Nuclear Energy (Financing) Bill (First sitting)
Tuesday 16th November 2021
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Nuclear Energy (Financing) Act 2022 View all Nuclear Energy (Financing) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 November 2021 - (16 Nov 2021)
The Chair
Before we begin, I will start with a few parish notices. You all know the points about social distancing and the wearing of masks, which Mr Speaker has asked us to do when we can. We will consider the Bill point by point and the rules of behaviour in this Committee are really identical to the rules of behaviour in the main Chamber. Date Time Witness Tuesday 16 November Until no later than 10.25 am Sizewell C Company; Westinghouse Electric Company; GE Hitachi Nuclear Energy Tuesday 16 November Until no later than 11.25 am Prospect; Unite The Union; GMB Tuesday 16 November Until no later than 2.30 pm Citizens Advice Tuesday 16 November Until no later than 3.30 pm Atkins Global; Doosan Babcock Ltd; Jacobs Engineering Group Inc.; Rolls-Royce Holdings plc Tuesday 16 November Until no later than 4.15 pm The Confederation of British Industry; The Nuclear Industry Association; Energy Industries Council Tuesday 16 November Until no later than 5.00 pm Mycle Schneider, Convening Lead Author, The World Nuclear Industry Status Report; Professor Stephen Thomas, Professor of Energy Policy, University of Greenwich; Greenpeace UK
We first agree the programme motion in private. This is a rather strange piece of procedure, which allows the Chair to ask the witnesses to leave and then to ask them back in again. I overrule that. As a member of the Procedure Committee, I keep meaning to tell us to change that properly. We now come to the programme motion, about which we met yesterday to agree. I call the Minister to move the motion formally.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 16 November) meet—
(a) at 2.00 pm on Tuesday 16 November;
(b) at 11.30 am and 2.00 pm on Thursday 18 November;
(c) at 2.00 pm on Tuesday 23 November;
(d) at 11.30 am and 2.00 pm on Thursday 25 November;
(e) at 9.25 am on Tuesday 30 November;
(2) the Committee shall hear oral evidence in accordance with the following Table:
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 42, the Schedule, Clauses 43 to 45, new Clauses, new Schedules, remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 11.25am on Tuesday 30 November.—(Greg Hands.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication. —(Greg Hands.)
The Chair
Copies of written evidence which the Committee receives will be circulated to Members by email and also made available in the Committee room on each day that we meet.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted. —(Greg Hands.)
The Chair
Welcome to our three witnesses. Before I call on them to give evidence, I remind all members of the Committee that the questions that we ask today and, indeed, the contributions that we make during the detailed discussion of the Bill from Thursday onwards must be strictly on what is written down in the Bill and may not be on anything else. They may not be about things that you wish were in the Bill but are not; they must be simply about those things that are in the Bill, and nothing beyond that. The other thing is that we must stick to the timings given in the programme motion, which the Committee has agreed. That means that when we get to 10.25 am, no matter who may be speaking, I will require you to stop speaking and the first witnesses to leave. That may seem harsh, but we stick firmly to the timings agreed in the programme motion. No discourtesy is meant to any of you.
Will any member of the Committee who has an interest to declare please do so?
Mark Jenkinson (Workington) (Con)
I would like to draw attention to my entry in the Register of Members’ Financial Interests. It is a matter of public record that I was employed in the nuclear sector prior to my election.
The Chair
Thank you. I will now call the first panel of witnesses, all of whom are appearing here in person, I am glad to say. We have Julia Pyke, director of financing at the Sizewell C company; David Powell, vice-president of nuclear power plant sales and head of UK business development at GE Hitachi Nuclear Energy; and Michael Waite, director of new plant market development at Westinghouse Electric Company. I thank all three of you very much for taking the time and trouble to be here. Could you briefly introduce yourselves?
Julia Pyke: Hello. I am Julia Pyke, the financing director for Sizewell C.
David Powell: Good morning. I am David Powell, vice-president for GE Hitachi’s nuclear power plant business in the UK.
Michael Waite: Good morning. I am Mike Waite, director of new plant market development for Westinghouse Electric Company.
The Chair
Before I ask the Committee for relevant questions, are there things that the witnesses would particularly like to say about the Bill? Have you particular views about the Bill that you would like to get across, or are you content simply to answer questions that may be put to you?
Julia Pyke: I am very happy to answer questions.
The Chair
In that case, let us start with Her Majesty’s official Opposition, represented by Alan Whitehead.
Dr Alan Whitehead (Southampton, Test) (Lab)
Q
Julia Pyke: I think the emergence of the RAB model is very welcome. We obviously believe that the country very much needs nuclear, to support the growth of renewables and to produce electricity when the wind is not blowing and the sun is not shining. It is very important that we deliver nuclear in a way that reduces the cost to consumers to the greatest extent it can, and we believe that the RAB model is a way of doing that and enabling private finance.
A point that is not always made about the introduction of private finance is that if we want a nuclear fleet, which, you will not be surprised to hear, I believe would be a good thing, then always relying on taxpayer funding for that fleet is not necessarily going to promote the growth of a fleet, whereas getting nuclear on to a financeable footing means that the country can size the fleet to need rather than to the availability of taxpayer funding from time to time.
Dr Whitehead
Q
David Powell: Just to make things clear, I represent GE Hitachi, which was helping with the technology supply for the project that Horizon and Hitachi was taking forward. Hitachi was one of the main participants in trying to push forward the project at Wylfa, and I think that one of the big issues was the project’s financing aspects. It takes considerable time and a lot of effort to build two large-scale reactors, and I think that the RAB model could have helped. Obviously that is history now, and we would have to go back and look at that, but I think it would have helped at least in being able to move forward with the project.
Dr Whitehead
Q
Michael Waite: That is correct.
Dr Whitehead
Q
Michael Waite: As you say, Springfields has been fuelling the majority of the UK’s nuclear fleet for almost 75 years. It is the exclusive supplier to the advanced gas-cooled reactor fleet, which will all have retired by the end of this decade. Whether Sizewell C moving forwards under a RAB would mean a supply of fuel from Springfields has yet to be determined. From a Westinghouse perspective, we see RAB as part of the solution for enabling further nuclear projects after Sizewell C. Certainly, the 2035 zero-carbon targets for the electricity generation sector require there to be further projects., If we could start a project at Wylfa and deliver our AP1000 technology under RAB, that would absolutely take its fuel from Springfields for the life of the facility and secure the life of the plant.
Anthony Browne (South Cambridgeshire) (Con)
Q
Julia Pyke: The first thing I would say is that, of course, it is very important that the developer remains incentivised to minimise construction spend consistent with building safely and to time. The introduction of the RAB model will enable Sizewell to move ahead, so, primarily for consumers, not only will they need the electricity that Sizewell can produce but electricity bills will reduce when it comes on, because the alternatives to nuclear as the producer of electricity when the wind is not blowing and so on will cost more. Overall it will reduce consumer bills. It is, as you say, very important that we get the incentive regime right so that, although risk is shared with consumers, developers are always incentivised.
Anthony Browne
Q
Julia Pyke: Because the cost overruns will be shared, so the developers will take a significant proportion of cost overruns.
Anthony Browne
Q
David Powell: Yes. I think it needs to be fair. Clearly, what we are trying to do from a GE Hitachi perspective is really focused on driving down the cost of capital of our plants. The capital cost is a key part of that, of course, and clearly that part of the development that we are working on at the moment is to develop small modular reactors, with a key focus on reducing those costs by making the construction as simple as we can through modular build and using as much of the factory environment as we can. That obviously helps to reduce the costs of construction, as well as the risks of construction and the schedule of those. Like all technology developers, we have a reputation that we want to uphold, so our focus is trying to minimise the cost of that electricity for consumers by managing the projects very well.
Anthony Browne
Q
Julia Pyke: One of the reasons that we are so keen to go ahead with Sizewell is that it is a copy of Hinkley, and it is in copies—fleet builds—that you get down construction risks. Hinkley has two units, and you can see how much easier it is to build unit 2. Common sense tells you it is because you are doing it again. We are very much hoping that Sizewell will be treated as units 3 and 4, and we believe—consistent with ideas about fleets of SMRs—that it is in repeat build where you get down costs. Nuclear in the UK has suffered from a considerable series of ones of a kind, followed by an extremely lengthy gap in construction. Nothing has been built since Sizewell B was turned on in 1995. It is by copying, the fleet effect, making sure that we learn all the lessons and using the same experienced team.
In terms of the proportion of risk sharing, it is not fixed yet, but around 50:50 is not an improbable outcome.
Anthony Browne
Q
Michael Waite: I missed out on the last question so I am happy to answer this one. On the designation process, there is not a huge amount of detail in the Bill about what the requirements are for a company project to be designated. In the 2019 RAB consultation process, we entered some fairly detailed feedback which suggested that RAB, as well as being a very positive way forward for construction and operation financing of nuclear power, could also be very effectively utilised for the development phase of a nuclear power plant project. That development phase for a technology that was mature, preferably generic design assessment-licensed, could enable the de-risking of a project under the watchful eye of the regulator, where they are learning about the project, such that when it enters the construction phase, there is a significantly lower risk profile. From a Westinghouse perspective, I would say that that designation process could take place prior to the construction phase and benefit both the project company, of course, and also ultimately the ratepayer and Government through lowering the risk profile of the overall project.
Anthony Browne
Q
The Chair
I am sorry. Maybe I am just getting old, but I cannot hear what you are saying. Could you speak up a bit?
Anthony Browne
Sorry. I am also interested in the point about who should actually do the designation. Julia, you made the point earlier that you would have a system that responds to need, as it were. Could you see this becoming just an ordinary function of the regulator, or should it always be the Secretary of State who does it?
Julia Pyke: I think that is very much a question for the Government, and it will partly depend on which organisation has invested the time and money in doing due diligence on the readiness and maturity of the project.
Anthony Browne
Q
David Powell: I agree with Julia: clearly, that is a decision for the Government. As Mike said before, it is quite important that we look at where the designation actually starts from as well, because there is a huge part of developing nuclear projects prior to getting to construction. With the Horizon project, we saw the amount of money that Hitachi had spent—over £2 billion—and it did not get to that final investment decision, so that is an important consideration as well.
Michael Waite: If I could address the same point, I absolutely think it should be the Secretary of State who has that final authority, predominantly because there are such a large number of moving parts of the project. It is not just about maturity: it is about value for money, and is that value for money just in terms of pence per kilowatt-hour, or is it UK content? There are a very large number of very broad aspects that can be assessed.
Anthony Browne
Q
Michael Waite: None of us is in the investment community.
Anthony Browne
I know, but you have relations with the investors and you know what they are looking for.
Michael Waite: Indeed.
Julia Pyke: And it is my job to raise the money.
Michael Waite: Absolutely, the pension funds historically are great supporters of operating nuclear power plants, because those are some of the most consistent returns on investment possible. The construction phase and development phase are something different, so it is all about the risk profile for them. As I said, the more you can de-risk a project, the more it can become investable by those institutions.
Anthony Browne
Q
Julia Pyke: A consumer prices index-linked investment stream is likely to be very attractive to people with CPI-linked liabilities, such as British pension funds. Increasingly, the financial investment community is very much interested in environmental, social and governance issues, and whether or not their investment is making a difference. I think that nuclear has a fantastic track record of making a positive difference: not only does it produce low-carbon electricity, but it is a great leveller-up. It has got a great track record of offering well-paid, highly skilled, unionised jobs. It also has a very good track record with the environment itself, and the land outside the power stations. Those three things coming together will make it an investment that can fit very well into the portfolio of companies that want to make a difference with their money.
Anthony Browne
Q
Anthony Browne
I do not know whether the microphone is working. I agree with the levelling-up point, although that is more a political thing rather than, presumably, one of the criteria that the investors would use.
David Powell: Just one operational point. Julia has spoken of the confidence that the Government will bring to the investment community, and we have seen that there are companies that want to invest in projects, but we would very much like that to be operational. Getting the investment early on is quite hard to do, so the confidence from the Government’s approach on the RAB model would help to provide that confidence to the investment community.
Anthony Browne
That is the whole purpose of the RAB model. That is all my questions. Thank you.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Ideally, the Bill is supposed to facilitate Sizewell C going ahead. Julia, you said that you view Sizewell C as units 3 and 4 of Hinkley Point C. Given that we are consistently told that the learning from the design of Hinkley Point C went on to Sizewell, why has the taxpayer committed £1.7 billion in the Budget to take Sizewell C to a final investment decision?
Julia Pyke: The £1.7 billion and its use is not published and not available to us. I think there is an assumption that it is for a Government investment in Sizewell C. Whether or not that money is for spending before you reach a final investment decision, or is a Government investment, is the type of investment decision for the Government and not for us.
Alan Brown
Q
Julia Pyke: There has been no express discussion about the use of the £1.7 billion in the Budget as pre-development funding for Sizewell C, no. The Government do discuss how it is that we may get from where we are now to a final investment decision, but there is no explicit linking of the £1.7 billion and that discussion.
Alan Brown
Q
Julia Pyke: We believe that the regulated asset base model—David and Michael will want to comment—is designed to come into place at financial close. The question of how nuclear projects get from where they are now—in the case of Sizewell the project is very mature, with a design and a team, and we have applied for consents; projects that are further behind obviously have a lot further to go and need a lot more money—is its own question. The regulated asset base model is designed to give the private investment community sufficient confidence in investing in nuclear that nuclear can go ahead and take its place in the electricity mix, which benefits consumers. The model is not necessarily designed to be a solution to the period from conception to financial close.
Alan Brown
Q
Julia Pyke: If you look at the roughly £200 billion of regulated assets in the UK across the national grid transmission lines, distribution lines, water companies and airports, the regulated asset base model will track the lifetime of the asset. In the case of a UK European pressurised reactor, the operational lifetime is around 60 years.
Alan Brown
Q
Julia Pyke: I think nuclear is unique among electricity-generating technologies in pricing in the cost of decommissioning and waste disposal up front. In the gas price, you do not see the cost of dealing with climate change. In the price for other forms of electricity generation, you do not see waste disposal priced in, but in the case of nuclear, the cost of decommissioning and waste management and disposal is priced in to the electricity price.
Alan Brown
Q
Julia Pyke: It is priced into the CfD for Hinkley, and it will be priced into the contractual arrangements for Sizewell.
Alan Brown
Q
Julia Pyke: A regulated asset base model will tend to pay for the asset to be available. We expect the electricity to be sold at market price and for the regulated asset base model to either provide a top-up, in the way the CfD does, if the costs under the RAB are above the then electricity price, or to pay back in if we see spiking electricity prices, in the way we have done recently, during low wind speeds and the gas price spike. It is two-way.
Alan Brown
Q
Julia Pyke: You would expect the regulated asset base to work in the way the existing £200 billion of regulated assets work, which is essentially to pay for availability.
Alan Brown
Q
Julia Pyke: I believe that the Government have done its calculations very carefully and cautiously, so I believe they are very realistic. They are comparing the cost of money under a contract for difference with the cost of money under a regulated asset base model. It is important to remember that the cost of money is by far the dominant cost to consumers. We need nuclear, and we need to get the cost of nuclear down. The dominant cost of nuclear to consumers is the cost of money, so it is entirely plausible that the Government’s figures have been carefully calculated and are right.
Alan Brown
Q
Julia Pyke: We have, of course, looked at the savings. The most important saving to consumers is that, in building nuclear, consumer bills will go down. Models without nuclear are more expensive—I think the Secretary of State himself has said that in Parliament. That is a major reason to go ahead with nuclear, and it is a major reason to introduce the most cost-effective way of financing nuclear, which the Government has concluded is the RAB.
David Powell: If I can help with that question, from the perspective of GE Hitachi, we are focused on small modular reactors in the UK. While the cost of those is considerably less than the cost of the Hinkley plants, the output is of course a lot less, at 300 MW or so. If you are going to build a fleet of those, which is where we would like to go in the UK—using that repeatability model and a standard licence design, so that once it is designed and licensed it can go through being built repeatedly, which is very much a factory output-type of approach—you very quickly get to the capital cost of something similar to a Thames Tideway project, which was £4 billion. I know that the RAB model is focused around large-scale nuclear projects, but we would also like to see that applied to small reactors or at least be considered. As yet, we have not done any analysis—all our focus has been on looking at costs, and the models have been on the contract for difference approach—but we would like to look at how that RAB model would apply, from the Government’s perspective as well.
Julia Pyke: If you look at the Tideway savings, when Tideway was first conceived of, before it was decided to do a RAB, I believe it was estimated that consumers would have to pay around £80 a year on their bills, and the RAB reduced that to around £25.
Alan Brown
Q
Julia Pyke: I cannot recall the length of the Tideway contract, but it is quite long.
Alan Brown
Q
You are hoping that RAB will facilitate the small modular reactors as well. Would that be a 60-year operational contract you would be looking for?
David Powell: That is a matter for discussion with the Government and BEIS, but our plant design life will be 60 years, in a similar way to the Hinkley and Sizewell reactors. So, yes, potentially. That really depends on what the developers and investors would like to see.
Alan Brown
Q
Julia Pyke: I do not know what plans the Government has to explain the arrangements, but I imagine it will be in line with the principles of transparency. There is a lot information available about Hinkley. Michael made the great point earlier that value for money is around many things; it is the electricity price including the price of decommissioning, but it is also around UK content and around jobs. We will have 70% UK content; we will give rise to around 70,000 jobs. We give work to over 3,000 British businesses. So value for money is a wider metric than just the cost. There is a lot of information available on our supply chain plans and UK content, and I think there will be a lot of information available around the calculation of the RAB price.
Alan Brown
Q
Julia Pyke: Jobs in construction, using the National Audit Office metric, are around 70,000. Permanent jobs to operate the plant would probably be around 900 in ordinary state, plus several thousand more when there are maintenance outages, which are approximately every 18 months.
Virginia Crosbie (Ynys Môn) (Con)
Q
Michael Waite: In the Bill, there is not currently a clear apportionment of risk between the constructor, the developer, the investors and the consumers. It is clear that if we are developing and constructing a project, there are two approaches to ensuring there are no overruns and minimising the chances of cost and schedule difficulties. You can either take a carrot or a stick approach. If the stick is applied to the developer and the constructor, there is necessarily a larger contingency applied from day one. If I remember correctly, in the Hinkley point original negotiations there was a £2 billion contingency for potential problems and cost overruns for a first-of-a-kind project in the UK. That sort of contingency allocation can be minimised by taking more of a carrot approach, where fees and profits can be at risk but a developer and constructor is not risking losing money on the job. There are many mechanisms in place that can incentivise on-time and on-budget operation without apportioning too much risk to the construction community.
Virginia Crosbie
Q
David Powell: Clearly, based on the information that the Government have put out on the RAB model, it is designed to help lower the overall cost of nuclear by lowering the cost of capital and the cost of financing. From the information I have read and discussions before, there is potentially a significant saving on large-scale projects such as Sizewell. We would hope that from building a fleet of SMRs you would be able to gain the same benefits for consumers. As I said, we have focused on trying to reduce the capital cost of the plant through simplifying the design. Add that to the benefits of the RAB model, which can help to reduce the cost of that capital through the reduction in financing, as well as increasing the incentive to deliver on schedule, there is an ideal way to try to reduce the overall costs of nuclear for consumers. We need more nuclear in the UK in order to meet the decarbonisation targets by 2035.
Virginia Crosbie
Q
Julia Pyke: Yes. I think it a brilliant question, and the answer is that in the contract for difference the construction cost overrun risk is priced in up front, so consumers pay regardless of whether you incur a construction cost overrun. That makes the capital expensive and, because it does not pay until the station turns on, you run up interest for the long construction period of nuclear. In the RAB model, the construction cost overrun risk is not priced in up front, which reduces the cost of capital. The consumer, in paying £92.50 for Hinkley, is prepaying for the risk of construction cost overrun; in the RAB model there is a possibility, which we will do everything we can to minimise, of a construction cost overrun.
An example of how the RAB model will give people more certainty to get on with repeat build is that they have put in 46% more steel at unit 2 than at unit 1 in the same timeframe. It is a combination of not pricing in the construction cost overrun risk up front, and introducing more predictability into nuclear new builds, so we stop having huge gaps between construction in which the workforce has to relearn every time you start again.
Virginia Crosbie
Q
Julia Pyke: No, I do not believe that we can. We have to make nuclear financeable, like offshore wind, and look for that fleet-build, cost-minimisation approach. The offshore wind industry has done a great job through being able to predict the opportunities to build more wind farms. We want that same fleet approach, and we want predictability so that people can have careers, and the workforce can learn and keep getting down the costs.
Virginia Crosbie
Q
Michael Waite: With AP1000, we can benefit from a global fleet effect. We have four operational reactors, which are breaking national and industry records. Two are approaching completion of construction, commissioning and fuel load in the US, and will bring a tremendous number of lessons learned and fleet benefits to the UK. Certainly, a potential AP1000 construction project at Wylfa and other sites can be enabled only by RAB being part of the financing solution.
Virginia Crosbie
Q
David Powell: It is pretty much the same, but we are clearly developing our BWRX-300 to be a global SMR technology. We are already working with several countries, looking at the first deployment of that. We also see the UK very high in that priority list—again, bringing that fleet-build mentality and 60 years of designing these types of reactors. We are able to bring a lot of experience and know-how to that. Part of that is to try to reduce the costs of nuclear overall. We are very encouraged by seeing the RAB model, and hope that it can be applied to fleets of SMRs in the UK.
Virginia Crosbie
Q
David Powell: I think it provides more opportunity for UK investors to come forward. We have spent a lot of time and money developing our reactor design, so we are quite well ahead now in developing projects, which is really the next stage. I think the Government funding that was announced will help the development of UK SMRs, and one of the big things that RAB does is help the development of projects. You need investors for those projects.
Virginia Crosbie
Q
Julia Pyke: I think that having a stable CPI-linked project will make it possible for UK financial investors. That is a great thing; you can create a virtuous circle with the money of British pension funds investing in apprenticeships, skills and jobs for younger people in Britain, as well as in the production of electricity of course. I am confident that the RAB model will bring forward a lot more British investment and, exactly as you say, reduce our reliance on overseas investors.
Virginia Crosbie
Q
Michael Waite: We are currently very active in the Czech Republic, Poland, Ukraine and so on. Those nations predominantly have either majority Government-owned utilities developing nuclear projects or Government financing for up to 100% of the project. They are reducing the cost of capital by fully leveraging Government financing, which is the cheapest financing. Those are absolutely all regulated approaches. No projects that we are doing currently rely just on market forces to develop nuclear; it is too much of a long-term project, with massive long-term benefits, to leave it up to the market.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I have a series of questions relating to—
The Chair
Before you start, Mr Pennycook, I should say that we have five people asking questions and 12 or 13 minutes left, so can everyone be swift in their questions and answers?
Matthew Pennycook
Q
Julia Pyke: CGN currently has a 20% shareholding in Sizewell C. No material supply chain contracts are in place or intended to be in place with the Chinese supply chain or CGN. Whether CGN chooses to invest at financial close, and the extent to which it chooses to invest, is a matter for CGN itself and the UK Government. As Virginia’s question elicited, the RAB model is designed to bring in a lot more British financing and reduce reliance on overseas investors.
Matthew Pennycook
Q
Julia Pyke: That is absolutely a question for the Government.
Matthew Pennycook
Q
Julia Pyke: I think that Sizewell C can raise money under the RAB model. How CGN intends to go forward with a financial investment in Sizewell C is a matter for CGN and the Government.
Alun Cairns (Vale of Glamorgan) (Con)
Q
Julia Pyke: I think that the Bill is a great framework under which there is a lot of detail to be developed, and we would expect more detail to be developed in relation to designation and the conditions of eligibility. While I could hardly deny that the cost of nuclear builds has had some uncertainty in some cases, what is not uncertain is whether nuclear works and the technology works. I think there are no cases worldwide of nuclear projects that have been abandoned for technical reasons. The industry knows how to make nuclear power stations work. So I think that there is a degree of uncertainty about the exact cost, but the whole point of building a replica of Hinkley is to minimise that uncertainty, benefit from all the lessons learned and get nuclear on to a stable, repeat-build footing.
David Powell: We designed our SMR BWRX-300 on the basis of proven technology. So we know very much the cost base for that technology, and it is really in our interest and that of investors to ensure that we can deliver to time and to budget on that. With respect to the build, we would obviously want to try to minimise any impact and risk of cost and schedule overruns, because we see this as building a fleet of smaller reactors out of a more modular-type approach.
Alun Cairns
Q
Michael Waite: I do not think it is implicit, actually. We have heard about fleet benefits. What I think RAB does do, though, is ensure accessibility to the UK market for non-foreign-sovereign-owned entities. Under a CfD approach, frankly only large foreign Government-owned entities can stand that up-front cost. Then you are potentially delivering electrons, but you are delivering a foreign Government’s objectives and strategies rather than benefiting from the UK Government’s objectives.
Dr Whitehead
Q
Julia Pyke: RAB is designed to attract low-cost capital, and the cost of capital will be set competitively. We anticipate a competition, which should drive down the cost of capital, between equity investors. We also anticipate that the cost of debt, which will actually be the majority cost of the project, will be set competitively. We do not have a hurdle rate, and deciding that hurdle rate will obviously be in part a matter for Government in terms of what will offer value for money. The Government’s impact assessment talks about example hurdle rates and we anticipate that the return will be somewhere in the region of the Thames Tideway tunnel rate, plus possibly some premium for it being nuclear, which is a novel asset class for private sector money in the UK.
Dr Whitehead
Q
Julia Pyke: We think the relevant rates to look at are the rates that are currently determined by Ofgem for investors in the £200 billion of existing UK regulated assets. That is the range that we anticipate will be relevant.
Dr Whitehead
Q
Julia Pyke: As the Government have put in their impact assessment, you can run this at percentages over inflation that equate to the existing market in investing in RAB. I do not want to suggest a particular number—that would not be appropriate, because we are going to set the cost of capital competitively—but you can see the ranges that the Government have used, which they have based on the evidence of what is invested today in RAB assets.
Dr Whitehead
Q
Julia Pyke: Do you mean whether I think the Government have been overly optimistic in assessing the likely cost of capital to be derived through competition? Is that your question?
Dr Whitehead
Q
Julia Pyke: I think we are talking about two things here. There is optimism bias in relation to the outturn capital costs. The Government have taken a cautious approach to applying optimism bias to the capital costs, given that we are replicating the Hinkley design, using the experienced team, and we can see the savings made in unit 2 compared with unit 1. In relation to the cost of capital, it is entirely sensible for the Government to have based their calculations on the existing market of investment in regulated asset base industries in the UK. I do not think there is an optimism bias issue around their evaluation of existing investment rates.
Dr Whitehead
Q
Julia Pyke: I would conclude no such thing. What investors choose to bid will be a function of how attractive the product is to the equity, what else is available in the market—it will be a whole range of considerations, but essentially it will be in the area of the existing investments in regulated assets in the UK, which are publicly available.
Dr Whitehead
Q
Julia Pyke: Indeed, it does depend on the hurdle rate, but—
Dr Whitehead
But you are not able to help us this morning.
Julia Pyke: I do not think anybody is questioning the assumption that, in moving to a RAB from a contract for difference model, the cost of capital will come down, so it will save money compared with a contract for difference model.
Dr Whitehead
Q
Julia Pyke: We cannot know how much, because it will be set in the future through competition.
The Chair
Unless any other of our colleagues have a one-minute question, we are at 10.24 am and that very neatly brings us to the end of our time. [Interruption.] I am afraid we only have one minute, Alan; one yes or no question, perhaps?
Alan Brown
Q
Julia Pyke: The construction period is about 10 years, so it will take about 10 years.
The Chair
Thank you very much. I thank all three of our witnesses, who have had a gruelling session. It has been very useful; a lot of information has been gleaned from your evidence and we are most grateful to you for taking the time to come and speak to us. Thank you very much indeed. Would you mind vacating the hot seat? You will be replaced by only one person in the room. Incidentally, you are more than welcome to stay and listen to the subsequent session. I invite the next panel to join us.
Examination of witnesses
Sue Ferns, Charlotte Childs and Simon Coop gave evidence.
The Chair
I welcome all three of our witnesses to this evidence session of the Bill Committee. Rather than me introducing you, it might be more sensible if you introduce yourselves in a moment. We have until 11.25 am for this session, and at 11.25, even if you are speaking, I will close the session at that moment, through no discourtesy but because the rules of the House state that we must stop at precisely 11.25. Starting with Mr Coop, as he is here, will you kindly all introduce yourselves? And if you have any introductory remarks about the Bill, that is always very helpful.
Simon Coop: My name is Simon Coop. I am acting national officer for energy and utilities at Unite the union.
Sue Ferns: My name is Sue Ferns and I am the senior deputy general secretary at the Prospect trade union.
Charlotte Childs: I am Charlotte Childs. I am national officer for the GMB trade union.
The Chair
Thank you all very much for being here. We will start with Her Majesty’s loyal Opposition and Dr Whitehead.
Dr Whitehead
Q
Sue Ferns: Certainly. At the moment, Springfields nuclear fuels faces a bit of a crisis, primarily due to the earlier than expected rundown and closure of the AGR—advanced gas-cooled reactor—fleet, which has been its major component of fuel manufacture, not the only but the major one. The effect of that is that from January of next year it will be producing only 55 tonnes of AGR fuel, compared with a normal load of about 200 tonnes. That obviously has implications for the workforce and it means that that plant will be operating in deficit as from January of next year.
There have been protracted discussions over the course of the year. We have seen two rounds of redundancy notices issued to the skilled and specialist staff on the site, and there is a danger, in the face of continued uncertainty, that more of those specialist skills and expertise will be lost.
I should say that fuel manufacturing is the key function of Springfields nuclear fuels but there is also much wider expertise. It provides a range of other services to the nuclear industry and is seen as a key part of the UK’s nuclear expertise. We very much fear for the future and are in active discussions with the company and Government about that.
There is both a short-term and a longer-term challenge, and a longer-term opportunity. If more nuclear power stations are constructed in the UK, we can see a good fuel load for Springfields from about 10 years’ time onwards, but the problem is that unless we solve the short-term hiatus in fuel orders, those skills and expertise will be lost and will not be easily recovered, if at all. The opportunity is for Springfields, as it was recognised in the nuclear sector deal, to continue as a centre of nuclear excellence and expertise as our unique UK fuel manufacturing capability, able to provide fuel to reactors in the UK of all types, and potentially to plants in other parts of Europe as well.
Dr Whitehead
Q
Charlotte Childs: The conversations that we have had with EDF in terms of building a nuclear supply chain, and the skills required to build both of those projects, and further projects, mean that the decision on the RAB funding model, hopefully leading towards a final investment decision in the near future, creates a really great opportunity for the timelines of those projects to line up, and for the skilled workforce who are needed at Hinkley Point to just about finish what they are doing there in time to move over to Sizewell. It creates certainty for the nuclear supply chain and for those who have gone through a training programme with Hinkley.
We have negotiated some industry-leading processes to ensure that people from the local area can go from low to no qualifications into qualified trades and apprenticeships. It creates an ongoing opportunity for those people and job security that we do not generally see in the construction sector. Time is of the essence. To maximise the benefit for the nuclear supply chain and drive down costs, because it is already in place, it is imperative that those decisions are made sooner rather than later.
Simon Coop: I reiterate those points. With regard to Hinkley Point C, it is really a no-brainer to adapt those transferrable skills and move them into Sizewell C in order to ensure that costs do not spiral out of control. There is a clear model already in use that we can learn from to move into Sizewell C. The timing of that transfer is of the essence in ensuring that we do not lose the skills from one project and that we develop and move them forward into Sizewell C. Urgency is needed to move that project forward as soon as possible in order to maintain the skills from Hinkley Point at Sizewell C. Any kind of developments have to be in line with industry standards, and we also have to make sure that any misgivings or fore learnings that we establish from Hinkley Point C are clearly ironed out as we move forward to Sizewell C. The replica gives us the opportunity not just to learn from what we have done but at Sizewell C to improve and iron out any problems that we have had to maximise value for money for all vested parties.
Dr Whitehead
Q
Simon Coop: The UK workforce are absolutely flexible and they are highly skilled. In construction, the same key workers with the key skills have moved to projects. I do not see that being a major problem in future construction projects. As a result of talking to the company, there are already plans to transfer the operational skills at Hinkley Point B to Hinkley Point C. Those operational skills are currently transferring and people are keen to move on and use those skills at the Hinkley Point C project. There should be no difference in terms of transfer to future construction projects.
Alan Brown
Q
Charlotte Childs: We are a member of that organisation, so the letter you received and the policy that we have set is based on a wide-ranging discussion with our members. In response to your suggestion about investment in manufacturing, it is not a this or that situation, is it? Scotland in particular has benefited greatly from the current nuclear civil generation, and the zero carbon generated by Torness and Hunterston B have contributed to southern Scotland consistently hitting the 2030 target, working alongside other renewables like wind to provide green energy. Without heavy investment in new nuclear projects we will not reach our net zero targets, and Scotland has set itself an even more ambitious target of 2045 to reach net zero. That simply will not be possible without having a consistent and reliable baseload that is net zero in its production of energy.
Alan Brown
Q
Charlotte Childs: Those alternates do not exist yet and will not do so for a long time. The technology is not there in the short term to reach the targets that have been set in the near future. It is also about investing in UK skills and jobs, and the existing nuclear supply chain—Sue spoke of Springfields and the nuclear supply chain in place to deliver Hinkley Point C. As Simon and I have said, we need to ensure that the decisions are taken decisively and quickly to protect those supply chain jobs. The supply chain for wind, for example, which you have suggested in the past is a viable alternative to nuclear, is not within the UK. We have the skills and the capability, but we are currently importing turbine parts and steel from China to create the wind turbine fields that are currently being constructed. The £20 billion is a lot of money, but it will create an inordinate number of skills, prospects and social changes for the local area around Sizewell, as well as for the wider UK workforce and supply chain.
Alan Brown
Q
Sue Ferns: If you do not mind, I just want to add to what Charlotte has said. Our analysis shows that investment in nuclear is more jobs-rich than investment in other low-carbon technologies. We have done some work, based on Office for National Statistics data, that shows that each installed megawatt of nuclear capacity supports roughly 4.7 direct and indirect jobs, compared with 1.5 in offshore wind and 1.1 in solar. I would be happy to share that analysis with you if it is of interest.
Alan Brown
I have seen that—I know some of it is up for debate. It is also about operational jobs. I will happily discuss that further.
The Chair
Great. Unless there are any further questions from Members or our witnesses have anything particular to say that they have not said—I see no indication that that is the case—I thank our three witnesses very much indeed for their time before the Committee. Their evidence will be useful in our deliberations over the next couple of weeks, when we will consider the detail of the Bill. I call the Whip to move the motion to adjourn.
The Lord Commissioner of Her Majesty's Treasury (Craig Whittaker)
I beg to move—[Interruption.]
The Chair
Q
Charlotte Childs: Apologies, but while I have this audience I want to touch quickly on the industrial relations model that we have in place at Hinkley Point. The benefit that it is creating for the workforce there could be transferred to Sizewell C, and amendments could be made to the Bill to entrench that within the process. We have a joint project board set up at Hinkley Point B, and the unions have an influential voice within it. A committee was also set up on site to deliver results for our members in industrial relations and health and safety, and we are putting agreements in place for the terms and conditions of those building the plant, and agreements are under discussion for those who will be operating the plant once it is finished.
It would be prudent for those who make the decisions to make amendments that require the nuclear company, as it were, to recognise established sector trade unions, and to embed union access—or the requirement for union access—into the Bill, not just for the client and the tier 1 contractors, but for second and third-tier contractors, as we have on the HS2 project. The nuclear company should have regard to the security of its supply chain, and figures on UK content should be published.
The access that we have on Hinkley Point has created an environment where the GMB in particular is able to have really in-depth discussions with the client and tier 1 contractors on things such as equality and diversity and inclusion. We are currently working on projects to encourage women into the construction sector at Hinkley Point and to create an environment that will be welcoming and encouraging to women who want to come into the sector. Given the skills gap the construction sector currently faces and is heading towards, it is important that that work is done with both employer and trade unions to ensure that we get that right for the workforce. While I had the floor, I wanted to suggest that union access was put into the Bill.
The Chair
Q
Simon Coop: On the investment question, which I did not respond to at the time, it does seem significant, but in order to have balanced UK energy security moving forward, that investment has to be put in place. There is no doubt, as we look at the streams of nuclear energy, that a fleet of nuclear energy is needed, and this Bill should not be just in line with Sizewell C; it should be a Bill that moves forward a nuclear fleet. We are in a position where, by 2025 and 2030, there will be clear problems in nuclear generation, as six stations will be coming off stream at that point in time. For a clear, balanced energy policy, nuclear, along with renewables, solar and wind, has to be a part of that—not just as a back-up situation, as some people state, but as an integral part of the UK’s energy moving forward. That has to be key.
On collective bargaining and union agreements on sites, there is no doubt that unions build clear relations and the highest health and safety standards, which in turn will definitely mean that any project has more chance of succeeding within budget because of the clear integrity of the health and safety situations through joint agreements.
The Chair
Thank you very much.
Ordered, That further consideration be now adjourned. —(Craig Whittaker.)
Subsidy Control Bill (Ninth sitting)
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Chair
Before we begin, I have a few preliminary announcements. Members are expected to wear face coverings except when speaking, unless exempt, and to maintain distancing as far as possible. This is in line with current Government guidance and that of the House of Commons Commission. Please give each other and members of staff space when seated and when entering and leaving the room. Members should have a covid lateral flow test twice a week, which can be carried out either at the testing centre in Portcullis House or at home.
Members should send their speaking notes by email to hansardnotes@parliament.uk. Officials in the Gallery should communicate electronically with Ministers. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.
Clause 65
Monitoring and reporting on subsidy control
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 29, in clause 65, page 37, line 12, leave out “fifth” and insert “second”.
This amendment, and Amendment 30, together require that the CMA publish a report after two years, and annually thereafter.
The Chair
With this it will be convenient to discuss the following:
Amendment 61, in clause 65, page 37, line 12, leave out “fifth” and insert “third”.
This amendment would require the CMA to conduct its first review under the section in the third year after commencement.
Amendment 30, in clause 65, page 37, line 14, leave out “five years” and insert “one year”.
This amendment is linked to Amendment 29.
Amendment 62, in clause 65, page 37, line 14, leave out “five” and insert “three”.
This amendment would require the CMA to prepare a subsequent review every three years.
Kirsty Blackman
Thank you, Mr Sharma, for your dedication in chairing the Committee, no matter how much we talk. It is appreciated that you continue to show up.
Amendment 29 would work in conjunction with amendment 30 on Competition and Markets Authority monitoring. The measures on subsidy control are new, and we do not know how they are going to work. We do not know how well subsidy control is going to work. It is therefore really important that the CMA reports on a regular basis.
I have had various arguments with Treasury Ministers about tax measures. Treasury Ministers have generally made it clear to me that tax measures are reviewed on a regular basis. Unfortunately, it is impossible to find what “regular” means. It is impossible to pin it down. It is impossible to work out when tax measures are actually reviewed and to see, in any sensible way, any evidence of that. I have previously asked Ministers on Delegated Legislation Committees, for example, to commit to writing to the members of a Committee in the future, when the tax measure under discussion is reviewed, but the Government continue to fail to do so.
I am concerned that the Government’s ability to be transparent on subsidy control measures needs to be in the Bill. The amendment addresses the CMA monitoring report, rather than the Government report, but the CMA will deal with the monitoring and reporting of subsidy control. I hope that the Government will also be reviewing measures, in addition to the CMA’s monitoring and reporting, and will be checking to see how subsidy control is working and whether the Bill is working as intended. As we have previously said though, we have significant concerns about the lack of data that will be provided and the fact that we cannot effectively monitor all the subsidies that are given because of the lack of requirement for granting authorities to register all of those subsidies, or even subsidies over a sensible threshold—the threshold as set is too high.
Amendment 29 would ensure that the CMA’s first report occurs two years, rather than five years, after subsidy control begins. Given the newness of the regime—it is being created and implemented for the first time in autumn next year—we need to know how things are going and we need to know that more quickly than in two or even three Parliaments, depending on how quickly elections are called. Five years is about three parliamentary terms, if we go by recent times. Some people would even say that five years is a generation.
Five years is too long for the initial report. Following that, five years for the subsequent report is also too long. Amendment 30 suggests that the report should be pulled together annually, rather than every five years. That would greatly improve transparency. The Government have been clear that this is a permissive structure that will encourage people to act in the best interests of economic development and improving their areas. I do not think we can properly assess that if we get a report on this from the CMA only every five years rather than more regularly. The Opposition’s amendments to the clause would similarly reduce the length of time between reports; they have been slightly more flexible than I have, but I support the aim of their amendments—to reduce the term from five years.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Sharma. I thank you for continuing to turn up to our ongoing and extensive deliberations. I thank the hon. Member for Aberdeen North for her comments. She is right that we have tabled a coincidentally similar amendment to hers. I support all the arguments she made. She is right that the Opposition amendment suggested slightly greater flexibility than the SNP amendment, partly because of our thinking on how long it might take to actually get the information to be able to add more meaningful assessments and recommendations to the monitoring of and reporting on subsidy control.
