on business. There are more than 2.9 million EU nationals living here, and most are in work. It is an insult to businesses, and especially to small and medium-sized enterprises, to claim that there will be no effect. What about the impact on employees? As we have seen today, 139,000 EU citizens left last year, and fewer are coming in every year.
What about businesses’ ability to recruit? What assessment have the Government made of the cost of recruitment and retention to businesses up and down the country? I know that the Government have given up the ghost as far as pretending to be party of business is concerned. The former Foreign Secretary, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), showed that as he pootled round the globe like Toad of Toad Hall—not always to dodge votes in this place—using highly colourful language about what he thought of British business. The regulations take that even further.
However, it is not only business that is affected. The Government claim there is no impact on the public sector. There are more than 50,000 EU nationals working in the NHS. Local authorities and NHS trusts commission St Christopher’s to provide palliative care and end-of-life care, and they rely on a workforce that in my constituency is 53% non-UK EU nationals. That is why an impact assessment was essential. Why did the Government not undertake one for the regulations? It could have revealed all the issues. Despite the impact on business, employment, health and social care, disabled people whose health and social care services are affected and the women who are the majority of the workforce in those sectors, as well as the potential for age discrimination against children from new costs, the Government should consider an impact assessment now—in full.
The Government say that the regulations will be monitored and reviewed, but there is no detail about how, when there is so little time to get things right. It is important to ask when the regulations will be reviewed. In 10 years, or a month? Will they be under constant review? Will any review consider the average process times for those who apply, and what will the Government do to address emerging challenges? It is important to get that right.
Home Office understaffing means that more than 300,000 people are waiting for decisions right now. That affects my constituents every week, because it takes more than eight months to get the simplest of visas. Lillian came to see me on Friday. She has leave to remain. She expected a biometric card in April, but it still has not arrived. As a result she has missed her father’s funeral in Lagos. Her mum is now in a critical condition in hospital in Nigeria as well. That card needs to arrive. No one should be similarly affected by the process, but there is no commitment in the regulations or associated documents on how the Home Office will address that kind of delay.
Business is affected as well. A financial news specialist firm from my constituency told me it is moving 30 jobs to Düsseldorf because of the Home Office delays in getting visas. It cannot wait, and that is under the current system. These regulations will add more people and work into Home Office systems, with no commitment to resourcing them, so how will the Government prevent further delays and their impact on business?
There are time limits on applying for registration, so how will the Home Office extend the timeline for applying, to cover delays? That should be in the regulations. The drafting of the statutory instrument is an insult to UK and EU nationals alike, and I cannot possibly support it.
Caroline Nokes
As I set out in my opening remarks, and as I told the House on 21 June, the EU settlement scheme will enable EU citizens and their family members to obtain settled status. We will ensure that there are assisted digital services to enable applicants to complete their applications online, where there are technology or access barriers. UK Visas and Immigration already has an assisted digital service to help the most vulnerable.
Nic Dakin (Scunthorpe) (Lab)
Can the Minister explain what a digital assisted service will consist of?
Caroline Nokes
I thank the Whip for that question. UKVI staff already travel to individual applicants’ houses in some instances to assist them through the process, but we are hoping to roll this out to a range of other stakeholders, including organisations such as Citizens Advice and Age Concern, which have participated constructively in the various user groups that we have already set up.
Neil Coyle
How much money do the Government provide to organisations such as Citizens Advice, bearing in mind that it already sees 50,000 people a quarter as a direct result of universal credit? Does it have the capacity for that, and how much is it being resourced to try to cover the Government’s backside?
Caroline Nokes
The hon. Gentleman makes an important point about support to local authorities and to Citizens Advice. We are not seeking to add burdens to those organisations that already provide great service to our constituents.
As I said, EU citizens and their family members who can provide evidence that they have lived here continuously for five years will be eligible for settled status. Those who have lived here for less than five years will generally be granted pre-settled status and be able to apply for settled status once they reach the five-year point.
Alongside the immigration rules and fees regulations that I will lay before Parliament shortly, the regulations that we have debated today will provide the legislative underpinning for an important scheme that I am sure all Members will agree we need to open as soon as possible. EU citizens will need to meet three core criteria to be granted status under the scheme: proving identity, showing that they are resident in the UK, and declaring whether they have any criminal convictions. Collecting biographical information and secure biometric data about applicants is critical to that process.
For those who wish to complete the application entirely online, an app will allow EU citizens to confirm the relevant details remotely on their mobile phone or tablet, or at a location established for them to use the app or be helped to do so. Alternatively, they will be able to send their identity document by post, and a dedicated team will check it and return it without delay.
Secondly, we will establish that the applicant is resident in the UK and, where appropriate, their family relationship to an eligible EU citizen. Where possible, we will do that automatically using employment and benefit records, but applicants will also be able to provide a range of supporting evidence and we will work flexibly with them to help them to evidence their continuous residence.
Thirdly, we will check that the applicant is not a serious or persistent criminal and does not pose a security threat. That is absolutely the right thing to do to protect everyone who lives in the UK. It will not affect the overwhelming majority of EU citizens and their family members.
The biometric regulations will enable us to require EU citizens and their family members to provide a facial photograph as part of their application, which we need to confirm their identity by comparing it with the photograph in their identity document, so as to be satisfied that they are one and the same person. We currently require a facial photograph as part of applications for documents issued under EU law, such as registration certificates and residence cards. As is currently the case across the immigration system, non-EU citizen family members who apply under the scheme will also be required to enrol their fingerprints, unless they already hold a biometric residence card.
Recording biometric data and biographical information is important because it enables us to confirm and fix a person’s details to their unique identifiers, and establishes a reliable link between the holder and their status. It also allows us to check against existing records to ensure that the applicant is not known to the police by another identity.
The withdrawal agreement permits the UK to open the scheme before we exit next March. It will be voluntary while EU citizens and family members exercise their free movement rights. Children under the age of five will not need to provide fingerprints, but we need to take photographs so that children are protected and do not face difficulty evidencing their stay in the UK.
It is for other member states to determine the rights of UK nationals living in the EU, but we are proactively engaging with them to encourage their preparations, alongside our detailed preparations. There is no requirement for comprehensive sickness insurance under the scheme, and that is not a matter for these regulations.