The clause rightly requires the CMA to undertake a periodic review of the effectiveness of the Bill’s operation and its impact on competition and investment in the UK. The Secretary of State may also direct the CMA to prepare a report in respect of a specified period. I am not fully sure whether that allows for some flexibility if issues are identified; perhaps the Minister can respond to that point. However, the review is important because the new regime contains many significant differences from the EU state aid rules in the processes that we will follow. Those processes, which I think have the support of the House, require safeguards to be in place, because they are not in place in a system in which some of the review and scrutiny is done up front. We cannot embark on this without making sure that there are safeguards on the use of public funds, adequate scrutiny measures and a system for learning what works well and what may not. For example, there may be a learning curve for public authorities, businesses and the Government alike, so it is important that the regime is subject to this regular review. It is good practice and it is important for value for money, for accountability to the taxpayer and to assess the effectiveness of the regime and make any necessary changes.
It is important that the regime is subject to regular review. I think we are joined here in the view that five years is not regular enough, particularly given the very good example of having three elections in five years. Politics is not always certain, yet we want that certainty to be in place. We want the learning to be fast cycle; it is good practice to learn in a more fast-cycle way. Perhaps the Minister could clarify why this time period was selected. Five years would effectively provide for one report per Parliament, assuming that we have a five-year Parliament.
What is more, five years is a significant amount of time to have passed before the first review of the effectiveness of the operation of the regime. There could be significant inefficiencies that cause substantive negative effects within that timeframe, and Parliament would be none the wiser without that informed view and assessment from the CMA. Labour tabled amendments 61 and 62 to reduce the reporting period laid out in clause 65 to every three years, which would allow for enough data to come through and for a cycle of meaningful reports that could take into account recommendations for change and assess how effectively the intended outcomes had been delivered. As a minimum, that is a more appropriate timeframe for reviewing the new regime. I would be grateful to know whether deciding on five years followed discussions with the CMA. If those discussions did happen, what was the CMA’s feedback? Engaging with the CMA is important, and there may be the need for challenge if Parliament has a different view.
As well as giving Governments more opportunity to make changes to the regime, including legislative changes and process improvements, any problems with the regime would be resolved considerably earlier because, let’s face it, if we have five years to do something, it may be left until the last minute. We want to ensure that Parliament is also responsive to any changes and plays its part in ensuring that the regime, and any changes, can be reviewed effectively every three years.
I hope the Minister recognises why five years is too long a reporting period, takes on board the comments of the hon. Member for Aberdeen North and her party and those from Labour, and perhaps offers some feedback to the Committee on why five years was suggested. Does the Minister recognise our arguments, and would he be prepared to include a review in the later stages of the Bill?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure, as always, to serve under your chairmanship, Mr Sharma. As we have heard, clause 65 requires the CMA to produce a report on the overall effectiveness of the regime and its impact on competition and investment within the UK. The monitoring report is to be produced in relation to the first five years following the Bill’s commencement and for every subsequent five-year period. That interval was chosen specifically as an appropriate length of time over which to consider the wider impacts of the regime as a whole and to evaluate its overall effectiveness during a period in which a sizeable number of subsidies would be given, so that the medium-term effects could be properly considered and evaluated.
The period is consistent with the maximum length of a parliamentary term, as we have heard, ensuring that there is a regime-wide assessment of the regime at least every normal parliamentary term. Producing such a report is a significant undertaking, requiring a good amount of time to gather and analyse the evidence. Five years strikes the right balance between the time needed to observe how the new regime is working and the benefit of timely analysis and evaluation.
Seema Malhotra
I thank the Minister for giving way, and I appreciate his comments. However, he has not explained whether periods of time other than five years were assessed, and has not yet explained—perhaps he will—whether the CMA was involved in the discussions. Given the work of the subsidy advice unit and all the other work going on, producing a report every three years will not be too onerous if it is part of business as usual. What consideration has been given to other time periods?
Perhaps the Minister can also clarify something. Does he see that if a report arrives in year four of a Parliament and some legislative changes are required and then we have an election, that would not be a sensible way of running a regime that requires some interplay between Parliament and the devolved Administrations? More frequent reporting at three years, which is not too onerous—it is as long as it takes to complete a common degree—would make a difference and allow for changes to be brought through.
Paul Scully
To be fair, I had only just started making my remarks. However, whether it is butting up against elections or not, that could equally be the case in three years as well as five years. However, five years was chosen, as I said, basically to correspond roughly with the standard parliamentary term; it gives a good amount of time for good and meaningful data to be collected and analysed; and it is also consistent with the monitoring reports of other bodies, such as the Office for the Internal Market.
Clearly, we work with the CMA on this issue and other issues. The CMA will work on the subsidy control regime in the future; we work with it very closely. In the evidence session, Rachel Merelie talked about the fact that there may be merit in the CMA providing advice more frequently at the request of the Secretary of State, and that is exactly what is set out in the Bill, so that the frequency of reporting can be changed, which I will come on to shortly.
We have heard that the various amendments will reduce the key periods, down to either two years or three years, depending on the particular amendment. I will cover the amendments in turn.
First of all, amendment 29 would require the initial monitoring report to be produced within two years of the Bill gaining Royal Assent, as opposed to within five years. Well, I have talked about the fact that five years would normally be the appropriate timeframe, so that the wider evidence and the consequences can be properly considered. I agree that circumstances might arise that could make it beneficial for any monitoring report on the new control regime to be produced within a shorter timeframe. That is why clause 65(4) says:
“The Secretary of State may direct the CMA to prepare a report in relation to a specified period.”
And the Secretary of State will provide the means for an earlier report if it should be considered necessary. Therefore, I believe that amendment 29 is unnecessary.
Amendment 30 relates to the reporting frequency. Again, I understand the desire of the hon. Member for Aberdeen North for more frequent reporting. However, reducing the interval between the reports by the subsidy advice unit to one year is not necessary and could divert resource from other important activities.
Equating more frequent monitoring reports with improved scrutiny and transparency might seem attractive, but in reality it could well have an effect opposite to that intended by the hon. Member, resulting in more superficial reports, which would be less useful in assessing the overall effectiveness of the subsidy regime.
Clause 66 already requires the subsidy advice unit to provide annual reports to Parliament, in order to provide transparency in referral cases that it has handled throughout the year. The monitoring reports set out in clause 65 go beyond that, covering the functioning of the whole regime and not just the specific role of the subsidy advice unit. By necessity, those reports take longer to produce, so that there is sufficient quality data for the subsidy advice unit to consider.
Kevin Hollinrake (Thirsk and Malton) (Con)
It may seem tempting to wrap all this stuff in lots of scrutiny, but does my hon. Friend agree that red tape costs money? Wrapping the economy in red tape costs money. Ultimately, the cost of that has to be borne by the taxpayer. He is absolutely right to say that at any point in time the Secretary of State could ask the CMA to consider whether there is any evidence of problems with the provisions in the Bill. Better to have that arrangement than simply to ask for review after review, for which there will be a cost to the taxpayer.
Paul Scully
My hon. Friend is absolutely right, as usual; we do not want reviews for the sake of reviews. It is good to have a focus, but it is also good to be able to look at the meaningful evidence rather than distract attention and resource from what may be important scrutiny by the subsidy advice unit itself in its day-to-day work. Such reviews would obviously put pressure on public authorities and the awarders as well.
It is important that we ensure that the unit has sufficient time to collate and analyse the evidence. Reducing the amount of time available to produce these monitoring reports would only result in less useful reports, as there would not be good enough quality data available for the unit to assess, nor sufficient time for it to collect and analyse the data that is available. And it would indeed divert resources away from the subsidy advice unit’s other functions, which could, for example, reduce the capacity to accept voluntary referral requests from public authorities.
Amendments 61 and 62, which are meant to be considered together, were tabled by the hon. Member for Feltham and Heston. They are obviously very similar to amendments 29 and 30, which were tabled by the hon. Member for Aberdeen North.
Amendment 61 would require the subsidy advice unit’s initial monitoring report to be produced within three years of the Bill gaining Royal Assent, as opposed to within five years. I have already said that five years would normally be the appropriate timeframe. However, I agree that in some situations it would be beneficial for the monitoring report to be produced within a shorter timeframe. For that reason, we already have the powers set out in clause 65(4). As I have already said, clause 65(4) says that
“The Secretary of State may direct the CMA to prepare a report in relation to a specified period”,
should that be necessary. As such, I believe that amendment 61 is unnecessary.
Kirsty Blackman
I want to address a few things that have been mentioned. It is absolutely the case that clause 66 requires annual reporting, but that annual reporting is on a very limited number of things. It seems to me that only numbers need to be provided, and that that reporting does not include very much else. The requirement is, “How many post-award referrals have there been, and how has the CMA dealt with them?” rather than, “Have they been dealt with properly?” It is not as much of a deep dive as it could be.
The Minister could commit to a step in between those two approaches. Clause 65 gives the Secretary of State flexibility to direct a report to be made within a shorter period. The middle step would allow an annual report to address more than just the data while not going quite as far as the requirements under clause 65 for a review of the entire scheme’s efficacy and whether it is working as intended. It would be interesting to hear whether the Minister would consider that.
Turning to the various other things that have been said, the Brexit vote was only five and a half years ago—which is not much longer than the five-year period—and before that we had no idea that we would be creating our own subsidy control regime. We have moved so far, and so much has happened over that period of time, that I do not think a five-year period is short enough. I appreciate the Minister’s comments about the possibility of the Secretary of State directing a report for an earlier period, particularly initially, but clause 65(3)(a) could have said that the period should be three or two years. If that had been written in the Bill in the first place, we would have had fewer concerns like the ones we are raising today.
The hon. Member for Thirsk and Malton said that red tape costs money. He is right, but red tape also saves money, and the whole point of this Bill is that public money is going to be given to organisations. Public money is going to be spent, and we need to make sure that that money is spent effectively, but I do not think that the suggested review system is adequate enough to ensure that we spend that public money effectively. Yes, this review would cost money—I am not for a second trying to dodge that fact—but I think that the benefits outweigh the risks, in that this is such a new regime and it will be really important for us to carry out that review at a relatively early stage. I am not asking for it to be done in six months; I am suggesting two years for the initial review, and the Opposition are suggesting three years. Neither is as long as five years, which will give us the early comfort of knowing that the regime is acting in the way that we hope and expect it will do.
Kevin Hollinrake
The hon. Lady’s amendment does not say “two years”, though, does it? It says:
“two years, and annually thereafter.”
That sounds like a huge amount of bureaucracy. She said that it would be a lighter-touch report, but I do not see anything in the amendment that says it is a lighter-touch report. It talks about the effectiveness of the provisions, so how would it not end up being a deep dive into the workings of the scheme?
Kirsty Blackman
I apologise—I did not make myself clear. When I talk about a lighter-touch report, I am talking not specifically about the amendments but about the fact that there should be a third approach in the Bill. If the Government are not going to move from five years—if the five-year reporting period for this deep dive report is going to remain—and we have the annual reports suggested in clause 66, which are too light touch and are just about the numbers, there is a case to be made for a middle step: a report that contains a little bit more than just the numbers, but not quite as much as that potentially costly review. That is not covered by the amendments; I am simply suggesting that the Minister consider it.
Paul Scully
I think the middle way that the hon. Member is talking about is actually what clause 66 does. The clause notes the bare minimum of what that the annual report should include. There is plenty more that the CMA can and should include—we are giving it the bare minimum.
Kirsty Blackman
That is a hugely helpful clarification. If parliamentarians or anyone else do not believe that the data included in the annual report is transparent enough, the Minister is open to us writing to the Secretary of State to request that it include more information.
The Minister has been clear throughout the course of our deliberations that a number of the changes made by the Bill are about ensuring that things can be done at speed. The tax measures and other things that were put in place because of covid had to be done very quickly—nobody is disagreeing with that—but such an approach can result in unforeseen circumstances. As such, if something started and finished during the course of a five-year period, we would not know anything about its efficacy. We would not know whether it had made a difference in the way intended until significantly after it had ended.
The Secretary of State has the ability to require those additional things. If specific funding is going to be put in place for natural disasters, for example, or any other issue we have discussed, it would be helpful if the Minister would consider asking the CMA to do an additional report, asking: “Did this work as intended? Did the funding subsidy for natural disasters achieve its aims? Could it have been done through means other than subsidies? Was there a requirement for it to comply with everything in these provisions? Would it have been easier if they had not had to jump through certain hoops in order for the subsidy to be given more quickly?”
I think that this provision does not go far enough. The Minister’s clarification about clause 66 is really helpful, and I am sure that both the Opposition and my party will continue to suggest areas where transparency could and should be improved. We will take our opportunity as parliamentarians to lobby the Government, and if there are specific concerns or issues that we believe require a report, we will request that such a report be undertaken. I wish to press amendment 29 to a vote.
Question put, That the amendment be made.
Seema Malhotra
I beg to move amendment 63, in clause 65, page 37, line 16, at end insert—
“(4A) In preparing any report under this section, the CMA must consult—
(a) the Secretary of State;
(b) the Scottish Ministers;
(c) the Welsh Ministers; and
(d) the Department of Economy in Northern Ireland.”
This amendment would require the CMA to consult with the Secretary of State and Devolved Administrations before preparing any report under this section.
The Chair
With this it will be convenient to discuss amendment 64, in clause 65, page 37, line 27, at end insert—
“(7A) The CMA must arrange for a copy of a report prepared under this section to be laid before the Scottish Parliament, Senedd Cymru and the Northern Ireland Assembly.”
This amendment would require the CMA to lay a copy of its reports before the devolved parliaments and assemblies.
Seema Malhotra
We return to a familiar theme, which is the absence of any clear role for the devolved Administrations and the failure to recognise the need for a truly four-nation approach. Yet again, the clause fails to provide a role for the devolved Administrations in the CMA consultations and report.
The Government seem not to have quite grasped the fact that the new subsidy regime will affect not just England, but Wales, Scotland and Northern Ireland. All nations should contribute to the review of the effectiveness of the regime and its impact on competition and investment within the UK, as all four nations will be affected. In fact, given that Scotland, Wales and Northern Ireland will have to implement not just what is in the Bill, but the many future regulations to be made by the Secretary of State, it is equally important that all voices are heard. Already, the devolved Administrations will not be included in defining many regulations; will not be able to call in subsidies or make post-award referrals; will not have automatic standing to challenge subsidies before the Competition Appeal Tribunal; and may not even be represented on the body that oversees the new regime—unless the Government are enlightened by discussion in Committee and the main Chamber, and with what is happening with the Office for the Internal Market.
Will the Minister explain what role he sees the devolved Administrations playing in the new regime and in the monitoring and review? Daniel Greenberg, Parliamentary Counsel for Domestic Legislation, said in the evidence session that
“when you are dealing with international obligations of the UK, that has to be dealt with by central Government but, again, doesn’t that have to be done in consultation with the devolved Administrations? Of course it does. With co-ordination with the devolved Administrations? Of course it does. With mechanisms for encoding that co-ordination and consultation into the way the Bill operates? Of course.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 61, Q80.]
The Labour party agrees completely with that, which is why we have consistently sought to amend the Bill to increase the role and voice of the devolved Administrations.
There have been fewer occasions on which Labour has wanted to increase the voice of the Secretary of State under the legislation, but clause 65 is one place where we think that might be important. The amendment would therefore require the CMA to consult both the Secretary of State and the devolved Administrations before issuing a periodic review of the regime. In particular, the CMA would find the inclusion of their voices helpful as it deliberates the impact of the regime on competition and investment across the UK.
Kirsty Blackman
I thank the hon. Member for her indulgence. There is no need for me to speak to the amendments, but I wholeheartedly support them. The Scottish National party will back them should they be pressed to a vote.
Seema Malhotra
I thank the hon. Member for her support.
Speaking to amendment 64, once the CMA has prepared its report, clause 65(7) requires the CMA to arrange for a copy of it to be laid before Parliament. We welcome the opportunity that that will provide for the UK Parliament to scrutinise the reports. Given the impact of the regime on the devolved Administrations, however, why will the report not also be laid before the devolved Administrations of Scotland, Wales and Northern Ireland, thereby giving them the opportunity to undertake detailed scrutiny? There might be a technical reason for that, but certainly the feedback that we have received is that laying reports before the Administrations would enable more formal scrutiny of them. I would be grateful for the Minister’s comments on that.
Amendment 64 would require the CMA to put a copy of its report before the Scottish Parliament, the Welsh Senedd and the Northern Ireland Assembly, which would provide each of the legislatures with a clear ability to scrutinise the CMA report and therefore the effectiveness and impact of the regime.
Paul Scully
As we have already discussed, clause 65 sets out the requirement for the unit to produce a report on the overall effectiveness of the subsidy control regime and its impact on competition and investment. Outside the broad content of the report, the Bill provides that the unit can draw upon powers set out in sections 41 to 43 of the United Kingdom Internal Market Act 2020 to gather information from public authorities, businesses and other persons in the service of producing its monitoring report.
In addition to the information-gathering powers of the 2020 Act, the unit can draw on other existing provisions that the CMA has under the Enterprise Act 2002 to engage with a wide range of stakeholders, and even commission new research in order to meet its statutory duties. Outside of those specific provisions, it is intended that the subsidy advice unit will have discretion on how to approach its monitoring functions.
We have heard that amendment 63 would require the subsidy advice unit to specifically consult the Secretary of State, Scottish Ministers, Welsh Ministers and the Department for the Economy in Northern Ireland in preparing a report. In preparing its monitoring report, the subsidy advice unit will want to seek information from public authorities across the UK, both in their capacity as subsidy granters and in relation to their various policy-making roles. That will be necessary in order to develop a balanced view of the function of the regime and its impact on competition and investment.
Highlighting the role of the Secretary of State and their contemporaries in the Bill gives rise to the question why other parties have been omitted. Why not also specify, for example, that the subsidy advice unit should consult regulators, businesses or their representative groups, or any number of other specific persons? The reason we have not specified individuals with whom the subsidy advice unit must engage is so as to afford it the maximum flexibility to undertake its monitoring function appropriately and as it thinks fit. The unit can also draw on the wealth of institutional knowledge that the CMA has, specifically related to the protection of competition. It is therefore unnecessary to direct the unit’s subsidy monitoring functions in the way intended by the amendment.
Amendment 64 also concerns the subsidy advice unit’s relationship with devolved Administrations in the fulfilment of its duties, and would require that its regime monitoring reports be laid before the relevant legislatures in Northern Ireland, Scotland and Wales, in addition to the UK Parliament. Hon. Members will undoubtedly point to the example of the Office for the Internal Market’s reports on the functioning of the UK internal market, which are laid before all four UK Parliaments.
Although the Office for the Internal Market also falls under the umbrella of the CMA, it is a uniquely constituted body reflecting the specific role and relationships that it has with the Administrations in all four UK countries. We have consciously not followed the governance model established by the Office for the Internal Market for the subsidy advice unit. Subsidy control is and will remain a reserved policy matter. The subsidy advice unit will be formed as part of the CMA, a non-ministerial department that serves the whole of the UK. It is therefore appropriate that the CMA and, by extension, the subsidy advice unit reports to the whole UK Parliament.
Kirsty Blackman
May I ask the Minister—sorry if I missed it—to say explicitly whether he would expect the CMA to consult the devolved Administrations in the preparation of the five-year report?
Paul Scully
As an awarding body, I fully expect the CMA and subsidy advice unit to speak to all the devolved nations as well as public authorities. That does not specifically need to be in the Bill, for the reasons I have given about excluding others. Given that subsidy control is and will remain a reserved policy matter, it is right that the UK Parliament considers and scrutinises the report. I therefore request that the hon. Member for Feltham and Heston withdraw the amendment.
Seema Malhotra
I thank the Minister for his comments. The devolved Administrations are distinct from other institutions because they are democratic institutions. For a regime that has to be accountable, it is important that the voice of those bodies and of Ministers, and others who may well have a view, are consulted. It is important to distinguish democratic institutions from others. The Minister is right that there will be a whole range of people who may want to contribute their views, and I am sure that the CMA will find a mechanism for seeking views.
I want to push amendment 63 to a vote because if this is something that should be done anyway, we want to ensure that it is done. Making sure at key stages that the voice of the devolved Administrations, and indeed of the Secretary of State, are formally heard will add significant insight to what will be in that report. We want that report to be the best it can be.
Question put, That the amendment be made.
Seema Malhotra
I beg to move amendment 65, in clause 65, page 37, line 27, at end insert—
“(7A) Within 30 working days of a report being laid under subsection (7), the Secretary of State must make a statement to the House of Commons explaining what action will be taken to remedy any deficiencies in the effectiveness of the operation of the Act or impact of the operation of the Act on competition and investment within the United Kingdom identified by the CMA.”
This amendment would require the Secretary of State to make a statement to the House of Commons on the CMA’s findings and any remedial action required.
I will keep my comments brief. This amendment would require the Secretary of State to make a statement to the House of Commons on the CMA’s findings and any remedial action required. It does not take a genius to recognise that reviews alone are not enough; they need to be acted on. Yet there are no provisions in the Bill that we have seen that require the Secretary of State to act in response to the findings of the CMA’s reports, or even to consider whether action is necessary to remediate any deficiencies in the regime identified by the CMA. Does the Minister agree that this seems to be a significant gap?
If the report and reviews under clause 65 do not trigger at the very least an obligation for the Secretary of State to consider and have due regard to its findings, are we not missing quite an important step in the overall process of review and improvement of the regime? That is why we have tabled amendment 65, which states that within 30 days of the report being laid under clause 65, the Secretary of State must make a statement to the House explaining what their response is and what action may be taken to address any deficiencies highlighted in the report. That would ensure that any issues with the new regime were not only raised, but actively considered. As the regulation currently stands, problems identified by the CMA may continue undebated and unaddressed.
Kirsty Blackman
I have a couple of other comments and suggestions. The laying before Parliament is, as has been said, a limited way in which parliamentarians can interact with the report. It is great that it is being laid before Parliament, but a ministerial statement, whether written or oral, would help in not just raising the profile of the report published by the CMA, but making clear what the Government intend to do about any deficiencies that have been created. Alternatively, there could be a requirement in the legislation—I might think about this for Report—for the report to go before the Public Accounts Committee or the Business, Energy and Industrial Strategy Committee, whichever would be more relevant, in order that it could scrutinise the report and ensure that it was taking evidence and creating a report with recommendations to the Government on what needs to be changed.
If the reporting period is to be only every five years, I assume that there will not be immediate—as soon as the report comes through—change happening and that it is likely that there will be a mulling-over period once the report comes in, so that, as the Minister said, the medium-term changes and so on can be assessed and any changes can be made to the legislation. In that case, a written statement or an oral statement being made, whereby we could ask any questions that we needed to, or a more in-depth report by one of the parliamentary Select Committees, would mean that Parliament had a stake, Parliament was invested, and Parliament was assisting in making the changes that the CMA required or in suggesting how to make the changes.
I am sure that the Minister would be the first to admit that the Government do not have every one of the answers. They may have a lot of the answers, in his view, but they do not have every one of the answers, and that is why consultation is hugely important with external organisations but also with those of us who are elected to scrutinise legislation, to scrutinise what the Government are doing, and to try to make the most appropriate changes so that things work, in the interest of spending public money appropriately but also in the interests of our constituents and the people of the UK.
Paul Scully
The hon. Member for Aberdeen North is absolutely right to want to improve the system. That is exactly the incentive; we need to improve the system. A number of mechanisms are available already. The BEIS Committee and the Public Accounts Committee can indeed call the report in and consider it, and there are urgent questions and any number of other mechanisms. I understand and appreciate the suggestions. There are mechanisms there.
The main purpose of the function of reporting, as I have said, is to provide a measure of objective scrutiny for the regime. Parliamentarians can consider the report and feed into the process of monitoring and continuous improvement of the regime, as can Government themselves. That objective assessment, based on the information that has been gathered, will be a really valuable and transparent mechanism to demonstrate what is working and what may require improvement. It will of course fall to the Government to provide a suitable response to any issues identified by the report.
The amendment tabled by the hon. Member for Feltham and Heston would put in place an arbitrary and constraining time limit of 30 days within which the Secretary of State must assess the findings from the unit’s monitoring report and then provide details for addressing any potential issues. Without prejudicing what the content of any future monitoring report might be, it seems unlikely that this amendment would have the effect of promoting effective and well considered changes if they were required, because the amendment, by tying the Government’s hands in this way, would risk hurried and ineffective solutions to any issues identified by the SAU. The monitoring reports will represent the culmination of many months of work by the SAU, so it is right that the Government should respond appropriately. However, arbitrary, short deadlines are not likely to promote sensible changes, especially if there is a need for substantive change.
This amendment also offers little benefit in relation to improving the transparency of the regime. First, monitoring reports will already be published for all to see. Secondly, many of the tools provided by the Bill require further scrutiny by Parliament through the means of affirmative regulations, which require debate and, ultimately, the agreement of parliamentarians in both Houses before they can be enacted. Transparency is one of the cornerstones of the new subsidy regime, and continuous improvement is one of the essential principles of good governance. The amendment would do nothing to enhance either of those aims and may in fact prove detrimental to them by forcing an artificially rushed response to the SAU’s finding. I therefore request that the hon. Member for Feltham and Heston withdraw the amendment.
Seema Malhotra
I thank the Minister for his comments. On the basis of some of the discussion, and the suggestion about what role Select Committees might play, issues with the report are perhaps something we can review and discuss offline with the Minister. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause requires the subsidy advice unit periodically to review and report on the effectiveness of the operation of the subsidy control regime and its impact on competition and investment. This report should be prepared every five years, or more frequently if requested by the Secretary of State. This review mechanism will ensure that the new subsidy control regime continues to operate effectively, based on experience of how it is working in practice and the impact it is having on competition and investment. The report will be published by the SAU and laid before Parliament.
Seema Malhotra
This is an important clause and we support its standing part of the Bill.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clause 66
CMA Annual Report
Seema Malhotra
I beg to move amendment 66, in clause 66, page 37, line 40, at end insert—
“(d) the proportion of subsidies and schemes in each of paragraphs (a), (b) and (c) in relation to which the CMA found that the public authority’s assessment under section 52(2)(d) or 56(2)(d) required improvement;
(e) the proportion of subsidies and schemes in each of paragraphs (a), (b) and (c) in relation to which the CMA identified a risk of negative effects on competition or investment within the United Kingdom;
(f) information on the geographical allocation of subsidies, including the total value of subsidies subject to mandatory and voluntary notification in the preceding 12 months that have been awarded to enterprises in each nation, region and local authority within the United Kingdom;
(g) the number of extensions to the reporting period made under section 53(6) at the request of the CMA and the average number of days of those extensions;
(h) the number of voluntary referrals made under section 56(1);and
(i) the number of those voluntary referrals in relation to which the CMA has given notice under section 57(2) that it has decided not to prepare a report.”.
This amendment would require the CMA to include the additional specified information in its annual report.
Clause 66 sets out the information that the CMA must include in its annual reports. It is connected in some regards to the debate that we have just had. Although we support the mandating of specific information to be included in the annual reports, the information required feels too high-level and not sufficiently detailed or useful. The clause envisages the CMA simply listing the subsidies and schemes in relation to which it has prepared reports. The Minister may explain what he expects in the annual report.
We believe that, first, the annual report should include information on the number of subsidies and schemes in relation to which the CMA found that public authority assessments required improvements. In doing so, the review would provide an assessment of how successfully public authorities are meeting their statutory obligations under the legislation.
Secondly, the report should include information on the subsidies and schemes that the CMA reviewed and found risked having a negative effect on competition and investment within the UK’s internal market. That would ensure that not only the House but the taxpayer and the devolved Administrations are made aware of what, where and how subsidies are putting pressure on the UK’s internal market, if that is happening.
Thirdly, the report should include information on the geographical spread of subsidies that the CMA considered in the last reporting period, as well as information on the value of subsidies that have been awarded to enterprises in each region, nation and local authority in the UK. We are used to statistics and information being available at a fairly granular level. This is important and significant, given that, despite our best attempts, the Bill currently provides no information or regulation on how subsidies and schemes will work to reduce economic inequality across the United Kingdom.
If the Government really believe in levelling up, they need to take action to match what they say. The new regime, and subsidies generally, can provide an important opportunity for channelling resources to deprived areas and reducing regional and intra-regional inequality. As the Bill currently stands, however, there are no regulations in place that actively allow for that. As Professor Fothergill, the national director of the Industrial Communities Alliance, explained:
“In certain places, if we really are serious about levelling up, we have to put more resources into that effort, and we have to use state aid as one of the tools for delivering new jobs.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 11, Q7.]
Does the Minister recognise that the contents of the Bill do not currently match up with the levelling-up rhetoric? Does he agree that subsidies can be used and could make a significant impact by supporting and aiding deprived areas? Including information on the geographical spread of subsidies could be quite an effective and efficient way of providing some insight about whether the resources under the regime are working to reduce inequality, which would surely be of help to the Government in achieving their stated goals.
We believe that the CMA’s annual report should include information that would allow the CMA’s resourcing, capacity and effectiveness to be evaluated. We have proposed that the annual report should set out
“the number of extensions to the reporting period”
for mandatory notifications that the CMA has made, the duration of those extensions,
“the number of voluntary referrals made”,
and how many of those the CMA has and has not prepared a report on. The CMA has a key role in ensuring that subsidies and schemes meet the principles and do not distort the market. If it is unable to carry out its responsibilities effectively, there will be a real risk that damaging subsidies continue without challenge or review.
Kirsty Blackman
I have just a couple of points to make. We have already raised a number of concerns about the limitations of the transparency that will be provided, particularly on the subsidies that will be on the database and our inability to get any meaningful information from it, because so many of the subsidies that will be made will be excluded from being on the website by merit of their being below the de minimis threshold. We continue to have concerns about that.
The amendment simply asks for transparency data and for the CMA to produce in its annual report data that it has already. These are data that the CMA will have within its local key performance indicators—stuff that it will be considering anyway. It will know the number of extensions and voluntary referrals that have been made. This is not an additional piece of work that the CMA will need to do. It is simply ensuring that such information is added to the annual report, rather than putting an additional burden on the CMA. It is stuff that the CMA will be measuring anyway—if it is not doing so, it is not a public organisation that is working sensibly. This is basic, bread-and-butter stuff, and it means that we would be able to scrutinise properly and have an idea of what is happening.
The points made by the hon. Member for Feltham and Heston, particularly in relation to the resourcing of the CMA, are incredibly important. We want the CMA to be adequately resourced so that it can carry out its functions effectively, because the system does not work if the CMA is not adequately resourced. We will struggle to know whether the CMA has adequate resource if it is not producing data on the number of extensions that it has required. As I say, the amendment is eminently sensible, and I look forward to hearing what the Minister has to say in response to the speech made by the Opposition spokesperson.
Paul Scully
The Enterprise and Regulatory Reform Act 2013 requires the CMA to prepare an annual report of its activities and performance during the year. Clause 66 requires the CMA to include details within its annual report of any subsidies and schemes that have been referred to the subsidy advice unit in the previous year, including both mandatory and voluntary referrals. The purpose of including that information is to provide transparency on the number and types of cases being referred to the SAU each year.
Amendment 66 adds to the information that the CMA would be required to append to its annual report in ways that we believe are overly prescriptive. It would limit the CMA’s flexibility to determine what information to include in its annual report and the most effective way to deliver that. Some of the information that the amendment mandates would not be accessible or consistently available. For example, the requirement that the CMA publish the proportion of cases where the SAU found that a public authority’s assessment required improvement, or where it identified a risk to competition and investment, misunderstands the role of the SAU.
The SAU will evaluate the public authority’s assessment of whether the subsidy or scheme complies with the Bill’s requirements. It will also evaluate whether there are any effects of the subsidy or scheme on competition or investment in the UK. The SAU may include advice about how the public authority’s statement might be improved or modified to ensure compliance with the requirements of the Bill, but the SAU is not a regulator. It will not make its own independent assessment of potential risks to competition and investment, or make definitive judgements on the extent of them.
Other requirements of the amendment are similarly unnecessary, including the requirement to publish the number of requests made by the SAU under clause 53(6) to extend the reporting period for a mandatory referral. Clause 53(7) already requires that such requests are published. In addition, the low number of mandatory referrals that we estimate in any given year will mean that calculating the average number of days for extension is unlikely to offer much additional insight into the subsidy control regime. It therefore need not be mandated for inclusion in the annual report.
The amendment would also require the CMA to publish geographical allocations of all subsidies subject to mandatory and voluntary referrals. That would be a burdensome task for the CMA, and would be difficult to comply with consistently. First, the amendment asks for information to which the CMA would not have ready access, since not all subsidies eligible for voluntary referral will be referred to the SAU. Secondly, if a public authority referred a scheme instead of an individual subsidy to the SAU, it would not be possible for the CMA to determine the expected geographic allocation of subsidies not yet awarded under that scheme. The same issue may apply to the beneficiary of a single subsidy that operates in more than one location.
The right approach is to provide the CMA with a degree of flexibility to determine what information about subsidies and schemes referred to the SAU is presented in its annual report. For the reasons that I have provided, I request that the hon. Member for Feltham and Heston withdraw the amendment.
Seema Malhotra
I thank the Minister and the hon. Member for Aberdeen North for their comments. I intended to press the amendment to a vote, but on the basis of some of the discussion I will not do so. However, I will challenge a couple of things the Minister said. We are all aware of where there could be burdens for the CMA or others in producing reports, but it is important to ensure that we have an X-ray view that provides insight into what is happening across the system as a whole. Where the CMA should have information that would be relevant, it may be useful to include it in the annual report.
The Minister talked about eligibility for voluntary referral, about which the CMA would not have information. We did not intend to include any wording around eligibility, and I do not think that we did. We talked about the number of voluntary referrals, and those for which the CMA decided not to prepare a report. It is important to ensure that our proposals are understood. I take on board what he said, I think in the debate on clause 65: that he would welcome suggestions from the Opposition, and perhaps from his own side, about what information would be useful. We all want to ensure that there is an effective and efficient regime. None of us wants to see unnecessary costs incurred, but we need transparency and the right information to inform the right decisions and the best response.
Kirsty Blackman
I am a bit confused by the Minister’s comments on paragraph (d). He seemed to suggest that the CMA’s report may not talk about where local authorities’ assessments require improvement. That is slightly concerning because, if a local authority is making an assessment on a subsidy and the assessment requires improvement, who is going to tell it? Who is going to say the assessment requires improvement if the CMA does not have the ability to say, “Excuse me. You have done this a bit wrong. Could you do it better?”
It would be helpful if the Minister contacted us, by letter if possible, to say what he expects will be in the CMA’s reports. At the moment, I do not understand what will be in those reports, specifically in relation to the mandatory referrals. What will be in the CMA’s report on the mandatory referrals that come forward? What does the Minister expect will be in the report? It does not have to be prescriptive; it could be ideas of the kind of things that would be in there, because at the moment I do not understand what that report is going to be.
Seema Malhotra
It would be helpful, in the light of our conversation, if we could start with the Minister’s expectation. He may well have reflected on the discussion we have had today. That may a good and efficient way for us to come back with suggestions of what else might occur, or perhaps there will be full, total agreement on what we want to see in the CMA’s annual report; we do not know. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Paul Scully
In accordance with the Enterprise and Regulatory Reform Act 2013, after the end of each financial year, the Competition and Markets Authority must prepare and send to the Secretary of State an annual report of its activities and performance during the year. The clause requires that the CMA include details within its annual report of any subsidies and schemes that have been referred to the subsidy advice unit in the previous year, including referrals made on both a mandatory and a voluntary basis. That will help to provide transparency on the number and types of subsidies and schemes that have been reported on by the subsidy advice unit.
Seema Malhotra
Notwithstanding the comments we have made in the ongoing discussion, we support the clause stand part.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Clause 67
information-gathering powers
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause gives the subsidy advice unit—the SAU—information-gathering powers to assist with its monitoring and reporting functions under clause 65. It does so by applying, with modifications, the information-gathering powers that the CMA has under sections 41 to 43 of the United Kingdom Internal Market Act 2020.
Those powers enable the SAU to require that persons produce specified documents and that businesses provide estimates, forecasts, returns and other information that may be specified. The SAU will be able to require that the information be provided for the purpose of assisting it to review and report on the operation of the Bill, and on its impact on competition and investment within the United Kingdom. The SAU will have the power to impose financial penalties, where a person fails to provide information as required, or intentionally obstructs or delays the SAU when it is exercising those powers.
The Secretary of State is given the power to make necessary modifications to the powers, so that they work when applied for those purposes. Such modifications cannot alter the maximum financial penalties that may be imposed by the SAU. It is important that the SAU can obtain credible and comprehensive information, so that it can monitor and report on the subsidy control regime effectively. The ability to impose financial penalties for non-compliance provides a powerful incentive for persons to provide that information to the SAU and is consistent with the CMA’s existing statutory functions.
Seema Malhotra
The clause applies sections 41 to 43 of the United Kingdom Internal Market Act 2020 for the purpose of assisting the CMA in carrying out its functions on subsidy control. The clause means that the CMA will be able to give an information notice or require the production of a document by an individual, business, or public authority. We recognise the importance of allowing the CMA to give an information notice, so that it can monitor the subsidy regime effectively. We therefore support the clause standing part of the Bill.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68
Subsidy Advice Unit
Seema Malhotra
I beg to move amendment 67, in clause 68, page 38, line 39, at end insert—
“(3A) The Chair of the CMA Board may appoint up to three non-executive members to the Subsidy Advice Unit established under subsection (1) in order to ensure that the Unit includes least one person with relevant experience in relation to each of Wales, Scotland and Northern Ireland.”
This amendment would allow the CMA Chair to appoint up to three non-executive members to ensure that the Unit includes at least one person with experience in relation to each of Wales, Scotland and Northern Ireland
The Chair
With this it will be convenient to discuss the following:
Amendment 68, in clause 68, page 38, line 41, at end insert—
“or persons appointed under subsection (3A).”
This amendment is linked to Amendment 67.
Amendment 69, in clause 68, page 38, line 41, at end insert—
“(4A) Before making an appointment to the Subsidy Advice Unit, the CMA must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”
This amendment would require the CMA to seek the consent of the devolved administrations before making an appointment to the Subsidy Advice Unit.
Seema Malhotra
The clause establishes regulations for the CMA to establish a board called the subsidy advice unit, which will carry out the CMA’s duties under the new regime. We support the creation of the subsidy advice unit and the duties it gains under the Bill. However, yet again, the Government have failed to create a role for the devolved Administrations. The Minister might wonder whether I sound like a broken record, but the reason is that the theme continues to be a cause of concern throughout the Bill.
The subsidy advice unit will play an extremely important role in the new regime, consistently assessing all subsidies and schemes referred to the CMA, by public bodies and by the Secretary of State. Its reports and advice will influence the challenging and carrying out of subsidies and schemes, and will provide important guidance for public authorities. The demands on its time and expertise will be considerable, as it sets up and carries out that very important function.
Rightly, the unit ought to have all the right input. A diversity of input means that some of the best decisions will be made. It is important to ensure that the right advice and input will be there in the unit, in particular that representing all four nations of the UK. Its work will be applicable not just to England, but to Scotland, Wales and Northern Ireland. However, the clause does not appear to ensure that all nations will be represented fairly in the subsidy advice unit. Why is that?
Does the Minister not feel that it is important for the devolved nations to be represented on this significant body? Doing so would enhance the Government’s reaching out and their ongoing connection with the devolved Administrations, ensuring genuine four-nation input in its work. As Dr Pazos-Vidal, head of the Brussels office for the Convention of Scottish Local Authorities, said, the Bill
“is too general and not reflective of the territorial constitution of the UK as it stands.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 8, Q4.]
The lack of specific representation for the devolved Administrations on the advice unit is a stark example of that.
Labour proposes two amendments to change that lack of representation. They would ensure that the Bill works as well as we want it to, and as well as we need it to for Scotland, Wales and Northern Ireland, as well as for England. Amendment 67 would allow the chair of the CMA board to appoint up to three non-executive members to the subsidy advice unit if the board felt that there was a gap. That would ensure that the CMA could include at least one person on the unit with specific, recent experience that was relevant to Scotland, Wales and Northern Ireland. Amendment 69 states that the CMA must seek the consent of the devolved Administrations before making an appointment to the subsidy advice unit.
The amendments would ensure that the guidance and reports issued by the CMA are not too England-focused, and take into account, in a more equal way, the views of all the UK regions. They seek to ensure that information and insights are considered in the round and together, and that the new regime is more effective across the whole of the UK.
It is not just Labour that recognises that representation is important. To choose just one comment that we heard in evidence, Thomas Pope, deputy chief economist at the Institute for Government, said:
“I certainly think that the CMA and/or the subsidy advice unit should have a membership and input reflecting its four-nation role in the UK”.––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 31, Q43.]
We think that that should be formalised as part of the structure, so that things are less likely to go wrong or be overlooked. If there is an intention to have such representation anyway, why not formalise it as part of the structure, and put it on the face of the Bill?
Paul Scully
Clause 68 requires that the CMA establishes a new committee of the board, called the subsidy advice unit, for the purposes of undertaking the subsidy control functions set out elsewhere in the Bill. The unit would be a specific committee within the CMA dealing with subsidy control, exclusively comprising staff and members of the CMA. In the clause, “members of the CMA” refers to the chair and individuals who sit on the CMA board and the CMA panel of competition experts. “Staff” refers to the civil servants employed by the CMA.
Amendments 67 and 68 appear to misinterpret the relationship between the CMA and the subsidy advice unit. The CMA was chosen as the home of the subsidy advice unit because of the former’s experience of protecting UK competition and its credibility with both domestic and international stakeholders. Although the subsidy advice unit is being set up as a distinct unit, reflecting its unique role compared to the CMA’s other statutory functions, it would still be an internal unit of the CMA. Subsidy advice unit appointments are therefore internal CMA appointments.
Amendments 67 and 68 seek to allow the CMA chair to appoint non-executive members to the subsidy advice unit. However, the CMA can already recruit personnel to the unit with relevant experience in relation to Northern Ireland, Scotland and Wales. The CMA already can and does recruit staff and members from across the UK, and currently employs staff in Belfast, Cardiff, Edinburgh and London.
Amendment 69 goes much further, by requiring that the CMA seek the consent of the devolved Administrations before making appointments to the subsidy advice unit. However, as we have already established, subsidy advice unit appointments are internal CMA appointments. The amendment represents an unprecedented and unwarranted intrusion into the CMA’s internal operations, putting at risk the very independence that makes it such a desirable home for the subsidy advice unit’s function. I therefore request that the hon. Member for Feltham and Heston withdraws amendment 67.
Seema Malhotra
The Minister has said that having the voice of the devolved Administrations is unprecedented. Before I come back on whether we will press any of the amendments to a vote, can he clarify whether that is really unprecedented? He was involved in the Office for the Internal Market legislation in a way that I was not directly, so is there a difference in how the Office for the Internal Market is constituted in relation to the devolved Administrations?
Paul Scully
It is a different set-up. The Bill places a requirement on the CMA to establish a new committee of its board, to be referred to as the unit, which would consist of members of the CMA and staff. It does not have the same constitutional impact, not least because the subsidy advice unit will deal with the subsidy regime, which is reserved. In the same way as Ministers do not get involved in the day-to-day workings of the subsidy advice unit or the CMA to ensure their independence, it remains for the CMA to determine which staff it appoints to the unit.
Seema Malhotra
I thank the Minister for his comments. I do not think he fully answered the question, which is whether there is anything different about the representation of the devolved Administrations in relation to the Office for the Internal Market. Perhaps he can answer that specifically.
The Minister is right about allowing for independence, but it is independence to operate within a framework that I think is being set in the Bill. There is room for us to do this without challenging the independence of the CMA or the subsidy advice unit by simply laying out what Parliament would expect. Perhaps he can come back to me specifically on the point about the Office for the Internal Market and the voice of devolved Administrations in it.
Paul Scully
The Office for the Internal Market is a distinct set-up—it is a new set-up—whereas this is a committee within the board of the CMA. As I say, they are two distinct bodies. The OIM is overseen by the CMA, but it sits as a distinct body. The SAU sits within the CMA’s overall tree.
Paul Scully
The hon. Lady talks about the devolved position. The OIM sits as a distinct board specifically because of the constitutional impact of the United Kingdom Internal Market Act 2020. Because the SAU sits within the CMA’s board, it is very much an internal appointment. The OIM is not constituted in the same way. It is not for the CMA to make those internal appointments to the OIM directly.
Seema Malhotra
I thank the Minister for that, but I do not feel that he has been completely clear. These are not God-given institutions; we are talking about decisions made by the same Government. The question becomes whether there is a reason, and whether it would be helpful and effective in the way that the regime is set up and operates, to have independent expert voices that are from and work with the four nations of the UK. I do not feel that there has been a clear response to that important issue.
Paul Scully
The 2020 Act constitutes the Office for the Internal Market—we determined that—whereas the subsidy advice unit, being not a regulator but an organisation that offers advice, sits directly within the CMA. It is not setting up a discrete body; it is setting up a portion of the CMA. We have charged the CMA to set up the subsidy advice unit. Either the CMA is independent or it is not. The amendment charges us to get under the bonnet of the CMA’s internal appointments and direct it to make certain appointments, which risks undermining its independence.
Seema Malhotra
Perhaps the Minister and I will have to agree to differ on this point, because seeking to have particular areas of expertise reflected in the membership of the subsidy advice unit is not challenging its independence; it is setting out the expectation of Parliament. It is within the Minister’s gift to say that, and it could be contained in the Bill if we chose to do so.
Paul Scully
The SAU has the ability to bring in independent experts, including experts with interests in Scotland, Northern Ireland and Wales. The staff clearly have that expertise as well, which is why they have offices in each of the cities I mentioned.
Seema Malhotra
I think we will come back to the point that the CMA is likely to do what is required by Parliament and Ministers. It is important to remember that distinction: we are the ones who are making decisions on legislation, so we are accountable to the public and the taxpayer for making legislation that will stand the test of time and operate in the interests of the four nations of the UK, as is intended. That is not for the CMA to make decisions on; it will be looking to the Minister to advise and help make decisions on that. I put it to the Minister that making sure that the subsidy advice unit contains expert voices from across our devolved Administrations is an important part of how we make sure it is constituted to have the inputs we need. After that, as I am sure we all agree, there needs to be independence in how the CMA operates. There will be no determination by Parliament of which specific people should be on those boards—we need to separate those issues.
On the basis of what the Minister has said, I do not think the Bill currently goes far enough, so we will press amendment 67 to a vote.
Question put, That the amendment be made.
Paul Scully
The purpose of clause 68 is to require the Competition and Markets Authority to create the subsidy advice unit as a committee of its board, and to allow the SAU to carry out subsidy control functions under, or by virtue of, this Bill on behalf of the CMA. This type of governance has the advantage of not requiring large structural changes within the CMA, while providing appropriate administrative ring fencing to allow the subsidy advice unit to carry out the subsidy control functions, existing as a discrete unit with its own character and brand.
Kirsty Blackman
A couple of questions have been raised about this clause. I am not particularly happy with how it works: I think more could have been contained in it. The questions from the hon. Member for Feltham and Heston have shown that there is a lack of clarity on what the subsidy advice unit means and how it will differ from the Office for the Internal Market, for example. The Minister will probably laugh, but it would be incredibly helpful if we were provided with an organogram that explains the work of the CMA, the SAU sub-committee, and the Office for the Internal Market, so that we can understand how it all goes together.
The Minister has been clear that the SAU sub-committee of the CMA board is a different thing from the internal market one. I do not entirely understand how it all fits together. I know that the Enterprise and Regulatory Reform Act 2013 explains some of it, but all those pieces of legislation, in various different places, being mashed together still does not give a picture of how it will all work. If the Minister could agree to look at that, it would be incredibly helpful.
Seema Malhotra
I thank the Minister for his comments. Notwithstanding the debate we have had, the Labour party supports clause stand part, but some areas need to be reflected on, including how the Office for the Internal Market is working, and what we can learn for the CMA and this regime. Clarity ahead of Report would be very helpful to settle some of those questions.
Paul Scully
I will happily supply an organogram. Effectively, the Office for the Internal Market sits as a specific panel, whereas the SAU is a committee of the CMA and will go down on the CMA board. Working that way was the CMA’s preferred approach because that gives it discretion on how to design the operational processes for fulfilling the SAU’s functions.
Seema Malhotra
I accept that the structures are different, but sometimes we can learn from principles. There is a difference between structures, functions and principles, and we are quite interested in the principles point.
Paul Scully
I appreciate that, but I was saying that the CMA preferred this way because it allows the CMA to draw on its board and staff members, as well as on existing members of the CMA panel, as it sees fit. That avoids creating any additional complexity in the governance arrangements—as we have seen with the Office for the Internal Market, we do not want that to keep expanding. That allows the CMA to draw on the expertise of CMA panel members with established backgrounds in state aid and subsidy control who were appointed in anticipation of the functions under the new regime.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clause 69
References to subsidy control groups
Question proposed, That the clause stand part of the Bill.
Paul Scully
The purpose of clause 69 is to enable the subsidy advice unit to make a reference to the CMA chair for the constitution of a CMA panel group under schedule 4 to the Enterprise and Regulatory Reform Act 2013. The provision gives the CMA the ability to refer certain subsidy control functions to its expert independent panel members as it sees fit.
Seema Malhotra
As the Minister has said, clause 69 enables the subsidy advice unit to make reference to the chair of the CMA for the constitution of a CMA panel group. We have no issues with the clause and will support clause stand part.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Clause 70
Review of subsidy decisions
Seema Malhotra
I beg to move amendment 72, in clause 70, page 39, line 30, leave out subsection (2).
This amendment would allow an application to be made to review a subsidy decision related to a subsidy given under a scheme.
The amendment would enable interested parties to apply to the Competition Appeal Tribunal for a review of the decision to give a subsidy or make a subsidy scheme. An interested party is defined in subsection (7) as
“a person whose interests may be affected by the giving of the subsidy or the making of the…scheme”
or the Secretary of State. Subsection (2) states that:
“Where an application for a review of a subsidy decision relates to a subsidy given under a subsidy scheme, the application must be made for a review of the decision to make the subsidy scheme”,
meaning that an application cannot be made in respect of a decision to give a subsidy under a scheme. The Bill is explicit on that matter.
The evidence from the law firm DWF is quite scathing about that aspect of clause 70:
“We also believe preventing challenges to awards made under a scheme runs contrary to the logic of the system, which seems to be to allow those affected to test the lawfulness of awards at the point they are affected.”
I would be grateful if the Minister could respond on that. Is it right that although an interested party may have suffered as a result of the awarding of a subsidy, if it is made under a scheme, they have no basis to bring a challenge? If that is right, can it be right?
Labour’s amendment reflects both our concern and a suggestion to remediate that deficiency, which is to leave out subsection (2). The result would be that an application to review a subsidy decision could also be made for a decision to award a subsidy made under a scheme. That seems to be one way to address the issue. I would be grateful for the Minister’s response, first, on the issue and, secondly, whether he thinks there is a better way to address it in legislation.
Paul Scully
Clause 70 sets out the terms under which an application for review of a subsidy decision may be made to the Competition Appeal Tribunal. The tribunal may review, on application by an interested party, a decision made by a public authority to give a subsidy or make a subsidy scheme.
As drafted, an interested party may not apply to the tribunal for a review of the decision to grant a subsidy under the terms of a scheme. An application may instead be made to review the making of the scheme itself. Before a scheme is made, the proposed terms must be assessed against the subsidy control principles; a scheme must not be made unless subsidies granted under it are consistent with those principles. Consequently, subsidies that comply with the terms of a scheme will comply with the principles and do not need a separate assessment.
Subsidy schemes have long been recognised as a convenient way to grant multiple subsidies—not least because of the administrative simplicity of making a single, scheme-wide assessment against the principles. It would significantly undercut the benefits of administrative efficiency of schemes if subsidies granted in line with the terms of a subsidy scheme were eligible for review by the tribunal.
I am not sure what harm the amendment is trying to remedy. Is it the risk that impermissible subsidies may be granted under a scheme? In such cases, either the scheme is non-compliant and can be challenged within the normal limitation periods, or the subsidy does not comply with the terms of the scheme it is granted under, in which case the non-compliant subsidy would be deemed a new individual subsidy, and could be challenged as such. I therefore request that the hon. Lady withdraw the amendment.
The Lord Commissioner of Her Majesty's Treasury (Michael Tomlinson)
The Minister is not giving way. The hon. Lady is making a speech.
Seema Malhotra
I thank the hon. Gentleman for that. Will the Minister clarify that last point, as to how a subsidy under a scheme could be regarded—if I understood him correctly—as a new subsidy, and treated as a new subsidy for the purposes of a challenge?
Paul Scully
The scheme can essentially be challenged under the Competition Appeal Tribunal against the principles. If a subsidy granted under a scheme is consistent with those principles, it is part of the scheme, and it is the scheme that would need to be challenged. If a subsidy granted under a scheme is not consistent with the principles, it is therefore not consistent with the scheme, and it would sit outside that. It could therefore be challenged.
Seema Malhotra
I must say that I find that a little confusing. I am not fully clear on how a challenge can be brought to a subsidy under a scheme to even determine—what the Minister said in relation to it. Perhaps I am missing the point here, but it currently seems to be very explicit: it ends up being about the scheme rather than an individual subsidy under the scheme. Nine out of 10 subsidies under a scheme may have no challenges against them, with only one being challenged.
Paul Scully
The scheme itself must already be consistent with those principles, so if any particular subsidy is given within the scheme, and it is not consistent with the principles, then it clearly cannot sit within that scheme itself, because it is inconsistent with the scheme that it is purported to be part of. Therefore, that will then be set aside and will be approachable for the CAT.
Seema Malhotra
Who would make that decision? It does not seem to be in line with the wording of the legislation.
Paul Scully
That is when the interested parties can approach the CAT on that basis.
The Chair
The Opposition spokesperson was asking for some clarifications from the Minister.
Kirsty Blackman
If there is a subsidy that is given under a subsidy scheme, who decides that that subsidy was not eligible to be part of the subsidy scheme and is therefore applicable to challenge outside the scheme? I think that is part of the point that the Opposition spokesperson was getting at. There does not seem to be a mechanism for saying “That subsidy doesn’t fit within this scheme, and is therefore challengeable in its own right, rather than as part of the scheme”.
A subsidy is, by definition, one given under the scheme until somebody analyses that and decides that it is not applicable to be given under the scheme, but there does not seem to be a process for that subsidy to be categorised as something that should not have been given under the scheme. How does the challenge procedure work here?
Paul Scully
Essentially, if the public authority has wrongly given the subsidy as part of a scheme, it will be for the CAT to decide.
Seema Malhotra
I thank the Minister for his answer; I want to ensure that we correctly understand what he is trying to say. On the basis of what I think he is saying—that there may be a mechanism for challenging subsidies under a subsidy scheme—I will not press the amendment to a vote today, but I would like the Minister to explain, in writing, how he would see that scenario working, and where the power to bring a challenge sits.
I am still not clear where a determination—that a subsidy is to be treated as a subsidy, rather than a subsidy under a scheme—would come from. That does not feel clear, so let us get that clarified. If we could have that in writing, that would be extremely helpful. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Seema Malhotra
I beg to move amendment 70, in clause 70, page 40, line 9, leave out
“whose interests may be affected by”
and insert
“who has sufficient interest in”
This amendment would alter the definition of interested party to make it consistent with clause 31(3) of the Senior Courts Act 1981.
The purpose of clause 70 is to enable interested parties to challenge subsidies before the CAT. It defines an interested party as
“a person whose interests may be affected by the giving of the subsidy or the making of the subsidy scheme”
or “the Secretary of State”. We are concerned that the definition is too narrow and is deficient in two respects. The definition of interested parties—the test that establishes standing for the purposes of judicial review—applies a test at subsection (7)(a), which seems narrower than under the Senior Courts Act 1981. The test under subsection (7)(a) is
“a person whose interests may be affected”.
By contrast, the test under section 31(3) of the 1981 Act is a person who
“has a sufficient interest in”.
While it may not seem so different on one level, it could have important consequences.
George Peretz and others have suggested that the definition of interested parties under the Bill narrows the standard public law right and could be interpreted as limiting those who could bring a challenge to parties whose commercial or financial interests have been affected. What would that mean for the ability of those acting in the public interest and not in a private interest to challenge a subsidy?
Let us use an example: the Good Law Project has serious concerns about the awarding of a tax relief to a particular business and does not believe the subsidy is consistent with the subsidy control principles. It is not inconceivable that the business could be owned by a friend or relative of a Minister who is awarding the tax relief or being involved in some other way. In light of the current climate around sleaze, perhaps it would not be surprising at all. Can the Minister clarify what standing an independent challenger, such as the Good Law Project, would have under subsection (7)(a) to bring a challenge to such a tax relief, and if not why not?
Labour proposes amendment 70 to make the definition of interested party consistent with section 31(3) of the Senior Courts Act 1981. It should not only be those whose financial interests are or may be affected and the Secretary of State who can challenge subsidies.
As Professor Rickard, professor of political science at the London School of Economics, explained in October:
“Thinking about who has a particular interest in challenging those subsidies, there may be good reasons to expand the potential set of challengers to ensure that it includes not just competitors but maybe also employees, trade unions, taxpayers or interest groups. That would give us more eyes on the subsidies to ensure that they are complying with the principles, ensuring value for money and achieving the economic outcomes that they set out to achieve.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 23, Q25.]
Does the Minister recognise that the subsidy’s impact can extend beyond those who are more narrowly defined as interested parties? The amendment could bring the test for standing in line with judicial review. It would be helpful if the Minister could clarify whether there was an intention to subtly deviate from the definition in the Senior Courts Act. We hope the Government recognise that it could be a way of improving how the Bill operates as well.
Paul Scully
I will go into a bit more detail in a second, but an interested party is any person whose interests may be affected by the decision in question. We are setting out a new UK-specific subsidy regime with unique rules. In that context, we have set out an intentionally broad definition of what constitutes an interested party. That said, the Competition Appeal Tribunal can exercise its discretion. We want to ensure that in each case the right people are determined to be interested parties. By exercising that discretion, the Competition Appeal Tribunal can build up a jurisprudence that is specific to and optimally used for the subsidy control context. The Competition Appeal Tribunal is an expert body in competition matters and has the right knowledge to make appropriate decisions on these questions of standing.
As we have heard, the amendment would require the CAT to adopt the test in the Senior Courts Act 1981, which states that a person seeking review of the subsidy decision must have “sufficient interest”. I understand that the hon. Member for Feltham and Heston intends that the amendment would broaden the scope of who can bring a challenge, but given the breadth of the existing test in the Bill, I do not think that she could be confident that her amendment would have the desired effect. In any event, it would bring along a body of case law that may be unrelated to the new subsidy control regime and could prevent the CAT from exercising its full discretion in each case. As I have said, it is a new system, with standalone enforcement through the CAT. It is therefore appropriate that the tribunal can decide for itself who can seek reviews of subsidy decisions.
The clause does not exclude any party whose interests may genuinely be affected by a subsidy. As such, I cannot see the advantage in changing the test for who can challenge a subsidy, as proposed in the amendment. The hon. Member for Feltham and Heston talked specifically about someone without a financial interest. As I say, that is why the definition of “interested party” is broad. It covers any person whose interests may be affected by a subsidy, and it will be up to the CAT to determine. We are giving the expert body the appropriate discretion to get the answers right in each and every case, and I therefore ask the hon. Lady to withdraw the amendment.
Seema Malhotra
This is an interesting and important discussion about who is included in the definition of “interested party”. I would like to reflect on the Minister’s comments and perhaps test them with expert advice and a detailed review of the definitions and explanatory notes for the Bill. On that basis, I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned.—(Michael Tomlinson.)
Judicial Review and Courts Bill (Seventh sitting)
Tuesday 16th November 2021
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Judicial Review and Courts Act 2022 View all Judicial Review and Courts Act 2022 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 November 2021 - (16 Nov 2021)
The Committee divided: - Ayes: 10 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 5 - Question accordingly agreed to.
The Chair
Good morning. I remind Members of the advice offered with regard to social distancing and suchlike that we have heard many times before.
Clause 8
Written procedure for indicating plea and determining mode of trial: children
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Justice (James Cartlidge)
Good morning, Mr Rosindell. The sun shines on the Committee. This is a sunshine clause, not necessarily a sunset clause, but it is an important one. The criminal age of responsibility in England and Wales is 10 years old, which means that children aged between 10 and 17 can be charged with a crime and prosecuted in court. The majority of children’s cases are dealt with in our youth courts, which are specifically designed to provide for the additional needs and vulnerabilities of children. In addition to specialist youth courts, there are bespoke procedures and processes that apply to criminal proceedings against children. That is why we are legislating for online plea and allocation for children under a separate clause, which recognises the distinct youth justice system that exists for them.
Clause 8 will help to avoid unnecessary hearings by giving children the option to provide an online indication of plea for offences that may require a subsequent trial allocation decision. Where the indication is not guilty, the clause will enable the court to deal with the allocation decision online. Like adults, children will need to have a legal representative to proceed with the new online procedure, which will be available only through the common platform. The purpose of the clause is to reduce the number of times that children, and their parents or guardians, have to travel to court. It will allow for case management of the pre-trial stage of cases to take place outside of a courtroom so that children have to attend court only for trial and sentencing hearings.
Courts will need to provide such defendants and, where appropriate, their parents or guardians with information explaining the written procedure, the choices available to them and the effects of those choices. Where a child provides an indication of a plea online, courts will have to ensure at the first court hearing that the child has understood their decision and confirms their written indication of plea before proceeding any further with the case. As with any case involving a child, when dealing with preliminary matters in writing or online, courts must continue to have regard to the current overarching statutory duties to prevent children from reoffending, and to have regard to their welfare.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell. As the Minister said, the clause creates a new pre-trial allocation procedure similar to that of clause 6, whereby an individual would be able to indicate a plea in writing for all summary-only, indictable-only and triable either-way cases, but this time it is for children. Thus far on the criminal procedure changes in the Bill the Opposition have tried to work with the Government’s proposals to find a workable solution through amendments; however, that is not the case with clause 8, as we believe that it is wholly inappropriate for remote proceedings of this kind to be used in cases with child defendants. The law rightfully affords children additional protections and safeguards to reflect their inherently vulnerable nature, and propensity to plead guilty notwithstanding the evidence or potential defences, as shown, for example, in the evidence-based Justice Lab report on incentivised legal admissions in children.
The Minister outlined the theory of what will happen with this set of measures, but sadly the implementation of it could prove to be very different. The Bar Council opposes the provisions too, saying:
“We do not accept that a written procedure for indicating plea or determining mode of trial in the case of children will do anything other than impede access to justice for the most vulnerable cohort of defendants within the criminal justice system.
It has long been the position of the Criminal Bar Association and the Bar Council that the prosecution of children and young people requires wholesale overhaul to ensure that they only enter into the criminal justice system as a very last resort, if diversion and other interventions are unsuitable.
Representation of children and young people, and the courts that administer youth justice, need to be properly funded, regulated and restructured in order to be fit for purpose.”
The Bar Council goes on:
“At present, these courts are not fit for purpose, and all too often act as a gateway for vulnerable youths into more serious offending. It follows that moving to a written procedure will compound the situation, limiting the opportunities for lawyers working under a legal aid system to meet with vulnerable defendants and their families, signpost interventions by other appropriate agencies and identifying children and youths with additional needs. It will also impede the child and youth’s understanding of the seriousness of the process into which they have entered.”
I very much agree with the Bar Council’s assessment. There is much wrong with the youth justice system, and the provisions of this clause would exacerbate the existing issues rather than do anything to improve them. I would also like to seek further clarity on whether the provisions of this clause would allow online pleas for children, which would be seriously concerning. I emailed the Minister about it last week, and he responded with a note from officials. However, I wonder if he could provide some more specific guidance about it on the record.
Although it is not within the Bill itself, paragraph 181 of the explanatory notes states:
“Clause 8 inserts new section 24ZA of the MCA 1980 that enables a child or young person under 18 years who is charged with a triable either-way offence to be provided with the choice to indicate a plea in writing/online, without the need for a youth court hearing.”
We are opposed to the introduction of a written procedure for indicating plea or determining mode of trial in the case of children in any way, but have even stronger objections to an online procedure being introduced directly for them.
I share the concern of the Equality and Human Rights Commission, which says:
“The Commission is concerned that children as young as ten could be engaging with the criminal justice system through an online process insufficiently adapted to their needs and with minimal engagement from a parent or guardian. Children are already more likely to struggle to understand and engage with legal processes. Youth Court hearings provide an important opportunity to respond to the specific and additional needs of children. This is particularly important in light of recent evidence indicating that children are more likely to enter a guilty plea when they are not guilty.”
While the Bill provides that a parent or guardian should be aware of proceedings where they take place online, the Opposition are not convinced that that is sufficient to mitigate against the risks posed to children. As the EHRC briefing notes:
“The law currently provides that, where a child under sixteen is charged with a criminal offence, a parent or guardian must attend all proceedings save where it would be unreasonable to require them to do so. For cases where a plea is entered by a child under sixteen in writing or any part of the proceedings is to be conducted on the papers, the Bill only requires the court to ascertain whether a parent or guardian is aware that proceedings are taking place and where necessary provide that information.”
That is in new section 34A(1B) and (1C) of the Children and Young Persons Act 1933.
Janet Daby (Lewisham East) (Lab)
My concern about children above 10 years old being able to make an online plea is that when children use a computer and everything is very much virtual, it is a different level of interaction and can seem like a game. I agree with my hon. Friend’s point that their understanding of the process or their experience of making an online plea will be of a less serious nature. I also support his view that children are more likely to say that they are guilty because they are used to apologising, or they want to get out of the situation quickly. This is not the appropriate way forward.
Alex Cunningham
Yes, computers may be learning tools for children, but they are also their game world. Those of us who have families or grandchildren know that to be very much the case. It is so easy to press buttons and tick boxes, and I am really concerned, as is my hon. Friend, that young people may well think, “Let’s take the easy way out. Let’s just tick the box, and let’s get this over and done with. Then I can forget about it.” Unfortunately, they cannot forget about it, because they can end up with a criminal record, even if they are not guilty of the offence of which they have been accused. That is all the more reason why we need to review this clause in some considerable detail.
Of course, the issues applying to children under 16 do not apply to 17-year-old children. Furthermore, article 40(2)(b) of the convention on the rights of the child sets as a minimum standard the right that a child hearing be held in the presence of legal or other appropriate assistance and, unless not in the best interests of the child, his or her parents or legal guardian. In addition, the UN Committee on the Rights of the Child recommends
“that States parties explicitly legislate for the maximum possible involvement of parents or legal guardians in the proceedings”.
This clause does the direct opposite. We do not believe that it makes adequate provision to protect the rights of children in the justice system. It is not appropriate that the important safeguards that exist for children should be watered down in that way through the provisions in clause 8. As such, we will oppose the inclusion of the clause in the Bill.
James Cartlidge
I appreciate where the hon. Members for Stockton North and for Lewisham East are coming from, in the sense that of course we have to be careful in matters involving children. It is fair to point out, however, that these are not revolutionary changes of procedure. In my view, there will certainly be cases where, particularly for vulnerable people, the online environment is more suitable in many ways, because after all they will have legal representation.
I will explain clearly exactly what the clause does, what the safeguards are and where the discretion lies, to try to ameliorate some of the concerns. At the moment, there would be the plea before venue and allocation decision procedures for children of 10 to 17-years-old, which can be completed only at a court hearing. The Bill enables those procedures to be completed in writing online via the common platform without the need for a hearing, as is clear.
On the safeguards, defendants will need a legal representative to proceed with online plea and allocation. That is an important safeguard that will remain firmly in place due to the accessibility restrictions created by the common platform and the stipulations in secondary legislation under the criminal procedure rules. Courts will need to provide information explaining the written procedure, the choices available to defendants and the effects of those choices. If a defendant fails to engage with an invitation to proceed in writing or online, the court will default back to a traditional first hearing. Clause 13, which we will come to, applies with regards to requiring and enabling the court to ascertain whether the parent or guardian is aware, and if they are not, to provide them with the relevant information.
Finally, in terms of discretion, it is the defendant’s discretion to proceed with online indication of plea and allocation in writing or online, so they can still have a traditional hearing. It is also the court’s discretion to withhold or disapply online indication of plea and allocation in writing, if it thinks that is appropriate in the circumstances. There are significant safeguards in place.
It means that we will have greater consistency, but I accept what the hon. Member for Stockton North is saying, which is why we have been keen throughout the debate on these clauses to stress the important safeguards and discretions that exist. I hope that, on that basis, hon. Members can support the clause.
Question put, That the clause stand part of the Bill.
James Cartlidge
I beg to move amendment 2, in clause 9, page 22, line 34, at end insert—
“(1A) In section 17B (power to proceed with indication of plea hearing in absence of disorderly but represented accused)—
(a) for the heading substitute “Power to proceed if accused does not appear to give indication as to plea”;
(b) for subsection (1) substitute—
“(1A) This section has effect where—
(a) a hearing is held for the purposes of section 17A,
(b) the accused does not appear at the hearing,
(c) any of the conditions in subsections (1B) to (1E) is met, and
(d) the court is satisfied that it is not contrary to the interests of justice to proceed in the absence of the accused.
(1B) This condition is that a legal representative of the accused is present at the hearing and signifies the accused’s consent to the court’s proceeding in the accused’s absence.
(1C) This condition is that—
(a) a legal representative of the accused is present at the hearing, and
(b) the court does not consider that there is an acceptable reason for the accused’s failure to attend.
(1D) This condition is that—
(a) it is proved to the satisfaction of the court, on oath or in such manner as may be prescribed, that notice of the hearing was served on the accused within what appears to the court to be a reasonable time before its date, and
(b) the court does not consider that there is an acceptable reason for the accused’s failure to attend.
(1E) This condition is that—
(a) the accused has appeared on a previous occasion to answer the charge, and
(b) the court does not consider that there is an acceptable reason for the accused’s failure to attend.
(1F) This section also has effect where—
(a) a hearing is held for the purposes of section 17A,
(b) the accused appears at the hearing,
(c) the court considers that by reason of the accused’s disorderly conduct before the court it is not practicable for the hearing to be conducted in the accused’s presence, and
(d) the court is satisfied that it is not contrary to the interests of justice to proceed in the absence of the accused.”;
(c) in subsection (2), for the words before paragraph (a) substitute “If a legal representative of the accused is present at the hearing—”;
(d) after subsection (4) insert—
“(5) If no legal representative of the accused is present at the hearing—
(a) the court is to proceed in accordance with section 18(1), and
(b) the accused is to be taken for the purposes of section 20 to have indicated that the accused would (if the offence were to proceed to trial) plead not guilty.””
This amendment allows a magistrates’ court to proceed if an accused person does not appear at the “plea before venue” hearing in a wider range of circumstances (equivalent to those provided for in relation to allocation hearings by clause 9(3)).
The Chair
With this it will be convenient to discuss Government amendments 3, 4, 8 and 9.
James Cartlidge
I have tabled these amendments to correct some errors in the Bill, which would prevent this measure from having the desired impact. When it comes to triable either-way offences, the procedures for plea and allocation are invariably completed in immediate succession of each other in the same court hearing. The primary purpose of clause 9 is to enable the court to complete preliminary pre-trial proceedings in the absence of a defendant in a wider range of circumstances than the law currently allows. That will help to ensure the timely progression through the criminal justice system of cases that would have otherwise stalled indefinitely where a defendant deliberately disengaged.
As currently drafted, clause 9 does not afford the same extended set of circumstances to proceed in absence for the plea procedure as there will be for the subsequent allocation procedure. That will in effect act as a legislative roadblock that prevents the courts from being able to make use of the new powers that clause 9 provides. Therefore, these amendments will ensure that the court has the same powers to proceed in the absence of a defendant for both the plea and the allocation decision procedures. Where the court decides that it is in the interest of justice to proceed in a defendant’s absence, it will be assumed that the defendant has pleaded not guilty, and the court will allocate the case for a trial.
A further amendment rectifies a drafting error in clause 9 to ensure that it remains consistent with current law, whereby there is no requirement for the presence of a legal representative when a court decides to proceed with allocation, having removed a disorderly defendant from the courtroom.
These amendments will allow the clause to work as intended, maximising the benefits for the criminal justice system. Clause 9 will continue to ensure that the court cannot proceed in absence unless it is satisfied that it is in the interests of justice to do so.
Alex Cunningham
I thank the Minister for his explanation of the need for a raft of amendments to his own Bill.
Clause 9 will introduce additional circumstances in which the magistrates court could continue with the proceedings in the defendant’s absence in triable either-way cases. This applies to adults, and there are similar provisions for children. I will speak on our general concerns in the debates on the Opposition amendments.
I again thank Justice for its assistance in highlighting potential concerns in this area. Currently, the Magistrates’ Courts Act 1980 provides that the process for triable either-way cases begins with a plea before venue, where an adult defendant is required to appear in a magistrates court to indicate whether they wish to plead guilty or not guilty. Thereafter, if the defendant pleads not guilty or refuses to state a plea, the case proceeds to the allocation hearing. That involves deciding whether the case should be tried in the magistrates court or the Crown court. The defendant is required to be present for both the plea before venue hearing and the allocation hearing. However, in both scenarios there are two circumstances where the court can proceed in the defendant’s absence: where the defendant has legal representation and the court considers that, by reason of the defendant’s disorderly behaviour, it is not practicable for the proceedings to be conducted in their presence—the legal representative will of course act on the defendant’s behalf—or where the defendant gives consent via their legal representative for proceedings to take place in their absence.
Clause 9 would introduce additional circumstances where the magistrates court could proceed with the allocation proceedings in a defendant’s absence in triable either-way cases. In its current form, the Bill does not introduce any changes to the way plea before venue hearings are conducted for triable either way cases. In addition to the two existing circumstances that I have mentioned, clause 9 would empower the magistrates court to now proceed and allocate the case without the defendant’s input in cases where the defendant does not engage in writing or does not appear at their hearing without an “acceptable reason”, provided that the court is satisfied that the defendant has been properly served. The allocation decision would be made on the basis of an assumed not guilty plea—the Minister said that—and the court would proceed to allocate the case to the magistrates court or Crown court. Defendants, however, will continue to have an opportunity to elect for a trial in the Crown court until the start of the summary trial.
Government amendment 2 will now allow a magistrates court to continue with the proceedings in cases where the defendant does not appear at the plea before venue hearing in a wider range of circumstances. The circumstances mirror those proposed for allocation hearings as set out in clause 9(3), including where a defendant does not appear at the hearing without an acceptable reason. The amendment proposes changes to section 17B of the Magistrates’ Court Act 1980, which currently empowers magistrates courts to proceed with the plea before venue hearing
“in the absence of a disorderly but represented accused”—
one of the two exceptions to the general rule mentioned earlier.
However, the amendment does not include any requirement for a defendant’s legal representative to be present, which is currently provisioned in the Bill for the allocation hearing, although the Government propose removing it through amendment 3. A number of other circumstances in which the plea can go ahead in the defendant’s absence also do not require the defendant’s legal representative to be present.
Janet Daby
Does my hon. Friend agree that children in particular are vulnerable, and that they should always have legal representation in any plea or pre-plea situation?
Alex Cunningham
I most certainly do. My hon. Friend knows that I will talk about children in the justice system forever, if I need to. It is absolutely critical that they are given every support. Not every parent is capable of offering the appropriate advice, so it is very important that legal representation is in place, in particular in the absence of parents.
Although the Bill previously expanded the circumstances in which an allocation hearing could take place in the defendant’s absence, it at least required that where the defendant was absent due to disorderly conduct, their legal representative would need to be present for the hearing to continue. However, the amendment removes the need for their legal representative to be present; instead, it empowers the court to proceed with the allocation hearing in cases where both the defendant and their legal representative are absent. I do not at all see the need for the removal of that important safeguard, and the Minister’s comments thus far have not convinced me. I wonder how many cases he expects those provisions to be used for.
Government amendment 4 would allow a magistrates court to move straight to the allocation stage if, under the provision inserted by amendment 2, it decides at the plea before venue stage to proceed in the absence of the accused or their legal representative, without needing to consider the merits of the proceedings in the absence of the accused. The court could therefore proceed with an allocation decision in the defendant’s absence, in which case the defendant would be deemed to have indicated a not guilty plea. Justice states that the amendments represent
“a significant alteration of the status quo”,
which permits plea before venue hearings and allocation hearings in the absence of the defendant only for reasons relating to the defendant’s disorderly conduct, or where the defendant consents via their legal representative to proceedings taking place in their absence.
The Opposition share Justice’s concern that clause 9 as a whole—especially with the Government amendments—may remove essential safeguards put in place for the accused’s effective participation in the proceedings, and instead prioritise alleged court efficiency over a defendant’s right to a fair trial. I do mean “alleged” court efficiency—as I will discuss in our next debates, I have concerns that some of the measures the Government are seeking to introduce to improve efficiency may in fact have the opposite effect. I am concerned that the Government amendments would expand the scenarios in which the court could proceed in the absence of a defendant’s legal representative at both the plea before venue stage and the allocation hearing.
I really do not understand why this is at all necessary. Plea and allocation decisions can have significant consequences for an individual and their liberty. It is right that every effort be made to ensure that defendants are properly engaged in their proceedings. The Minister knows that we are all too keen to support the Government in improving the efficiency of our courts, but it is important that the measures we introduce have a genuine evidence base and are not obviously detrimental to the rights of defendants and due process, and I think these amendments would fail both criteria.
The Opposition want an efficient court system every bit as much as the Minister does. However, I worry that if we get it wrong the measures will have the opposite effect. That said, we will not oppose the amendments at this stage, but instead will offer the Government an opportunity to improve the clause through our own series of amendments, to which I hope the Minister will be as accommodating as we have been to his.
Amendment 2 agreed to.
Alex Cunningham
I beg to move amendment 80, in clause 9, page 23, leave out lines 15 and 16 and insert—
“(b) the accused has given a reason that the court does not consider to be an acceptable reason for their failure to attend”.
This amendment would ensure that the defendant is given the opportunity to provide a reason for their non-attendance and avoid the court speculating as to what that reason might be.
The Chair
With this it will be convenient to discuss the following:
Amendment 81, in clause 9, page 23, leave out lines 22 and 23 and insert—
“(b) the accused has given a reason that the court does not consider to be an acceptable reason for their failure to attend”.
See Explanatory Statement for Amendment 80.
Amendment 82, in clause 9, page 23, leave out lines 27 and 28 and insert—
“(b) the accused has given a reason that the court does not consider to be an acceptable reason for their failure to attend”.
See Explanatory Statement for Amendment 80.
Amendment 83, in clause 9, page 24, leave out lines 36 and 37 and insert—
“(e) the accused has given a reason that the court does not consider to be an acceptable reason for their failure to attend”.
See Explanatory Statement for Amendment 80.
Alex Cunningham
I begin by thanking Justice for its detailed briefing on the clause, which was extremely helpful for identifying potential issues of concern. As the Minister has outlined, clause 9 introduces additional circumstances in which the magistrates court can proceed with the allocation proceedings in a defendant’s absence in triable either-way cases. That applies to adults, and the clause contains similar provisions for children. A magistrates court would now be able to proceed and allocate the case without the defendant’s input in cases where the defendant does not engage in writing or appear at their hearing without an “acceptable reason”, provided that the court is satisfied that the defendant has been properly served.
The allocation decision would be made on the basis of an assumed not guilty plea and the court would proceed to allocate the case to the magistrates court or the Crown court. Defendants, however, will continue to have an opportunity to elect for a jury trial until the start of the summary trial. That would represent quite a significant expansion of current practice, which only permits allocation hearings in the absence of the defendant for reasons relating to the defendant's disorderly conduct—we have discussed that already—or where the defendant gives consent via their legal representative for proceedings to take place in their absence.
I note that the Law Society expressed some concern with the clause. In its Second Reading briefing, it said:
“If the court decides the defendant’s case should be tried in the magistrates’ court, the defendant will only subsequently be able to elect a jury trial if the court agrees that it would be in the interests of justice to reopen the question of the mode of trial. This would effectively result in the defendant losing their right to a jury trial without their consent. In our view a defendant should only lose the right to elect a jury trial if they have expressly waived that right.”
Will the Minister outline a couple of illustrative examples of he imagines a magistrate would consider it in the interests of justice to reopen the matter of allocation, so we can understand how stringently it is intended to be imposed?
Justice also considers clause 9 to be problematic for three reasons. First, it is concerned that the measure would significantly impair the ability of defendants to engage in their proceedings. It notes that
“At present, the defendant has a right to choose the trial venue in cases of triable either way offences. Clause 9, however, empowers the Magistrates to determine the trial venue in cases of triable either way offences in the defendant’s absence, where the defendant does not engage in writing or appear at their hearing without an “acceptable reason”, for which no definition is provided in the Bill or in the Explanatory Notes.”
I agree that it is therefore difficult to assess how it would operate in practice when magistrates would be given a wide discretion to proceed and allocate the case in the defendant’s absence. Indeed, if a defendant has not appeared at the allocation hearing and has not been able to instruct or inform their counsel as to the reason for their non-appearance, it would be impossible for the magistrates to know whether an “acceptable reason” exists or not. Moreover, should the magistrates allocate the case to a court that is different from the one the defendant wants, that could result in the case returning to the allocation stage: they could make a statutory declaration under the Magistrates’ Court Act 1980, stating that they did not know of the summons or the subsequent proceedings. That would result in both being void. As Justice explained,
“This will cause delays and additional expenditure of resources, contrary to the aim of this provision, which is to ‘provide the court with an important means of progressing cases which would otherwise stall creating uncertainty and lengthy waiting times’.”
I would welcome the Minister’s thoughts on that point. We certainly do not want to pass measures aimed at increasing efficiency in the system if they will have the opposite effect in reality. In an attempt to avoid those issues, the Opposition have tabled amendments 80, 81, 82 and 83, which all do the same thing, and together would ensure that the defendant was given the opportunity to provide a reason for their non-attendance and avoid the court speculating as to what that reason might be. I am also interested to hear whether the Minister has any further thoughts on how such speculation by the court can otherwise be avoided.
James Cartlidge
The hon. Gentleman has asked some very good questions. I accept that these are important points, so let me try to clarify some of them.
The hon. Gentleman asked about the statistics. We do not have precise data on failure to appear, and particularly about prediction of failure to appear in the context of these powers. The majority of defendants prosecuted for triable either-way offences who are sent to Crown court for jury trial are sent there by a magistrates court, rather than by the defendant electing. In 2019, magistrates courts sent 32,262 defendants to the Crown court for a jury trial; of those they decided not to send, 5,277 defendants elected for their case to be sent to be tried by a jury at the Crown court.