Biometrics will be used and shared only in accordance with the law, which will mainly be for law enforcement purposes or as specified in the regulations as amended. That does not include sharing biometric data with commercial partners. We will retain biometric information only as long as its retention is necessary in connection with an immigration or nationality purpose, and we will normally delete fingerprints 10 years after any leave lapses, unless the person is considered to be a threat of high harm to the UK, in which case we will retain them indefinitely.
Neil Coyle
I have a quick question, as I suspect we will not get answers to many of the others. Does the Minister expect the system to be as effectively and sensitively administered as that which affects Commonwealth citizens who are legally entitled to be here but are affected by the Windrush scandal?
Caroline Nokes
The hon. Gentleman makes an important point about those Commonwealth citizens who have been affected by issues related to Windrush. The key issue for the Windrush generation is that they did not have documentation to evidence their legal immigration status, which is why it is so crucial that EU citizens and their family members apply under this scheme, so that they will be able to evidence their status in future.
We have engaged comprehensively with stakeholders throughout the process.
Stuart C. McDonald
On the issue of engagement, as I said earlier, the Home Office has repeatedly said that it will not require fingerprints from EU nationals, but these regulations appear to allow for that to happen. Can the Minister clarify that?
Caroline Nokes
For absolute clarity, the regulations allow for the collection of fingerprints from the non-EU family members of EU citizens. We will not collect fingerprints from EU citizens.
We have engaged with EU citizens at every stage of the development process, and will continue to do so. We recently set up a user group specifically for vulnerable users, which has enabled us to draw on important and useful information from organisations such as Age UK. We will continue to expand our communications to ensure that EU citizens are aware of the scheme, how it will operate and what information they will need to provide, and that they are reassured that they will have plenty of time to apply for their new UK immigration status.
The issue of fees was raised. That matter was comprehensively examined last week in front of the Exiting the European Union Committee. It is clear that the fee was agreed with the EU when we were conducting the citizens’ rights part of the withdrawal negotiations and, with a process that will take three years to complete, I absolutely expect that the average family will be able to save up the amount required.
Caroline Nokes
An adult fee is £65, which is the same amount as the current fee for a permanent residence document. Of course, permanent residence is a status conferred under EU and not UK law, and it will lapse after we have exited the EU. For children it will be £32.50, and for children in care there will be no fee.
Richard Graham
It was interesting that the Opposition spokesman, the hon. Member for Manchester, Gorton, called earlier for a prolonged consultation on the regulations while his colleague, the hon. Member for Bermondsey and Old Southwark, asked whether we could introduce them yesterday. Am I not right in thinking that they will come into force 21 days after they are made, and therefore EU nationals living in this country can get on with applying to regulate their status pretty quickly, which could not possibly happen if we had the sort of long consultation that the Opposition are calling for?
Caroline Nokes
I thank my hon. Friend for his question. He is, of course, right: we want to crack on with this. To me it is important that we get the settled status scheme up and running, so that the EU citizens who have contributed so much to our community and our economy have the ability to confirm their status without further delay. I therefore hope that the Committee will approve the regulations.
Question put.
Draft Higher Education (Fee Limits and Fee Limit Condition) (England) Regulations 2018
(5 years, 9 months ago)
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The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
I beg to move,
That the Committee has considered the Draft Higher Education (Fee Limits and Fee Limit Condition) (England) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Rosindell. On 2 July, I announced that maximum fees for students undertaking undergraduate courses in the 2019-2020 academic year would remain at 2018-2019 levels for the second year running. The Government have listened to the views of young people, parents and Members, and have decided to freeze maximum tuition fees for the 2019-2020 academic year, saving students up to £255.
The freeze in fees builds on other changes we have made to help students with their finances. From the ’18-’19 tax year we increased the threshold above which graduates are required to make repayments on their loans from £21,000 to £25,000, rising by average earnings thereafter. That puts more money in the pockets of graduates, and it is happening in the context of widening access to higher education. A record proportion of 18-year-olds, including those from disadvantaged backgrounds, are going to university to study full time. However, there is still more to do across higher education. That is why the Government are undertaking a major review of post-18 education and funding to ensure that we have a joined-up education system that is accessible to all and encourages the development of the skills we need as a country. The Government expect to conclude the review in early 2019.
These regulations are made under section 10 and schedule 2 of the Higher Education and Research Act 2017. They set the maximum fee limits that providers in England can charge home students in 2019-2020. The existing fee caps, made under section 24 of the Higher Education Act 2004, will be revoked automatically on 1 August 2019 as a result of paragraph 30(2) of schedule 11 to the 2017 Act. It is therefore essential that new regulations are made under HERA to ensure that fee caps continue and that students benefit from the freeze in maximum fees.
Under HERA, providers can choose to register with the new independent regulator, the Office for Students, in one of two categories: the “Approved (fee cap)” category or the “Approved” category. Providers registering in the “Approved (fee cap)” category will, for 2019-2020, be eligible for OfS grant funding and subject to maximum fees set in the regulations—£9,250 for a full-time course offered by a provider with a teaching excellence and student outcomes award. Students attending “Approved (fee cap)” providers will be able to access loans to cover the full costs of their fees. Providers registering in the “Approved” category, however, will not be eligible for OfS grant funding or subject to maximum fees. Students attending those providers will be able to access lower rates of loans towards the costs of their fees. Under HERA, the OfS will be able to limit fees charged by “Approved (fee cap)” providers once the regulations come into force.
Without the regulations, providers will be free legally to charge whatever fees they wish, and we will be unable to implement fully the new regulatory framework under HERA—in particular, the requirement for “Approved (fee cap)” providers to submit access and participation plans to the OfS in order to charge fees above £6,165 for full-time courses. The regulations will ensure that providers have to adhere to the maximum cap, and without them, providers would be free to charge whatever they want. I commend the regulations to the Committee.
Gordon Marsden (Blackpool South) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Rosindell. I thank the Minister for the indications he has given today. I give notice, for the relief of Government Members, that we do not intend to oppose these regulations. We do, however, intend to hold the Government to account—that is the role of the Opposition—by asking one or two questions about them.
We are discussing regulations that will, as the Minister said, freeze tuition fees for a second straight year and set the levels at which institutions can charge students, depending on their place in the Office for Students’ new register. I emphasise for the benefit of all Committee members that we are entering new and uncharted waters. The OfS is not the same as the Higher Education Funding Council for England, and the Government do not wish it to be the same; that was made very clear during proceedings on the Higher Education and Research Act 2017. That means that we have to tread carefully, both in establishing precedents and in evaluating the effectiveness of the implementation of the regulations, the capacity of the OfS to implement them, and the outcomes. I will be asking the Minister one or two questions about that.