In 2019, of the 250,387 adult defendants scheduled to appear at magistrates court for a triable either-way offence, 41,968 defendants had a recorded outcome of failing to appear. However, as the hon. Gentleman will appreciate, it is extremely difficult to predict how this clause will affect those figures. Regarding the circumstances in which the decision could be revisited, to be clear, where a defendant has no knowledge of the proceedings brought against them through a summons or requisition until after a magistrates court has begun to try the case, they will be able to make a statutory declaration and restart the proceedings from the beginning, providing adults with another opportunity to elect for a jury trial.
The hon. Gentleman has tabled amendments 80, 81 and 82 in order to ensure that adult defendants are given the opportunity to provide a reason why they are not attending an allocation hearing, and to avoid the courts speculating as to what that reason might be. Amendment 83 would extend the same opportunity to children. The whole point of clause 9 is to give the courts powers to deal with defendants who deliberately delay proceedings and try to evade justice in a wider range of circumstances. These amendments would achieve the opposite by preventing the court from progressing cases in the absence of any communication from the defendant who has not attended. If no reason is given for the court to consider, the case simply cannot progress.
Sir John Hayes (South Holland and The Deepings) (Con)
I listened to the Opposition spokesman, and it seemed to me that he made a persuasive case. However, a few moments ago, the Minister introduced an important addition to this discussion in the form of a safeguard. He said very clearly that the accused could restart the whole process if they were not aware of the circumstances, so it seems to me that the people the Minister is describing who are malevolent or malign—who are deliberately trying to frustrate justice—will be caught by this clause, but those who are not will be protected by the safeguard. Perhaps the Minister should amplify or accentuate that safeguard, because it seems to be exactly what the Opposition spokesman was asking for.
James Cartlidge
My right hon. Friend, who is an expert on amplification, makes an excellent point. He is entirely right: there are safeguards—as with any safeguards, they are there to protect those who have been subject to inadvertent circumstances. They are not there to allow those who have deliberately avoided justice to do so: that distinction is absolutely crystal clear and important. My right hon. Friend has hit the nail on the head, as it were.
Alex Cunningham
I appreciate the Minister’s explanation outlining again the safeguards in place. I do not believe the safeguards are sufficient and I hope that, over time, the Government will look again at the issue.
I accept wholeheartedly that we do not want people to deliberately slow down their cases for time immemorial, but it is important to recognise that the people we are concerned about are those who have a genuine reason for not having been in touch with the court. Even if we get to the point where they can opt for a trial at a later stage, an awful lot of time and resource are wasted in the interim period. I accept what the Minister says for now and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 3, in clause 9, page 23, leave out lines 33 and 34
This amendment allows a magistrates’ court to carry on with an allocation hearing in the absence of the accused if the accused disrupts the hearing, even if the accused is not legally represented.
Amendment 4, in clause 9, page 23, line 41, at end insert—
“(1G) This section also has effect where a magistrates’ court determines that section 17B(5) applies and proceeds straight away to a hearing in accordance with section 18(1).”—(James Cartlidge.)
This amendment allows a magistrates’ court to move straight to the allocation stage if (under the provision inserted by Amendment 2) it decides at the plea-before-venue stage to proceed in the absence of the accused or a representative, without fresh consideration of the merits of proceeding in the absence of the accused.
Alex Cunningham
I beg to move amendment 58, in clause 9, page 23, line 41, at end insert—
“(1G) In a case within subsection (1A)—
(a) the accused may, at any time before the taking of a plea in the summary trial, apply to the court for the question of the mode of trial to be reopened;
(b) the court may, if it considers it in the interests of justice to do so, accede to the application and arrange a hearing under paragraph (c);
(c) if a hearing takes place under this paragraph and the accused appears at it, the court is not to proceed to summary trial by virtue of subsection (1A), but is to proceed in accordance with subsections (2) to (9) of section 20 above.”
This amendment would allow defendants to reopen the allocation process and elect for jury trial up to the point of taking a plea in a summary trial if the court considers it in the interest of justice to do so.
I will be very brief. Members will understand why we tabled amendment 58—simply to introduce another safeguard for the use of the new powers under clause 9. The amendment provides defendants with an additional opportunity to reopen the allocation process and elect for a jury trial where this provision is used. That would save the summons or proceedings from being void should a defendant have to make a statutory declaration under section 14 of the Magistrates’ Court Act 1980. It does not go as far as the Law Society suggests in keeping the matter of electing for a jury trial open unless the defendant has explicitly waived that right, but it at least provides an additional opportunity for the defendant to reopen the matter. It is critical that we do everything possible not just to protect the integrity of the new way of working but to ensure that justice is done. I look forward to the Minister’s response.
James Cartlidge
As the hon. Gentleman says, the amendment would enable an adult defendant to apply to a magistrates court to re-open an allocation decision taken in their absence to try an either-way offence summarily and thus provide the defendant with another opportunity to elect for a jury trial. Such an application could be granted provided it was done before the start of the summary trial and the court considered that it was in the interests of justice.
Clause 9 already provides that important safeguard, albeit with two minor differences. First, the amendment will not explicitly require the court to consider the reason why the defendant failed to appear at the allocation hearing when considering whether it is in the interests of justice to re-open the allocation decision. That is an important provision: it recognises that there will be legitimate reasons why a defendant fails to appear—if they were gravely ill in hospital or were genuinely unaware of the proceedings against them, for example. However, it also recognises that allowing defendants to deliberately hold up proceedings by absconding on bail or refusing to leave their cells does not serve the interests of justice.
Secondly, the amendment gives absent defendants who were represented by a legal representative at their allocation hearing the opportunity to make an application to re-open the allocation decision. Clause 9 already ensures that if a legal representative is present at the allocation hearing but is unable to signify an absent defendant’s consent to a summary trial, the case must be sent to the Crown court for jury trial anyway. This amendment would simply provide defendants with a further means of deliberately delaying proceedings.
The amendment undermines the purpose of clause 9, which aims to tackle deliberately obstructive defendants who are intent on denying victims justice, while protecting the trial rights of those who are genuinely unaware of proceedings. I therefore urge the hon. Member to withdraw his amendment.
Alex Cunningham
Again, the Government concentrate on the people who are difficult in the system rather than those who might have a genuine reason for seeking change. I accept the Minister’s explanation and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Cunningham
I beg to move amendment 84, in clause 9, page 24, line 21, leave out subsection (4).
This amendment would remove cases involving children and young people from the provisions of Clause 9.
Again, I will be relatively brief. I remain surprised, given what we have discussed already, that the new proposed procedures for adults will, through clause 9(4), apply to children. Given our debate on previous clauses, it will be no surprise to the Minister that this causes me and the Opposition some considerable unease. It introduces a power for the court to proceed with allocation proceedings in a child’s absence. Children are considered inherently vulnerable. While the Bill recognises children’s increased vulnerability and additional requirements, it is not specified how their rights will be appropriately safeguarded.
The Opposition have tabled amendment 84, which would remove subsection (4) and thus limit the provisions of the clause to cases not involving child defendants. I am interested in the Minister’s thoughts as to why the procedure needs to be extended to cases involving children at all. I imagine the number of cases to which it would apply would be relatively few in number anyway, although the Minister may have some data to show otherwise. If so, I would like to hear of it and gain some understanding as to why, once again, the Government want to apply adult criteria to children. Without sufficient reassurances from the Minister, I intend to press the amendment to a vote.
James Cartlidge
The amendment would prevent clause 9 from applying to cases involving children. I do not have those statistics to hand, but I will see if I can endeavour to find them for the hon. Gentleman.
I want to start by acknowledging the hon. Gentleman’s concerns about the application of the clause when it comes to children. As I said before, I recognise the sensitivities here, which is why we have emphasised safeguards, and I fully agree that it is vitally important that we protect the interests of children in the criminal justice system.
Subsection (4), which the hon. Gentleman proposes to remove, has been specifically drafted for children. It takes into consideration that defendants under the age of 18 have an extremely limited role to play when it comes to allocation hearings, given that they do not have the same rights as adults to elect for a jury trial at the crown court. It recognises children’s increased vulnerability in the criminal justice system and provides additional safeguards. For example, the additional new circumstances that will enable the allocation of children’s cases in their absence are far more limited than those provided for adults. In addition to the existing exception of disorderly conduct, the clause specifies that the court can only proceed to allocate in a child’s absence where the child has been invited, but failed, to provide an online indication of plea and either the court is satisfied they were served with a notice of the hearing or the child has already appeared at court on a previous occasion to answer the charge. The court must consider whether there is an acceptable reason for the child’s absence and must be satisfied it would not be contrary to the interests of justice for the hearing to proceed in the child’s absence.
The provision must be viewed in the context of existing safeguards in primary legislation. When a child is arrested and held in police detention, the law requires that a parent or guardian must be notified as soon as possible. If a summons and postal requisition is served, it will always be sent to their parent or guardian. When the case is then brought before a youth court, the law will continue to enable the court to require a parent or guardian to attend during all stages of the subsequent proceedings where that is deemed appropriate.
Sir John Hayes
There are concerns about children in care. Again, the Minister makes a compelling case about the role of parents and guardians in respect of the clause and the amendment. However, many Members recognise that sometimes children in care are in very difficult circumstances. What provision will there be for those children and what consideration has the Minister given to their plight in those circumstances?
James Cartlidge
My right hon. Friend makes a very good point. It is difficult to have specific clauses for children in care in that sense, but I will give consideration to that important point and provide him with further information.
Courts also have a statutory duty to have regard to the welfare of children. They will always have the discretion as to whether to proceed to allocate in a child’s absence. We recognise that in the majority of cases, the courts may not deem it appropriate to proceed if a child is absent from the plea and allocation hearing. However, the clause provides the court with an important means of progressing a case involving a child where it is in the interests of justice to do so. I therefore urge the hon. Member for Stockton North to withdraw the amendment.
Alex Cunningham
I am grateful to the right hon. Member for South Holland and The Deepings for raising the issue of looked-after children. He helps to illustrate further why subsection (4) is inappropriate and why we support its removal. The Minister talked about the court being satisfied that notice has been served on the child. I am not sure how the court determines that, because children can always spirit things away and parents do not always find out until much later down the process.
Sir John Hayes
I am grateful for the hon. Gentleman’s remarks, but I took from what the Minister said that he is going to go away and think about that. When a combination of a diligent Opposition and a brave Government Back Bencher raises an issue and the Minister has given—I will not say concession—that acknowledgement, the wise thing for an Opposition to do is to take that as a win and withdraw their amendment.
Alex Cunningham
I think the right hon. Gentleman almost makes my argument for me. The Minister does not actually know how the subsection will apply to a particularly vulnerable group of young people, those in care. Perhaps it is the Minister who should support the amendment.
James Cartlidge
Just to clarify the point about our not knowing, we are talking about primary legislation setting out the core changes. The most important part, as always, is that there is discretion in the courts and that is inherent in almost all aspects of proceedings in the courts. I have great faith in the judiciary in these matters. The courts have discretion over whether to apply these—and other clauses that we have been talking about which have similar measures—to children and so on. Whatever the detail in respect of the most vulnerable children—I think I have answered some of that—the most important part is the discretion that exists which is inherent in our legal system.
Alex Cunningham
I too have tremendous confidence in our judiciary, but this is an additional power that it does not require. I suspect if it was consulted, it would not particularly want it either, unless the Minister has evidence to the contrary. I maintain that it is totally unnecessary.
James Cartlidge
The hon. Gentleman will know that the judiciary will not set out explicit views on proposed legislation. Of course, we have the Law Society, the Bar Council and other important stakeholders, and we feel that there has been significant consultation on these matters. I would add that there is detail to come in the normal way through the procedure rules which is then agreed by negative resolution. I will write further to my right hon. Friend the Member for South Holland and The Deepings and happily share that with the hon. Gentleman if he so wishes.
Alex Cunningham
I am grateful for that, but again, the impacts on different groups of vulnerable children have not been fully thought through. It does not take into consideration what happens when a child fails to appear and perhaps nobody is aware that the child has been charged. I remain very concerned about the amendment and we will press it to a vote.
Question put, That the amendment be made.
Alex Cunningham
I beg to move amendment 85, in clause 9, page 25, line 5, at end insert—
“(5) If the court proceeds with the allocation decision procedure in the absence of the accused, the accused must continue to have the opportunity to plead guilty at any time before the start of the summary trial and still receive the full credit had he pleaded guilty at the first stage of the proceedings.”
This amendment would ensure that the accused is entitled to the full credit that they would have received had they pleaded guilty at the first stage of the proceedings.
Another area of concern is that the Bill could remove the potential for any credit or reduction in sentence to which the defendant would have been entitled for pleading guilty. That is because magistrates would be able to proceed to allocate the case on the basis of an assumption that the individual wishes to plead guilty. Currently, courts have the power to reduce a sentence if a defendant pleads guilty. A defendant who pleads guilty at the first stage of proceedings, defined as up to and including the allocation hearing, can benefit from a maximum reduction of one third of the sentence that would have been imposed if the case had progressed to a trial.
Justice notes:
“It is therefore beneficial to seek engagement from the defendant as to how they would like to plea rather than make it easier for Magistrates to assume based on the uncertain criterion of an ‘unacceptable reason’, since the measures may result in cases progressing whereas they otherwise may not have. This is counterproductive and may in fact result in cases being disposed of in a less efficient manner. This would therefore represent a significant disadvantage to both defendant and the criminal justice system.”
If we want a more efficient system, we should make sure that the measures will actually deliver one. For these reasons, the Opposition have tabled amendment 85, which would ensure that the accused is entitled to the full credit they would have received if they had pleaded guilty at the first stage of the proceedings, but where the court proceeds in their absence and presumes a non-guilty plea and they later affirmatively plead the contrary.
I would welcome the Minister’s assurances that full credit for a guilty plea would still be available in these circumstances. As we know, where appropriate, a defendant pleading guilty at an early stage saves the court time and money and can save the alleged victim and their family the stress and difficulty of a trial. We would not want to disincentivise appropriate pleas because the credit would be reduced due to the proposals in the Bill.
James Cartlidge
Amendment 85 seeks to ensure that a defendant, whose case is allocated in their absence, is still entitled to the full reduction on their sentence that they would have otherwise received had they appeared at court and pleaded guilty at the first available opportunity. The location of the amendment in the new legislation means that it would only apply to children. However, as the hon. Gentleman’s explanatory statement makes reference to all “accused” persons, I hope that I have correctly understood that the amendment was intended for both child and adult defendant alike.
The safeguard that the hon. Member’s amendment intends to implement is already provided for under the existing Sentencing Act 2020 and the Sentencing Council’s guidelines for both child and adult defendants. The early guilty plea provisions of the guidelines are intended to support the efficient administration of justice and the early resolution of cases. The key difference is that the existing guidelines take into account the reasons why the defendant’s plea was delayed—which I believe is the right approach—rather than reducing the sentence irrespective of why they failed to appear.
Currently, where a defendant fails to appear at a plea and allocation hearing, the case stalls until the defendant appears; under the new provisions a case can progress. Defendants who fail to attend for allocation and then later plead guilty will create inefficiencies in the system; the court and prosecution will expend time and effort preparing for a trial that is not required, and victims and witnesses—who we should not forget—will be caused anxiety and inconvenience because they are told to attend court. In such circumstances, it is right that defendants should not always be entitled to the full reduction of one third off their sentence.
Alex Cunningham
The Minister just used the phrase “not always”. Could he expand on that, please?
James Cartlidge
The existing law and Sentencing Council’s guidelines provide that magistrates’ courts must consider whether there are particular circumstances which otherwise made it unreasonable to expect a defendant to have indicated a plea at an earlier stage in the proceedings. This means that defendants who fail to appear at the plea and allocation hearing for legitimate reasons will continue to be entitled to the full reduction of one third off their sentence—just to be clear. I therefore urge the hon. Member to withdraw the amendment.
Alex Cunningham
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause, as amended, stand part of the Bill.
James Cartlidge
As I have said, this is an important clause. We have considered the amendments, and I understand the motivations of the hon. Member for Stockton North, but just to remind us, under the current law, a magistrates court cannot reach a decision in the absence of an adult defendant about whether to allocate a triable either-way case for summary trial at magistrates court or jury trial at Crown court.
Until that decision is made, the case cannot progress any further. The only exceptions to the rule are if the defendant has agreed, through their legal representative, that the court can proceed in their absence or if the defendant’s disorderly conduct in the court means that it is not practicable to proceed in their presence.
That means that the timely progression of cases through the criminal justice system can stall indefinitely when defendants deliberately disengage from the proceedings—for example, by absconding on bail or refusing to leave their cell when held on remand. That can have serious negative impacts on victims and witnesses and cause serious delays to justice. In some cases, it may lead to witnesses withdrawing their support for the prosecution, causing cases to collapse and allowing perpetrators to go unpunished.
Clause 9 will enable magistrates courts to decide mode of trial for such cases in the absence of defendants in a wider range of circumstances than the law currently allows for, where the defendants fail without good cause to appear at court for their allocation hearing. Any decision to allocate in absence will be subject to the interests of justice test.
Adult defendants will retain the right to elect for a jury trial at Crown court up until the start of any subsequent summary trial, depending on why they failed to attend the allocation hearing. Defendants with legitimate reasons for failing to appear will get another opportunity to elect before the start of a summary trial allocated in their absence.
Although defendants under the age of 18 do not have the same right as adults to elect for a jury trial at Crown court, there are still occasions when a court will need to reach an allocation decision in a child’s absence. The current law only provides one exception that allows for this: where it is not practicable due to a legally represented child’s disorderly conduct before the court. Subsection 4 provides additional new circumstances—albeit far more limited than those provided for adults—that will enable the allocation of children’s cases in their absence in a way that acknowledges their increased vulnerability and provides additional safeguards to those already in the youth justice system.
Alex Cunningham
Briefly, the Minister has heard our arguments in relation to children throughout this. That, of course, remains our principal concern around this clause. I would ask that—whether for children or adults—the Government look again at the various safeguards that are in place, to see if there are opportunities for them to be improved. Again, the Government are concentrating on the difficult defendants rather than the wider range of defendants within the court system, even if they do have an opportunity at a later stage to elect for that particular type of trial. Despite our reservations about children, we will not oppose the clause, but we hope that the Government will reflect on the many things we have said, particularly on young people.
Question put and agreed to.
Clause 9, as amended, accordingly ordered to stand part of the Bill.
Clause 10
Sending cases to Crown Court for trial
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Measures in this Bill will clear away obstacles in current legislation standing in the way of the courts carrying out more of their administrative case management outside of the courtroom. Clause 10 will help to deliver that by removing the legal requirement that defendants charged with indictable offences must first appear before a magistrates court to be informed that their case is being sent to the Crown court.
Under existing law, where a defendant has been charged with an indictable-only offence, such as conspiracy to defraud, and there is no other reason to hold a hearing—for example, to consider issues of bail—then a court hearing is surely superfluous. The defendant will be sent to the Crown court for trial regardless of his or her consent.
Similarly, in triable either-way cases, where a defendant has engaged with the court in writing or online and elected for a Crown court trial, equally there would be no need to hold a hearing. This provision will help to streamline criminal procedures by reducing the need for physical appearances in the magistrates court and removing unnecessary hearings. However, this is a discretionary power. A magistrates court will only exercise that power where it considers it appropriate and in the interests of justice to do so and no issues, such as bail, need to be considered.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Powers of Crown Court to remit cases to the magistrates’ court
Question proposed, That the clause stand part of the Bill.
James Cartlidge
We come to a particularly important clause in the context of court recovery.
Clause 11 will help create a more flexible and unified court system by providing the Crown court with increased flexibility to return certain cases to the magistrates court. Currently, the Crown court can return cases to the magistrates court in a very limited set of circumstances. The clause will provide the Crown court with a new general power to return cases to the magistrates court, including to the youth court, for trial and sentencing, when the judge is satisfied that magistrates have the necessary jurisdiction.
A defendant’s right to elect for jury trial is unaffected by this measure. Before the Crown court can return a case back to the magistrates court for trial, it must first obtain the defendant’s consent to do so if the defendant is over 18.
Clause 11 also requires the Crown court to provide reasons whenever it decides not to send a child defendant under the age of 18 back to the youth court. The clause recognises that the nature and seriousness of criminal cases can change as they progress through the criminal justice system. It helps to create a more efficient criminal court system by ensuring that cases are always heard in the most appropriate venue.
On the important point of court recovery, we estimate that clause 11 will make room for a further 400 Crown court sitting days. Those days will be saved on the following assumptions: that 5% of not guilty triable either-way cases would be sent back for trial and 10% of guilty triable either-way cases would be sent back for sentencing. The 5% and 10% figures are of eligible cases—in other words, cases that received less than six months at Crown court; that is based on pre-covid 2019 data. I remind colleagues that 400 days saved in the Crown court are 400 days when we can hear murder cases, rape cases and cases in the backlog. That is why the clause is incredibly important.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I was fortunate enough to witness a case at the Old Bailey last week, and to see how the process operates. There are people waiting quite a long time on remand to have their cases processed. Can my hon. Friend confirm that the terms of the clause will also reduce the amount of time that people spend on remand, waiting for their trial?
James Cartlidge
My hon. Friend makes an excellent point. We should be cognisant of those on remand—whether in custody or on bail, but particularly those in custody. She makes exactly the right point: by definition, if we free up space in the Crown court through the clause, we are enabling more cases to be heard more quickly.
It is important to stress that those cases would go back to the magistrates court. We can do that because the “backlog” in the magistrates court is now far better; we have seen a huge reduction in the outstanding case volume because it has faster throughput. All of us would pay tribute to our voluntary judiciary. I was pleased yesterday to hold a meeting with MPs invited from all parties who are currently magistrates or have been magistrates. A number of hon. Friends were there and we had a very interesting discussion. I have great faith in the ability of the magistrates courts to take more cases and to assist the Crown court, which has the serious matter of indictable cases.
Without further ado, I should say that this is an important clause, which forms an important and significant part of court recovery.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Powers of youth court to transfer cases if accused turns 18
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 12 amends existing legislation relating to the power of the youth court to return defendants who have turned 18 before the start of trial to the adult magistrates court or to send them to the Crown court. Although the power is already operationally possible, the clause makes the process for exercising it much clearer. It also enables such decisions to be made other than in open court where appropriate, provided that the youth court serves certain documents on the defendant.
The clause also provides that, where the youth court proposes to remit a person to the adult magistrates court for an offence triable either way, the court must give the defendant the opportunity to elect for a jury trial. It also provides that the criminal procedure rules should set out the circumstances when joined cases or co-defendants are to be sent to the Crown court along with the main offence.
The clause aims to ensure that new provisions for adults, which enable cases to be sent to the Crown court without the need for a hearing, are replicated in the youth court system.
Alex Cunningham
As the Minister outlined, clause 12(3) inserts proposed new subsection (1D) in section 47 of the Crime and Disorder Act 1998, empowering the youth court to transfer the proceedings without an in-person hearing if the accused turns 18. Organisations that campaign on youth issues have raised several concerns about this cliff-edge clause.
Moving into the adult courts system can have a number of knock-on impacts on sentencing and the spending periods associated with convictions. It is therefore significant, and it is important that the accused is involved in the hearing. I am not convinced that it is appropriate to proceed with such a hearing in the absence of the accused via a written procedure. As the backlog continues to grow, more youths are likely to cross the significant age threshold while their case is still travelling through the justice system.
The Minister will be as concerned as I am by the backlogs in the youth courts, although they are not as significant as those in the adult system. The Minister of State, the hon. Member for Louth and Horncastle (Victoria Atkins), confirmed in her answer to my written question No. 58390 that the average time taken to deal with youth cases had doubled recently from 52 days in April 2020 to 102 days in June 2021.
Sadly, no up-to-date figures are available. I suspect, given inaction and the pandemic, that the period of time for youth cases to be heard will have grown along with others. If it is taking months on end to get youth cases into court, it follows that more and more young people could be transferred to the adult courts. With the magistrates court backlog as it is, there could be further delay in getting the case to court, with young people being forced to lead their lives on hold, not knowing their fate. That is all the more reason why the Minister should think again about the new measure he wants to introduce.
I would welcome the Minister’s thoughts on how we can mitigate the cliff edge at the end of the youth justice system. It seems to me that simply proceeding with this jump on paper, without engaging the defendant, does the opposite. Yes, the person may be an adult by the time they get to court, but they were children at the time of the alleged offence. I repeat what I said about clause 9: we must do everything possible to ensure that justice is done and that children are properly protected.
James Cartlidge
I stress an important point to colleagues about children. I am afraid that it is a fact that they can commit very serious crimes. Although, in all aspects of the justice system that deal with younger people, we have to be cognisant of vulnerabilities, they have to face justice as well under our system as it is configured.
Let me deal with the point about whether the provision would lead to more cases of a defendant who has turned 18 after committing the offence being sent to the adult system. As the power already exists, the provision is not intended to result in any such increase. Alongside the provision to enable the Crown court to remit cases back to the magistrates court, the clause aims to ensure that courts have the discretion to ensure that cases are always heard in the most appropriate venue.
Alex Cunningham
Will the Minister make a statement on the record about his view of children being transferred from the youth court to adult courts, having committed the crime as a child? What is his position on those transfers?
James Cartlidge
The hon. Gentleman knows that this is not a new matter. When that is the case, when it comes to sentencing, the court will have to take into account the age at which the offence was committed. That is the most important point we need to remember.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Involvement of parent or guardian in proceedings conducted in writing
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Under the current law, when a defendant under 16 years old is charged with a crime, or is for any other reason brought before a court, the court must require a parent or guardian to attend court at all stages of the proceedings, unless it would be unreasonable to do so. When a defendant is 16 to 17 years old, the court may require a parent or guardian to attend.
The purpose of the provision is to ensure that this important safeguard applies to the new written and online procedures in the Bill—for example, when a child is invited to indicate a plea online, or receives a written notification that the court has decided to send their case directly to the Crown court.
Clause 13 provides that, having regard to the circumstances of the case, the court must ascertain whether the parent or guardian of a child under 16 years old is aware of any written or online proceedings and, if not, to provide them with information about the proceedings. The court may do this for children aged 16 to 17 years old. Where it is appropriate to make a parent or guardian aware, the clause also requires the courts to provide them with information explaining the new written and online procedures, including the choices available to the child, and the effects of those choices.
Alex Cunningham
Given what I have already said about the need for full and proper safeguards for child defendants involved in the criminal process, I am sure it will be no surprise to the Minister that the Opposition are minded to oppose the clause. I will not go over again matters debated on clauses 8 and 12, but I wish to share the additional concern of the Bar Council, which says:
“Many parents of children coming into the criminal justice system have literacy issues and are often themselves vulnerable adults. Securing their involvement in writing, as a ‘safeguard’ for a child or youth, who is also to be dealt with by way of a written process, is an insufficient safeguard for the administration of criminal justice.
Face-to-face hearings that require the attendance of the parent, guardian or responsible adult mark the gravity of the proceedings. They also allow for further opportunities for appropriate intervention by relevant agencies on behalf of vulnerable children and youths, or in support of parents or guardians that need help and guidance, for which the legal representative is often the point of referral.”
I agree with that entirely, and clause 13 contributes to the watering down of the vital safeguards for child defendants. We are therefore unable to support it.
James Cartlidge
To be fair to the hon. Gentleman, he is being entirely consistent. He will appreciate that it would be odd and inconsistent if we were to keep the other clauses and remove this clause, given that it has safeguards in relation to those clauses. Notwithstanding the fact that he has some overarching concerns, he will appreciate that it would be odd for us to remove it in those circumstances.
Sir John Hayes
I wish to add remarks similar to those I made about children in care. When the Minister sends a note, as he said he might, and gives this further consideration, perhaps he could also address this clause, as the same arguments I made earlier apply.
James Cartlidge
My right hon. Friend is correct; to be clear, this clause sits with the other clauses, as it contains safeguards relating to them. They are part and parcel of the same set. I will ensure that he receives the further information that he seeks.
Sir John Hayes
I am grateful to the Minister.
Question put, That the clause stand part of the Bill.
James Cartlidge
The clause gives judges greater flexibility to manage criminal proceedings, avoid unnecessary hearings and speed up justice. It allows the Crown court to determine an application for a witness summons without a hearing. It also removes certain statutory requirements in criminal proceedings for the court to hold a hearing before lifting reporting restrictions. Courts will continue to have the option of convening a hearing in those cases, but this provision will enable them to make such decisions on the papers when they consider that appropriate and in the interests of justice. They will still have to consider any representations made by the parties concerned, including perhaps that the issue requires a hearing, before making a decision.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Documents to be served in accordance with Criminal Procedure Rules
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 1 be the First schedule to the Bill.
James Cartlidge
It is vital that we ensure that the courts are accessible to everyone who needs to use them, and that includes how documents may be sent and received. In some older legislation, a particular document is deemed served only if sent by registered post, which is both inflexible and inefficient.
As we introduce the common platform, it is important to ensure that our court users have the opportunity to make full use of online processes where appropriate when interacting with the court and other interested parties. The clause gives effect to schedule 1, which contains amendments to existing legislation—14 Acts in total—to enable the service of documents in criminal proceedings in accordance with criminal procedure rules, by whichever means is the most appropriate, including by electronic means.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 16
Power to make consequential or supplementary provision
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause gives the Lord Chancellor the power to make consequential or supplementary amendments to legislation in relation to any of the criminal procedure provisions in clauses 3 to 15. It is to be read in conjunction with clause 45, which covers regulations relating to all the provisions in the Bill.
The clause provides that the Lord Chancellor may amend, repeal or revoke any provisions within an Act of Parliament passed before this legislation or during this parliamentary Session. It will also enable the Lord Chancellor to amend, repeal or revoke any provisions within secondary legislation, irrespective of when that legislation was made. Any regulations that amend or repeal primary legislation are subject to parliamentary scrutiny through the affirmative resolution procedure. The wording is standard, and standard practice to have in a Bill, as I understand it.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Consequential and related amendments
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 2 be the Second schedule to the Bill.
James Cartlidge
The clause introduces schedule 2, which amends existing primary legislation as a result of the implementation of clauses 3 to 12. The amendments in schedule 2 take account of the new court processes we are introducing and the changes we are making to current criminal procedures. They include amendments to the Magistrates’ Courts Act 1980, the Road Traffic Offenders Act 1988, the Courts Act 2003, the Criminal Justice Act 2003, the Police and Criminal Evidence Act 1984, which includes legislation about bail after arrest, the Crime and Disorder Act 1998, the Coroners and Justice Act 2009 and the 2020 sentencing code. These are technical and consequential amendments required to enable these clauses to have the intended effect. I commend clause 17 and schedule 2 to the Committee
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Alex Cunningham
I beg to move amendment 86, in clause 18, page 34, line 38, leave out “require online procedural assistance” and insert “are digitally excluded”.
This amendment would require regard to be had to the needs of persons who are digitally excluded when making Online Procedure Rules.
The Chair
With this it will be convenient to discuss the following:
Amendment 87, in clause 24, page 41, line 30, leave out “require online procedural assistance” and insert “are digitally excluded”.
This amendment would require the Lord Chancellor to have regard to the needs of persons who are digitally excluded when allowing or disallowing Online Procedure Rules to be made.
Amendment 88, in clause 27, page 42, line 31, leave out “require online procedural assistance” and insert “are digitally excluded”.
This amendment would require the Lord Chancellor to arrange for the provisions of appropriate and proportionate support for persons who are digitally excluded.
Amendment 89, in clause 31, page 44, leave out lines 11 to 15 and insert—
““persons who are digitally excluded” means persons who, for reasons including their inability to access the internet or digital devices, lack of basic digital skills, or problems with confidence and motivation, experience difficulty in engaging with computers or online processes”.
This amendment inserts a new definition of “persons who are digitally excluded”.
New clause 2—Online Procedural Assistance—
“(1) Online Procedural Assistance, must be made available and accessible to any party or potential party to proceedings governed by Online Procedure Rules that requires it. In delivering this duty, the Lord Chancellor must have due regard to the intersection of digital exclusion with other factors, such as age, poverty, disability and geography and deliver support services accordingly.
(2) It must include assistance to enable such a party or potential party to have a reasonable understanding of the nature of the proceedings, the procedure applicable under Online Procedure Rules and of how to access and navigate such procedure. To this effect, it will provide both advice and technical hardware, as appropriate, and will provide assistance to such individuals throughout the course of their proceedings.
(3) Anyone who requires Online Procedural Assistance must have the option of receiving it either via remote appointments or in-person appointments at a site local to them.
(4) Online Procedural Assistance must include, for a party or potential party whose first language is not English, assistance, by interpretation or translation as appropriate, in a language that is familiar to the party or potential party.
(5) The delivery of Online Procedural Assistance must be evaluated at yearly intervals by an independent evaluation team. To assist in these evaluations, data must be routinely collected relating to the protected characteristics of those using the service, outcomes of cases that used Online Procedural Assistance and the frequency and location of the appointments provided. This must also be made publicly available.”
This new clause clarifies the nature of online procedural assistance.
Alex Cunningham
We now move to part 2, chapter 2 of the Bill, which sets up powers to make online procedure rules for specified proceedings in civil, employment, family and tribunals to be started, conducted, progressed or disposed of by “electronic means”. The Opposition recognise the importance of expanding the use of online procedures in our court processes, and its role in making the system more efficient and cost effective, and so are broadly supportive of the provisions of this chapter.
However, we seek some reassurances about the provisions for digitally excluded individuals in the Bill. Research by Lloyds Bank shows that 16% of the UK population lack basic digital skills and are unable to
“participate in a digital society.”
It is vital that these people are not left behind by the provisions in this Bill.
The amendments aim to introduce further safeguards and accountability and scrutiny mechanisms at points we think may be appropriate, so as to ensure the measures do not preclude practical access to justice. I look forward to hearing what the Minister thinks of them.
The amendments relate to the parts of the Bill that refer to
“persons who require online procedural assistance.”
I thank Justice and the Public Law Project for their assistance and input. This phrase is used at a number of points in the Bill, including at clause 18(3)(a), which requires
“Powers to make Online Procedure Rules…are to be exercised with a view to securing…that practice and procedure under the Rules are accessible and fair,”.
Clause 18(4) states:
“For the purposes of subsection (3)(a), regard must be had to the needs of persons who require online procedural assistance.”
Clause 24(4) states:
“In deciding whether to allow or disallow rules,”—
made by the Online Procedure Rule Committee—
“the Lord Chancellor must have regard to the needs of persons who require online procedural assistance.”
Clause 27 places a duty on the Lord Chancellor to arrange for support that is
“appropriate and proportionate for persons who require online procedural assistance.”
Such persons are defined in Clause 31, which states
“‘persons who require online procedural assistance’ means persons who, because of difficulties in accessing or using electronic equipment, require assistance in order to initiate, conduct, progress or participate in proceedings by electronic means in accordance with Online Procedure Rules;”.
The Bar Council’s briefing for Second Reading noted:
“It is unclear if “persons who require procedural assistance” is a socio-economic, physical, mental or other difficulty.”
It also recognises that this
“seems to raise potential equality and diversity issues.”
Justice is also concerned that the definition is “unduly narrow and unclear”. Although the Opposition support the inclusion of the duty to arrange support for persons who require online procedural assistance, we share the concern that the current definition of such persons undermines the effectiveness of the duty. Justice explains that people may be able to access or use electronic equipment but may still be unable to effectively engage with or participate in online proceedings for other reasons—for example, people who speak English as a second language, people with learning difficulties, cognitive or sensory impairments, and those who require different modes of communication, such as braille or sign language. Furthermore, digital exclusion can be situational, because people
“who might normally be confident online may struggle with online services when faced with crises such as divorce or debt which reduce people’s confidence and capability.”
Those are some of the findings from Justice’s excellent 2018 report, “Preventing Digital Exclusion from Online Justice”, of which I am sure the Minister is aware. Justice also notes that it is unclear whether the definition as currently drafted would include people who are able to use electronic equipment but do not have access to the internet—for example, because they cannot afford the data, as opposed to the equipment, such as a phone, tablet or computer. Will the Minister please provide some clarification on this point? I hope the intention is that the definition will cover such scenarios.
In its 2018 report, Justice argued for the need to provide effective support to those who are digitally excluded, in order to realise the full potential of online justice services and improve access to justice for many people. In the report, Justice used the term “digitally excluded” to describe people who, for reasons such as
“an inability to access the internet or digital services, lack of basic digital skills, or problems with confidence and motivation”,
experience difficulty in engaging with computers and online processes. We think reflecting that meaning in the legislation would ensure that the duty to provide support to those who need it would be most effective and would encompass all those who may need assistance. To that end, amendment 89 inserts a new definition into clause 31, stating that
“‘persons who are digitally excluded’ means persons who, for reasons including their inability to access the internet or digital devices, lack of basic digital skills, or problems with confidence and motivation, experience difficulty in engaging with computers or online processes.”
Amendments 86, 87 and 88 insert the phrase
“persons who are digitally excluded”
in the place of
“persons who require online procedural assistance”
at the points I mentioned previously. The Opposition and Government have the same intention here: to provide support to those who need it, so that no one is precluded from accessing justice. I hope the Minister can see where we are coming from and will look favourably on the amendments.
I turn now to new clause 2, which is another approach to dealing with some of the concerns. It simply clarifies the nature of online procedural assistance, and I would be grateful if the Minister could address each of its subsections and tell the Committee whether they are matters that he and his team have already considered, and whether he envisions that the Bill as drafted would cover them. Does the duty on the Lord Chancellor currently include consideration of other factors that intersect with digital exclusion, such as age, poverty, disability and geography? The right hon. Member for South Holland and The Deepings was helpful on these issues in an earlier debate, when he spoke up for older people. I am sure that he, too, will want answers to our questions and, I hope, a few of his own.
Will the assistance cover both advice and technical hardware, and will it be available throughout the proceedings? Will persons receiving the assistance be able to do so via either a remote appointment or an in-person appointment at a site local to them? For those whose first language is not English, will assistance be provided through interpretation or translation, as appropriate, in a language that is familiar to the party or potential party? Will the assistance be monitored and evaluated at regular intervals? If so, how and by who? We want to be able to offer the Government keen support for the proposals, so I look forward to the Minister’s response to the concerns we have raised.
James Cartlidge
I am grateful to the hon. Gentleman for giving us the opportunity to talk through the issues of digital exclusion. These are important issues. As colleagues know, much of the Bill, particularly once we go beyond the judicial review clauses, relates to digitisation and I feel very strongly that digitisation has many benefits.
Colleagues will remember the evidence from the Scottish Law Society. One of its most interesting points was how, in Scotland, its experience had been that the use of video technology and so on had kept justice going during the pandemic. That has certainly been the case in England and Wales. I appreciate that the hon. Gentleman is not saying otherwise—he is looking at those who are excluded. In principle, in many ways digitisation can enhance access to justice. In the greatest collective challenge to access to justice that this country has seen for many decades—the pandemic—digitisation maintained access to justice when otherwise many more cases would have been stuck and the backlog would have been even worse.
I have two points to make on a personal note. I am not a lawyer by background, but I spent my year off as an outdoor clerk in the High Court, carrying bundles of paperwork around the Royal Courts of Justice, from window to window. Some were shut in my face, because it was not the right window or the person was going off for lunch—it is quite common, actually. There has always been an enormous amount of paperwork in the system, as the hon. Member for Hammersmith, who I believe was a barrister, will know. Trying to reduce those bundles will take time. In the Crown court in particular, we will still see large bundles of papers. We will still have large paper packs for the jury to look at; in many ways, that is still the most effective method. Stripping out the paperwork and increasing digitisation will have its moments of frustration for practitioners and staff. It will have its downsides. The system will never be perfect, but in general and in principle digitisation enhances the system.
The second personal point is about my business idea. Mr Rosindell, you will know about house prices in London. The idea was to enable groups of friends who were renting to buy property together. It was for flatmates to buy and was called “Share to Buy”. Once we had come up with it and had approached a lender, who was supportive, we realised that the problem was how to get people to apply. We decided that the only way to do it was online. At that time, there were not really online mortgage applications. We thought at great length about what to do if people do not have internet access and want to make a paper-based application. Obviously, that scheme is not as significant as the legal system, but the same principles apply. I am a great believer in the ability of the digital sphere to enhance accessibility, to increase people’s access to important things, alongside having the appropriate safeguards and support, which are the two key words.
We recognise that those who are digitally excluded may need assistance in starting or progressing their case online. Therefore, HMCTS has set up a digital service that is designed with and for users to help navigate the justice system. It will be supported through HMCTS user contact functions, who will issue guidance and help on the journey through the service over the phone and related call-centre channels, such as web chat. As I said in discussion on earlier clauses, HMCTS recently awarded a national contract to deliver positive and practical solutions to support users and break down barriers to digital inclusion across civil, family and tribunal jurisdictions.
Although the measures seek to direct as many users as possible through primary digital channels, some users may have problems accessing digital services. The hon. Member for Stockton North made some quite specific points about geography, age and disability. We recognise that some users may have particular problems. As I noted in the previous discussion, paper forms will remain available, and work is ongoing to review and simplify those forms. HMCTS will ensure users receive equal service no matter what channel they use to engage.