In the 2017 Act, the Government balanced the introduction of differentiated fees for institutions with the creation of the teaching excellence framework. The TEF was one of the ways in which differentiated fees would be established, which is why the Government used the Act to put those mechanisms in place. However, the Government have not been able to do as they originally intended with these regulations, because they are committed to a full review of the TEF. Although the Minister was not involved in the discussions that took place between Labour and Conservative Front Benchers before the previous general election, he will know that that review was one of the concessions that the Government made in the so-called wash-up period. We and a large number of Members of the House of Lords were concerned that that should be done, and amendments were tabled to that effect, so the Government have to begin the process this year. Will the Minister let us know what progress has been made on appointing the independent chair for that review? If the review does not go forward in a timely fashion and is not accepted by all parties, it will be difficult to make the TEF work in establishing differentiated fees for institutions.
Although it is important and absolutely right that tuition fees do not go up any further—we await the outcome of the Government’s post-18 review—it is instructive to look at why the Government have had to do what they have done. The Minister, perfectly reasonably, said that they had listened to Parliament and various groups, including universities and young people. All of that is highly laudable, but they also had to listen to the growing clamour of concern about the long-term implications of the system they have put in place.
The Institute for Fiscal Studies found that the removal of maintenance grants from students from low-income families meant that those students were graduating with the highest debt levels—in excess of £57,000. That makes the current educational climate for students not favourable, despite what the Minister said about the number of students from disadvantaged backgrounds under the age of 18; that is an important caveat. Since 2010, Governments have repeatedly raised tuition fees. They trebled them to £9,000, with a subsequent increase during the 2017-18 academic year to £9,250. According to a Sutton Trust report from late last year, the average debt for students in England is £46,000.
There has been a steady stream of reports in recent months criticising the Government’s market model for higher education as completely unworkable. Bodies such as the Lords Economic Affairs Committee and the Public Accounts Committee have said that the student loan system is economically unsustainable and damaging to social mobility.
I understand that in introducing the regulations, the Minister wants to put the best gloss on the Government’s motivations. I appreciate that he has listened, as he said he would, to the views of students, but the Government are also introducing the measures for practical and political reasons. Whatever the basis for it, however, this freeze is highly welcome and definitely desirable, which is why the Opposition will not vote against it. We do not believe that we should place any further burdens on students at this stage. The freeze is the bare minimum that the Government should do, and there are other impacts on students and certain groups that must be looked at urgently.
Before I turn to those impacts, I will ask the Minister one or two questions about the detail of the regulations. For the benefit of the Committee, I will refer to the explanatory memorandum that we have been given. I said earlier that the OfS was a different animal from HEFCE, and it behoves me to ask a couple of questions about that. Paragraph 4.1 of the memorandum describes the background to the establishment of the process, how HEFCE currently imposes the limit on tuition fees and how the regulations
“will prescribe the maximum tuition fees that will apply to higher education providers which are registered in a certain part of the register maintained by the OfS under section 3 of the Act.”
In advance of introducing the regulations, what discussions has the Minister had with the OfS about its capacity to register the various higher education providers? We know, of course, what the Government anticipate. Indeed, one of the elements of the pitch made by the Minister’s predecessor, the hon. Member for Orpington (Joseph Johnson), was that we were going to get a great influx of new higher education providers, not least in the private sector; he made great play of that throughout proceedings on the Bill. What consultations has the Minister had with the OfS about how it is proceeding with the register, and what differences does he anticipate between the OfS’s handling of the register and how HEFCE handled it?
The Minister also spoke about the differential between providers on the register that have in place OfS-approved access and participation plans—I refer to paragraph 4.6 of the memorandum—and those that do not. The regulations prescribe an absolute commitment to fair access and participation as part of being on the register. Furthermore, paragraph 4.7 states:
“These Regulations similarly set a limit on the maximum fees that prescribed registered providers which do not have access and participation plans approved by the OfS in place, but which do have a high level quality rating may charge for full-time or part-time higher education courses…This limit is known as the ‘basic amount’.”
I have two concerns about that. Is the Minister absolutely confident that the OfS has the mechanisms it needs to distinguish between higher education providers that come under the higher amount category and those that come under the basic amount category? The phraseology in the explanatory note is those that can charge the basic amount must have a “high level quality rating”. The words “quality” and “high level” are potentially quite subjective, so it would be helpful to have some illumination from the Minister about whether it is down to his Department or the OfS to decide what a high-level quality rating is.
The last thing we need is for providers to go on to the basic amount register if they do not provide even that. Right from the beginning of proceedings on the 2017 Act, we raised the question of whether new providers could assume that they would eventually be taken as higher education providers. We argued strongly against that “day one” scenario. We accept that we were not successful, but that makes further reassurance in that area all the more important. I ask the Minister to look at that issue, in particular.
I turn to the broader issues that must be addressed with this freeze. The Minister said that the Government have had consultations but, as the former Universities Minister, Lord Willetts, admitted, the fee increases have had a major—indeed, devastating—impact on part-time and mature learning. I hope the post-18 review will look at that very closely, and I am concerned that these regulations contain nothing to remedy it. We know from the Sutton Trust that the biggest decrease has been in the number of students aged over 35—people of prime working age—and we know about the disastrous effect that that has had on the part-time sector. The Government have a key role in widening access for older people, but unfortunately they have had a funny way of showing it in recent years. There is nothing in the regulations to tilt the status quo in favour, or even in support, of mature students.
I must challenge the Minister on one point. Contrary to popular belief, and according to the Open University, the total number of English undergraduate entrants from low-participation areas actually fell by 17% between 2011-12 and 2016-17. I know I have written to him about that recently, but I am extremely concerned about it.
The regulations freeze fees for a year but do not diminish them. Given the nature of statutory instruments, they contain no measures to mitigate the effects of fees. We are agreeing to a freeze for a second year, but who knows what will happen after that? Whatever comes out of the post-18 review, it will not have any effect until the 2021 academic year, at the earliest, and the sector needs some remedy before then. What immediate remedies can the Minister put in place, financial or otherwise, to encourage more take-up of part-time courses and more take-up from mature students?
I want to return to the specifics of the regulations, which talk about the areas and the types of students that will be affected by this process. What the regulations say about maximum fees for specified cases for full-time courses includes students who come to the UK and study on an Erasmus study or work placement year. There is a great deal of concern about what the status of those students will be in terms of funding and eligibility for loans, in relation to the maximum fees that will be charged. In the HE sector, an Erasmus year is the academic year in a course when a student participates in the European Union’s Erasmus+ programme.
I wrote recently to the Minister about the application of Erasmus in 2019-20. I was grateful for his response, which said that EU27 students will be guaranteed for course studies in September 2019, possibly lasting until 2023. We welcome that and I know the HE sector welcomes that, because of the important security it offers the university sector at a time when it has lots of concerns and fears about the implications of Brexit.
However, I also wrote to the Department about whether it would provide a parallel guarantee for those in the further education sector, given that one in 10 higher education students in this country takes their degree via the FE sector. Nothing has been said about a parallel guarantee for adult education courses and apprenticeships or for those participating in the FE sector. Can the Minister chivvy up his colleagues in the Department for Education, particularly the Secretary of State, to make a parallel commitment? It would be greatly appreciated.
Finally, the Minister has talked about the importance of freezing the fees. He has talked about the rise in the threshold, but he did not talk about the interest rate payments, which brings us to the vexed issue of the retail prices index. According to the Library’s research, graduates with student loans in England will be saddled with up to £16,000 more debt because of the Government’s use of RPI instead of the consumer prices index to set interest rates. Analysis shows that the use of RPI, which has been criticised by the Bank of England and the Office for National Statistics, adds the most interest to the debt of the lowest paid graduates.
As I have said, on average students leave university with £46,000 to £50,000 of debt, which is bad enough, but because of the Government’s current interest rate system, they are being charged an additional £16,000 on their loans. In other areas, the Government have dropped RPI in favour of CPI: for example, for uprating public sector pensions. The House of Commons analysis found that switching to CPI would result in £16,000 less interest being added over 30 years to the debt of graduates. Why has there been foot-dragging on that change? What representations is the Minister making to the Treasury team and the Chancellor for his autumn Budget to make a significant change?
At the risk of being accused of being a dog in the manger about this, it is all well and fine to freeze the fees at what the Labour party would consider to be an excessive sum of money in the first place, but if the Minister and his colleagues do not do something to address the issue—or perhaps we are supposed to wait for the post-18 review—the promise of relief that they are trying to offer students and which is embodied in the regulations today will be only half fulfilled.
Emma Reynolds (Wolverhampton North East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell.
Although the official Opposition are not planning to vote against the regulations—I would not want higher education institutions to set whatever fees they like, so I understand that there has to be a cap, which is what today’s regulations are about—I remind the Committee that Labour Members opposed the increase of the cap from £3,000 to £9,000 and I regret, as my hon. Friend the Member for Blackpool South has outlined, that the regulations do not decrease the fees. I think the fees should come down. There is an argument that students should make a contribution, but I do not think that it should be as high as £46,000 or £50,000.
I have said in the Chamber that I oppose the Government’s removal of maintenance grants. I was able to benefit from such a grant at university, and I urge the Minister to ensure that universities such as the one that he and I attended, the University of Oxford, redouble their efforts so that people from under-represented groups—black and ethnic minority communities, but also working-class communities—attend them. My right hon. Friend the Member for Tottenham (Mr Lammy) recently made a freedom of information request. There were some appalling answers from the University of Oxford and other elite universities that are taking in very few people from under-represented groups. The universities and the Government need to do a lot more.
Mr Gyimah
I thank hon. Members for a wide-ranging debate and for some very pertinent questions, which I will try to answer.
The first question pertained to the independent reviewer for the teaching excellence and outcomes framework. I want to put it on the record that the process of appointing the reviewer is under way and an announcement will be made in due course, once the appointment has been made.
A number of issues were raised about the current fees system. Interestingly, the Opposition did not mention the effect of raising the threshold, which is an important policy. It cost billions of pounds and will save the average student about £10,000 over the duration of the loan. It is not an insignificant policy in ensuring that we alleviate the burden of debt for students.
Since I was appointed to this job, I have travelled around the country speaking directly to students. I have spoken to about 1,500 students since I was appointed in January. When I say that what we are doing is a response to listening to students, that is meant very seriously. Students have a range of concerns. The issue that is most likely to get them to riot on campus is actually not tuition fees, but the rent going up. That has come up repeatedly.
In that context, maintenance grants were mentioned. It is worth putting it on the record that maintenance grants offered significantly less money than a student can get through a loan. It was actually more difficult for students to pay their way through university, because they received maintenance grants of about £3,000, whereas now they can get a loan, with almost no questions asked, of £10,000. Furthermore, if someone earns less than £25,000 and cannot pay back the loan, they do not have to and after 30 years it is written off. That is helpful for disadvantaged people, because there is no barrier to their accessing higher education. It is therefore unsurprising that the proportion of disadvantaged 18-year-olds applying for full-time undergraduate courses was, in January this year, a record high of 22.6%.
Emma Reynolds
I welcome the threshold that the Minister outlined in his opening speech and has just emphasised, but there is a difference between a grant and a loan. Even if someone will never pay the loan back, they do not know that for sure because they are not entirely sure how much they will earn over their lifetime. Does he not accept that, although maintenance grants were only £3,000, that was money in people’s pockets up front that they never had to pay back? That is different from a loan.
Mr Gyimah
There are two points to make about that. If someone got a £3,000 grant in the previous system and then had to go to a bank to borrow, that would cost them a lot more than it does to borrow under the current loans system. The truth about the current system, which is obviously under review, is that it is a hybrid between a loans system and a contribution system. Opposition Members do students a disservice by pretending that it is similar to a loan from Lloyds bank. It does not go on their credit score if a student is not able to pay the money back, they will not have a bailiff knocking on their door, and there is the issue of their having a job in which they earn more than £25,000. That is very different from a commercial loan, and we do students a disservice by not explaining the system to them and pretending that it is something it is not.
Gordon Marsden
I am sorry to have to intervene on the Minister on that point. He accused the Opposition of not talking about the raising of the threshold. Let me put it on the record to satisfy him, for what it is worth, that we welcome the raising of the threshold. We have persistently and continually argued for the need to raise it, not least because of its implications for students in certain parts of the country who leave university and do not get a decent graduate premium immediately. They are in a very different situation.