Amendment 86 would require regard to be had to the needs of persons who are digitally excluded when making online procedure rules, changing, as a number of the amendments would do, the terminology “require online procedural assistance” for that of being “digitally excluded”. Amendment 87 would require the Lord Chancellor to have regard to the needs to persons who are digitally excluded when allowing or disallowing online procedure rules to be made.
The duty to have regard to the needs of those who may be digitally excluded is addressed in clause 27, which requires the Lord Chancellor to make provisions for those who require additional support. Through that measure, court users will be supported through their online journey in person and remotely. When considering whether to allow or disallow rules, the Lord Chancellor must have regard to those who require online procedural assistance.
Amendment 88 would require the Lord Chancellor to arrange for the provision of appropriate and proportionate support for persons who are digitally excluded. The measures already seek to ensure appropriate and proportionate support for persons who are digitally excluded or who, in the Bill’s terms,
“require online procedural assistance”
so that they are able to engage with online procedures. That includes assistive technology, such as a screen reader, and simplifying language to ensure that users understand what they are required to do.
Sir John Hayes
I was delighted to hear that in his earlier life the Minister was a kind of Wemmick figure to Mr Jaggers before his expectations were even greater and he came here. His account of carrying papers around the courts perhaps prepared him for the immense amounts of paperwork that one deals with as a member of the Government, from my memory of it. However, I could not disagree with him more on this part of the Bill, for three reasons.
The first is accessibility. There are profound problems with moving what was previously a personal connection or a written connection with any organisation or body to an online one. It is particularly disadvantageous for vulnerable groups, including people with learning difficulties, people with mental health problems, people with particular disabilities such as hearing loss, and the unsighted. The hon. Member for Stockton North mentioned the elderly too, and the Minister acknowledged that point in respect of his own parents, who he said were not as switched on to these matters as he doubtless is.
There are other issues too, such as security and confidentiality. There is an immense myth. I know that from having been in the IT industry and having been Security Minister. The combination of those experiences taught me a long time ago that online procedures and processes are very hard to secure beyond doubt, so I have great doubts about whether confidentiality can be maintained as it can by more conventional means.
Fundamentally, my problem is one of community. We have to ask in what kind of place we want to live, and how we want to conduct our lives. That applies to our work in Parliament, to the exercise of the law, and to business, as the hon. Member for Stockton North said. Personal interaction and the intimacy associated with face-to-face engagement are critical to framing and affirming our sense of community and connection with others. The more remote and anonymous we make that engagement, the more we will undermine that sense of what we share, so I have profound doubts about the whole move to online government, as I mentioned earlier.
The Minister is being extremely adroit in his handling of the Committee; indeed, I sent him a note to say how deftly he handled my earlier inquiries. I do not mean to patronise him, but I think he can be very proud of his performance. I have been in that seat many times, as he knows, and I know how tough it is. However, when I raised these matters previously he suggested—slightly untypically and rather clumsily—that I was regressive. He must know that the very concept of progress is suspect, because believing in progress means believing in a destination—a pre-ordained destination towards which we are all hurtling.
In truth, of course, that is profoundly philosophically unsound. I can only assume that, standing there under those dreadful Whigs in Gladstone’s Cabinet, the Minister has adopted the Whig theory of history that we are all merely actors who are acting out a script written for us by some other power. There is nothing regressive about my remark; there is perhaps something human about it. I want more politics on a human scale; I want it to be safe, secure and accessible to all, and I want it to affirm our sense of community and build on what we share.
For all those reasons, I seek extremely profound reassurances from the Minister—of the kind that he has offered previously, in the spirit that I recommended a few moments ago—that my constituents, particularly the most vulnerable, will not be disadvantaged by the legislation. The hon. Member for Stockton North alluded to geography. Well, some people in rural areas such as South Holland and The Deepings are not yet “online”, and I am sure that that applies to constituencies represented by Members on both sides of the Committee. I do not want those people to be at a disadvantage.
The Minister is right that during the pandemic we had to make do, and that did have some beneficial effects: it forced us to think about how we could perhaps do things more efficiently. In the end, however, I was desperate to get back to the business of meeting my constituents face to face, and of debating and engaging in person with colleagues in Parliament. I am sure that that applies to most right hon. and hon. Members in this House. Let us not hurtle down the road to moving everything online, only to look back in years to come and think, “My goodness! What have we done and what have we lost?”
Andy Slaughter (Hammersmith) (Lab)
I shall be brief. I felt half invited by the Minister to respond, but I will not tell a whole war story from the courts, as we used to do on the Justice Committee. I commiserate with him for his treatment by the Royal Courts of Justice; it is nothing personal that the windows are being shut in his face.
I will shock the Committee again: I agree with the right hon. Member for South Holland and The Deepings. I am afraid that I am one of those people who still carries large amounts of paper around and cannot quite manage otherwise. That is possibly why it is good that I am not a practitioner any longer: the courts have adapted quite well to new technology—practitioners, the judiciary and the senior judiciary in particular are extremely adroit in that respect. I agree entirely with my hon. Friend the Member for Stockton North that we have in common with the Government the intention to ensure that things are done as efficiently, quickly and economically as possible. I entirely agree that new technology has a big role to play in all that.
The Committee may hear a “but” coming. The “but” is that there are several ways, but two in particular, in which we must be very wary. First, there is the issue of access. We have all had to learn to deal with new technology, and an example of that is how we advanced our ability to do so under the stresses of covid. Zooming is as common to us now as face-to-face meetings.
Sir John Hayes
It is a mark of both the sense and sensibility of the scrutiny of the Committee that the hon. Gentleman should be defending the Minister and the Government’s position from my mild but profound attack. It is a good Committee where that kind of communion, if I may put it that way, can be enjoyed.
Andy Slaughter
I am going to impress the right hon. Gentleman even more in a moment by making a 180° turn and joining his critique of the Minister.
There may well be times when Zooming is more efficient and appropriate, but there will be many times when face-to-face meetings are more appropriate, including meetings with constituents. During the long debates that we had on the Legal Aid, Sentencing and Punishment of Offenders Act 2012, I cautioned many times that it moved too quickly to exclude people from the system in the name of efficiency. There is a danger that we will do that here.
The Minister fairly said that we must proceed with caution and be aware of some people’s digital limitations. It is easy to say that, but it is more difficult to ensure that it happens, because the same people who struggle with matters online are those who cannot make their voices heard, and they just disappear from the system. We have excluded people even though it was not intentional.
A second important category—coroners—was touched on. I will not say much now because I expect that we shall come on to the plans to move those online when we come to that section. The Minister will remember that Mr Rebello, senior coroner for the Liverpool and Wirral coroner area and secretary of the Coroners Society, said that he liked to have everybody in the room. He was not saying that for its own sake, but because there are times, when evidence is being heard or judicial decisions are being made rather than in administrative hearings, when it is important for people to be present. Although doing things remotely may have been the best that we could do during covid, that will not always be the case.
I simply caution that if justice is to be properly done, we should be cautious before we throw out the methods that have served us not just for decades but for centuries in assessing the quality of evidence, in advocacy and in ensuring that we get to the best result we can in every case. I hope that we will be as modern and efficient as we can, and use as much technology as we can, but not at the price of excluding people or of not seeing justice done.
Alex Cunningham
I appreciate the Minister’s sharing information about his past career; it is fascinating to find out what people have done in their previous lives. Perhaps one angle of his business could have been encouraging people to move to the north where, instead of buying a share in a house for £150,000, they could buy a lovely three-bedroom semi-detached house in Stockton; have access to our wonderful newly opened Globe theatre; and be 30 minutes from the Yorkshire moors, 40 minutes from the Yorkshire dales and only an hour from the Northumberland coast.
James Cartlidge
Very quickly, because it is incredibly relevant, I assure the hon. Gentleman that our business was entirely national. The reason that it was able to operate nationally, in every part of the country, is because it operated online.
Alex Cunningham
That is why we welcome the way that we can move forward, even in the world of justice. We can move online as much as possible, but the Minister knows how much we have been pressing on the issue of safeguards.
The right hon. Member for South Holland and The Deepings was concerned that some people in his area, as in other areas of the country, might not have access. When he talked about face-to-face meetings and the importance of community, it struck me that he said that he did not want us to underestimate how important that is and to undermine those personal relationships. I have maintained throughout my contributions to the Committee that we do not want justice to be undermined as a result of moving online.
The Minister spoke about the Scottish experience. It did keep it going, but for those who had access to systems. He acknowledged the need for appropriate support and recognised that more detail must be provided. We look forward to seeing that detail in future.
My real concern is that some of the language in the Bill is a little on the soft side. I would rather see it more clearly defined and nailed down, to ensure that the people who are most likely to be excluded from digital services are given all the support they need, which might even mean providing them with the data that they require to use the systems that are available to them.
In the light of the debate, however, I do not intend to press any of the amendments to the vote, but I say again that some of the language is soft. We need that detail and I hope that there will be no devils in it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned.—(Scott Mann.)
Animal Welfare (Kept Animals) Bill (Third sitting)
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is to be consumed during sittings except for the water provided. Members are expected to wear masks when they are not speaking, in line with current Government guidance and that of the House of Commons Commission. I remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate. That can be done either at the testing centre in the House or at home. Please give each other and members of staff space when seated, and when entering and leaving the room. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
We now begin line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments take place not in the order they are debated but in the order they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses. Members wishing to press a grouped amendment or new clause to a Division should indicate when speaking to it that they wish to do so.
Clause 1
Prohibition on keeping primates without a licence
Daniel Zeichner (Cambridge) (Lab)
I beg to move amendment 91, in clause 1, page 1, line 7, leave out from “primate” to second “under”.
This amendment would prohibit the keeping of primates as pets in England.
It is a pleasure to see you in the Chair, Ms McVey, and to be back in Committee Room 10 discussing these issues, which some of us have spent many a happy hour doing. I look forward to an excellent debate over the next few days. I think we all enjoyed the excellent witness sessions last week, from which we learned a great deal, and there is much common ground. Both parties promised this Bill in their election manifestos, and I am delighted that the Government have put Members on the Committee who have expertise and interest in it. I strongly encourage them to speak, intervene and vote with their hearts when the moment comes. I am looking at the Government Whip; I know that she will encourage them to do that.
On one level, the Bill is quite dry, and it is a mixture of things, but it sits within the wider framework of the Government’s action plan for animal welfare, which was published some months ago, and was well received by Members on both sides of the House. It covers a lot of ground. When rereading it, I could not help noticing that, as in many documents from Governments of all colours, there is a kind of year zero, as if nothing happened before 2010 and all the good things have happened since. Indeed, in his introductory speech on Second Reading, the Secretary of State referred to 1822 and then jumped to 2010. Of course, Labour is quite proud of the Animal Welfare Act 2006, which was significant. Much that we will discuss comes on the back of that groundbreaking legislation, but we will let that pass in a spirit of generosity, as we work together.
There is a slight problem with understanding how all the legislation fits together. That starts with the amendment and clause 1. When the animal welfare action plan refers to the Bill, it talks about
“ending the low-welfare practice of keeping primates as pets”.
I immediately wonder what that means. There is not a ban, as far as I can see. I will return to that point later. The plan starts with sentience, which is quite logical, although of course, as so often in this place, we have not started with that. Debate on that started in the other place, and doubtless we will talk about it in the months, or possibly weeks, ahead.
The plan goes on to cover animals abroad. I will perhaps gently press the Minister occasionally during these discussions on where that measure has got to. There seems to be some speculation that it may have got lost temporarily. We would be interested to hear more, as some of the issues that we would have liked to raise in the Bill may well have been in that measure.
Overall, there is a slight sense of an out-of-control shopping trolley veering along the aisles of animal welfare goodies, seeking to find the odd crowd-pleaser along the way. That is not how we would have done things, but here we are. There is a rather odd mix of things in the Bill, and perhaps to everyone’s slight surprise, we begin the journey of tackling all the issues around animal welfare with primates. Amendment 91 to clause 1 deals with that. It is a simple amendment, because it merely translates what is in the Bill to what was promised in the Conservative manifesto.
I admit to being slightly unkind, but I took another look at the manifesto—during elections, we all rush around and try to find time to read manifestos—and was delighted to find a happy picture of the hon. Member for Penrith and The Border. I know we are not supposed to wave things around when we are speaking, but I have a copy with me: it is a very nice picture. Next to him is a list of all the animal welfare things that are going to be done, including this statement:
“We will ban keeping primates as pets.”
The manifesto does not say that the Conservatives would ban the keeping of primates as pets unless someone has a licence. That is rather different, but that is what the Bill says. It goes into great detail on how a licensing system will be set up, and we will spend a lot of time discussing that this morning. However, that is not banning the keeping of primates as pets. Despite my attempt to make this amendment, I suspect that we will go on to discuss many of those issues. There are a range of other things in the manifesto, including an ivory ban, which I have referenced, so I commend the Conservative manifesto to Conservative Members, and we will hold them to account on it.
During the evidence sessions, we heard excellent evidence from witnesses on this issue. It is clear that the number of primates in this country that are not in zoos or research institutions is hard to estimate. We really do not know the number, which makes this quite difficult. However, I understood from the evidence that there are very few people who can provide the zoo-equivalent conditions in which, the Government argue, primates can reasonably be kept. The number may be hundreds, although I am sceptical that it is as many as that. We heard from many organisations, both in oral and written evidence. Interestingly, we also heard from Members on both sides of the House on Second Reading who believe, as Labour does, that primates should not be kept as pets, whether licensed or not. That is because primates are intelligent and socially complex creatures. Their physical, behavioural and environmental needs mean that they cannot be kept properly in a household environment. However well-intentioned the keeper, their suffering is all but inevitable. I will press the Minister on what a good environment might look like. We heard what a bad environment looks like—the awful cases of people keeping primates in parrot cages—but what conditions are good enough? I do not think that that is set out in the Bill.
Primates kept in domestic settings are liable to experience a host of welfare issues that can result in profound physical and psychological harm. For good welfare, both physical and psychological health must be ensured. Primates need to be kept in social groups, in complex, specially designed indoor and outdoor facilities, as I have just said. Generally, when kept as pets, primates do not have access to such facilities, and sadly, all too often, owners lack knowledge and understanding of the species they own, with inevitably serious welfare implications. That is why we all want this to stop.
The Royal Society for the Prevention of Cruelty to Animals and the consultation on the Bill have exposed some awful stories of primates being kept in the kind of cages that I have described. They are also given unsuitable diets and can become sick as a result of not being exposed to proper light and heat levels. The evidence against keeping primates as pets is so strong that it has resulted in broad consensus among all those concerned with animal welfare that it should stop.
The danger of a licensing system, I am afraid, is that it will potentially allow the private owning, breeding and selling of pets to continue in perpetuity. This is not a ban; it is a licence. The RSPCA, Blue Cross and Wildlife and Countryside Link have all expressed their grave disappointment that the Government have opted for a licensing system rather than a ban. The British Veterinary Association has also raised concerns about the system.
We have identified a further inconsistency. Schedule 5, which the Committee will debate on Thursday when we come on to zoos, sets out the underlying principle of the Secretary of State’s zoo standards and licensing system: that as a society we do not approve of the keeping and breeding of animals in captivity unless there is a conservational and educational remit. Zoos are not allowed to keep animals for entertainment or hobby purposes only.
If privately owned primates are to be kept and traded under licence to the zoo welfare standard, frankly we think that the accompanying principles should be the same. It is widely recognised elsewhere in Europe that personal gain or hobby is not a sufficient justification for welfare compromises on the captivity of a wild animal. We believe that there is a need for a licensing system for genuine rescue and sanctuary, but that is different, and it would require clear definition and criteria.
Let us examine a further objection. The Government argue that the Bill will ban keeping primates as pets but will allow individuals who can keep primates to zoo quality standards to maintain ownership. A recent conversation with the RSPCA reconfirmed what is palpably obvious: whether an animal is deemed a pet is based on the purpose of keeping it, not on the standard of care. That position is backed up by the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018.
An animal kept in a domestic environment, however fancy and well equipped, is a pet. I know of several cats in Cambridge that live in the lap of luxury—not mine, sadly—with a quality of life high enough to please even the wealthiest of individuals, but it would be ludicrous to say that they are not pets.
The licensing system proposed in the Bill categorically fails to live up to the promises of the manifesto on which the Government were elected, which is why we have tabled amendment 91. I am afraid that it is for the Minister to explain why she does not think that the manifesto promise should be honoured.
Our amendment would put an end to keeping primates as pets. It would avoid the inevitable failures that I fear will result from the Government’s proposed licensing system—not least because, beyond allowing the practice of keeping pets as primates to continue, licensing will effectively create a sanctioned system for breeding and selling primates, as the RSPCA noted in oral evidence. That will do nothing to reduce the primate population; it could allow it to grow and could allow people to continue to profit from the domestic ownership of primates.
In the evidence session, we also heard the likely consequences of the Government’s expectation that local authorities with no extra resources will have to pick up the pieces of what we think is a flawed system. As we all know, the past 11 years have left local authorities struggling, to put it mildly. Most are struggling, and when it comes to animal welfare duties, I fear that many lack the experience and skills to carry out the task—a point to which we will return. Now it seems that the Government are proposing that primates whose keepers fail to meet the requirements of the licence should become the responsibility of the local council.
In our discussion of the Bill’s various clauses and amendments, there is an issue that I think the Committee should address. It is not clear what will happen to the potentially thousands of pet primates that will be taken from their owners as a result of measures introduced in the Bill. Whether there is a complete ban or a licensing system, that question really has to be addressed.
Beyond the care of primates whose keepers are unable to obtain a licence, there is also the question of enforcement. I fear that the system will put extra strain on councils. They will need to oversee licensing and conduct premise inspections, which are quite likely to have to be carried out by people who are not primate experts. Potentially, the system will also leave primates at the whim of a postcode lottery: their standard of care will vary significantly, depending on which council has responsibility for them.
Then there is the licensing. Despite the claims that the Bill will dramatically improve the welfare of primates, I am afraid that the Government are at risk of presiding over a situation in which animal welfare organisations are expected to give an opinion on licensing standards that they have not seen, and we in turn are expected to vote on licensing standards that we have not seen. This is an important decision, so we will press the amendment to a vote. There is a clear choice: a ban or a licensing system. The amendment will give many Committee members the opportunity to fulfil one of their election manifesto commitments if they come with us and ban the keeping of primates as pets.
The Minister of State, Department for Environment, Food and Rural Affairs (Victoria Prentis)
It is a great pleasure to serve under your chairmanship, Ms McVey. As I said at the conclusion of the Second Reading debate, this House has been passing animal welfare legislation since 1635. I very much view the Bill as being on that continuum. We try to deal with all creatures great and small, but we cannot do that in every single Bill. I view the Bill as part of the ongoing journey since 1635. I see it not as a wobbly supermarket trolley, but as being on a trajectory towards better animal welfare. I will focus my remarks on the Bill, when I can; we will deal with many amendments that seek to go broader.
“Primates are long-lived, intelligent, socially-complex animals. They engage in imaginative problem-solving, form intricate social relationships, and display complex patterns of behaviour. Being social is a striking feature of primates, and perhaps the most important in terms of meeting their needs. With few exceptions, they live in complex societies that can comprise tens of individual animals.”
That statement is found in our “Code of Practice for the Welfare of Privately Kept Non-Human Primates”. It is always worth remembering that we are all, of course, primates in the wider sense. That code sets important parameters within which primates thrive.
The amendment seeks an outright ban with no exemptions. We need to focus on the welfare of the primate. We propose a licensing scheme for primates who are kept outside zoos, but to very high zoo standards. The fear is that if we have an outright ban, as the amendment suggests, we would trigger a rehoming crisis, which might lead to primates being euthanised. It is possible that there are up to 5,000 primates being kept privately in the UK, and if a ban comes in overnight, they would overwhelm rehoming capacity.
We heard powerful evidence last week from Dr Jo Judge of the British and Irish Association of Zoos and Aquariums and Dr Alison Cronin of Monkey World, who both supported our approach. Dr Judge said:
“there are a number of responsible, registered—with BIAZA—keepers who keep their animals to…the highest level. We are very much in favour of banning
primates
“as pets but allowing a licensing system for responsible keepers.”––[Official Report, Animal Welfare (Kept Animals) Public Bill Committee, 9 November 2021; c. 24, Q32.]
Dr Cronin said:
“somebody’s back garden might have higher standards than…Monkey World”,––[Official Report, Animal Welfare (Kept Animals) Public Bill Committee, 9 November 2021; c. 29, Q41.]
which is her own organisation.
Some of these private keepers help zoos manage excess primate stock, including primates who, for temperamental reasons, are not suited to a zoo environment. In our public consultation on this issue, only 19 respondents out of 4,500 opposed our licensing scheme.
I reassure the hon. Member for Cambridge that as part of the new standards for keeping primates, the code of practice will be backed up with secondary legislation that will be subject to the affirmative procedure in this House, so we will have many more opportunities to consider the way in which they are kept, and I respectfully ask him to withdraw his amendment.
Daniel Zeichner
The Minister gives it a good try, and I do not dispute her good intentions, but I think there is a fundamental problem. A number of responsible keepers could mean anything from zero to 5,000, and we heard in evidence that numbers are relatively low. My worry is that the crisis that she talks about will happen regardless. That is the problem, and the Bill presents no solution to it, so far as I can see.
Victoria Prentis
I beg to move amendment 3, in clause 1, page 1, line 7, leave out “anywhere in England”.
This amendment results in Part 1 of the Bill applying to Wales. There follow a number of other amendments in the name of the Minister which enable Part 1 to operate in relation to Wales. Functions under Part 1 that in England are conferred on the Secretary of State will, in Wales, be conferred on the Welsh Ministers.
The Chair
With this it will be convenient to discuss Government amendments 71 to 78, 5 to 9, 79 to 81, 15 to 17, 19 to 25, 27 and 28, 30 to 35, 59 and 60, and 65 to 67.
Victoria Prentis
We have worked closely with the Welsh Government to ensure that the protections that this Bill provides to primates in England can be extended to Wales.
Daniel Zeichner
I am not going to make a longer speech. I am very pleased to see that the Welsh Government have come forward on this Bill. I am sure they would share many of the Opposition’s objections, but we are not going to go through amendment by amendment and query it. Clearly there are a lot of technical changes that have been made, and it would be in the interest of the Committee to get them through.
Amendment 3 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
This clause, as amended, will prohibit the keeping of primates in England and Wales without a primate licence unless the primates are being kept under another licensing regime, for example, the Zoo Licensing Act 1981. Anyone keeping a primate without a licence, or without being subject to an exemption, will be committing an offence and will be subject to the maximum penalty of an unlimited fine on conviction. The goal of this legislation is to ensure that primates are not kept in unsuitable welfare conditions that are bad for their health. Primates are wild animals with complex needs. Where keepers have sufficient knowledge, time and resources it is possible to meet a primate’s needs in private ownership, as it is in a zoo or rescue centre. I therefore move that this clause stand part of the Bill.
Daniel Zeichner
This is the nub of the question: is it possible for these creatures to be kept in these kind of standards? I am not sure if the issue is whether it should be private or public ownership. We will possibly come back to the definition of zoos, rescue centres and sanctuaries, which prompt some big questions. There is a profound difference of opinion here. When one sees the documentaries one is struck by how complex and sophisticated these creatures are. There has been a long philosophical debate over the centuries considering our relationship with these complicated creatures, and I suspect that this is not the end of the story. I fear that we will look back—I am not sure we all will, but some of us will—in decades to come and think that we could have moved quicker towards a position where we treat these creatures with the respect that they deserve. I fear we have not gone far enough today. I suspect that we are now going to go on to discuss the details of a licensing system, but the Opposition do not think that there should be one.
Question put and agreed to.
Clause 1, as amended, accordingly ordered to stand part of the Bill.
Schedule 1
Transitional provision relating to primates
Amendment made: 71, in schedule 1, page 34, line 7, after “regulations” insert—
“made by the appropriate national authority”.—(Victoria Prentis.)
This amendment provides that regulations under paragraph 1(1)(a) of Schedule 1 are to be made by the appropriate national authority.
Daniel Zeichner
I beg to move amendment 115, in schedule 1, page 34, line 15, leave out—
“basic welfare needs of the primate”
and insert —
“welfare needs of the primate as required by the Animal Welfare Act 2006 and the Code of Practice for the welfare of privately kept non-human primates”.
This amendment would clarify that keepers must meet the Animal Welfare Act requirements and the associated Code.
The Chair
With this it will be convenient to discuss amendment 114, in clause 15, page 8, line 29, leave out—
“basic welfare needs of the primate”
and insert—
“welfare needs of the primate as required by the Animal Welfare Act 2006”.
This amendment would clarify that keepers must meet the Animal Welfare Act requirements and the associated Code.
Daniel Zeichner
We are obviously disappointed that we are on to these amendments, because we hoped the strength of our arguments would see the overwhelming weight of the Government machine defeated. We are where we are, but I say to Conservative Members, the Government are not that scary—though perhaps they are scary actually, as I am terrified.
Labour will continue to work in collaboration with animal welfare groups, zoos and primate experts in pushing for a full ban. That will remain one of our key animal welfare policies, and it may well become an issue at any future election. However, if the Government are determined to steam ahead with—as we call it—this manifesto-breaking primate-licensing system, it is important that we get as good a system as we can, so we will begin to go through the proposals in detail.
I have one observation, which I will probably come back to: given the numbers of people to whom this licensing system might apply, we will spend a lot of time and effort on a very complicated system. Furthermore, I notice that, under a clause later in the Bill, the system could be modified for use for other creatures. Is this something of a Trojan horse? The Minister looks entirely innocent, of course.
We might need to think about the system in those terms, however, because a system that is suitable for primates might not necessarily be suitable for other creatures. Given how this place works, such changes can be made through regulations and, even though we euphemistically say that that is subject to rigorous parliamentary scrutiny, we know full well that for anything in regulations to be overturned is rare—it is hard to do—so we are thinking about the measure in wider terms than just primates. I cast that as a warning.
Our amendments 115 and 114 seek to improve the welfare of primates by altering the language of the Bill to ensure that, during the transition period proposed by the Bill and during suspension periods, keepers are obliged to ensure that primates’ welfare meets the standards required by the Animal Welfare Act, to which I have referred. The Act sets out a broad set of principles that will be useful in the Bill, to apply to any licensing system such as this one. I hope the Government do not have a problem with our proposal. The wording in the Bill seems a touch meagre, because it requires keepers to fulfil only the
“basic welfare needs of the primate”.
The amendments strengthen the schedule
I hope that the Minister will explain the thinking behind the temporary, transitional registration approach. I found the extra level slightly hard to follow. I understand the concerns about a possible sudden rush, and about how we do not wish to create a welfare crisis, but if the system only lasts for a year, the real danger is that we just postpone the point at which that rush and the problem begin to happen.
I might have misunderstood the nature of the proposal, which may not be there just for a year, in which case it becomes a permanent transition—[Interruption.] The Minister is shaking her head, so I possibly have understood it correctly. In the evidence sessions, the Committee did not explore that as closely as we perhaps should have done, because we will have a licensing system and a transitional registration system.
We will not press our amendment to a vote. This is a genuine attempt to understand what the Government propose. I continue to fear that it has not been thought through fully, in part because the problem is so difficult. I will welcome the Minister’s comments.
Victoria Prentis
Amendment 114 states that primates kept under direction must have their welfare needs met as laid out under the Animal Welfare Act, as the hon. Gentleman said. We all agree, of course—but we disagree with the need to restate it. Requirements under the Animal Welfare Act are not negated by the Bill; they simply do not need to be repeated by the Bill.
Amendment 115 requires keepers to adhere to the Animal Welfare Act—of course—and to the code of practice for primates, which I made reference to earlier. Primate keepers are already required to do both those things. The code explains what keepers must do to meet the requirements of the Animal Welfare Act. Again, that does not need restating. I would, however, like to take the opportunity to allay some of the hon. Gentleman’s concerns about the transitional period.
Daniel Zeichner
I hear that, and I am grateful for the clarification that it effectively adds up to two years. However, I still do not understand where the Government think these creatures are going to go.
Victoria Prentis
Part of the issue, as we heard in evidence, is that we are not clear on how many primates are in private ownership. That is why we thought very carefully about the new licensing system. As people will initially have to register their primates, we will then know the extent of the problem. We are working extremely closely with rehoming centres and zoo centres to make sure that within that two-year period there will be places for all the primates that need to be rehomed. The system will give local authorities time to determine the scale of ownership, and rehoming centres willing and able to take on new primates will have time to prepare to do this once we know the scale of the problem in each area.
That is why, instead of an outright ban as suggested in previous amendments, we have selected this licensing system as the most humane way to go, and the way that we hope will lead to healthy primates not needing to be euthanised. I therefore respectfully ask the hon. Gentleman to withdraw his amendment.
Daniel Zeichner
This has been a useful exchange, although it also shows some flaws in the way we do things in this House, in the sense that we are having to divine the Government’s thinking through pulling apart legislation. It would be helpful to have an overview of what is trying to be achieved. I have genuine sympathy, as this is a very difficult problem. However, I remain unconvinced. In the evidence session, I asked a witness—I believe it was the RSPCA, right at the beginning—that if I were to wander around my constituency, would I randomly come across people who keep primates? To my astonishment, the answer was yes, although I will not be breaking into people’s gardens to look.
However, I am sceptical about the likelihood of the kind of people who behave like that coming forward to register in a timely manner to allow the local authority to respond in a rational way. I fear it is far more likely, as is often the case with new legislation, that a few law-abiding, sensible people will come forward, but the vast majority will not. Therefore, we will end up—at the halfway point or at two years—with the exact same problem we had at the beginning. I do not think we will have come any further forward. I do not have a clear solution to this problem, but I am sceptical as to whether the Government have a solution to it either.
We will not push this amendment to a vote, but I do think we have learned something. I suspect that as we continue this process, there will be more discussion, more thought, and maybe some suggestions as to how we can resolve it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 72, in schedule 1, page 34, line 19, leave out “Secretary of State” and insert “appropriate national authority”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 73, in schedule 1, page 34, line 23, leave out from “who” to “may” in line 24 and insert,
“meets the application condition in relation to a primate”.
This amendment relates to the application of Part 1 to Wales (see the explanatory statement to Amendment 3), and provides that an application for registration under the Schedule may be made if the application condition (see Amendment 76) is met.
Amendment 74, in schedule 1, page 34, line 25, after “regulations” insert,
“made by the appropriate national authority”.
This amendment provides that regulations under paragraph 3(1) of Schedule 1 are to be made by the appropriate national authority.
Amendment 75, in schedule 1, page 34, line 26, after “premises” insert,
“in which the primate is kept”.
This amendment provides that applications under this Schedule are to be made to the local authority in whose area the primate is kept.
Amendment 76, in schedule 1, page 34, line 26, at end insert—
“(1A) “The application condition”, in relation to a primate, means—
(a) in the case of an application to a local authority in England, that the individual kept the primate in premises in England or Wales immediately before the date specified under paragraph 1(1)(a) in regulations made by the Secretary of State;
(b) in the case of an application to a local authority in Wales, that the individual kept the primate in premises in England or Wales immediately before the date specified under paragraph 1(1)(a) in regulations made by the Welsh Ministers.”.—(Victoria Prentis.)
This amendment sets out the condition that must be satisfied for an application under paragraph 3(1) of the Schedule to be made.
Question proposed, That the schedule, as amended, be the First schedule to the Bill.
Victoria Prentis
The schedule introduces the transitional registration scheme that we were just talking about, for those who keep primates before the prohibition in clause 1 comes into force. The schedule will cease to have effect one year after the prohibition of keeping a primate under clause 1 comes into force.
Daniel Zeichner
I do not have much to add, other than that I am not sure the general discussion has fully appreciated the role that this schedule plays in the transitional process. As I have already suggested, I have some worries as to how successful it is likely to be. I suspect the numbers will be low. I hope I am wrong. I am not sure how the Government plan to promote this, or how people who should register will know about it or how they will be prompted. A range of questions comes to mind. I can see what the Government are trying to do with this measure, but I am sceptical about its chances of success. Let us hope it helps us find a way out of this tricky situation.
Question put and agreed to.
Schedule 1, as amended, accordingly agreed to.
Schedule 2
Offences relating to primates: fixed penalty notices
Amendments made: 77, in schedule 2, page 38, line 30, at end insert
“in the case of local authorities in England, or the Welsh Consolidated Fund in the case of local authorities in Wales.”
This amendment and Amendment 78, taken together, provide for sums received by local authorities in Wales under Schedule 2 to be paid into the Welsh Consolidated Fund, subject to deduction of investigation costs.
Amendment 78, in schedule 2, page 38, line 31, after “Fund” insert “or Welsh Consolidated Fund”—(Victoria Prentis.)
See the explanatory statement to Amendment 77.
Question proposed, That the schedule, as amended, be the Second schedule to the Bill.
Victoria Prentis
The schedule allows a local authority to issue fixed penalty notices where it is satisfied that the person has committed an offence relating to the keeping, breeding or transferring of primates. Fixed penalty notices will allow local authorities greater flexibility in their enforcement of the offences outlined in part 1, and will alleviate some of the burden on them associated with pursuing prosecutions through the courts, which can take time and money. It also allows a more proportionate response to lower-level offending and will enable us to act quickly to ensure that primates are kept in appropriate conditions.
Daniel Zeichner
Again, there is not a great deal to be said, other than, as with my earlier observation, that we are setting up a complicated system—understandably, if one assumes that the licensing system is likely to work. I wonder how many cases we will actually see processed through this system.
There is one point I do worry about: as I read it, if someone pays the fixed penalty notice within the relevant period of 14 days, it is a bit like a parking ticket, in that there is a 50% reduction, and there will be a fine of only £2,500. Given the costs and the scale at which some who keep primates might be operating, I wonder whether that is a sufficient deterrent. To some extent that touches on another piece of legislation in the Government’s animal welfare action plan, which is the private Member’s Bill on fixed penalty notices, which I believe will soon be going to Committee. In the Second Reading debate on that Bill, I raised the concern that although I understand the benefit to enforcement agencies of having an extra, more flexible tool in the box, there is a potential risk that one could end up diminishing the severity of the penalty for the more serious offences. I feel that that is beginning to creep in here. I do not want a situation in which people for whom £2,500 is not a great deal of money just feel that this fine is like a parking ticket—they do not really bother about it and can carry on doing what they are doing. That is cause for concern, and I would welcome the Minister’s comments.
Victoria Prentis
I will be brief. The fixed penalty notice as a tool in the toolbox is a very good description. I remind the Committee that, of course, if the ultimate offence, which we have just created and which is to keep a primate without a licence, is committed, the fine is unlimited.
Question put and agreed to.
Schedule 2, as amended, accordingly agreed to.
Clause 2
Primate licences
Victoria Prentis
I beg to move amendment 4, in clause 2, page 2, line 6, after “species” insert “at such premises”.
This amendment spells out that a primate licence must specify the premises to which it relates.
The Chair
With this it will be convenient to discuss Government amendments 10 to 14 and 18.
Victoria Prentis
The purpose of the amendments is to strengthen the functions of local authorities under the new licensing regime. Amendment 4 will ensure that the premises where the primate is kept are stated on the licence. Amendments 10 and 14 allow local authorities to take into account any previous failure of the applicant to meet licensing standards, and any other conduct of the applicant that is deemed relevant, when deciding whether to grant or renew a licence.
Amendment 12 allows local authorities to decide whether to grant an application to vary the licence of an applicant who wishes to reduce the number of primates specified on their licence. That may not always be appropriate, as primates are social animals and a minimum social grouping size may well be needed to ensure that they thrive.
Amendment 11 makes it clear that licence holders may apply to vary the specified premises on their licence only when the new premises are located in the same local authority area. Amendment 13 provides that where the licence holder moves the primate to new premises, the local authority will be required to arrange an inspection before granting the application. Amendment 18 ensures that any guidance issued to local authorities on the implementation of the primate licensing regime is made publicly available.
Amendment 4 agreed to.
Daniel Zeichner
I beg to move amendment 105, in clause 2, page 2, line 8, leave out “six” and insert “two”.
This amendment would reduce the length of a licence from six years to two.
You will be delighted to know, Ms McVey, that this is not a complicated amendment. This is basically the question of how long the licence exists for. We think that six years is too long. I think that evidence was given by some of the witnesses that agreed with us on that. We think that two years might be a more appropriate period. I suspect that, under other amendments, we will come to the issue of who is really suited to do these kinds of checks. My suspicion is that the average local authority, because it is a district local authority, is going to struggle to have this expertise. To some extent, it could be argued that if it were going to struggle every six years, it would struggle even more every two years, but we think that this is a flawed system and that six years is just too long. We would rather the checks be more frequent, although overall, as I have said before, we would rather the provision not be needed at all.
Victoria Prentis
We believe that six years is the right length for a primate licence. The length of the licence and the number of inspections, which I will detail in a minute, is in line with the Zoo Licensing Act 1981 and the Dangerous Wild Animals Act 1976. Before a licence is granted in the first place, the primate will be assessed by a veterinary surgeon. The six-year licensing period then involves at least two more inspections by an inspector appointed by the local authority. We anticipate that those inspections will be spaced relatively evenly over the six-year period.
We are also looking very carefully at, and working with expert groups on, what we can put in the regulations about the care of primates. For example, we might look at making an annual vet visit a requirement. I therefore ask that the hon. Gentleman withdraw the amendment.
Olivia Blake (Sheffield, Hallam) (Lab)
Is the licensing scheme aimed at encouraging people to no longer keep primates as pets? Perhaps six years gives the impression that this is an okay practice to continue in perpetuity, while two years would perhaps accelerate the process of people no longer wanting to keep primates as pets.
Victoria Prentis
For the reasons we set out in earlier debates, the aim of this legislation is to ensure that primates are kept to very high—at least zoo-level—welfare standards and that those who keep them comply with those conditions. It is for that reason that we put in the six-year period, in line with other zoo and dangerous wild animal licensing regimes. We very much view this provision as part of that package. There will be regular inspections throughout that period, and the main thing is to ensure that the primate is properly kept.
Olivia Blake
I assume that the licensing will provide some financial benefit to local authorities so they are able to undertake this work. Will the pricing of the six-year licence guarantee that they are able to provide the necessary services? Would a two-year licence not provide more income for local authorities so that they can do the work asked of them?
Victoria Prentis
That is a fair question. Local authorities will be able to charge fees, both for any initial licence application and for registration under the transition scheme that we talked about. They will also be able to charge fees in respect of any inspections carried out under the licensing regime. The fees will enable the local authority to recover any costs that it incurs as a result of carrying out these activities. We hope that the ability to charge fees will minimise the burden placed on them in implementing the legislation, although I accept that they will have to do additional work.
We are very much co-developing the guidance on the implementation of these primate measures with local authorities. That work has already started and the group is discussing issues such as the appropriate level for fees to be set at, what sort of help local authorities will need and what training inspectors might need to enable them to comply with the provisions.
Daniel Zeichner
It is interesting listening to the Minister, because there is a fundamental difference of opinion here. Of course, the welfare of the primate is paramount, but I took her to say that we are talking about having high enough standards for primates to be allowed to be kept under a licensing system—that goes back to the opening debate. However, there is a fundamental difference of opinion here: we do not think that primates should be kept—full stop. In zoos, and in some research establishments sadly, we still need them—in zoos, they are for specific conservation and educational purposes. However, I do not see the case for this licensing system. There is a clear divide here.
Six years is far too long. As my hon. Friend the Member for Sheffield, Hallam said, it is an encouragement. Essentially, it says, “It’s okay. If you have the money and you can afford to do it, it is okay.” Well, it is not okay, and we do not think that it should be happening, so we will press this amendment to a vote.
Victoria Prentis
As we have heard, the clause specifies the number and type of primate that licence holders are permitted to keep. It will ensure that licence holders keep neither more primates than they are capable of caring for nor species that they do not have the facilities or expertise to keep.
Clause 2, as amended, ordered to stand part of the Bill.
Clause 3
Licensing standards and other requirements
Amendment made: 5, in clause 3, page 2, line 11, leave out “Secretary of State” and insert “appropriate national authority”.—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Daniel Zeichner
I beg to move amendment 106, in clause 3, page 2, line 15, leave out “may include” and insert
“must include but are not limited to”.
This amendment would place a responsibility on the Secretary of State to include fundamental welfare requirements in the licencing conditions.
The Chair
With this it will be convenient to discuss the following:
Amendment 107, in clause 3, page 2, line 21, at end insert—
“(g) their social grouping.”
This amendment would add the social grouping of primates to standards that can be included under licensing conditions.
Amendment 108, in clause 3, page 2, line 21, at end insert—
“(g) microchipping of any primate kept under the licence.”
Amendment 109, in clause 3, page 2, line 22, leave out “may” and insert “must”.
This amendment would require microchipping of licensed primates, and require licence holders to provide specific information to local authorities.
Daniel Zeichner
I am slightly surprised that we needed to table this set of amendments, which concern the limited scope and lack of clarity on what the standards will be. We have discussed before what should be in the Bill and what should be left to regulation. In time-honoured fashion, I suspect that the Opposition want more and the Government want less. We may well find our positions reversed in a few years—who knows? Although I understand the case for flexibility and the need to adapt to changing circumstances, we think that more could be put in the Bill, which would give people more confidence that the welfare concerns that we all share are being addressed properly.