However, I really must take issue with the Minister saying, “Oh well, they don’t have to pay it back.” I thought that this was supposed to be a fiscally prudent Government who wanted to look to the future, but the Minister is throwing around public loans like a man with no arms. We all know—surely the Minister has seen this too—that the resource accounting and budgeting figure for the debt that will be lain on future generations is going up and up. We cannot simply work on that basis.
The other point I will mention briefly is that the Minister says that it is much better to take up a loan, based entirely on the assumption that the cohort is made up of 18 to 22-year-olds. I am not sure that is even correct for them, but it is very different for older people—mature students in their 30s and 40s and those doing part-time courses—to take on a debt of the sort of amount we are talking about. The statistics are clear that there has been a catastrophic drop in the number of mature students and part-timers. Although we cannot say absolutely that the tripling of the fees is 100% responsible, it certainly bears a great part of the responsibility.
Mr Gyimah
I thought that was meant to be an intervention but it was a mini-speech. At the risk of drifting into a Second Reading debate on the student finance system, there is one clear difference between Government Members and Opposition Members: if university education was made free, which the Opposition argue for, the numbers would have to be capped. If it is free, it is capped; and if it is capped, it is the well-off who will benefit the most. The system we have introduced means that more disadvantaged students are going to university than ever before. We do not say that the system is perfect, and that is why there is a post-18 review with a wide-ranging remit looking at the issues, including the interest rate, which was raised by the Opposition. If the Opposition would make it free, they have to tell us whose child will not go to university under their scheme when they cut the numbers.
A number of other questions were raised. On the OfS and its capacity to register, it does have that capacity. A lot is going on, and it is on track to deliver in the timeframe that has been set. On new providers, the OfS is dealing with a number of inquiries from them. On EU students and whether the clarification regarding university students applies to FE students, I would like to put it on the record that it does.
The issue of part-time students is of serious concern. We have adopted a number of measures to support part-time and mature students. For example, in the next academic year, part-time students will for the first time be able to access full-time maintenance loans, and we are looking at a lot more support for such students as part of the Augar review.
The regulations must be introduced now because universities have to market their courses for the next academic year, but this is by no means the end of the matter as far as student finance is concerned. I thank Members for their contributions and I welcome the points raised by the Opposition. We must ensure that access to our elite universities is as open as possible, without resorting to any kind of social engineering, so that wherever in our system someone is educated, they are competitive and can apply and get into the top universities if they have the grades. That is a real focus and passion of mine, and I will say lots more about it in due course. I therefore commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Higher Education (Fee Limits and Fee Limit Condition) (England) Regulations 2018.
Draft New Towns Act 1981 (Local Authority Oversight) Regulations 2018
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Housing (Kit Malthouse)
I beg to move,
That the Committee has considered the draft New Towns Act 1981 (Local Authority Oversight) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Sharma. The draft regulations were laid before this House on Monday 4 June 2018. If approved, they will allow for the establishment of new locally led town development corporations to be overseen by the local authorities covering the area designated for the new town. Currently, any newly created town development corporation is overseen by the Secretary of State for Housing, Communities and Local Government.
The Government are committed to helping fix the broken housing market and close the gap in getting towards building 300,000 homes a year. Garden towns and villages are a key part of that, and we want them to have every lever at their disposal.
Where there are complex delivery and co-ordination challenges, we consider that new town development corporations may be the right vehicles for driving forward high-quality new communities at scale. With a statutory objective to secure the laying out and development of the new town and their own suite of powers, they should have the focus and heft to get things done. In line with our locally led approach to new garden towns and villages, we think it is right to provide the option for new town development corporations to be overseen not by the Secretary of State but by the local authorities covering the area for the new town. Our housing White Paper, “Fixing our broken housing market”, published in February 2017, therefore committed the Government to legislating to allow locally led new town development corporations to be set up. Section 16 of the Neighbourhood Planning Act 2017 enables that to happen by providing a regulation-making power to set out the necessary detail to make it work in practice.
The draft regulations effect a simple principle: the transfer of functions relating to the oversight of a new town development corporation from the Secretary of State to the local authority or authorities covering the area of the new town. As the length of the draft regulations testifies, in practice that process is not as straightforward as replacing the words “Secretary of State” with the words “local authority” in the New Towns Act 1981.
Some functions, such as the confirmation of compulsory purchase orders, will remain with the Secretary of State, and it will, of course, continue to be the Secretary of State who will lay the regulations that designate new towns and establish and dissolve new town development corporations. Some provisions, such as those relating to audit and accounts and planning, have required amendment to make them work in a context where the development corporation answers not to central Government but to local councils.
I emphasise that the draft regulations do not change the powers of new town development corporations; they simply localise oversight of the development corporation. Moreover, although the draft regulations provide the mechanism for a locally led new town development corporation to be set up, they do not enable Government to simply do so at the behest of a local authority or group of local authorities. If, as we hope and expect, local authorities consider a locally led new town development corporation to be the right vehicle, we will need to undertake a public consultation, and only if we consider designating the particular new town to be expedient in the national interest would we lay a statutory instrument to that effect. It is also important to note that Parliament will have an opportunity to scrutinise each proposal for the designation of a new town, because a statutory instrument designating a new town must be debated in both Houses.
In conclusion, if approved, the draft regulations will allow newly established town development corporations to be overseen by local authorities, via further statutory instruments laid under the affirmative procedure. In short, the draft regulations support locally led ambitions for high-quality new development at scale. They provide an important lever for delivering the transformational housing growth we need, while ensuring that surrounding existing communities can also benefit through well-planned infrastructure and community amenities.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. I welcome the Minister to his new position and hope that he manages to stay in it for some time—I have lost count of the number of housing and planning Ministers I have shadowed over the years. I thank him for outlining why the Government wish to introduce the regulations. I understand the need for them, having discussed this issue throughout the passage of the Neighbourhood Planning Act 2017.
The Opposition do not intend to divide the Committee largely because, as I pointed out often during the passage of the Act, the Government’s approach to new towns borrows heavily from ideas set out by Labour in the Lyons review, published in 2014, on how to deliver more housing for the nation. The review had a whole chapter on garden cities and new towns. On page 95, we say:
“The process of establishing the sites for new Garden Cities is both politically and technically complex…The evidence is clear that Garden Cities will not happen without local support and therefore we propose that the process will be locally-led with designation proposed by local authorities”
and proposals from other local agencies. We set out the policy intention to enable local authorities to lead on garden cities and new towns in 2014, and we are pleased that the Government have taken our idea on board, but I have a few questions for the Minister.
The regulations seek to create an oversight mechanism for new town development that reflects the locally led approach to new garden cities and villages. That is set out clearly in what the Government want to do. We are pleased that new town development corporations can be locally led, but if that is to happen local authorities need to be adequately supported and, from the information in paragraph 7.4 of the explanatory memorandum and regulation 2, I am not sure that that is the case.
Although the Opposition welcome the fact that new towns will be locally led, we have some concerns about what schedule 1, which modifies the 1981 Act, says that a new town should encompass. Our contention is not with what the schedule says but with what is missing. The Government say a new town should be expected to be
“a high quality settlement which is a sustainable community”,
that it should
“support sustainable development and good design”,
that it should have a plan for the long-term stewardship of assets, that there should be participation from the local community and that arrangements should be set in place for a legacy from the new town development corporation. However, that is not the same as adopting garden city principles to underpin new towns. There is nothing in that list about ensuring a degree of affordability and mix in the local community or how the new settlements might address climate change, and there is nothing specific about how the infrastructure that makes new settlements work, particularly through access to transport and employment, will be funded.
There is a reliance on local authority borrowing to finance new towns in paragraphs 7 and 8 of schedule 1. Indeed, I cannot see where the Government outline their financial commitment to supporting local authorities who propose plans for new towns or garden villages, and the Minister can tell me if I missed it. I accept that the Government have made a small amount of money available for the garden towns programme, some of which is for infrastructure, but the general consensus seems to be that it is nothing like what is needed if local authorities are to be encouraged and incentivised to bring forward local new town development corporations.
It seems very curious for the Government to shift the whole financial responsibility for new towns to local government when many local authorities up and down the country have had their budgets cut massively for the past 10 years. The Opposition think that that might mean that it will be very difficult for local authorities, even if they wish to establish a new town development corporation, to do so, because they will be worried about financial liability and, perhaps, the lack of support from central Government.
Similarly, I have some issues with paragraph 11 of schedule 1 about the appointment of members to the corporation board, and their tenure of office. It is good that the Government want some resident membership of the board, or local knowledge reflected on it, and we would expect to see that in a proposal made by local authorities. But the local voice could always be heard under the current system, through the public inquiry process. There does not appear to be any mention in the regulations of local authorities’ new town proposals needing to go through a public inquiry process. Indeed, when outlining the process a few minutes ago, the Minister said there would be public consultation, but we do not know what that will be. Will the Minister confirm that there is no requirement for a public inquiry in the process, and that that is a change? Will he inform the Committee of how that public consultation will be carried out in future?
As I said earlier, Labour does not wish to reject any proposals, including these, that might lead to the creation of new towns and help deal with our housing crisis, but we would have liked to see the proposals for new towns genuinely reflect garden city principles so that their success for the longer term could be guaranteed. If the Government are going to swipe our policies, that is fair enough, but we would like them to implement them properly. I look forward to hearing the Minister’s comments.
Kit Malthouse
It is a great pleasure on my first outing as Minister in a Delegated Legislation Committee to preside over a break-out of cross-party consensus. Obviously, great minds think alike on local control. I am pleased that the hon. Lady has seen the importance of having local control over some of the drivers of new towns and how that it is likely to inject an element of dynamism into the proposals. She has raised a number of questions; if I do not get to them all, I am more than happy to write to her and clarify.
On support, there is a coincidence of interest between the Government and a group of local authorities that promote the new garden town to get the thing off the ground and get it built as quickly as possible. It is certainly the case that we would expect to be part of the ongoing dialogue that will take place beyond the establishment of the development corporation. The hon. Lady has my commitment that that would be the case, and I hope that of my successors whenever they may come—hopefully not for a long time. We have made a significant financial commitment, as she knows, of £22 million, with £7 million available this year. We have other pots of money, in particular for infrastructure. She knows that there is a £5 billion pot is available in the housing infrastructure fund to enable and accelerate development where appropriate.
On appointments, it is worth bearing in mind that we are increasing local democratic oversight. Although we encourage local authorities to ensure that local representation is embedded in the governance structure, the responsibility for that governance will fall to local, democratically elected politicians. An element of improved direct local oversight and local voices in the organisation will come about because of the draft regulations.
On the public inquiry, we want to make sure that the development corporations can be established as quickly and unbureaucratically as possible. There will be an up-front assessment process. The Secretary of State will look carefully at the robustness of the plans, particularly around some of the elements that were mentioned—community involvement, plans for the legacy, ongoing stewardship of the development corporation—and at their financial viability and deliverability before he or she, whoever the Secretary of State is, tables the regulation for the establishment of the development corporation. The House will then get a chance through the affirmative procedure to make known its own views about the likely success of the corporation being established. As far as we can see, that seems a sensible, non-bureaucratic—as lightly bureaucratic as we can get it—process to get these things established.
I am sure the hon. Lady agrees with me that the housing need in this country is extremely pressing. We do not want to see undue delay where there is an accepted view among local democratically elected representatives that this is what they want to do. If a robust plan has been developed, it should proceed.
Dr Blackman-Woods
We would like reassurance from the Government that, if they are not going down the public inquiry line, there will be a real opportunity for local voices to be heard on what the new town will encompass. Local people often know best how to achieve the end product. I want to know a little more about what the Government intend to do. The Minister does not have to provide us with the information about how local voices will be included today, but can he at some point?
Kit Malthouse
We will look at things on a case-by-case basis, but the whole point of the regulations is to make local voices louder. Local authorities—people who have been elected by local people—are the progenitors of the idea. The hon. Lady raised issues about affordable housing, climate change and all that kind of stuff. We should not forget that the planners will be intrinsically involved. While the development corporation is able to master-plan and make proposals, the local planners will ultimately make decisions about those kinds of issues. The local voice will be very strong in these organisations. They will serve the areas they are designated in much better than they have done thus far. I am happy to elucidate further if the hon. Lady wishes. If she has specific questions, she can drop me a line and I will be happy to respond.