It is disappointing that the standards that the licensing system will be expected to achieve are not being published. As you know, Ms McVey, we do not think that the licence system is the way to go, but if we are to have one it needs to be tough and robust. I thought that there would be more on that in the Bill than there appears to be. Again, those of us who have been on Bill Committees before have discussed the distinction between “may” and “must” on many occasions. It is a familiar debate and, I suspect, one that the Minister will respond to in the traditional fashion. We would like to see the language toughened up so that these things must be there.
The options listed in the Bill are:
“(a) the environment and accommodation that primates need;
(b) their diet;
(c) provision for their behavioural needs;
(d) their handling;
(e) their transportation;
(f) protecting them from pain, suffering, injury and disease”,
all of which, of course, we strongly concur with. However, any licensing standards supposedly as high as those of a zoo will surely need to include standards on all those things and more. The theme that has perhaps come through in our debate this morning is the difficulty of distinguishing between the levels and standards in the various places in which primates might end up residing: zoos, sanctuaries, rescue centres, or private accommodation. There lines between those are fairly hazy.
At the end of this process, one of the questions that anyone looking at the legislation in the round will be asking themselves is whether those criteria have been accurately set out and defined. I am not convinced that they have been. If one were being generous to the Government, which of course I am, one would say that this can be achieved through regulation, but sceptics would then say, “That’s not much of a guarantee.” We are here to try and make sure that it actually happens. As such, our amendment 106 would alter the language in the Bill to ensure that the Secretary of State includes in the licensing conditions all the fundamental welfare requirements I listed earlier. However, we do not think that list is exhaustive. Following discussions with the Royal Society for the Prevention of Cruelty to Animals, we think it is essential that provisions covering the social grouping of primates be included in the licensing standards.
I suspect that Members on all sides of the House will agree with what I am about to say: we know that primates, including ourselves, are highly social creatures, and to prevent primates from socialising adequately with other primates causes a great deal of suffering and lasting damage. I am told that isolated primates may mutilate themselves, become severely depressed, pluck their own hair, or show abnormal behaviours, and some even die prematurely. I do not think any of this comes as a surprise to us, because we know how close those creatures are to us, and we know that all those things happen when people are subjected to solitary confinement, which is effectively what we may be risking without specifying these provisions for primates. As such, our amendment 107 is essential to ensuring that any licensing system for primates takes into account their social groupings and, at the very least, prevents any primate from being kept on its own. Other than the fact that the Government refuse to ever accept amendments, I cannot see any logical reason why an amendment like this should not be accepted, but I live in the real world.
Finally, I will briefly discuss amendments 108 and 109 which, taken together, would require all primates kept under licence to be microchipped. We will probably come back to microchipping later in the Bill, but we think it would be sensible to include microchipping in the licensing standards. Microchipping has become an essential part of animal care. It is a safe, effective and permanent way to identify individual primates, and would ensure the traceability of any primates kept under the new licensing scheme. That is quite an interesting point. I think there is a further clause that touches on some of this, which we will come on to in a moment, but clearly we are relying on the keepers to provide the information. Given that not all of them are necessarily to be relied upon, and some are trading for financial gain, it would seem sensible to have a way of identifying the individual creature.
My understanding is that this proposal received broad support in the consultation on the keeping of primates as pets, so I was surprised to find that such a measure was not included in the Bill. I hope we can help the Government by proposing these sensible amendments, which I am sure they will adopt.
Victoria Prentis
The code I referred to earlier, which I would be delighted to share with the hon. Gentleman, already applies. It goes into some detail about the importance of social interaction for primates and the way in which they should be kept. As I said, the regulations will develop the specifics and we are actively working on them with experts in the field. I would be delighted to share with the hon. Gentleman the details of that process as it continues.
We intend to introduce microchipping for licensed primates, but not where that is harmful, which it may be in a few exceptional cases. Microchipping primates is a significant procedure. It can require anaesthetic and carries a degree of risk to more vulnerable primates. There will be cases where exemptions to microchipping are needed—for example, if a primate is elderly or in ill health. As the hon. Gentleman said, primates are closely related to us and I sympathise with that position. Microchipping will be set out in the regulations, however, and we need to work slowly and carefully with the sector to come up with the right set of exemptions.
We also think that licence holders should provide key information to local authorities, including on primate births, deaths or transfers. That can be set out in secondary legislation, after we have worked with relevant experts. As we develop our standards, we are consulting widely. We want to set the bar high and aim for zoo-equivalent standards, and we need to ensure that the standards include species-specific requirements. Some of these are set out in the code, but learning has developed since the code was written, and it is important that we have the most up-to-date advice.
We need to work in a collaborative and expert-led way. I do not want to presuppose exactly what the standards should be now, so we will introduce our licensing standards via regulations made under the affirmative procedure and Parliament will be able to scrutinise their detail. I ask the hon. Gentleman to withdraw the amendment.
Olivia Blake
I want to talk a little more about social groupings. We do not need to be experts in the field to know that this is an important standard that should be met under any licensing conditions. It is incredibly important that it is on the face of the Bill and I would be pleased if the Government thought again.
On the issue of microchipping, I accept that there might be some stress for certain animals, but “may” is too weak a word. If we are asked for exemptions, and as long as the exemptions are clear, “must” is entirely acceptable.
Although microchipping can help us trace animals, I am concerned that there is no standard way in which it is done across local authorities. As we know from other types of microchipping, there has been confusion about different systems. Given the nature of primates, without a microchipping system or some other relevant form of identification, I am concerned about how people would know if the primates they are looking at today are the same primates they looked at five years ago,.
Daniel Zeichner
I listened to the Minister carefully and I too would not want to go against expert advice on this matter. As my hon. Friend the Member for Sheffield, Hallam just said, we would like to see the issue addressed more strongly in the Bill, rather than in guidance and advice, but I hear what the Minister says.
We will have a longer debate about microchipping in relation to other parts of the Bill. It is complicated, not least because of the way the various databases have grown up, probably in a rather disorganised and difficult way, which makes access to them complicated for vets.
I heard the Minister’s point about the difficulty of microchipping primates. The Whips do not yet have plans to microchip MPs, have they? I am looking at the hon. Member for South Derbyshire. I am sure it could be useful under some circumstances.
Daniel Zeichner
Yes. We will all do exactly as we are told.
I understand the Minister’s arguments, so we will not press this amendment to a vote, but I hope she heard our points. There are challenges involved in dealing with creatures that are so close to us. We want to make sure they are treated properly and respectfully. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 6, in clause 3, page 2, line 22, leave out ‘Secretary of State’ and insert ‘appropriate national authority’.
This amendment relates to the application of part 1 to Wales. See the explanatory statement to amendment 3.
Amendment 7, in clause 3, page 2, line 28, leave out ‘Secretary of State’ and insert ‘appropriate national authority’.
This amendment relates to the application of part 1 to Wales. See the explanatory statement to amendment 3.
Amendment 8, in clause 3, page 2, line 29, leave out ‘Secretary of State’ and insert ‘appropriate national authority’.—(Victoria Prentis.)
This amendment relates to the application of part 1 to Wales. See the explanatory statement to amendment 3.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause sets out that the Secretary of State will provide licensing standards via regulations for the care and management of primates kept under the licence. They will be developed in close collaboration with experts on primate welfare. The licensing standards will be introduced via regulations made via the affirmative procedure and we will have the chance to scrutinise them.
Daniel Zeichner
To reprise the debate: as ever, the danger with licences that may include things is that they may not. While we have no reason to not trust the Government on that, we would much rather it were stronger. We see no reason it could not have been strengthened in the Bill and although we will not push to a vote, we continue to worry that far too much has been left to regulation.
Question put and agreed to.
Clause 3, as amended, accordingly ordered to stand part of the Bill.
Clause 4
Applications
Amendment made: 9, in clause 4, page 2, line 32, leave out ‘in England’.—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to amendment 3.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The Bill provides for the creation of a primate licensing scheme that exempts licence holders from the prohibition on keeping primates in England and Wales. Clause 4 outlines who is eligible to apply for a primate licence and the steps involved in the application process. The clause is necessary for establishing a common set of application principles.
Daniel Zeichner
I have little to add, other than to say, yet again, that we worry about the licensing system. I was quite struck by clause 4(4)(a), in which the application was to state the “name and sex” of the primate. That brings home to us that this is different from many other animal regulations, although we all ascribe names to our pets. This is almost like the registration of a birth or a death and it reflects the different way in which we treat primates compared with other creatures. I find it both moving and slightly chilling, because we are saying that a creature has a name that is recorded that we are allowing, under licence, to be imprisoned or kept as a pet. That does not feel right.
Question put and agreed to.
Clause 4, as amended, accordingly ordered to stand part of the Bill.
Clause 5
DETERMINATION OF APPLICATIONS
Daniel Zeichner
I beg to move amendment 110, page 3, line 27, leave out “veterinary surgeon” and insert
“competent veterinary surgeon with appropriate specialist expertise in the health and welfare requirements of the species the licence relates to”.
This amendment would require premises inspections for licence applications be conducted by a competent veterinary surgeon with appropriate specialist expertise in the health and welfare requirements of the species the licence relates to.
The Chair
With this it will be convenient to discuss the following:
Amendment 111, page 5, line 10, leave out “veterinary surgeon” and insert
“competent veterinary surgeon with appropriate specialist expertise in the health and welfare requirements of the species the licence relates to”.
This amendment would require that premises inspections for licence renewals be conducted by a competent veterinary surgeon with appropriate specialist expertise in the health and welfare requirements of the species the licence relates to.
Amendment 112, in clause 10, page 6, line 20, at end insert—
‘(1A) For the purposes of paragraph (1)(a), a “suitable person” means a person with appropriate specialist expertise in the health and welfare requirements of the species the license relates to who is—
(a) a competent veterinary surgeon; or
(b) a competent zoo inspector appointed by the Secretary of State.”
This amendment would require enforcement inspections to be conducted by a competent veterinary surgeon or a competent zoo inspector appointed by the Secretary of State who has appropriate specialist expertise in the health and welfare requirements of the species the license relates to.
New clause 9—List of competent veterinary surgeons and zoo inspectors—
“The Secretary of State must compile a list containing the names of competent veterinary surgeons and competent zoo inspectors with appropriate specialist expertise in the health and welfare requirements of primates and make this available to local authorities.”
Daniel Zeichner
The amendments are about the level of expertise required of a veterinary surgeon. Our view is that more specialist expertise is required for primates. Looking to expertise in the room, the hon. Member for Penrith and The Border may wish to comment.
All veterinary surgeons have skills and qualifications, but given that this will be a relatively unusual occurrence one wonders whether they will be in the right place to do what is needed. I understand that a range of organisations, including Born Free, the RSPCA, Wild Futures, the British Veterinary Association, the Ape Alliance and others have expressed concern that premises inspections for licences, renewals and check-ups should be conducted only by competent veterinary surgeons with suitable knowledge and experience of primates. We have discussed how infrequent those checks could be. We do not know what the geographical spread will be, so it is possible that people will be doing this very rarely. Therefore, the question is: do they fully appreciate what is required?
I hinted earlier that the Government have failed to spell out the ideal conditions. I understand that further work may be done in regulations and so on, but, as we have just been reflecting, these creatures have extremely complicated welfare needs. They are long-living, intelligent —highly intelligent, in some cases—social animals. It is hardly surprising that many animal welfare organisations believe that a high level of expertise should be a prerequisite of assessing whether a keeper will be able to provide the right environment for a primate.
Amendments 110 and 111 address the aspects of the Bill that cover premises inspections for licence applications and renewals, which under the Bill currently can be carried out by a veterinary surgeon. An average veterinary surgeon will have a broad and extensive knowledge of a wide variety of animals, but how rarely will this arise? I genuinely do not know how many primates the average vet sees, but I guess it is a few. I shall happily take an intervention from a vet. How many primates does the average vet see?
Dr Neil Hudson (Penrith and The Border) (Con)
I declare an interest as a veterinary surgeon. I am not competent or experienced when it comes to treating or examining primates, and that is the nub of the point that the hon. Member for Cambridge is making. I am sympathetic to what he is saying.
When veterinary surgeons train, certainly in this country, they have the potential to practise on any species; they are described as being omnipotential. That is very different from being omnicompetent. The hon. Gentleman’s amendments are very sensible, but I respectfully disagree with the detailed wording. Committee members will recall the evidence we took from the president of the British Veterinary Association about the term “specialist”—unfortunately, the amendments contain the word “specialist”. In the veterinary world, that will conflate and confuse the issue. As the president of the BVA said, she is not a specialist as per the definitions, but she is experienced in zoo medicine, having worked in it for many years.
Daniel Zeichner
I am grateful to the hon. Gentleman for his expertise. When I looked through the amendments last night, I sighed, realising that he was very likely to make exactly the point he has just made.
I hope the Minister has heard the broad gist of what has been said. We do not know the numbers who will come forward through the licensing system, but even if it were the upper limit of 5,000, there are, I am told, 10.8 million cats in the UK. That gives one a sense of how likely it is for any individual vet to be asked to provide an opinion on these cases and it offers a comparison with what they do in their normal daily work.
Amendment 110 is as drafted on the amendment paper, but there may be scope down the line to revisit the issue. It is important that we get this right. We can help local authorities by making sure that the Government sort out a list of people who have the necessary skills. As I have already hinted, I worry that the average district council will consider the issue and wonder how it will cope with the provisions in the Bill. Clearly there are parts of the country where zoos and rescue centres have the necessary experience, but there will be other parts where they do not. If they came up against an application, they would struggle and it would make it far simpler if the Government did what we are suggesting and compiled a list of the names of competent veterinary surgeons and zoo inspectors who have the skills to carry out the work.
Despite the suggestions from the hon. Gentleman, we think the issue is sufficiently important for us to push it to a vote. We know what the outcome will be, but we want to put it on the record that the Government should take another look at the issue. When the Bill is passed, we hope it will have been improved in this regard.
Victoria Prentis
We all agree that those carrying out inspections should be competent to do so. With his depth of knowledge, my hon. Friend the Member for Penrith and The Border reminded us that vets have established competency standards. It is important that the regulations use the right terminology—competency, experience and expertise—as they are developed.
We have provided flexibility in the Bill about who can undertake inspections. The aim of that was to avoid creating delays to licence processing, which could be bad for primates awaiting inspection. We are looking to support training for vets and inspectors so that they have the right knowledge to carry out inspections. We hope that the training will increase the pool of people local authorities can call upon. I say once again that primates vary enormously: someone with expertise in one type of primate may well not be competent to deal with another.
We will certainly include material on the selection of inspectors as part of our guidance for local authorities—the list that the hon. Member for Cambridge wanted—and we intend to ensure that local authorities are given details of suitably qualified inspectors, including specialist vets and vets who have undergone primate training.
Local authorities already undertake a lot of that work for us in the space of zoo inspection and dangerous wild animal inspection. They can already request information on competent zoo inspectors from the Animal and Plant Health Agency. We do not need to include that in the Bill, but I will look carefully, having heard the debate, at the language that we use in regulation. I respectfully ask that the amendment be withdrawn.
Daniel Zeichner
This has been a helpful discussion—hopefully, we will come to a sensible resolution. I hear what the Minister says about the advice and guidance. My reflection, having been some years ago a district councillor in a rural area that had some areas that needed to be licensed, is that we struggled with expertise.
Much of the discussion in the end is not so much about primates but about licensing, and how we go about it. Having spent a number of years trying to get the taxi licensing system improved, I am beginning to draw on my conversations with the National Association of Licensing and Enforcement Officers; I remember some of the complexities that can be brought up. None of this is simple or easy. We need expert advice, and the right people. If we do not have them, we will not get a very good outcome. We think that amendment 112 is sufficiently important to vote on, but I will withdraw the others.
Dr Hudson
I support the Government on this issue, but we heard evidence last week that the number of veterinarians with the relevant competence and expertise to look at primates is unclear, but in the order of 50. If we had the word “specialist” in the Bill, we could whittle that down to single figures—or it could be 10 or 20 —because that term means that a person has either their royal college boards or their European college, American college, Australasian college or many others, and that then the Royal College of Veterinary Surgeons has accredited them as a specialist.
The current wording would really complicate things. I strongly urge the Minister and the Government to take on board the Opposition’s comments about competence and experience so that the licensing protocol is not merely a box-ticking exercise by someone who will potentially be very much out of their comfort zone.
Daniel Zeichner
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 10, in clause 5, page 4, line 1, at end insert—
“(4A) For the purposes of subsections (2) and (3) a local authority may take into account—
(a) any previous failure by the applicant to meet the licensing standards, and
(b) any other conduct of the applicant that is relevant.”—(Victoria Prentis.)
This amendment allows a local authority to take previous breaches of the licensing standards, and other relevant conduct, into account when making determinations under clause 5(2) and (3).
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause outlines the steps that local authorities will take when determining an application for a primate licence. The clause ensures that a licence is granted to those who have demonstrated that they are able to keep primates to the required standards, while ensuring that local authorities have the flexibility to make allowances for those who are very close to those standards but have not yet quite met them.
Question put and agreed to.
Clause 5, as amended, accordingly ordered to stand part of the Bill.
Schedule 3
Decisions relating to primates: representations and appeals
Amendments made: 79, in schedule 3, page 39, line 32, leave out “First-tier Tribunal” and insert “appropriate tribunal or court”.
This amendment, together with Amendments 80 and 81, secures that appeals under Schedule 3 in Wales are made to a magistrates’ court.
Amendment 80, in schedule 3, page 39, line 34, at end insert—
“(2) In this paragraph and paragraph 9, ‘appropriate tribunal or court’ means—
(a) in relation to an appeal relating to the decision of a local authority in England, the First-tier Tribunal;
(b) in relation to an appeal relating to the decision of a local authority in Wales, a magistrates’ court.”
See the explanatory statement to Amendment 79.
Amendment 81, in schedule 3, page 39, line 35, leave out “First-tier Tribunal” and insert “appropriate tribunal or court”.—(Victoria Prentis.)
See the explanatory statement to Amendment 79.
Question proposed, That the schedule, as amended, be the Third schedule to the Bill.
Victoria Prentis
The schedule clearly sets out the circumstances in which a person may appeal a local authority’s decision. That includes decisions on applications for a primate licence or registration, rectification notices issued under a primate licence or registration, and the revoking or amending of a licence to keep primates.
Question put and agreed to.
Schedule 3, as amended, accordingly agreed to.
Clause 6
Conditions
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause places the requirement on licence holders to meet certain conditions in order to fulfil their obligations.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Variation and surrender
Amendments made: 11, in clause 7, page 4, line 26, at end insert—
“to other premises in the area of the same local authority”.
This amendment clarifies that a local authority can only vary the premises to which a licence relates if the new premises are in its area.
Amendment 12, in clause 7, page 4, line 29, leave out—
“reduce the number of primates or”.
This amendment has the effect that a local authority is not required to grant an application to reduce the number of primates to which a licence applies.
Amendment 13, in clause 7, page 4, leave out lines 34 to 37 and insert—
“(a) may request further information from the licence-holder;
(b) in the case of an application under subsection (1)(a) or (b), may arrange for the premises specified in the licence to be inspected by a veterinary surgeon;
(c) in the case of an application under subsection (1)(c), must arrange for the proposed new premises to be so inspected.”—(Victoria Prentis.)
This amendment requires a local authority, where an application is made to vary the premises to which a licence relates, to inspect the new premises before determining the application.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause provides licence holders with the ability to apply to local authorities to vary their licence to account for changes in their circumstances. It is needed to ensure that the licensing process is dynamic and can respond to changes in the circumstances of both the licence holders and the primate.
Question put and agreed to.
Clause 7, as amended, accordingly ordered to stand part of the Bill.
Clause 8
Renewal
Amendment made: 14, in clause 8, page 5, line 24, at end insert—
“(7A) For the purposes of subsections (5) and (6) a local authority may take into account—
(a) any previous failure by the applicant to meet the licensing standards, and
(b) any other conduct of the applicant that is relevant.”—(Victoria Prentis.)
This amendment allows a local authority to take previous breaches of the licensing standards, and other relevant conduct, into account when making determinations under clause 8(5) and (6).
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
Under this clause, a primate licence lasts for six years, as long as the licence holder meets the conditions of their licence.
Daniel Zeichner
We are seeing exactly what I predicted earlier: a rolling process of permanent licensing. The Bill absolutely does not stop primates from being kept as pets, and I regret that. We have had the discussion about six years and two years—we do not need to go back over it—but this shows that the process is a constant and ongoing one, which will allow primates to remain being kept as pets.
Question put and agreed to.
Clause 8, as amended, accordingly ordered to stand part of the Bill.
Clause 9
Death of licence-holder
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause sets out the steps to be taken in the unfortunate event of the death of a primate licence holder. It is necessary to allow the deceased licence holder’s personal representative—who, obviously, will often be family members—time to make arrangements for the primate in their care. Primates might otherwise be subjected to unnecessary stress from being moved to other premises without sufficient time for preparations to be made.
Daniel Zeichner
The dialogue around this issue is becoming interesting. The clause further shows the potential problem: not only are primates being kept as pets, but they are being kept in perpetuity, rolling forward, when the licence holder dies. I quite understand the necessity of setting up a licensing system, but this is where it leads—it quite clearly leads to these creatures being kept in perpetuity, and we do not think that should be happening.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Victoria Prentis
The clause gives the local authority the power to arrange for an inspection of the premises specified in the licence as a means of assuring that the licence holder is meeting the requisite standards and any rectification conditions that they have received.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Fees
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause gives the local authority the ability to charge fees for the processing of applications and for conducting inspections relating to a primate licence. It will ensure that the administration of the licensing scheme is not a significant cost to the taxpayer. It will also ensure that local authorities have the resources to implement the scheme effectively.
Daniel Zeichner
As I have already reflected on, this has become a discussion around how to license. Once again, as ever, I defer to the legal expertise of the Minister. I am sure that she knows full well from other legislation how that is done, and I imagine that it will be done in the same way here. However, the clause raises slightly difficult questions about the other criteria that the local authority will use to determine what is an appropriate fee—how many, how often, to what standard and by whom. It is a bit of a moveable feast, and I confess that I do not understand how a local authority might arrive at a reasonable judgment and whether the Government will give guidance. I seek some clarification on that point.
Victoria Prentis
Of course. We cannot specify at this point, for the reasons given, what a typical fee for this licence may be. The fees will reflect local authority costs for administration of the licensing regime, and therefore will be dependent on the costs associated with the licensing scheme in the area. However, we will most certainly be providing guidance to local authorities on the range of fees that should be applicable and we would expect all fees to fall within this range, unless there is good reason why not. We would expect fees to be similar across different local authorities, although there will be some variations.
We are working closely with local authorities and we have a working group dealing with this at the moment. The Welsh Government will be providing guidance in relation to Wales, and again we are working closely with the devolved Administrations on this matter.
Daniel Zeichner
I understand the difficulty the Minister has trying to license something of which we have very little knowledge. That goes back to my basic point that this is a slightly flawed process. What we are hearing is that we have no idea how much the fees might be, which is a problem for anyone applying. Do we not have any sense at all of what an appropriate fee might be for this kind of inspection?
Victoria Prentis
The work is going on at the moment, and I would be delighted to keep the hon. Gentleman in the loop as it continues. Licence holders will have the choice as to whether they wish to apply for a licence and continue to keep their primates. It is right that the financial burden should rest with them. Under existing legislation, zoo licence holders and dangerous wild animals licence holders are also expected to pay a fee to their local authorities, so there is some precedent for this.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Offences
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause makes it an offence for a licence holder under this part to fail to meet the general licence condition attached to their licence. The penalty for this offence is set at a fine of up to £2,500, although, as I said earlier, the penalty for not having a licence is unlimited. I move that this clause stand part of the Bill.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Rectification Notices
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
Clause 13 authorises the local authority to serve a rectification notice on a licence holder if they fail to meet any of the licensing standards. This will provide licence holders the opportunity to take any remedial action to provide better for the welfare and management of their primates before further enforcement action is taken. I move that this clause stand part of the Bill.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Revocation etc. of licence
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause sets out the circumstances in which a local authority is obligated, or has the option, to revoke or vary a primate licence unilaterally. These powers should enable local authorities to act to prevent people who have acted in contravention of this Bill, or the Animal Welfare Act 2006 more generally, from keeping primates. This will help ensure primates are protected from any potential future harm. I move that this clause stands part of the Bill.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Directions
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause will enable the local authority to monitor the welfare of any unlicensed primates, and ensure their basic welfare needs are met while they remain in the care of their keeper. I move that this clause stand part of the Bill.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16
Determination of applications
Daniel Zeichner
I beg to move amendment 113, in clause 16, page 9, line 15, leave out ‘put down’ and insert ‘humanely euthanised’.
This amendment would bring the language in the Bill in line with existing animal welfare legislation.
This is not a complicated change; it is self-explanatory. In my correspondence with animal welfare organisations, they expressed their misgivings about the use of the term “put down” in the Bill. I am told that currently the wording used in the majority of animal welfare legislation, including the Animal Welfare Act 2006, is “humanely destroyed”. However, I have had conversations with the RSPCA, and it suggests the most suitable language would be “humanely euthanised”, as that, I am reliably informed, is the correct veterinary term. This is a fairly technical amendment, and I hope that if colleagues want to ensure the accuracy and suitability of the technical language in the Bill, the amendment might be fairly uncontroversial. I have never had a successful amendment in Committee, so I am hoping this may finally be it.
Victoria Prentis
I am so sorry to disappoint the hon. Gentleman. It is already the case that when an animal is euthanised—this is an awful subject to be discussing—it must be done humanely. Under section 4 of the Animal Welfare Act 2006, it is already an offence to cause an animal unnecessary suffering, and that includes the method of the animal’s death. Therefore, it is not necessary to specify that primates must be euthanised humanely, though, of course, all of us here feel they should. I ask the hon. Member to withdraw his amendment.
Dr Hudson
Again, I am sympathetic to the hon. Member for Cambridge and understand his intention. We have to be sensitive about the language when euthanasing animals. In different contexts, we use different terms. In small animal practice, “put down” and “put to sleep” are often used. In the equine profession, where I have spent many years, we will not use “put down”, but will often use “euthanased”. I take on board the hon. Gentleman’s comments that in some of the legislation “humanely destroyed” has been used, which is often used in clinical and scientific literature.
To the Government, I say that in considering changing the terminology, I disagree with the hon. Gentleman and would not prefer “euthanised”. If we look at the Royal College of Veterinary Surgeons’ website and the section on euthanasia, we often use the term “euthanased”, in that a vet euthanases an animal. There is that matter of semantics. In America, they talk about “euthanatizing” and “euthanizing”. I cannot support “humanely euthanised” for some of the reasons I have just given and I suggest that “humanely euthanased” would be a suitable substitution. I wish the Government would have a look at this to get to more clinical and scientific language.
Daniel Zeichner
I am grateful to the hon. Gentleman. His expertise is extremely helpful to the Committee and shows how complicated this is. Clause 16(2)(c) is just too aggressive in this context. While I accept the Minister’s explanation of the legal situation, I cannot see why that cannot be put in a different way, given the kind of creatures we are dealing with. I suspect the Minister agrees, but she has to do what she has to do. We are not going to push this to a vote to embarrass people—there is no point—but if there is an opportunity, perhaps it could be amended at some further point in the process. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause will help to ensure compliance with the new licensing system, and provide local authorities with a better ability to enforce higher standards of animal welfare. I urge that it stand part of the Bill.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Selling primates to unlicensed persons
Amendment made: 15, in clause 17, page 10, line 6, leave out “in England”.—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause will prohibit anyone from selling, gifting or transferring a primate to a person who does not hold a relevant licence, with the knowledge or with reasonable grounds to suspect that that person does not hold such a licence. This provision will cover both private traders and third-party sellers and prevent them from selling primates to individuals who cannot care for their needs adequately. I urge that the clause stand part of the Bill.
Question put and agreed to.
Clause 17, as amended, accordingly ordered to stand part of the Bill.
Clause 18
Breeding primates
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause sets out that a person who does not hold a relevant licence commits an offence if they take steps to breed a primate under their care with another primate, or where they keep two or more primates together in conditions in which they are able to breed. It should prevent unscrupulous breeders from continuing to fuel a market for pet primates kept in low-welfare conditions. I urge that the clause stand part of the Bill.
Daniel Zeichner
I need say no more than that we totally agree. This is a very strong and important provision.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Clause 19
Powers of entry
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause, together with schedule 4, gives power of entry to a person authorised by the local authority; it is to be used in relation to one of the offences that we have already discussed. The power of entry will enable local authorities to investigate whether an offence is being, or has been, committed at the premises, and should allow them to enforce for the offences and penalise those responsible. This will in turn ensure that primates are not being kept, bred or sold in contravention of the Bill. I urge that the clause stand part of the Bill.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Schedule 4
Powers of entry relating to primates
Question proposed, That the schedule be the Fourth schedule to the Bill.
Victoria Prentis
The schedule provides local authorities with a power to support investigation and enforcement in respect of offences in the Bill relating to the keeping, breeding and sale or transfer of primates. The powers in the schedule are necessary to ensure that the offences introduced in the Bill can be effectively enforced against. The powers will allow local authorities to investigate those who keep, breed and sell primates illegally, which in turn should help to ensure the high welfare of all primates kept in England and Wales. I urge the Committee to agree to the schedule.
Daniel Zeichner
Once again, this is an important additional set of powers, which we think will be helpful. I suspect that this is also an exercise in updating the powers available in order to take into account changing technologies and circumstances, and we strongly support it.
Question put and agreed to.
Schedule 4 accordingly agreed to.
Clause 20
Guidance
Daniel Zeichner (Cambridge) (Lab)
I beg to move amendment 116, in clause 20, page 11, line 3, leave out “may” and insert “must”.
This amendment would require the Secretary of State to provide guidance to local authorities.
This is the familiar “may” or “must” argument, and I suspect that we will go over old ground yet again with it, but it does allow me to speculate on what happens if the Secretary of State is tardy in providing guidance to local authorities. This takes us back to the equally long-standing issue of support for local authorities, or lack thereof. Throughout the proceedings on the Bill and in the evidence and submissions that we have had from various organisations—we have talked about this at some length this morning already—real concern has been expressed about the capacity of local authorities to enact the system that we are talking about. We all look forward to a time when we can talk about local authorities without adding such adjectives as “underfunded”, “cut” and “on the brink of collapse”. We all know the circumstances in which local authorities find themselves. What strikes me is that the Government continue to load extra obligations on to local authorities without necessarily giving them the help that they need to take on yet more responsibilities.
I have already summed up the Kafkaesque picture of the monkey dumped in the reception of the guildhall in Cambridge. Quite what the monkey or the council officer is supposed to do in those circumstances I am not sure, and it may superficially seem quite amusing, but my partner used to work for a local authority, and quite often they are the last resort, particularly with animals and where people have mental health issues and so on. It is the poor old social worker who ends up at 6 o’clock on a Friday evening trying to find a home for the primate who has been dumped in the lobby.
We need clear guidance. In the evidence session, I asked Dr Girling, chair of the Zoos Expert Committee of the Department for Environment, Food and Rural Affairs, what happens to animals when zoos or others fail to meet licensing standards. The answer was:
“They become the responsibility of the local authority in the first instance”.––[Official Report, Animal Welfare (Kept Animals) Public Bill Committee, 9 November 2021; c. 28, Q40.]
Well, good luck to the local authority. The guidance ought to be there. It should not be a “may”; it has to be a “must”. I very much hope that that will be done in a timely manner. Were we to transfer this provision to “must” rather than “may” we would be insisting upon it.
Victoria Prentis
As I have said several times, we certainly intend to develop guidance on the implementation of these primate measures, and in doing so we will continue to engage closely with local authorities, vets and specialist primate keepers. Local authorities do much good work, included in which is their work with dangerous wild animals and other licensing. I have already referenced how they will be able to charge fees to enable them to carry out that work.
I very much hope that the Kafkaesque situation that the hon. Gentleman envisages never comes to pass, and that we are able, because we have brought into play a sensible and proportionate licensing system, to have transitional arrangements that mean that a suitable space in a zoo or rehoming centre where appropriate can be found for primates that need to be rehomed. Government amendment 18 will ensure that any guidance developed for local authorities will be published so that it is fully transparent and available to all. In those circumstances, I ask him to withdraw the amendment.
Daniel Zeichner
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Heather Wheeler.)
Judicial Review and Courts Bill (Eighth sitting)
Tuesday 16th November 2021
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Judicial Review and Courts Act 2022 View all Judicial Review and Courts Act 2022 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 November 2021 - (16 Nov 2021)
The Chair
Before we begin, I have a few preliminary announcements. I remind Members that they are expected to wear a face covering except when speaking or if they are exempt, in line with the recommendations of the House of Commons Commission. Please give each other and members of staff space when seated and when entering and leaving the room. I remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate. That can be done either at the testing centre in the House or at home.
Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes @parliament.uk. Please switch electronic devices to silent. Tea, coffee and other beverages are not allowed during sittings.
Clause 18
Rules for online procedure in courts and tribunals
Alex Cunningham (Stockton North) (Lab)
I beg to move amendment 59, in clause 18, page 35, line 9, after “that” insert—
“(a) a person may choose to participate in a hearing by non-electronic means, and
(b) “
This amendment would allow a person to choose to participate in a hearing by non-electronic means.
The Chair
With this it will be convenient to discuss amendment 90, in clause 18, page 35, line 11, at end insert—
“(7A) Online Procedure Rules must require a person to participate in a hearing by non-electronic means if a physical or mental health assessment of that person confirms that online proceedings will impede their ability to understand or effectively participate in proceedings.”
This amendment would ensure if someone had a physical or mental condition that would prevent them from understanding or effectively participating in online proceedings then the Online Procedure Rules must allow them to participate by non-electronic means.
Alex Cunningham
It is a pleasure to serve under your chairmanship, Sir Mark.
As I mentioned in my previous speech, clause 18 provides for the creation of online procedure rules. The online procedure rules must require that proceedings of a kind specified in regulations made by the Lord Chancellor, per clause 19(1), are to be initiated by electronic means. Paragraphs (l)(b) and 1(c) of clause 18 allow for the online procedure rules to either authorise or require that specified proceedings are conducted, progressed and disposed of by electronic means, and that parties to the proceedings participate by electronic means.
The Courts and Tribunals (Online Procedure) Bill provided participants with a choice to initiate, conduct, progress or participate in proceedings by non-electronic means. That choice is retained for those without legal representation in relation to the initiation, conduct, progression or participation other than by a hearing. However, a person is currently unable to choose to participate in hearings by electronic means, and may do so only at the direction of the court or tribunal.
As JUSTICE explain:
“A myriad of issues, including health conditions and disabilities, may make it difficult for individuals to follow or engage with a virtual hearing and those same issues may make it difficult for them to explain to the court or tribunal why they would prefer to attend in person.”
Amendment 59 would allow a person to choose to participate in a hearing by non-electronic means if that is appropriate for them. Amendment 90 would ensure that if someone had a physical or mental condition that would prevent them from understanding or effectively participating in online proceedings, the online procedure rules must allow them to participate by non-electronic means.
Amendments 59 and 90 share the same aim, and together their impact would be to ensure that court users who may have vulnerabilities or particular conditions are able to access the type of hearing most appropriate for them, which research suggests may often be in-person hearings. I am sure that the Minister agrees with me that as we progress with changes to court processes, we must not negatively affect access to justice for any group of court users with particular needs. I would welcome his thoughts on how we can ensure that does not happen.
The Parliamentary Under-Secretary of State for Justice (James Cartlidge)
It is good to have you back in the Chair, Sir Mark. I hope that we will make diligent progress this afternoon.
As the hon. Member for Stockton North said, both amendments would provide options for a person to participate in a hearing via non-electronic means. Amendment 59 would give those participating the option, while amendment 90 would require someone who had a physical or mental condition preventing them from understanding or effectively participating in online proceedings to participate in a hearing via non-electronic means.
The online procedure rule committee will make simple and consistent rules that provide simple processes that can be followed by the average court user. We have seen an increase in online proceedings in response to the pandemic—I will say more on that when speaking to clause stand part. Her Majesty’s Courts and Tribunals Service is moving towards digital services being the default, but we absolutely understand that not everyone will choose to participate in a hearing by electronic means.
I will emphasise specific clauses. In many ways, it is a disappointment that my right hon. Friend the Member for South Holland and The Deepings is not here, because he would have been greatly reassured by the clauses. He has obviously struggled to get here for an in-person sitting—perhaps we could have held it online, but unfortunately that option is not available at the minute, which is a shame for my right hon. Friend. I have no doubt that he has a good reason for being absent.
Clause 18(6) states:
“Where Online Procedure Rules require a person—
(a) to initiate, conduct or progress proceedings by electronic means, or
(b) to participate in proceedings, other than a hearing, by electronic means,
Online Procedure Rules must also provide that, if the person is not legally represented, the person may instead choose to do so by non-electronic means.”
The key thing is that the rules reply entirely to civil cases—civil, family and tribunals. Those are the jurisdictions to which those particular rules apply. It is not obvious how there would be a situation where someone who had legal representation would not be able to participate online given that practitioners should, for obvious reasons, be able to participate online.
Furthermore, subsection (7) states:
“Where Online Procedure Rules require a person to participate in a hearing by electronic means, Online Procedure Rules must also provide that a court or tribunal may, on an application or of its own initiative, order or otherwise direct that person, or any other person, to participate by non-electronic means.”
Well—[Interruption.] My right hon. Friend has duly arrived, and I say to him that one of the downsides of physical sittings and in-person hearings is that one is subject to the whims of chronological events, to put it bluntly, and unfortunately he has missed a great bit of the Bill, which I read out not just for him but primarily because it is relevant to the amendments from the hon. Member for Stockton North, the Opposition spokesperson. The Bill shows that where one is represented, one would be able to request a physical or in-person hearing.
There could be a number of reasons why someone would chose to participate in a hearing by a means other than electronic. Her Majesty’s Courts and Tribunals Service provides a support service over the phone as well as more intensive face-to-face support for those who might require it, such as vulnerable users who might not otherwise be able to participate in proceedings effectively or those who are digitally excluded. HMCTS has also awarded a national contract to deliver positive and practical solutions to support users and break down the barrier of digital exclusion across civil, family and tribunal jurisdictions. Through this contract, support will be available in person and remotely through a network of delivery partners who are experienced in supporting users of justice services. As per the specification, the services will be delivered across different channels to ensure that all those who require them can access them. Those channels would include local-centre support in more than 300 physical sites, over-the-phone support, remote video appointments with those who have access but need support in navigating the service, and in-home face-to-face support with necessary equipment. HMCTS has considered forms of support that can be provided to the user throughout their online proceedings.
I recently visited Isleworth Crown court where the citizens advice bureau was actively involved in providing services to witnesses. It is conceivable that the physical roll-out of these support services could be provided on a sub-contracted basis by a range of organisations. The point is that that is precedented and it works to provide effective support on the ground to vulnerable users.
Most importantly, as I have said, the measures in the Bill also ensure that paper form will remain available for citizens participating in proceedings, so an offline option will always be available for those who need it, not least my right hon. Friend the Member for South Holland and The Deepings.
Sir John Hayes (South Holland and The Deepings) (Con)
I am delighted to have come hotfoot from a discussion with one of the people who gave evidence to the Committee, Professor Ekins, who shares my view that the Bill should be widened to deal with matters of parliamentary sovereignty and other issues. We were debating how the new clauses that stand in my name and those of my hon. Friends might be recast to ensure that they are in scope. On the point that my hon. Friend the Minister raises, the key is that the move to online should not be obligatory. Sir Mark, I was making the argument earlier, as were one or two others on the Committee, that vulnerable people, in particular, might struggle with a purely online system and that they needed some protection from the effects of a system that could become exclusively online. Is the Minister giving the reassurance, which would certainly satisfy me, that this will not be obligatory and that there will be an option for people who wish to do so to appear before a court in the traditional way and to make representations accordingly?
James Cartlidge
I am glad that the reason for my right hon. Friend’s delay was that he is so proactive he was working to amend earlier parts of the Bill, which we will presumably come to after all the other clauses. To allay his concerns and for his benefit, I will repeat the quote because I think it is important. Clause 18(6) states:
“Where Online Procedure Rules require a person—
(a) to initiate, conduct or progress proceedings by electronic means, or
(b) to participate in proceedings, other than a hearing, by electronic means,
Online Procedure Rules must also provide that, if the person is not legally represented, the person may instead choose to do so by non-electronic means.”
To be clear, if a person is legally represented, there is no reason that a legal firm would not be able to participate electronically, and that is why the clause says
“if the person is not legally represented”.
I remind the Committee that those rules apply entirely to civil and family tribunals, not to criminal proceedings. That is a different part of the Bill. I hope that has reassured my right hon. Friend that there will always be choice.
As I have already stated in reference to previous amendments, there is a range of support in place. We have just set up a national contract which will deliver not only telephone and web-based support, but physical, in-person support, of the kind that we see in our courts and other physical locations around the country. There is a wide range of measures.
Sir John Hayes
I am extremely grateful to the Minister, both for giving way and for that assurance. He is right that our endeavour in the Bill is to increase efficiency, free up court time and make the system run more smoothly. I was discussing that with hon. Members earlier, and I share that view. My fear was that the most vulnerable of our countrymen might be disadvantaged, but my hon. Friend has reassured me that that will not be the case because the measures will not be obligatory. “There will always be choice” were his words. Let those words ring out in the Committee and assuage the fears that I articulated on behalf of the most needy.