We have debated regulations that will enable local areas to use the New Towns Act 1981—previously the preserve of central Government—to create their own locally led new town development corporations. This will give local authorities a powerful and effective tool for driving forward high quality new garden communities at scale. It is a game-changing move that puts local areas in the driving seat of developing new towns. We are really very excited—certainly I am, having campaigned on these issues in the past—to see how the measure will be picked up and used to deliver exemplary new settlements. I again commend the draft regulations to the Committee.
Question put and agreed to.
Draft Liverpool City Region Combined Authority (Business Rate Supplements Functions) Order 2018
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)
I beg to move,
That the Committee has considered the draft Liverpool City Region Combined Authority (Business Rate Supplements Functions) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Wilson. The draft order, which was laid before the House on 7 June, will confer on the Liverpool city region combined authority the power to raise a business rate supplement, to be exercised by the Mayor. This is a similar power to the mayoral infrastructure supplement included in the Government’s devolution agreement with Liverpool city region. I commend the order to the Committee.
Maria Eagle (Garston and Halewood) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson.
I do not object to the order in any way. It is a welcome, although very modest, measure enabling the combined authority to raise some of its own finance in certain circumstances. I hope that the Minister will go on to think about other ways we might give more genuine power to the combined authority.
I hope that we will see the Minister again in due course with more real devolved power for the combined authority.
Jake Berry
I take the hon. Lady’s comments on board. I note that this is one of many powers that the Government have given, and as a Scouser born and bred—which I believe she is not, although she recently accused me in the papers of not knowing where Liverpool was, I think—I am happy with any Government policy that returns more power to the great people of Liverpool. The Mayor, of course, has the power to raise his own precept if he wants, to enable him to have more money to spend on exercising his function in the combined authority.
Question put and agreed to.
Draft Investigatory Powers (Codes of Practice and miscellaneous amendments) order 2018
(5 years, 9 months ago)
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The Minister for Security and Economic Crime (Mr Ben Wallace)
I beg to move,
That the Committee has considered the draft Investigatory Powers (Codes of Practice and Miscellaneous Amendments) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Bailey.
The Regulation of Investigatory Powers Act 2000—RIPA—provides the regulatory framework to govern the use and authorisation of a number of investigatory techniques, ensuring that their use by public authorities is compliant with the right to privacy under article 8 of the European convention on human rights. The provisions of RIPA and related legislation, including the Investigatory Powers Act 2016, play a most important role in the work of our law enforcement and intelligence agencies, as well as other public bodies with enforcement or regulatory functions. The techniques authorised under these Acts are crucial in enabling investigators to obtain intelligence and evidence that can prevent terrorist attacks, disrupt the activities of serious organised crime groups, establish culpability so that offenders can be brought to justice and effectively enforce a long list of laws and regulations.
The framework that RIPA established ensures that there are strong and transparent safeguards appropriate to the intrusive nature of these investigatory powers, ensuring that they are used lawfully and proportionately. The Investigatory Powers Act fundamentally overhauled the safeguards around a number of powers and the oversight of all investigatory powers. All these safeguards, the clear requirements set out in the codes of practice and the independent oversight provided by the Investigatory Powers Commissioner establish clear limits around the use of these powers, and ultimately provide reassurance to the public that the powers are being used in ways that serve the best interests of us all.
The order introduces three revised codes of practice as well as making some amendments and updates to the public authorities authorised to use surveillance powers under RIPA. The order also makes a minor technical amendment to provisions on the use of combined warrants under the Investigatory Powers Act 2016. The revised codes of practice provide guidance on specific investigatory powers that are regulated by RIPA, as well as by the Police Act 1997 and the Intelligence Services Act 1994. These are covert surveillance, property interference, covert human intelligence sources and the investigation of protected electronic information.
The CHIS and covert surveillance codes of practice, originally issued in 2002 and last updated in 2014, and the investigation of protected electronic information code have been updated to ensure that the guidance remains relevant and keeps pace with change. These updates are necessitated mainly by the changes made by the Investigatory Powers Act. This includes reflecting the creation of the new Investigatory Powers Commissioner, the changes made by the introduction of equipment interference as a technique separate to the existing property interference powers, and the need to mirror the strengthened safeguards for the handling of confidential and privileged material introduced by the Investigatory Powers Act.
A number of other updates and clarifications to the guidance reflect and improve current operational practice. These include expanded guidance on procedures to be followed where investigators use the internet for covert investigatory purposes, where covert surveillance is undertaken by means of drones and provisions intended to reinforce the safety of covert human intelligence sources.
Alongside the codes of practice, we are updating the lists of the public authorities and officers able to authorise the use of directed surveillance and covert human intelligence sources. These lists are in themselves a safeguard against the inappropriate or indiscriminate use of the investigatory powers, as they ensure that their use is limited to specified public authorities and can only be authorised by specified officers within those authorities, who have sufficient authority and expertise. These updates ensure that public authorities can continue to authorise the use of investigatory powers following changes to their organisational structures, and remove any authorities that no longer require the powers.
Finally, we are taking this opportunity to make a minor correction to the arrangements under the Investigatory Powers Act for authorising a combined warrant. This corrects a technical error, which meant that Parliament’s clear original intention that warrants should last for six months was limited to the clearly far too short period of two working days. This can never have been the intention, and so we are taking the opportunity to correct the error. This is a timely improvement that will be of assistance to our intelligence services as they set about their tasks of identifying and disrupting threats to our national security.
All the changes made by this order, both to the codes of practice and the authorisation framework for the powers, ensure that the highest standards continue to be required of those using the powers, and that they are underpinned by ever stronger safeguards against their misuse.
I commend the order to the Committee.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. I say at the outset that it is not the intention of the Opposition to oppose this statutory instrument.
First, I should refer to the general approach taken to the Investigatory Powers Act 2016, during whose passage the Government accepted a significant number of amendments. That was an entirely appropriate way in which to proceed, and I pay tribute to my predecessors in the shadow home affairs team, who obviously worked for the Opposition on that Bill, and also to my predecessor as Member of Parliament for Torfaen, now Lord Murphy, who chaired the Joint Committee that looked at the Bill and recommended a substantial number of amendments that were accepted by the Government. It is with that approach in mind that I look at the order.
As the Minister set out, the order brings into force three revised codes of practice relating to covert surveillance and property interference, to covert human intelligence sources and to the investigation of protected electronic information. These revised codes will, of course, replace the previous version. I agree with the Minister that it is obviously important that the codes of practice keep pace with change. The codes of practice in themselves are important safeguards as we try to balance the obvious needs of security with liberty and appropriate safeguards for that.
The second part of the order relates to public authorities and updates the public authorities listed in schedule 1 to the Regulation of Investigatory Powers Act in order to authorise direct surveillance and indeed use or conduct of covert human intelligence sources. It also sets out those within public authorities who may authorise these activities, and the purposes for authorisation. Again, those would seem to the Opposition to be entirely sensible measures.
On the third part of the order and the combined warrants, there was, as the Minister has set out, an unintended effect on warrant duration, which the order entirely appropriately seeks to correct. The double lock system of Secretary of State authorisation and judicial commissioner approval is a very important part of the overall framework, and very important in terms of the safeguards that are set out.
On that basis, the Opposition do not intend to oppose the order.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to see you in the Chair, Mr Bailey.
I should say at the outset that it is not my intention to divide the Committee. However, during the rather arduous scrutiny of the Investigatory Powers Bill a couple of years ago, my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry), and, to be fair, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), scrutinised the Bill in some detail and raised concerns time and again about the retention of data being far too widely drawn in the Bill, with far too few safeguards. We said during the passage of the Bill that these powers would not survive legal challenge. The Government thought differently and ploughed on regardless.
It is a shame that the Government’s failings on investigatory powers have been admitted only after the matter was taken to the European Court of Justice. It is to be welcomed, however, that there will be a cut in the number of cases, through increased protections, in which communications data can be accessed by the authority. We have to remember that the Court ruled that EU law precludes EU countries from passing law that
“provides for general and indiscriminate retention of all traffic and location data of all subscribers and registered users relating to all means of electronic communication”
in order to help fight crime. The Court also said that EU law does permit national law makers to, “as a preventive measure,” require traffic and location data to be retained on a targeted basis, but only where the objective of the data retention rules is to fight “serious crime”.
The Scottish National party has always accepted that security powers are extremely important and must always be shown to be necessary, proportionate and in accordance with the law. In our view, the Government have a way to go in making other aspects of the investigative powers proportionate and lawful. As this instrument mainly tightens provisions, we will not oppose it.
Mr John Whittingdale (Maldon) (Con)
I do not want to detain the Committee; I just have one question for the Minister and one area in which I seek reassurance. My question refers to the explanatory note, which says that one of the purposes of this instrument is to
“reflect changes to strengthen protection for juvenile covert human intelligence sources”.
To me, that sounds like under-age spies. Could the Minister say in what circumstances we might be using juvenile covert human intelligence sources, unless my interpretation is wrong?
Like many in my party—including the Minister, I am sure—I regard the restriction on civil liberties represented by investigatory powers or electronic surveillance as necessary when it comes to national security matters and organised crime. As we have seen in the past, however, the list of agencies with access to those powers is considerable. It is difficult to imagine why the General Pharmaceutical Council, for example, might need them. The double lock provision offers some reassurance, but I would like the Minister to assure me that agencies not obviously in the frontline of the battle against terrorism or organised crime, such as some of those listed, are likely to use these powers only on extremely limited occasions.
Mr Wallace
I am grateful to all parties here for their support, in principle, for these guidelines. As I said at the beginning, they are designed to reflect changes—for example, in the areas around oversight. The three commissioners have been folded into the judicial commissioners—the Investigatory Powers Commissioner— and that needs to be reflected. They are also designed to reflect changes in technique since RIPA was introduced. Equipment interference used often to be included under property interference, but is now a technical capability—how the law enforcement agencies and intelligence services can access information within an electronic device. To some extent and in some examples they would use equipment interference, so that is only right and proper.
On the increasing safeguards, I specifically changed the guidance to increase the onus on journalistic protections, to ensure that that is properly reflected. There are now whole sections of the guidance that relate to what a police officer or a user using these powers has to follow. I think that was important.
On the subject of juvenile CHIS, it is regrettable that there are young people, below the age of 18 and even 16, who are engaged in criminality, sometimes with gangs; we see it more in county lines, as well. On some very rare occasions, with the authority of the parent, guardian, social worker or other person, we can authorise young people to be part of a process where they can share information, or indeed be tasked. It is not some sort of Alex Rider, secret agent or 007 scenario—my children and I enjoy those books on long car journeys—but a sad reflection of how criminality is working.
We wanted to change the operational impact. At the moment, under RIPA, there is authorisation for one month at a time. We said that that was leading to a stop-start situation and we needed a four-month period—with oversight, obviously. We wanted to slightly broaden who could give the authority, because the guardian or other individual might be engaged in the abuse or the problems that the young people might be tasked with. That is simply a reflection of our trying to ensure that we provide a broader number of people who can safeguard it and extend the time so that we can have an operational impact.
I am happy to write to my right hon. Friend the Member for Maldon about the extension in who can use some of the powers—he referred to the General Pharmaceutical Council—and explain why that is necessary.
The hon. Member for Paisley and Renfrewshire North and I might have a slightly different opinion of the ruling that he mentioned. Yes, the European Court of Justice ruled that the Data Retention and Investigatory Powers Act 2014 did not provide for enough independent authorisation. That is why we conceded that in court—I will grant him that. However, the broader stuff on our regime being indiscriminate, and on required notification, was not agreed with, and the UK Government’s case was upheld by the Court. The regime was proportionate and necessary, and recognised the reality of how some of this has to be dealt with.
I can give all colleagues confidence that the judicial commissioners are formidable, independent individuals. Lord Justice Fulford and his judicial commissioners are all senior or retired judges. I promise the Committee that they will not be a pushover. I have met them a considerable number of times; as members of the judiciary, they are not shy about asking when they think something is wrong.
We should be proud of where we have ended up. I would not like to see any further erosion of the balance that we have, which is a gentle one. I think Liberty is before the court at the moment trying to prevent us even from having communications data; we would not then even be able to find out about someone’s telephone when they were arrested. That would, in my view, be unacceptable and put the public at huge risk. It is time for some people to put aside their purity and realise that this is a balance between our constituents’ rights to life and to privacy. I think we have got the balance just about right. That is why I am very grateful for all parties’ support for tonight’s measures.
The guidelines are there to be used by the people using the powers. If they follow them and the judicial oversight, we will be in a better place—one where our rights are protected, but our law enforcement and intelligence services can get on and do the job of keeping us safe.
Question put and agreed to.