James Cartlidge
I am grateful to my right hon. Friend. As a Conservative, he is, of course, a champion of choice at the forefront of public policy—
James Cartlidge
Of course—and the needy. They are both important. Given the safeguards in place and the fact that an offline option is already available, I do not think the amendments are necessary. I therefore urge the hon. Member for Stockton North to withdraw them.
Alex Cunningham
The theory is all well and good. I hope that, in practice, the service is delivered to the standard the Minister believes is possible. He has had our demands for quality support and flexibility for vulnerable people ringing in his ears for several days now. The right hon. Member for South Holland and The Deepings—who I thought had acquired a red box earlier this afternoon, but it is not quite the right colour—has joined the fray in championing vulnerable people, and I welcome the reassurances he has received from the Minister.
I want to expand slightly and talk a bit about the citizens advice bureaux and the tremendous support they give not only in courts across the country, but to people in my constituency in Stockton. I am interested to know how the services will be designed for the future. The Minister has talked about 300 hubs; he has talked about the CAB and others, as well. How will those services be delivered to ensure that people are properly covered with the necessary support? The comments from the Minister are clear and the theory is clear. We just want to see it in practice. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 3 be the Third schedule to the Bill.
James Cartlidge
I intended to use part of the stand part debate to address some of the concerns from my right hon. Friend the Member for South Holland and The Deepings about the impact on those who are less acquainted with the digital sphere. To be fair, that also addresses some of the points from the hon. Member for Stockton North.
Alex Cunningham
There is no doubt that electronic systems have already made a great difference within our Courts and Tribunals Service and I am sure that they will continue to do so in the future. However, as the Minister well knows, it is a case of ensuring that those at the margins—the vulnerable and the excluded—do not lose out in terms of justice as we go forward. Given the crisis in our courts, there is no doubt that we desperately need solutions, and the electronic solutions are part of that process, but again we want to ensure that the support within the system for everybody is correct and that justice is done.
The Minister has talked about various organisations that will be engaged in the process, but we look forward to seeing the system operating—perhaps he and I could go together when it is—to listen to people about its operation and make sure that what we have delivered in this new legislation is practical and that the most vulnerable people are still being looked after.
James Cartlidge
When we meet to discuss the single justice procedure—a meeting that I was more than happy to agree to—we can talk about how we can look at things. There will obviously be ongoing reviews. It is important that we get this issue right—by ensuring that it has been through a tender, for example.
Sir John Hayes
We have teased out important things from this debate. Would the choice that my hon. Friend the Minister mentioned earlier apply to witnesses, too? I am thinking of a blind person who has heard something or a deaf person who has seen something that might provide vital evidence, both of whom would struggle with the conventional online model. Will provision will be made for them to exercise, as witnesses, the sort of choice that he described earlier?
James Cartlidge
I can absolutely confirm that to my right hon. Friend. At the moment, we are talking about civil cases; he is absolutely right that those people could be witnesses in those, of course.
I stress that the matter would be at the discretion of the courts, without a shadow of a doubt, but I think there will be far more cases of vulnerable witnesses where technology assists the process. The obvious example is section 28 proceedings, in which evidence can be recorded in advance of the actual in-person hearing; they have become a very important part of the justice system. The Secretary of State has set out his desire for them to be rolled out more broadly. In a way, my right hon. Friend makes the point for me: technology in such cases can be of great assistance, and we are applying it to intimidated witnesses as well.
Alex Cunningham
The Minister mentioned section 28 proceedings and the recording of evidence. During consideration of the Police, Crime, Sentencing and Courts Bill, the Opposition tabled a number of amendments in that particular area, to expand the use of the process. Given that the new Minister is a fan, will he look at the issue with his colleagues in the Lords to see whether there are ways in which we can expand the service to the benefit of the sorts of people who the right hon. Member for South Holland and The Deepings just spoke about?
James Cartlidge
There are two points to make on that. First, the specific point about the Bill’s progress in the Lords is a matter for Lord Wolfson, who is an excellent Minister; I effectively shadow him on the areas for which he is responsible. However, the hon. Gentleman should be assured of the Lord Chancellor’s commitment to section 28 proceedings following his comments in media interviews. There is widespread support for them among the relevant victims’ groups and charities.
Of course, there are practical issues that we need to consider, but, as I have said, there is widespread agreement about this issue. Using such technology can be very important in enabling and assisting vulnerable witnesses.
Alex Cunningham
I am in danger of drifting back to the other Bill that I mentioned, but we were also talking about how potential witnesses, in some circumstances, would be interviewed. For example, at the moment they may be interviewed by a non-legal person; in other words, there might not be a legal representative, either for the prosecution or the defence, carrying out the interview in those circumstances. Would the Minister be prepared to look at that?
James Cartlidge
With respect, I think that does stray too far into the specifics of the measure. It was a nice try, but I was setting out the principle that technology has assisted access to justice in the context of those who are vulnerable—the sorts of people who we would have in mind in discussing precisely these provisions.
I agree about the importance of in-person proceedings where it matters most. The most obvious example for all of us is that, like my right hon. Friend the Member for South Holland and The Deepings and others on this side of the Committee, I passionately wanted Parliament to return to its normal ways of working at the earliest safe moment, because we could not intervene on each other when we were on a TV screen.
It is not democracy when arguments are not challenged. It gives me a great thrill to take an intervention from the Opposition side that I have to try to answer. That is how we thrash out and debate an argument. It is sub-optimal to have it online and optimal to have it in person, but there will be many aspects of life, and many aspects of legal proceedings, that can be perfectly competently and satisfactorily conducted online.
By maximising those aspects, we maximise the in-person resource for the things that really matter. On the criminal side, that is clearly criminal trials, particularly jury trials in the Crown court. On the civil side, that could be complex cases, such as family cases, that need to be heard in person. By maximising the use of technology, we liberate more of that resource, so it is important to support the measure.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Schedule 3 agreed to.
Clause 19
“Specified kinds” of proceedings
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 19 provides for online procedure rules to be made in relation to civil, family or tribunal proceedings specified by the Lord Chancellor. It enables the Lord Chancellor to specify in regulations such proceedings by reference to, among other matters, the legal or factual basis of the proceedings, the value of the matter in issue, and the court or tribunal in which the proceedings would be brought.
The regulations, which will require the concurrence of the Lord Chief Justice and, where tribunal proceedings are involved, the Senior President of Tribunals, and which will be subject to the affirmative resolution procedure, will accordingly govern the scope of application for any online procedure rules. They may provide safeguards, for instance, by setting out circumstances in which a party to proceedings may choose whether to use the online procedure or circumstances where proceedings of a specified kind may not be governed by online procedure rules.
We envision that there is likely to continue to be a need for a parallel paper-based procedure for those who are digitally excluded. That would act as a safeguard for the majority of claims that remain within the scope of the online procedure.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Clause 20
Provision supplementing section 18
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 20 allows for provision to be made about the circumstances in which a party to proceedings may have a choice whether to use the online procedure or the appropriate alternative civil or family court or tribunal procedure to which the standard rules apply. Provision may also be made for excluded cases to which online procedure rules are not to apply and for circumstances in which proceedings may cease to be subject to online procedure rules or, conversely, may become subject to them even though they were not initially. That will enable flexibility, so that the most appropriate procedure can apply to any given proceedings or part of proceedings thereof.
Regulations under the clause will require the affirmative resolution procedure. Before making any regulations under the clause, the Lord Chancellor must secure the concurrence of the Lord Chief Justice or, if the regulations concern tribunal proceedings, the Senior President of Tribunals.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21
The Online Procedure Rule Committee
Alex Cunningham
I beg to move amendment 28, in clause 21, page 37, line 28, leave out “(3)” and “(4)” and insert “(3), (4) and (4A)”.
This amendment is consequential to Amendment 29.
The Chair
With this it will be convenient to discuss the following:
Amendment 60, in clause 21, page 37, line 38, at end insert—
“(c) one person who is an ‘authorised court and tribunal staff member’ as defined by the Courts and Tribunals (Judiciary and Functions of Staff) Act 2018.”
This amendment would require the Lord Chief Justice to appoint an authorised court and tribunal staff member to the Online Procedure Rules Committee.
Amendment 61, in clause 21, page 38, line 5, leave out “one person who has” and insert “two people who have”.
This amendment will expand the membership of the OPRC to include two IT experts.
Amendment 29, in clause 21, page 38, line 6, at end insert—
“(4A) The Lord President of the Court of Session is to appoint one person with experience in and knowledge of the Scottish legal system.”
This amendment would require the Online Procedure Committee to include a person with experience in and knowledge of the Scottish legal system, appointed by the Lord President of the Court of Session.
Amendment 62, in clause 21, page 38, line 6, at end insert—
“and;
(d) one person who has experience representing the views of people who are digitally excluded.”
This amendment will expand the membership of the OPRC to include someone with experience representing the views of people who are digitally excluded.
Amendment 91, in clause 21, page 38, line 6, at end insert—
“(d) one person who has experience in, and knowledge of, accessible service design”.
This amendment would increase the membership of the Online Procedure Rule Committee by requiring the Lord Chancellor to appoint a person with expertise in accessible service design.
Amendment 64, in clause 21, page 38, line 25, at end insert—
“(9A) In making appointments under subsections (3) and (4) above, the Lord Chancellor and the Lord Chief Justice must have due regard to the ethnic and gender balance of the Online Procedure Rules Committee.”
This amendment would require the Lord Chancellor and the Lord Chief Justice to have due regard to the ethnic and gender balance of the Online Procedure Rules Committee when making their appointments.
Alex Cunningham
I move the amendment on behalf of the hon. Member for Glasgow North East, who is unable to be here this afternoon.
Clause 21 sets out the membership of the online procedure rule committee and makes other provisions—for the Lord Chancellor to reimburse expenses of members appointed to it, for example. Under the clause as it is currently drafted, the online procedure rule committee would have just six members. Three of them would be judicial appointments made by the Lord Chief Justice and would include the chair of the committee. The other three appointments would be made by the Lord Chancellor and drawn from elsewhere in the legal profession, the lay advice sector and those with professional experience of online portals.
I understand that the number of committee members and the qualifications and experience that they must have can be modified. As the Bill is currently drafted, that would be done by regulations under the negative procedure, although regulations cannot be made until the agreement of the Lord Chief Justice and the Senior President of Tribunals has been secured, and only after consulting other specified members of the senior judiciary. Even though the Bill contains a provision to change the rules governing the committee’s membership, I think the initial set-up as provided for by clause 21 is very unusual for its small size and, as a consequence, the limited amount of experience that would be covered by the committee.
I recall the evidence of Richard Leiper from two weeks ago. I am going to quote him at length because he captures in a few sentences what is wrong with the Government’s proposals. He said:
“The current composition of the committee is a total of 6 people. That is in contrast to the civil procedure rule committee, which has 18 members. The family procedure rule committee has 18 members. To me, given the potential breadth of the rule that could be set by this committee, having one senior judge, a couple of other judges, one practitioner, one layperson and one computer person is simply not enough. That is partly because the scope for the procedures would be trespassing on areas which it is likely that no member of the committee would have any knowledge of.
For example, I have no knowledge at all about family court proceedings—how they begin, how they proceed, or what the interests of the various parties would be. Yet, if there is just one practitioner, who could be a barrister, a solicitor or a legal executive—each of whom have different perspectives on how the system operates, how it impacts on clients, other parties and so forth—there will not be the wealth of knowledge, even with consultation with people who do know, to enable effective online rules. The composition of the committee is my single greatest concern.”––[Official Report, Judicial Review and Courts Public Bill Committee, 2 November 2021; c. 37, Q41.]
That is clear and wise counsel, I would say. The concern that Mr Leiper expressed is shared by many in the sector and, indeed, by the Opposition. I thank the Public Law Project, JUSTICE and the Legal Education Foundation for their expertise and constructive assistance in scrutinising this clause. This set of amendments looks at the membership of the online procedure rule committee, mostly with a view to expanding it to include additional professionals with relevant experience. I would be interested to hear from the Minister in relation to each amendment whether it represents the kind of regulation change that he anticipates may be brought in via the negative procedure.
Amendment 60 would require the Lord Chief Justice to appoint an authorised courts and tribunals staff member to the online procedure rule committee. JUSTICE has recommended that the OPRC should feature an authorised courts and tribunals staff member, as defined in the Courts and Tribunals (Judiciary and Functions of Staff) Act 2018. The effect of that 2018 legislation is to allow individual rule committees to delegate functions that were traditionally judicial in nature to non-judicial court staff.
For example, in the context of the online court, JUSTICE understands from HMCTS that the pilot of legal advisers within that service will allow them to make various procedural determinations, including case progression directions, for defending claims. Given the extent to which procedural functions in online courts are to be delegated to authorised courts and tribunals staff and the concomitant need for those staff to understand and apply relevant procedural rules, would it not be prudent to include their voice in the drafting of the relevant rules? The Opposition agree that that would be a very sensible addition to the OPRC, and I hope the Minister will agree.
Amendment 61 would further expand the membership of the OPRC to include two IT experts, where now it only includes one. As it stands, the Bill places significant responsibility on a lone information technology expert. As the Public Law Project puts it,
“To imply that there is one information technology expert who can be the source of truth for digital procedure is incorrect as there are lively debates in that sphere.”
Limiting the committee to only one information technology expert presents a risk that a particular view of the capability and role of information technology in the justice system will take precedence. We think that expanding the Committee to include a wider range of expertise in information technology and internet portals would be a valuable contribution to ensuring that the online procedure rules are suitably futureproofed.
Amendment 62 would again expand the membership of the OPRC—this time, to include someone with experience representing the views of people who are digitally excluded. Currently, the online procedure rule committee does not include any members who would be able to represent the views of digitally excluded people or have expertise in the specific challenges that digitally excluded people might encounter if they needed to be a party to proceedings under the online procedure.
I spoke about this issue in our debate on clause 18, but I will stress the point again. In making the online procedure rules, it is important that we do not negatively impact access to justice for those with vulnerabilities or conditions, or who are digitally excluded for any reason. I think this would be a most important voice on the committee and I hope that the Minister will agree with me that it would add great value to its work.
Amendment 91 would increase the membership of the online procedure rule committee by requiring the Lord Chancellor to appoint a person with expertise in accessible service design. Again, we believe this would be an extremely valuable perspective to include on the committee.
I know the Minister wants these reforms to have a positive impact on justice; including a professional with experience in accessible service design would ensure that the online procedures can be used by the widest range of persons possible, which is surely an aim that the Government share with us. As I said earlier, I am keen to hear from the Minister on whether his Department has considered the addition of any such members to the Committee. If not, is it something he foresees being introduced under the negative procedure as outlined in the Bill? If the latter is true, I suggest that an easier route would be to include them now in the primary legislation.
Amendment 64 is slightly different. It would require the Lord Chancellor and the Lord Chief Justice to have due regard to the ethnic and gender balance of the online procedure rule committee when making their appointments. I understand that in Committee and on Report in the Courts and Tribunals (Online Procedure) Bill, Lord Beecham tabled an amendment, introducing a requirement that
“The Lord Chancellor must ensure that gender balance is reflected on the Online Procedure Rule Committee.”
Amendment 64 is tabled in that spirit, but goes further, adding that the racial diversity of the committee must also be considered.
JUSTICE’s working party report, “Increasing Judicial Diversity”, found that reducing homogeneity in the legal system is important for both legitimacy and quality of decision making. Ensuring gender balance in the creation of new rules committees would serve as a positive step towards that aspiration. However, the Opposition agree that there is no reason why that should be prioritised any more than racial diversity, especially given the dreadful disparities in the legal profession.
A recent report by the race working group of the Bar Council found that barristers from ethnic minority backgrounds, particularly black and Asian women, face systemic obstacles to building and progressing a sustainable and financially rewarding career at the Bar. Indeed, they found that a black female junior barrister with the same level of experience as a white male junior bills £18,700 a year less on average, and an Asian woman £16,400 less. That is clear evidence that addressing racial diversity within the legal profession must be an urgent priority for the Government. The amendment provides one opportunity to address some of these disparities, and I hope the Minister will take it.
James Cartlidge
The amendments in the group all relate to the membership of the new online procedure rule committee. The Bill provides for a committee of six members, of whom three are judicial members appointed by the Lord Chief Justice and three are non-judicial members appointed by the Lord Chancellor. The range of members will ensure that the new committee will have expertise in the law and the provision of lay advice and information technology. That will equip it to produce straightforward, easily understood court rules, which will support the online procedure.
When the committee comes to develop rules for courts and tribunals, it will be able to consult or seek advice from those with relevant qualifications, and create working groups including persons with relevant experience and expertise, such as in service design or representing those who are digitally excluded. That is in line with how existing rule-making committees work.
The committee is specifically designed to be small and agile in its decision making. Adding additional members at the outset will detract from that. Any need for additional expertise to inform the committee’s decision-making process that may become apparent through experience can be addressed through the power in clause 23, which enables the Lord Chancellor to amend clause 21 to change the required membership of the committee. I suggest that a more flexible approach would be preferable to adding the additional members proposed in amendments 60 to 62 and 91.
Amendments 29 and 28 would require the online procedure committee to include a person of experience and with knowledge of the Scottish legal system appointed by the Lord President of the court of session. The OPRC will be responsible for making rules across civil and family courts in England, Wales and the specified tribunals. The vast majority of the committee’s work, certainly at the outset, is likely to concern procedure for online court proceedings in England and Wales for which a dedicated member of the committee specifically with expertise in Scottish law would, with respect, not be so well equipped to contribute.
When the committee comes to develop rules for tribunals, which would currently include Scottish employment tribunals, it will be able to consult or seek advice from those with relevant qualifications, and to create working groups including persons with relevant experience and expertise. This is in line with how existing rule-making committees work. The need for a distinct Scottish contribution in the decision-making committee through membership can be addressed through the power in clause 23, which enables the Lord Chancellor to amend clause 21 to change the required membership of the committee. That is a better solution than requiring a Scottish member at the outset, since work is continuing towards the devolution of tribunals for Scotland.
Amendment 64 would require the Lord Chancellor and the Lord Chief Justice to have due regard to the ethnic and gender balance of the online procedure rule committee when making their appointments. We can all agree that, as the refreshed public appointments diversity action plan states, drawing public appointees from all aspects of the society that they serve
“will improve the quality of our public services overall.”
I do not, however, consider it necessary to include the specific duty embodied in this amendment in the appointment process for this rule committee alone. Compared with the other committees that, like the online procedure rule committee, are covered by the action plan and the governance code for public appointments under the supervision of the Commissioner for Public Appointments, the OPRC is designed to be small and agile to address rules that can be updated quickly, keeping step with technology changes to meet the expectations of 21st century court users.
The OPRC requires a range of expertise to complement new technology and online working. When making appointments to the OPRC, the Lord Chancellor and Lord Chief Justice will follow the standard process in line with the civil procedure rule, family procedure rule and tribunal procedure rule committees.
I hope I have reassured the hon. Gentleman about the proposed membership of the committee, and that the Bill has built in significant flexibility should its expertise not be sufficient. I therefore urge the hon. Gentleman to withdraw the amendment.
Alex Cunningham
I am grateful to the Minister for his response and for addressing the Scottish amendments. I attached some notes on that to the end of the wrong speech, but I was going to speak briefly to it because our Scottish colleagues—I am Scottish myself, of course—from the SNP made the point that there was no real representation of the Scottish legal profession. The Minister has, however, already addressed that.
I am disappointed that the Minister does not recognise how such a small committee may not have the length and depth of expertise that is required to carry out the jobs that he requires of it. To have one IT expert and just one appointed judge strikes me as totally inadequate in the circumstances. While we will not press the amendment to a vote, the Minister needs to take that away and think again. I have not come across anybody within the sector who does not think that this committee is potentially weak, and will not be able to do the job that it is required to do. We hope that the Minister will take this issue away and look at it again in the spirit that we intend.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Cunningham
I beg to move amendment 63, in clause 21, page 38, line 14, at end insert—
“(6A) Before appointing a person under subsection 3(c) the Lord Chief Justice must—
(a) consult the Lord Chancellor, and
(b) obtain the agreement of the Senior President of Tribunals.”
This amendment makes the appointment of the authorised court and tribunal staff member to the Online Procedure Rules Committee subject to consultation with the Lord Chancellor and agreement of the Senior President of Tribunals, mirroring the current requirements in relation to judicial appointments to the Committee.
I will be briefer in dealing with this amendment than I have been on anything else. This straightforward amendment relates to amendment 60, and would make
“the appointment of the authorised court and tribunal staff member to the Online Procedure Rules Committee subject to consultation with the Lord Chancellor and agreement of the Senior President of Tribunals, mirroring the current requirements in relation to judicial appointments to the Committee.”
As I said in my previous speech, the Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 allows individual rule committees to delegate functions that were traditionally judicial in nature to non-judicial court staff. Therefore, we think it would be appropriate to appoint this member in line with the process for the members appointed under subsection 3(b) of clause 21.
James Cartlidge
This amendment would make
“the appointment of the authorised court and tribunal staff member to the Online Procedure Rules Committee subject to consultation with the Lord Chancellor and agreement of the Senior President of Tribunals, mirroring the current requirements in relation to judicial appointments to the Committee.”
As I said when we discussed the previous group of amendments, the committee is to be comprised of six members: three are judicial members, to be appointed by the Lord Chief Justice, and three are non-judicial members, to be appointed by the Lord Chancellor. To alter the composition of the OPRC, the Lord Chancellor is required to consult the Lord Chief Justice and the Senior President of Tribunals. That requirement is in line with the existing rule-making committees. The reason for including this power is that, as the scope of the online procedure rules increases, it may be necessary to expand the committee’s membership or widen its expertise in order to assist in making rules for different online procedures. I therefore urge the hon. Member to withdraw his amendment.
Alex Cunningham
I am pleased to hear the Minister talk about the possibility of the committee being expanded in future, and the process for doing so. That is heartening: it is certainly something that needs to be looked at. In those circumstances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
James Cartlidge
To recap, clause 21 provides for the membership of the online procedure rules committee and its powers. It also includes the procedure for appointing members. The committee is to comprise six members, of whom three are to be appointed by the Lord Chief Justice: one person who is a judge of the senior courts of England and Wales, and two persons, each of whom is either a judge of the senior courts of England and Wales; a circuit judge or district judge; a judge of the first-tier tribunal; a judge of the upper tribunal; an employment judge; or a judge of the employment appeal tribunal—a fair selection. The Lord Chancellor is to appoint the committee’s non-judicial members: one person who is a barrister in England and Wales, a solicitor of the senior courts of England and Wales, or a legal executive; one person who has experience in, and knowledge of, the lay advice sector; and one person who has experience in, and knowledge of, information technology related to end users’ experience of internet portals.
Before appointing a person, the Lord Chief Justice must consult the Lord Chancellor, and must also consult the Senior President of Tribunals or—in the case of a person to be a tribunal judge member—secure the agreement of the Senior President of Tribunals. Similarly, the Lord Chancellor must consult the Lord Chief Justice and the Senior President of Tribunals and, in the case of a practitioner member, must also consult the relevant authorised body. The range of members for which this clause provides will ensure that the new rule committee will have expertise in the law, the provision of lay advice, and information technology. This will help equip it to produce straightforward, easily understood court rules, which will support the online procedure, which, as far as possible, will be embedded in the online software.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Powers of the Online Procedure Rule Committee
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 22 provides that the online procedure rules committee has the same rule-making powers that are available to the civil, family and tribunal rule committees. It will therefore have the full range of powers appropriate to any proceedings for which it may make online procedure rules. The committee may also apply any other rules of court. That is to ensure that any rule that is included in the current civil, family and tribunal rules and other rules of court may be used and modified as appropriate to ensure that the online procedure may operate as intended. It does not, however, enable the committee to make procedure rules for procedures that are not subject to the rule-making powers specified in the clause. For example, it may not make online Court of Protection rules because the clause does not give it power to do so.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Power to change certain requirements relating to the Committee
Alex Cunningham
I beg to move amendment 92, in clause 23, page 41, line 14, leave out subsection (5) and insert—
‘(5) Regulations under this section are subject to affirmative resolution procedure (see section 45(3)).”
This amendment would make regulations under clause 23 subject to the affirmative resolution procedure.
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in clause 24, page 41, line 38, leave out subsection (7) and insert—
‘(7A) A statutory instrument containing Online Procedure Rules is subject to affirmative resolution procedure (see section 45(3)).”
This amendment would make SIs containing Online Procedure Rules subject to the affirmative resolution procedure.
Amendment 65, in clause 25, page 42, line 5, at end insert—
‘(1A) The written notice under subsection (1) is subject to the concurrence requirement (see section 30(1)).”
This amendment would make the Lord Chancellor’s power to require the Online Procedure Rules Committee to make rules to achieve a specified purpose subject to the concurrence requirement.
Amendment 68, in clause 26, page 42, line 20, leave out subsection (3) and insert—
‘(3) Regulations under this section are subject to the concurrence requirement (see section 30(1)).”
This amendment would make the Lord Chancellor’s power to make amendments in relation to the Online Procedure Rules subject to the concurrence requirement.
Amendment 94, in clause 26, page 42, line 25, leave out “that amend or repeal any provision of an Act”
This amendment would make all regulations under clause 26 subject to the affirmative resolution procedure.
Amendment 95, in clause 26, page 42, line 27, leave out subsection (6)
See Explanatory Statement for Amendment 94.
Amendment 66, in clause 30, page 43, line 17, after “regulations” insert “or notices”
This is a consequential amendment to include a notice given to the Online Procedure Rules Committee to make rules to achieve a specified purpose within the concurrence requirement.
Amendment 67, in clause 30, page 43, line 21, after “regulations” insert “or notices”
See Explanatory Statement for Amendment 66.
Alex Cunningham
Members of the Committee may be relieved to learn that this will be my final speech on chapter 2.
Clause 23 makes provision for how certain changes relating to the online procedure rules committee can be made. Concern has been raised that the breadth of powers provided to the Lord Chancellor by the online procedure rules provisions in the Bill as drafted is vast, and that there is therefore a danger of a democratic deficit.
Currently, the Lord Chancellor has the power to specify which proceedings will be made subject to the online procedure rules under clause 19; designate exceptions or circumstances where proceedings may be conducted by the standard procedure rules rather than online procedure rules under clause 20; appoint OPR committee members under clause 21; change the composition requirements of the OPR committee under clause 23; allow or disallow online procedure rules made by the OPR committee under clause 24(3); require online procedure rules to be made under the terms of clause 25; and under clause 26(1) the Lord Chancellor may
“by regulations amend, repeal or revoke any enactment to the extent that the Lord Chancellor considers necessary or desirable in consequence of, or in order to facilitate the making of, Online Procedure Rules.”
That is quite a raft of powers for the Lord Chancellor.
The Lord Chancellor’s powers under clauses 19, 20 and 23 are subject to the concurrence of the Lord Chief Justice or the Senior President of Tribunals, depending on whether the regulations relate to proceedings in the courts or tribunals. This is the “concurrence requirement”. However, the power in clause 26 is subject only to a requirement to consult the Lord Chief Justice and Senior President of Tribunal, while the power to require OPRs to be made in clause 25 is subject to neither a consultation nor a concurrence requirement.
Clause 26 has caused particular concern to some. I note that Joshua Rozenberg has observed that this clause differs in this Bill from its earlier forms in the Courts and Tribunals (Online Procedure) Bill and the Prisons and Courts Bill, in which there were more stringent limits on the ability of this power to be used to amend future Acts of Parliament. Mr Rozenberg described the refinement of the drafting as “Henry VIII mission creep”. He said:
“Let's imagine that parliament passes new legislation of some sort in 2030. There is a change of government in 2035 and the new lord chancellor thinks the 2030 legislation gets in the way of procedural rules that the incoming government wants to introduce. Using legislation passed in 2022, the lord chancellor will have power to sign an order in 2035 which, if all goes to plan, will repeal legislation made by parliament in 2030. It’s no excuse to say that this is very unlikely to happen — and the clauses are simply included just in case. Having got a foot in the door, ministers are pushing it a bit further open every time they try. Soon, they'll be pushing at an open door. If they really need to amend or repeal an act of parliament, ministers should take the trouble to bring forward legislation in the normal way.”
I certainly agree.
In our evidence session, I asked Richard Leiper about this democratic deficit, and he said that yes, there was something of a democratic deficit, but that his personal view was that
“it seems to reflect the processes that are already in place into the existing procedure rule committee. This appears to have been the accepted approach since about 2005, and it seems to be replicating that.”
He went on:
“It does seem to give a substantial power to the Lord Chancellor in this regard, which I personally find surprising. However, it seems to be the way that things have operated for some time.”–[Official Report, Judicial Review and Courts Public Bill Committee, 2 November 2021; c. 39, Q45.]
For me, that does not make it right, even if it does go back to 2005 and a Labour Government.
I appreciate that clauses 25 and 26 mirror the approach taken with other procedure rule committees. I would say that is no reason not to get it right first time.
Even the Government have recognised that the broad powers provided to the Lord Chancellor in this part of the Bill could have a significant impact on access to justice, and have therefore decided that some of those powers should be subject to the requirement to obtain the concurrence of the Lord Chief Justice and Senior President of Tribunals. Indeed, the concurrence requirements in clauses 19 and 20 were brought forward by the Government in the Courts and Tribunals (Online Procedure) Bill, on Report, to address concerns that the Bill conferred broad powers on Ministers in particular to limit oral hearings in an extensive range of cases.
The amendments that the Opposition have tabled make provision for two additional mechanisms in this process, allowing for greater scrutiny and accountability of decisions that the Lord Chancellor makes. The first mechanism is covered by amendments 65 to 68, which would make the Lord Chancellor’s power to make rules to achieve a specified purpose and to make amendments in relation to the online procedure rule subject to the concurrence requirement—that is, the powers covered by clauses 25 and 26.
As Lord Judge pointed out when the Courts and Tribunals (Online Procedure) Bill was at Report stage, it is inconsistent with clauses 19 and 20 of this Bill, which are subject to the concurrence requirement, that the power to require OPRs to be made in clause 25 and the broad Henry VIII power to make consequential or facilitative amendments in clause 26(1) are not also subject to the concurrence requirement. Clauses 25 and 26, taken together, give too much power to the Lord Chancellor: they enable the Lord Chancellor to, as Lord Judge put it,
“overrule the very rules which were made with the concurrence of the Lord Chief Justice”.—[Official Report, House of Lords, 24 June 2019; Vol. 798, c. 956.]
The Opposition’s amendment is a simple extension of a safeguard that the Government already recognise is appropriate for these types of powers, so I hope the Minister can support our aim here.
The second mechanism is covered by amendments 92 to 95, which would make regulations made under the powers of clause 23 and statutory instruments containing online procedure rules subject to the affirmative resolution procedure, rather than the negative resolution procedure, as the Bill currently allows for. This will provide a different type of safeguard, in that it would allow for greater parliamentary scrutiny of the online procedure rules. I look forward to the Minister’s response.
James Cartlidge
The amendments in this group all relate to the powers granted to the Lord Chancellor through the legislation. I start with amendment 92, which would require the regulations made by the Lord Chancellor to change the composition of the membership of the online procedure rule committee to be subject to the affirmative resolution procedure. The arrangements for making changes to the membership of the committee are the same as those that apply to the Civil Procedure Rule Committee, the Family Procedure Rule Committee and the Tribunal Procedure Rule Committee and reflect the existing responsibilities of the Lord Chancellor, the judiciary, the committee and Parliament in making procedure rules.
Any regulations changing the Committees’ membership must be agreed by both the Lord Chief Justice and the Senior President of Tribunals. Before making them, the Lord Chancellor is also required to consult other senior members of the judiciary. The regulations must be laid before Parliament and may be subject to debate if either House wishes. That is, I would suggest, an appropriate level of control and scrutiny, as it is for all the other rule committees, and there is no good reason for treating the online procedure rule committee differently in that regard. The amendment is unnecessary, as the arrangements under clause 23 reflect the existing constitutional arrangements, and I therefore urge the hon. Member for Stockton North to withdraw that particular amendment.
Similarly, amendment 68 would require the Lord Chancellor to secure the concurrence of the senior judiciary to, rather than to consult them on, regulations amending, repealing or revoking any enactment. I should start by stressing that this power is designed to allow the Lord Chancellor to make minor revisions or consequential amendments to legislation to support or facilitate the making of online procedure rules.
The provision mirrors the arrangements in place for the Civil Procedure Rule Committee and the Family Procedure Rule Committee, which require the Lord Chancellor to consult the Lord Chief Justice before making regulations of this nature. It is therefore in line with the respective constitutional roles of the Lord Chancellor and the judiciary for the making of procedure rules.
Alex Cunningham
I am grateful to the Minister for his response. As I outlined at the beginning of my speech, this is a huge power grab by the Executive.
Alex Cunningham
The Minister laughs and shakes his head, but it is a huge power grab by the Executive, which is all the more reason why we need to ensure that there are protections in the Bill for people within the system. I also say to the Minister that, as I pointed out in my speech, there is a lack of consistency in the approach in different parts of the Bill. I suspect that the Government may well have to repeat some of the work that they have done on the online procedure rule committee, so they might have to correct that on Report. I will leave the Government to do that.
In trying to persuade the Minister that we should apply the affirmative procedure in a much greater way, I do not believe that, as he says, there is sufficient scrutiny by Parliament through the processes that he proposes in the Bill. Far greater powers are passed back to Parliament with the alternative procedure, but I have listened to what the Minister has said and can possibly look forward to amendments on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
James Cartlidge
To recap, clause 23 enables the Lord Chancellor to alter the composition of the online procedure rules committee in the future, but only with the concurrence of the Lord Chief Justice and the Senior President of Tribunals. The Lord Chancellor must also consult the head of civil justice, who is Sir Geoffrey Vos, the deputy head of civil justice, who is currently Lord Justice Birss, and the President of the Family Division. Any changes are made by negative resolution.
This is an important provision, because it allows the committee to change, vary or extend its membership as circumstances change and online provisions develop. It also reflects the powers available to existing rule committees. This power is useful, in that it will allow the committee to extend its membership as circumstances change. The power is precedented in other rule committees— for example, it has been used to ensure that the Civil Procedure Rule Committee and the Family Procedure Rule Committee include a judicial member with particular experience of proceedings in Wales. I recommend that the clause stand part of the Bill.
Alex Cunningham
Briefly, and with reference to what I said before, we believe that the clause leads to a democratic deficit. It is a power grab by the Executive, but we look forward to seeing how it progresses at later stages of the Bill and in the other place.
Question put and agreed to.
Clause 23 accordingly ordered to stand part of the Bill.
Clause 24
Process for making Online Procedure Rules
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 24 outlines the process for making online procedure rules, which mirrors the process by which civil procedure rules, family procedure rules and tribunal procedure rules are made. The clause requires the committee to hold a meeting before making or amending rules, unless it is inexpedient to do so, and to consult any persons that it considers appropriate. Before being submitted to the Lord Chancellor for approval, rules drafted by the committee must be signed by at least three members, with one of the signatories being the Chair, or by a majority of members. The Lord Chancellor may disallow any rules, but must give written reasons for doing so.
This safeguard reflects similar powers available to the Lord Chancellor in relation to civil, family and tribunal rules. The powers have never had to be used, but it is none the less right that an equivalent power is available in relation to the online procedure rules. It would be interesting to know whether the hon. Member for Stockton North would still think they are a power grab if they are never used. I recommend that the clause stand part of the Bill.
Question put and agreed to.
Clause 24 accordingly ordered to stand part of the Bill.
Clause 25
Power to require Online Procedure Rules to be made
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause gives the Lord Chancellor the power to require online procedure rules to be made. The Lord Chancellor may give the online procedure rule committee written notice that he or she thinks that the online rules should include provision to achieve a specified purpose. The committee must make the rules within a reasonable period and in accordance with the procedure for making rules. The power is consistent with the Lord Chancellor’s powers for other rules committees.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Clause 26
Power to make amendments in relation to Online Procedure Rules
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause gives the Lord Chancellor the power to make amendments to facilitate the making of online procedure rules. It is anticipated that it will be used to make minor revisions to legislation, for example in order to regularise and modernise terminology to match that in new rules. For making regulations, the Lord Chancellor must consult the Lord Chief Justice and the Senior President of Tribunals. Any regulations that amend or repeal primary legislation are subject to the affirmative resolution procedure and must go before Parliament for approval. Regulations that amend or repeal secondary legislation are subject to the negative resolution procedure.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clause 27
Duty to make support available for those who require it
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause requires the Lord Chancellor to make provision for those who require digital support. HMCTS is moving towards digital services being the default, but we absolutely understand that not everyone is able to use online procedures and may need assistance in starting or progressing their case online.
Digital services are designed with and for users, so that they are easy to use. That includes, for example, ensuring that services work with assistive technology, such as screen readers, and simplifying language to ensure that users understand what they are required to do. HMCTS user contact functions support users with guidance and help on their journey through a service over the phone and through related call centre channels, such as web chat. HMCTS has also awarded a national contract to deliver positive and practical solutions to support users and to break down the barriers of digital exclusion. Through the contract, support will be available in person and remotely through a network of delivery partners who have experience in supporting the users of Justice services.
The measures above seek to direct as many users as possible through the primary digital channels. However, that does not mean that non-professional users will only be able to interact digitally with the court. HMCTS will ensure—as I have explained before—that all users receive an equal service, no matter what channel they engage through. Paper forms will be kept as a channel for non-professional users and work is ongoing to review and simplify those. The use of digital applications has been made mandatory for professional users in some HMCTS services, but in all services paper forms will remain available for non-professional users.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Power to make consequential or supplementary provision
James Cartlidge
The clause details the powers of the Lord Chancellor to make consequential or supplementary amendments to legislation in relation to any other provision within chapter 2 in order to facilitate the making of the online rules. In particular, the Lord Chancellor may amend, repeal or revoke any provisions within an Act of Parliament passed before this legislation or during this parliamentary Session. In addition, the Lord Chancellor may amend, repeal or revoke any provisions within subordinate legislation, irrespective of when the legislation was made or will be made, or which Act the power to make it is contained within. It is anticipated that the power will be used to make minor revisions to legislation, for example in order to regularise and modernise terminology to match that in new rules. Any regulations that amend or repeal primary legislation are subject to the affirmative resolution procedure and must go before Parliament. Regulations that amend or repeal secondary legislation are subject to the negative resolution procedure.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Clause 29
Amendments of other legislation
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss, That schedule 4 be the Fourth schedule to the Bill.
James Cartlidge
I propose to deal with clause 29 and schedule 4 together, as the clause simply gives effect to that schedule. Schedule 4 amends existing legislation as a result of the new online procedure in courts and tribunals. Those amendments provide that the standard civil family and tribunal procedure rules must be framed to ensure that they do not apply to proceedings while they are subject to the online procedure rules. That provides clarity so that court users are aware of which set of rules apply to their case. This power will ensure that rules made by the online rule committee are not subject to, or undermined by, rules made by the other rule committees.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Schedule 4 agreed to.
Clause 30
Judicial agreement to certain regulations
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 30 explains what is meant by the concurrence requirement, which the Lord Chancellor is required by a number of the preceding clauses to fulfil when making regulations. The requirement is to obtain agreement of the Lord Chief Justice and the Senior President of Tribunals when making regulations. The clause explains that the Lord Chancellor must obtain the concurrence of the Lord Chief Justice before making regulations that relate to civil or family proceedings in England and Wales, and of the Senior President of Tribunals before making regulations that relate to proceedings in the first-tier, upper, employment or employment appeal tribunals.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Interpretation of this Chapter
Question proposed, That the clause stand part of the Bill.
James Cartlidge
It is fair to say that this is not the longest speech I have given so far. Clause 31 is a technical clause and merely defines terms used in the online procedure clauses.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Nuclear Energy (Financing) Bill (Second sitting)
Tuesday 16th November 2021
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Nuclear Energy (Financing) Act 2022 View all Nuclear Energy (Financing) Act 2022 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 16 November 2021 - (16 Nov 2021)
Mark Jenkinson (Workington) (Con)
Chair, I would like to bring to the Committee’s attention my entry in the Register of Members’ Financial Interests. It is a matter of public record that I worked in the nuclear industry prior to my election.
The Chair
We will now hear from Richard Hall, chief energy economist, Citizens Advice, who is appearing via video link. We have until 2.30 pm for this session. Welcome, Mr Hall. Would you like to introduce yourself?
Richard Hall: Good afternoon. My name is Richard Hall. I am the chief energy economist at Citizens Advice. Citizens Advice has a statutory role to act as a consumer representative in the electricity and gas sectors. That comprises a research and advocacy function in terms of trying to understand the issues consumers face and propose better solutions for them; an advice function in terms of helping consumers to understand their rights and options that is provided through our bureaux, our website and a telephone consumer advice service; and providing advanced support to consumers with difficult complaints or issues through an extra help unit that is shared between ourselves and Citizens Advice Scotland based in Glasgow.
Dr Alan Whitehead (Southampton, Test) (Lab)
Q
Richard Hall: Yes, certainly, Alan. There are good reasons to think that a RAB model could reduce the cost of capital associated with bringing forward new nuclear projects, but it is important to be mindful that consumers are not simply exposed to the cost of capital; they are also exposed to the volume of capital. That is relevant in the case of nuclear because nuclear projects have a track record of coming in over budget and behind schedule.
If you look at the impact assessment that the Department for Business, Energy and Industrial Strategy published alongside the Bill, it highlights that, on average, new nuclear projects of the nth of a kind—not the first reactor of a particular model to be built, but an iteration of it—have come in 20% over budget within Europe and 100% over budget worldwide since 1990. It also highlights that nuclear projects within Europe have suffered construction time overruns averaging 40% following the final investment decision. The average is 90% on a worldwide basis since 1990. This matters to consumers because, under a RAB model, unlike a contracts for difference model, they are exposed to the cost overruns and to the time overruns if they occur in a different way.
Perhaps to unpack what we mean by that, I should point out that under the CfD model that was adopted for Hinkley Point C a price is guaranteed to the developer for every megawatt-hour of output it produces, and that is inflation-linked, but consumers do not become liable to start paying those costs until the plant is operational. Those costs are pay on delivery. Consumers are not expected to pay in advance of the plant being there. Under a RAB model, consumers would start paying towards the cost of the plant from the time the construction commenced. Indeed, the Bill as it is drafted allows for that. If there are construction cost overruns, consumers will essentially be paying for a benefit in terms of a production facility that is not actually being delivered yet. That is the point about construction time issues.
On cost overrun issues, while the strike price that was agreed for Hinkley Point C appears to some commentators to be quite high, it has the advantage to consumers of being, in effect, an all-in price. If the cost of the build project escalates over time, those escalating costs will have to be met, but they would be met by the developers; they would not be met by consumers. Essentially that risks sits with investors. Under the RAB model, however, it is likely that any cost escalations would be shared between the consumers and investors. At this stage, we do not know exactly how. The BEIS consultation from the autumn of 2019 suggested that it might look at putting in place mechanical sharing factors between the developer and consumer. That means if the construction were to run under or over budget, a proportion of the benefits or additional costs would be borne by the investors and the developers, but a proportion would also be borne by consumers. On that, it is important to be aware that although the developers have some control over construction because they are in control of the overall project, consumers do not have any control over the risk. Essentially, they are the passive recipient of the risks.
In a nutshell, the concern that we have is that if a project were to come in on budget, RAB looks like a very good model potentially, but there is a strong historical track record that suggests that projects may not come in on budget. Under the RAB model, consumers may be exposed to significant cost overruns as a consequence.
Dr Whitehead
Q
Richard Hall: There is a lot in that question. I will try to unpack it if I can—there was something about methods of financing, and something about cost caps too. Regarding cost caps, the Bill envisages that there would be a funding cap essentially—a point at which, if costs escalated significantly above the expected spend, the Secretary of State would be prompted to take a decision on what should happen with those additional costs. I do not believe that the face of the Bill actually stipulates what that materiality would be, and I think it also leaves that decision very much at the Secretary of State’s discretion, so there is the potential that they could simply acknowledge that there was a problem, but continue to put those costs on to consumer bills. That seems to be fairly vague: it leaves room for ambiguity on what a Secretary of State might do in that type of scenario in future.
A couple of things could be done to try to mitigate consumer costs. The first is that the sharing factors that are set out—they are not set out in the Bill; they are to be agreed between the Department and the developer, as to who bears the costs if there are significant cost overruns—should be slanted towards the developer facing most of those costs. Again, that is because consumers have no ability to control those costs whatsoever, whereas the developer does have the ability to control some of those costs. Effectively, that risk needs to be borne as much as possible by the developer. It should be borne in mind that, obviously, that creates some interactions with the cost of capital: effectively, the more you de-risk the developer, the more you reduce the cost of capital, but given that you are only doing that by pushing those risks on to consumers, we think it is probably better to ensure that the developers are subject to as sharp incentives as possible to build it on time.
Turning to the other areas that I think would be of assistance, the Bill envisages that the developer would have a right to appeal any decisions that Ofgem made on the price control that had been agreed for the developer. Intuitively, those appeals are only going to go in one direction—that is, if the developer feels that a settlement is not generous enough to it. It is hardly going to appeal if it feels a settlement is too generous. I notice that elsewhere, in terms of many aspects of energy governance, where appeals processes exist, they are bidirectional: they allow for someone to appeal that a settlement is too tough, but they also allow for people to appeal that a settlement is too weak. We think that type of approach should be followed here: if the developer has the right of appeal to basically ask for more money, other interested parties should have the right of appeal to argue that there should be less money, so there is bidirectional scrutiny and tension there.
A second area in which I think we could help to bear down on costs is that it is quite important that some form of independent third-party impact assessment is made of the key terms of any deal that is agreed under this Bill, and published before that agreement becomes legally binding. I would also like parliamentarians such as yourselves to have an opportunity to see the headline terms of any agreement and that independent third-party impact assessment, and to be able to scrutinise those costs before the agreement becomes legally binding. If that seems like it might be quite an unusual thing to do, because obviously Parliament does not micromanage individual infrastructure purchases, we would argue that it is justified in this case, because we are talking about building assets that will—even at the most conservative estimate—cost consumers tens of billions of pounds, and those costs will be recovered from consumers for potentially 50 or 60 years.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Q
Richard Hall: On those two specific projects, Heathrow and Thames Tideway, I cannot give any insight. I am not particularly close to those individual cases. It is fair to note that in both cases the cost of capital brought forward by the model seems to have been low, in particular in the case of Thames Tideway. On nuclear, I simply go back to the point that there is a large base of literature looking at historical cost overruns and the extent to which things come in on budget. That tends to display fairly consistently that these types of projects are very likely to be subject to optimism bias at the time that they are procured—a belief that they will be cheaper than they actually will be.
In addition to the costs and dates I mentioned from the BEIS impact assessment suggesting the average levels of cost overruns, look at a couple of other examples from academia: Sovacool et al. looked at a global example of 180 new nuclear plants and found that 97% of them came in over budget and that the average cost overrun was 117%; and Flyvbjerg et al. found that in a sample of 194 nuclear plants, the median cost overrun was 68% and the median schedule or construction-time overrun was 40%. That is a fairly large sample set of projects, and the analysis tends to suggest considerable optimism bias for new nuclear—it tends to come in late and over budget.
Matthew Pennycook
Q
Richard Hall: I think potentially it could, simply because of the scale of the project. The cheapest cost estimate in the impact assessment is that, for a Hinkley Point C-sized plant put forward on the RAB model, it would cost about £24 billion. That is the cheapest estimate, so we are talking about extremely chunky consumer spend.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Richard Hall: It is hard to see a case for this being the most cost-effective way to spend money on generation. A lot of the argument for whether we need new nuclear or not comes down to whether it is perceived as being useful to provide a balanced generation mix, so that it is available when other forms of low-carbon generation are not available. On that point, I note that the Government are more confident on the need for new nuclear than some of their advisers are. The Committee on Climate Change’s sixth carbon budget work from last December shows a range of pathways to net zero by 2050, some of which involve new nuclear. It talks about it being “possibly” needed, not definitely needed.
The National Infrastructure Commission’s 2018 national infrastructure assessment recommended that the Government consider bringing forward one new large-scale nuclear plant in the 2020s—but only one, suggesting that in general terms the cost reductions in renewables were so sharp and likely to continue that a pivot to renewables appeared a better bet than backing nuclear more forcefully.
The case for whether new nuclear is needed is ambiguous at this stage. Could you get better value for money from investing in other things? I think the challenges of making our homes energy-efficient so that we stop spending so much on energy and reduce emissions should be tackled as a priority.
Alan Brown
Q
Richard Hall: I certainly think that the risk of it being brought out of service earlier than expected has to be borne by the developers rather than by consumers. There is no way in which consumers can forecast or manage that risk.
On affordability over 60 years, we are talking about a 60-year lifespan, but there may be another 10 years in addition for construction, so we are talking about a payback period that, if we had the decision now, might continue until 2091 or towards the end of the century. It is extremely hard to know what options will be available to consumers 10 or 20 years out, let alone 70 years. It is hard to forecast whether it will offer consumers good value for money over that period.
One can only note that the cost of alternatives—renewables, storage and so on—has fallen rapidly over time. There is some risk of buyer’s regret: an option that looks cost-competitive today might look quite cost-uncompetitive quite rapidly.
Alan Brown
Q
Richard Hall: That is a good question. If the special administration regime were to be used, I understand that effectively it would mean that the special administrator would be taking on that risk. That may mean that it became a public liability. I do not know how a special administrator would sell on that risk to others.
In terms of where it would be borne if the special administration regime were never used, I think that would come down to the terms of the contract agreed between the Government and the developer. In its current form, the Bill basically enables the Government to enter into negotiations with a developer to agree a contract based around the RAB model, but the details of that contract are not contained in the Bill. Earlier, I said that I thought it very important that an independent third-party impact assessment be laid before Parliament after a deal is struck but before it becomes contractually binding. That would provide the opportunity to understand where the liabilities would sit in that type of situation.
Mark Jenkinson
Q
Richard Hall: We do not have an anti-nuclear stance; we are technology neutral. In terms of the options between bringing forward new nuclear or leaving catastrophic climate change unchecked, there is no question that nuclear is an option that can help us to reduce our emissions and tackle the climate change crisis. We do not have concerns on the technology itself, and whether it can be done safely and so on. Our concerns are simply around cost. It looks like a costly option compared with others.
On whether we have a preferred approach, because we are technology neutral we do not have a preference for any particular technology over others. I would simply highlight such things as the analysis of the Committee on Climate Change, which showed a range of possible pathways to 2050 that it considered to be affordable. Some of them involved nuclear and some of them did not. It appears that there is a choice to be made.
Dr Whitehead
Q
Richard Hall: Yes, certainly. Paragraph 4.2 of the impact assessment sets out a range of tables showing what the estimated construction and financing costs would be for a Hinkley Point C-sized power station in a range of scenarios: under a CfD with 20% cost overruns, or with 100% overruns, or under the RAB model at various different costs of capital—
The Chair
Order. I am afraid that that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank you very much, Mr Hall.
Examination of Witnesses
Chris Ball, Dawn James, Cameron Gilmour and Alan Woods gave evidence.
The Chair
We will now hear from Chris Ball, managing director of EMEA nuclear at SNC-Lavalin, and Alan Woods, director for strategy and business development at Rolls-Royce, both of whom are giving evidence in person. We will also hear from Dawn James, vice-president of nuclear at Jacobs Engineering Group, and Cameron Gilmour, vice-president of nuclear at Doosan Babcock, who are both giving evidence via video link.
We have until 3.30 pm for this session. Could the witnesses please introduce themselves for the record?
Chris Ball: I am Chris Ball, managing director of the Europe-middle east business at Atkins SNC-Lavalin.
Alan Woods: I am Alan Woods, director of strategy and business development for Rolls-Royce SMR.
Cameron Gilmour: Good afternoon. I am Cameron Gilmour, and I run the nuclear business at Doosan Babcock.
Dawn James: Good afternoon. I am Dawn James, the vice-president responsible for the nuclear power business at Jacobs.
The Chair
Thank you very much. Are there any questions for these witnesses? I call Virginia Crosbie.
Virginia Crosbie (Ynys Môn) (Con)
Q
Chris Ball: We talk about the RAB model, from the numbers that I have heard, probably putting about £1 on to consumer bills on a monthly pay-in. To put that into the context of some of the price increases that we have seen through the energy sector over recent weeks, we are probably talking about an 80% increase from some of the figures that I have seen. I have been looking at this with elderly relatives as well.
When you look at the RAB model in terms of the impact on consumers, there is a cost associated with that—of course there is. It is very limited compared with many other models, and we have to take the long-term view in the energy sector. That is something that the energy sector has been sadly lacking for many, many years. We have to take that 2050 view. It represents very good value for money in the big scheme of things.
Alan Woods: We welcome any model that helps the deployment of new nuclear. From a Rolls-Royce SMR perspective, if we were to deliver our power plant under a RAB, we estimate that it would be capable of getting in the order of £35 a megawatt-hour, whereas a CfD mechanism would be in the order of £60 a megawatt-hour. That is the different that we would forecast.
In terms of one against the other, it comes down to a question of risk. Our whole programme is designed to eliminate risk, particularly construction and build risk, and to move away from what we would call a one-off infrastructure project to a factory-repeatable product that means we can build certainty into the design. We believe that we can use the CfD mechanism for our plants. We believe that we can raise the private capital to fund that, and that is something that we will be exploring in the coming weeks and months.
Dawn James: The way that I look at this, large gigawatt-scale nuclear power stations require a huge up-front investment. Under the CfD model, looking fundamentally at the costs over time, there are a huge number of hidden costs associated with financing these projects, and those costs over time will essentially all be passed on to the consumer.
Under the RAB model, by driving down the uncertainties associated with financing costs because of risk, we are able to actually—
The Chair
Ms James, I am afraid your evidence is not very clear. Could you move nearer the microphone?
Dawn James: I do apologise. I will do that. Is that clearer?
The Chair
Thank you.
Dawn James: The costs associated with the CfD model are passed on to the consumer over a much longer period of time. Because the capital investment is so much greater due to financing, ultimately the cost to the consumer is much greater than it would be under the RAB model.
Cameron Gilmour: I largely echo the points made by all three of my colleagues. When we look at the Hinkley Point C case, the financing cost within the CfD is the largest amount within the rating—over £82.50. The cost of construction at Hinkley is actually a small element—£11—of that CfD price. The more we can introduce a more economical financing model, that is obviously of benefit to the consumer down the line, so we welcome that.
The Chair
Thank you. Anthony Browne or Virginia, did either of you have a follow-up question?
Anthony Browne (South Cambridgeshire) (Con)
Q
Alan Woods: We believe we can, yes. It is worth noting that our plant is an order of magnitude different to the larger ones in terms of the capital. It is also different in terms of the time it takes to build and in the fact that we have completely changed the risk profile. As I say, this is a factory-built product and it is something we are used to.
Anthony Browne
Q
Alan Woods: We have removed a lot of the construction risk. We have what is called our fourth factory, so we actually assemble our modules on site in a controlled factory environment. This allows us to remove and reduce that risk profile. It is a completely different ball game.
In that regard, we believe that we can attract private capital. We spent some time at COP26 last week and there is an appetite in the financial markets for investment in projects that can demonstrate an acceptable risk profile, which we believe we can. It is up to us to demonstrate that and to attract that private finance, but we think that is doable.
Anthony Browne
Q
Alan Woods: I am referring there to the CfD model. If we have the CfD, which is essentially providing some certainty of returns, then that certainty of returns, coupled with the fact that the risk profile of our product is completely different, represents an attractive financial investment.
Anthony Browne
Q
Alan Woods: Well, look, if RAB is available then RAB is great. If you have got that high-risk profile, it will provide even better value to the consumer. From our perspective, the pace is also important and RAB is not legislated for yet. CfD is an available mechanism that is tried and tested, and we believe we can make it work. Therefore, to operate at pace, our preferred route at the moment would be to move forward with the CfD approach.
Anthony Browne
Q
Alan Woods: Yes, sure. There is nothing stopping you.
Anthony Browne
Change horses.
Alan Woods: Yes, it is no secret that SMRs work by building a fleet. How you finance each SMR does not mean they all have to be financed the same way. We are also looking at models for the future, looking at the net zero challenge. The scale of energy or electricity generation that we will need to decarbonise things like heat and transport, or for synthetic aviation fuel, hydrogen and so on—it will take an enormous amount of electricity to make those new fuels. We see a world where you might need to do that on energy campuses that operate in an off-grid manner to maximise that value. In that kind of a regime in the future, we may be able to build these under a separate, more simplified PPA model.
Anthony Browne
Q
Chris Ball: Yes. I would take it back a step, actually, because we cannot let this conversation become either/or; it has to be both. I say that because, if you look at the future net zero world, the general view is that we should electrify as much as possible and then decarbonise the electricity supply industry. The electrification will probably double our demand on the grid and will probably lead to a tripling of our capacity on the grid, because a large amount of it is intermittent renewables.
There are various studies out there and everyone has a different view, but broadly speaking a quarter of the grid should be—will have to be—firm power, for a host of reasons, not least the storage costs escalating almost exponentially with increased of renewables penetration. We are talking around 50 GW of firm power, or 50 large plants; Hinkley is 3.2 GW. You have two main sources for that. The first is gas with carbon capture and sequestration. By the way, that energy sector has risks; there is no large-scale carbon capture and sequestration plant in the UK, but some of the modelling suggests that we would have to capture and sequester in the UK alone four times the current world capacity of carbon capture and sequestration. The other source is nuclear. This should not become an either/or conversation. This should be a conversation about how we make sure that the CCS market starts moving, the SMR market starts moving, and the large-scale nuclear market starts moving.
For context, we need to build something like 9 GW a year across all technologies—firm power and renewable power—between now and 2050. If you go back over the last 60 years, our peak output is of the order of the construction of 6 GW a year, averaging at 3 GW, so we have to treble the average output every year for the next 30 years, working to the 2050 timescale. This has to be a conversation about all. There is no doubt that, to push large-scale nuclear forward, the RAB model seems to the most appropriate method.
Anthony Browne
Q
Chris Ball: This is not really my area of expertise; I suggest you are better off asking other people about that. The big piece for me is the risk allocation within that model—where risk sits. There is a balance there. From listening to some of the earlier evidence, clearly the more risk that is transferred to the developer, the more attractive that might become to some investors. The flipside of that is that you are starting to move to a scenario where risk is priced in through the delivery vehicle. That is a trade-off that I would be very careful of. I will limit my comments to that area.
Anthony Browne
Q
Dawn James: I hope you can hear me okay now. I am not an expert in the field of investors, but building on what Chris said, it would certainly bring more developers into the UK. As I think you are all aware, a number of programmes have started then stopped, including at Wylfa and Moorside, and that is largely down to issues around financing. So yes, I believe that the RAB model will definitely attract more investors and developers, which, as you just said, is critical to our meeting our net zero target.
Anthony Browne
Q
Cameron Gilmour: Looking at some of the detail and how the Bill has been written, it seems to be designed to encourage that investment. Again, I am not a financial expert, but it is encouraging to see that nuclear is recognised as playing a key part in our journey towards net zero. From an investment perspective, it becomes something that the Government want to invest in and commit to, so you would say that has to be an encouraging sign for any potential investors.
Anthony Browne
Q
Alan Woods: I notice I keep getting questions first, so I have less time to think of the answer, but—
Anthony Browne
I can ask Chris first if you want.
Chris Ball: No, that’s fine. [Laughter.]
Alan Woods: Look, clearly there needs to be a regulator, and a regulator is needed to regulate the way RAB is deployed and managed. From our perspective, Ofgem is as good a point to start as anywhere.
Chris Ball: Clearly this creates a new demand, and there is a need for additional capacity somewhere to oversee the management of the RAB model. I think the question is whether Ofgem is best placed to do that, and the answer is: possibly.
The other piece that I would look at is, ultimately, where our country’s energy system architect is now. Who is defining the way in which our energy system should look and operate in 2050? Is there benefit in establishing a new energy system architect who takes decisions on the future power mix, and actually putting into that system architect the capability to oversee investments in all sectors? I think that is one of the reflections that I would have about the controlling mind in how we reach that 2050 net zero energy system.
Anthony Browne
Q
Chris Ball: It may well be within Government and BEIS, absolutely. But I think we do need that capability firmly established in one place. I am not suggesting it should necessarily sit outside of Government or BEIS, but we should have a clear collection of people under that title as the controlling mind.
Alun Cairns (Vale of Glamorgan) (Con)
Q
Alan Woods: Let me break that down in terms of the proven part. Our design and our plant use proven technology. At the base of the reactor island, there is a pressurised water reactor. It is the same as what Rolls-Royce has designed, built and operated for the past 60 years in the submarine programme. We do not have the same set of requirements as the submarine programme, but it is the same core technology. Is it proven? Yes, it is absolutely proven. We know it works and that we can build it. We are building them today.
The rest of the turbine island plant is designed to use products that are already available in the market today. We are not designing a power plant that requires us to invent a specialist product here or a specialist product there and that has never been made before. It is designed to use products that exist in the market. Even though it is a steam turbine, it is a commodity product we can buy. All the constituent parts at our plant are proven technology. Our civil module approach has been proven by our partner, Laing O’Rourke, which is making modules of this nature today at Worksop. We will expand that facility to replicate and grow that module manufacturing capacity. The constituent parts are all proven. There is no technology innovation at the plant that is questionable as to whether it will reach the right technology-readiness level.
Then we come to our ability to manufacture and join the modules together. Again, this is not a technology challenge. It becomes more of a logistical challenge and there is plenty of evidence in other industries—in fact, inside Rolls-Royce—where we manage those logistics from the supply chain to the module facilities to the delivery to site and to the installation and commissioning of them.
I do not accept that we are not proven technology; we absolutely are. As I said, we have built into the design, intentionally from the outset, technologies and features that remove the risks associated with traditional construction. It is no longer a very large construction project; it is a factory of products. For example, when we build the power plant, we assembly the modules on site where an average of 500 people are assembling the parts. We do that to move those jobs into the module facilities and the supply chain and into the factory environment where we are manufacturing the same products over and over again in a production line environment.
The Chair
Do any of the other witnesses want to answer the question?
Chris Ball: There are two aspects to the question. First is the one about proven technology, which Alan has covered. Secondly, there is taking the lessons learned and leveraging the skills and capability within the UK nuclear industry. If we look at Hinkley Point C from unit 1 to unit 2, we see broadly in the order of a 20% reduction in time scales and costs as we take the lessons from unit 1 on to unit 2. Clearly, if we carry on with that same trajectory at Sizewell C, it will be 40%. I am not suggesting that it would necessarily get to 40% but one would assume it would be in excess of 20%. That is a benefit. Going back to the RAB model, leveraging the experience of Hinkley Point C affords good protection against the risks of cost and schedule overrun. Equally, leveraging those lessons into the SMR programme and from the skills and capability that have been built up on existing nuclear programmes is the benefit from all programmes.
My big fear for us as an organisation, which has several thousand engineers in the UK, is that disruption to workflow means that we lose the lessons learned from the industry. That is not to the benefit of the UK, job creation and the cost of our energy.
The Chair
Dawn, do you wish to comment?
Dawn James: I merely wish to echo Chris’s point that intelligence replication will drive down risks and costs significantly. I really wish to impress on everyone the need for pace in getting the Bill through. A huge number of jobs are at risk across the whole UK.
Can you not hear me very well?
The Chair
Not very well at all, I’m afraid. If you’d like to speak up.
Dawn James: I have never been accused of this before. I was echoing Chris’s point about the benefit of intelligence replication and how it will reduce risks and therefore drive down costs. I was also pressing the need for pace in moving the Bill through so that we retain the skills and the knowledge as we move from Hinkley to Sizewell. That is where a huge amount of value can be realised.
The Chair
Cameron, do you have anything to add?
Cameron Gilmour: I will be brief. The thing to remember is that the Sizewell C project is global European pressurised reactor Nos. 7 and 8, so the core technologies are proven and operational in a civil nuclear power plant right now. The important thing for the industry is that we generated the continuity and recreated our nuclear expertise in the UK when we started on Hinkley Point C. We have learned a huge number of lessons and we have created a lot of energy in the industry and on the programme. I echo the points made about pace and moving forward. If we give people continuity of employment and the long-term horizon, we will retain the skills and the knowledge. Those skills will be there not just for the gigawatt plants that we can build but for SMRs. For me, this is a crossroads not just for the engineering and construction industry but for the nuclear industry. The skills have been hard earned, and the lessons have been hard learned, so we have to capitalise on that and move forward quickly.
Alan Brown
Q
Alan Woods: That would depend on a number of factors, including the expected rate of return that the investors were looking for and the value of the CfD itself. In the previous session you were talking about having a requirement for 60 years to pay back on. It would not be that long for an SMR because the capital cost is that much lower and the speed we can build them that much quicker, particularly once we have reached that nth unit and we are rolling them off the production line. The payback period will therefore be a lot quicker, and that will reflect what is available on the CfD. It becomes a balancing act.
Alan Brown
Q
Alan Woods: There are two things to say on that. First, it is not just about repetition to get down the costs of SMR; there is a core reduction in the capital cost per megawatt purely driven by that factory approach. Taking jobs off an external site environment and moving them to a factory delivers immediate portable efficiencies anyway in terms of the efficiencies that we get out of the people and the product. The method of manufacture and build reduces the capital cost to start with. What was the second part of the question?
Alan Brown
Q
Alan Woods: We need to have a pipeline of orders, mainly for us to underpin the investment in the factories, and for the supply chain to underpin the investment that it is looking for in its own facilities and capability capacity. They do not all have to be in the UK. Certainly, we are equally looking at export markets to deliver that order book and line of sight to orders.
The other critical point is that to take advantage of the reduced capital of an SMR, it is beneficial to look, in certain circumstances, at an SMR as a single product. If we start grouping them together in chains of four, five or six as a single project, all of a sudden the capital goes higher and you have a similar position, in some respects, to raising large amounts of capital for single projects. There is a benefit to be had from treating SMRs in smaller multiples, but we need line of sight to orders off the back of the first order or two for us to get the confidence to build the factories, and for the supply chain to invest behind us.
Alan Brown
Q
Alan Woods: We have a very detailed schedule to get us to the first of the fleet, as we call it, operating by 2031. The first one has a number of activities that are unique to the first unit. For example, we have to go for generic design assessment, which we entered last week. We have to build those factories and the supply chain. That puts more time into building the first unit. Coupled with that, we know that the first unit will take as long, because it is that first one, and that is in our plan.
The Chair
Q
Dawn James: The only thing that I would add is that, as I think Chris said before, we have an ever-increasing demand for electricity in the UK. Our current suite of nuclear power stations bar Sizewell B will all be off the bars by 2030, so we really need to be investing in those big gigawatts and in SMRs, using whichever models are appropriate.
The Chair
Q
Cameron Gilmour: I am largely in agreement. I will reinforce Alan’s point about the need for certainty, where any developer or investor needs a programme. When we create a programme, whether it is gigawatt-sized or SMRs, we create that confidence, the continuity of resources, and then we start to see the efficiencies flow through in the programme as we deliver them, whether it is factory or site construction.
Dr Whitehead
Q
Alan Woods: We actually challenged the IAEA on its definition. The response we got was that, at the time it defined an SMR, that was halfway between what it classed as a medium reactor and a small reactor. There was no set rationale for why it classified, and it was many years ago, that 300 MW. The simple reason that ours is 470 MW is that we set a requirement on the design to be road transportable. Each module has to be transportable to site by road. That gives us maximum site flexibility. It also removes the need for expensive additional infrastructure, such as new port facilities or new roads, to get the parts in.
Having set the size for the biggest module to be road transportable, the biggest limitation across Europe is about a diameter of 4.5 metres for the biggest module. If we set that as the maximum size for our reactor pressure vessel, that gives us an internal diameter and an internal volume for that pressure vessel. Using conventional available fuel that is made today in the UK and elsewhere, that sets the power that we can get out of that pressure vessel, so we need to design around that power.
The objective that we had, which was set by the utility partners we have worked and continue to work with, was that they want the maximum power for the least capital cost. We are therefore delivering that within the constraint of road transportability.
Dr Whitehead
Q
Alan Woods: Yes; all new plants that come to the UK have to go through the generic design assessment process. We put in our application to enter that process last week.
Dr Whitehead
Q
Alan Woods: Our next phase of the programme is for the next three and a half to four years, which will get us to the end of GDA step 2. That is the point at which we have completely de-risked it—not that we see any risk to going through the regulation, because as I said, this is proven technology power plant. We have already been working with the regulator for some time. At that point, we move to the final step, which is step 3, and that will take about another 18 months.
Dr Whitehead
Q
Alan Woods: We would actually start building ahead of that, because the GDA process allows us to prioritise the longer-lead items, the critical items, up front. We validate those with the Office for Nuclear Regulation early, on the basis that we can then get a release to order to accelerate the manufacturing process. We can do some of that activity in parallel by the way that we sequence the assessment through the GDA activity.
Dr Whitehead
Q
Alan Woods: No, it is eminently possible by the 2030s; it is very doable.
Dr Whitehead
Q
Chris Ball: If we work on the basis that Hinkley C is on line in let’s call it five years from now, we would have an issue if we held back over that time and thought that we then just move across. Naturally, within any project there is a phasing—there is a phasing of skills which means that we need to maintain a continuity almost at a lower level in terms of the breakdown of those skills. In my own organisation we currently have of the order of 600 people mobilised on Hinkley Point C. At this point in time, that is largely connected with civil engineering, civil design, design of structures, and that positions us quite clearly in a good position for future export markets. Those skills start to demobilise 12 months from now. Naturally in any major project such as this, civil engineering design is one of the earlier phases of the project. We will start to demobilise those skills 12 months from now, if not sooner, and you would probably say that we would demobilise three quarters of that skills base over the course of the subsequent 18 months. We are talking of a one year to two and a half year period over which we would be demobilising three quarters of our workforce, and taking skills out of the industry.
We would look at other neighbouring industries that have a demand on common skills bases to ensure that we maintain employment where possible, but it still represents a loss of capability from the industry that we may or may not be able to bring back in at some future point. That 12-month period from now is what is high on our mind.
Virginia Crosbie
Q
Alan Woods: Chris made the point earlier that net zero is such an enormous challenge. We often think about decarbonisation in the context of the grid, but the grid in the UK in particular represents about 20% of the total energy we use. The rest of it is heat and transport. As we look to decarbonise heat and transport, there are not that many routes available, certainly in some of them. Hydrogen is one, synthetic fuels is one and of course more electrification, but the common denominator among all of those is that you need more clean electricity. The scale is enormous. We therefore welcome any financing mechanism that will help any industry, not just the nuclear industry, bring forward those clean technologies, because the reality is that we have to have them if we are going to meet net zero.
The implications if we are not innovative with how we approach financing both in nuclear but also in other industries mean that we become dependent on other sources of technologies—imported technologies financed from overseas, which bring with them the whole dependency on other nations for our critical energy infrastructure. Increasing that dependency puts our ability to meet net zero at more and more risk.
Chris Ball: I will take a step back here. Earlier, I mentioned that there is a need for about 9 GW a year of construction to take place each year for the next 30 years. We need to find a way of building everything we possibly can in a way that is most cost-effective for the consumer. In every single area, there will be challenges for us to overcome.
People talk about offshore wind at £40 per megawatt-hour strike price. Actually, when it comes to the last two offshore wind farms—one up in East Anglia and one in Hornsea—one was at about £120 and one at £140 a megawatt-hour initial strike price. I recognise that offshore wind prices have been coming down; that is because of consistent underpinning Government policy. We have to replicate that in each and every one of these areas.
Just because offshore wind prices have come down, does not mean that they will continue to do that; they will reach a plateau and companies will start to go to deeper waters and floating offshore wind prices will pick up. We are also judging things on an old-fashioned measure of the levelised cost of electricity, but for renewables we need to start building in the cost of energy storage as well. That does not come cheap. There is a lot of talk about hydrogen, but that requires a lot of power. For every electron that goes into generating hydrogen, we might get 0.3 electrons back out again; it is not a one for one. That is quite often lost in the debate. Actually, I am a supporter of all these technologies; what I am saying is that we need to look at how we manage those risks.
Net zero will not be achieved without nuclear. From an engineering perspective, the system requires firm power on the grid. The RAB model is a good way of driving forward large-scale nuclear for the benefit of the consumer. Look at the levelised cost of electricity at, let us say, £40 per megawatt-hour for wind, noting my earlier comment, and add the storage costs; if you compare that with nuclear and the RAB model, the prices are very similar. Obviously, Alan also knows the SMR nuclear market very well and would say that, yes, it is similar there.
It worries me that if we do not find a way of pushing all these technologies forward, including carbon capture and sequestration and the technical challenges around that, the risk of failure for the 2050 net zero system is very high.
The Chair
Q
Dawn James: Yes, please. There is a risk of not having financing models for UK electricity prices. We have seen some evidence of it this year. Earlier this summer, the wind was not blowing—I know it is a trite phrase, but it is so true—and the sun was not shining very much. We were having to fire up gas plants and to bring coal plants back on to meet the needs that we had then and to use our current fleet of nuclear power stations that, as I said before, had come offline.
Not having the financing model so that we have control of our energy supply here in the UK would mean that we would be held hostage by other nations. We have seen what has happened with gas prices. I am sure that you have heard all these arguments from other people; maybe it has even been quite emotional. It is a huge risk to every type of taxpayer in this country if we do not take control of our electricity generation, and not just from a net zero point of view. But actually, we will not achieve what we need to from a net zero point of view without nuclear.
Cameron Gilmour: I can reinforce that. Our baseload generation comes to the end of its life in this decade; if we do not replace that and add to it, we will not continue our net zero ambitions with the current technologies on the table.
Dawn made a really good point about security of supply. We have seen what has happened to gas prices over the last few months. Baseload nuclear gives us confidence around pricing and supply. It is very complementary with renewables as well, with a mixed system of gigawatts, SMRs and future technologies being very complementary with all the renewables that we have on the grid and planned.
Virginia Crosbie
Q
Chris Ball: I would observe that it is about making sure that companies come together as one, and that there is leadership in the industry. If a RAB model supports and encourages that, fantastic. Looking at nuclear nations around the world, those that have been successful in the decades since—the 2000s and ’90s onwards—we tend to find a clear industry lead. Sometimes that is the operator, and sometimes it is a reactor vendor, behind which everyone else is corralled. It is probably that leadership that we used to have in the UK in decades gone by, and behind which everyone corrals, that has aided a successful industry, particularly in overseas exports. That is the piece that is missing at the moment, but that does not mean that industry should not come together and do something about it itself. It probably should, and I include myself in that comment. If RAB encourages that, all the better, but that is an observation that I would make.
Alan Woods: I would say that for us to be seen as a global leader in nuclear again we need to own the technology as a nation. We need to own the intellectual property; we need to export it; we need to be the country that other countries come to when they are thinking about wanting to deploy and exploit nuclear solutions in their home markets. I think that we will get there. With SMR, we will definitely get there. I think that that is what differentiates us.
You only need to read the news—there is an awful lot of noise around SMRs. There are a lot of vendors out there, and there is a lot of confusion about what is near-term and what are future technologies. I can speak at first hand, as I was in the Czech Republic yesterday, and they said that there is one thing that differentiates us. They believe that we can and will do it—and that is not true for everyone they look at. Having our own technology, coupled with the heritage that we have as a nation, we can and will grow back our position of being seen as a global leader in nuclear technologies around the world, without a doubt.
Dawn James: I think your question, Virginia, is about the magic key to unlocking or getting back to that fabulous heritage that we have in the nuclear industry. At this moment in time, yes, it is, and we really welcome the legislation that is moving forward. I cannot begin to tell you how excited I am finally to see my industry moving forward at pace. I started in the nuclear industry when Sizewell B was commissioned—at the back end of the construction of the last power station in the UK—yet we still have a really thriving nuclear industry. This is the key to unlocking and creating an industry that will thrive for many years to come.
Cameron Gilmour: A couple of points. I think that it is probably a question for the developers about gigawatt plants—could they raise the capital required without RAB? Probably the answer is no. There is a bigger issue at stake, which is sustaining the advantages in the ’60s and ’70s that Virginia talked about, and being able to have a new build programme that is both gigawatt and SMRs—EMRs in due course. That helps us to sustain expertise and knowledge, and help people with the careers that Dawn and I have had, for apprentices and for graduates in modern history. Without that funding we do not have a programme, and without a programme we do not have an industry with a future.
Anthony Browne
Q
Chris Ball: Again, that is probably not my area of expertise. The way I have looked at this is to look at every technology, and where the challenge is around enabling mass deployment of that technology. With CCS at this point in time, the key issue is not necessarily about the financing but about how the market is going to be structured and the quality of demonstrator projects.
There are different models, of course, but if you believe some of the modelling out there, we would need to capture and sequester within the UK four times the current world capacity. That is not without its challenges. So in answer to your question, I would suspect that, of course, it can be applied to that, but I actually think there are other key focus areas that need some attention to start that market moving—not least the deployment of demonstrator projects in the near term hopefully as well.
Virginia Crosbie
Q
Chris Ball: I think that is absolutely right, if you look at the RAB modelling. You have got to look at this from the concept of managing risk. How do we manage risk in the best possible way? You manage that risk through commonality and through ensuring that capability remains within the industry. We might deploy that commonality as pressurised water reactors. It might be a fleet of a couple of different designs, for instance, instead of one. From a risk perspective, it starts to consolidate down to a smaller number of different designs, with a level of commonality, where we can really drive risk and take the lessons from more projects to the next as well.
Alan Woods: A fleet clearly drives cost benefits. That is absolutely true of SMRs, despite the fact that they are factory produced anyway. We need that throughput in the factories. I would go back to the point I raised at the start. We welcome RAB. It is a mechanism that helps reduce cost of capital, but from our perspective we see there are alternative mechanisms, such as leaning on the CfD mechanism, and pace is important for us. We need to start thinking about delivering this fleet now, and that is what we are doing. Therefore, we have to look at mechanisms that are available for us now. We believe we can do this from a CfD to start with.
Dawn James: A fleet approach, without a shadow of doubt, drives down costs to the consumer by driving up our ability to replicate and driving in lessons learned from one station to the next. That security of work allows us to develop our workforce and to bring more people in. The more people you bring in at the bottom end, the more you drive down your costs, because you can spread the workforce across a number of different projects. It drives down costs in so many ways that, ultimately, that does get passed on to the consumer.
Cameron Gilmour: Yes, I agree with that. I will just bring a people angle to this as well. When I talk to some of the amazing, talented young apprentices and people in our business and we talk about this exciting future, there is no question that, without RAB, we will not have that opportunity to create that future for them, which would be a huge waste of talent. RAB is the enabler to getting that certainty and continuity for that next generation.
The Chair
Thank you. If there are no further questions from Members, I thank the witnesses for their evidence. I am sorry about some of the technical issues that we have had—that happens. We can move on to the next panel.
Examination of witnesses
Tom Thackeray, Tom Greatrex and Rebecca Groundwater gave evidence.
The Chair
We will now hear from Tom Thackeray, director for decarbonisation, Confederation of British Industry; Tom Greatrex, chief executive officer, Nuclear Industry Association; and Rebecca Groundwater, director of external relations, Energy Industries Council, all of whom are giving evidence by video link. We have until 4.15 pm for this session. Could the witnesses please introduce themselves for the record?
Tom Thackeray: I am Tom Thackeray, the programme director for decarbonisation at the Confederation of British Industry. We are the UK’s largest business representative organisation, representing small, medium and large businesses right across the country. My role is aiding businesses’ decarbonisation efforts and pursuit of sustainability. Part of that is influencing Government policy to enable them to invest, and part of it is working with businesses directly to drive down their own carbon footprints.
Tom Greatrex: Good afternoon. I am Tom Greatrex, chief executive of the Nuclear Industry Association, which is the trade association for the UK civil nuclear industry, representing companies throughout the supply chain.
Rebecca Groundwater: I am Rebecca Groundwater, and I am responsible for external affairs at the Energy Industries Council. We are a supply chain energy trade association. We represent all the energy sectors, not only in the UK but internationally, and we have five other offices in Houston, Kuala Lumpur, Dubai, London and one other that always escapes me—apologies.
The Chair
Thank you very much for attending, all of you. Could Members please indicate to me whether they have any questions to the panel? Dr Alan Whitehead.
Dr Whitehead
Q
Tom Greatrex: Apologies, but I missed part of the question; it cut off partway through, but I think I got the gist in relation to Chinese investment in UK nuclear. I think that is what you were asking about—is that correct?
Dr Whitehead
Yes, basically.
Tom Greatrex: You will recall, I am sure, the original arrangements that were made to facilitate Chinese investment in UK nuclear. China General Nuclear, who are currently the minority financial shareholder in Sizewell C, are also a member of the Nuclear Industry Association and have a potential project at Bradwell. In terms of technology, it is very clear that any reactor technology has to go through the same process to be approved, and that is done independently by the Office for Nuclear Regulation. I do not think there is any difference in the thoroughness of that approach, wherever the technology comes from.
However, making decisions on the larger geopolitical issues is, I am afraid, way above my current—or ever anticipated—pay grade. As far as I am concerned and as far as the industry is concerned, Chinese companies have significant expertise in nuclear capacity and have built quite a lot of nuclear capacity, working with different reactor designs in China. Whether, and to what extent, they should be involved in the UK is not really for me to express a view on.
Dr Whitehead
Q
Tom Greatrex: In terms of that funding being available, for a number of years, the Nuclear Industry Association and companies that we represent have made representations to Government about the costs associated with large-scale projects prior to getting to final investment decision. Significant amounts of money were spent on projects that have not happened during that process, and that pre-development funding is something that needed to be considered.
As to what that announcement covers, we have asked Government for further information on that. At the moment the information we have is that that is funding that could be available to a range of different projects and opportunities, but nothing specific. In relation to what I think was your implied question, on whether this is instead of buying out the CGN stake in Sizewell, it has not been made clear to us that that is what it is for.
Dr Whitehead
Q
Tom Greatrex: Yes, we have had the announcements and spoken to officials about the announcements, but we do not have any more detail than is currently available.
Dr Whitehead
Q
Tom Greatrex: Well, I hope that there will be clarity on that and other aspects of what has been announced by the Government in recent announcements as we proceed.
Anthony Browne
Q
Tom Greatrex: The Bill sets out a framework for a mechanism that we as the industry welcome. We think it is very important to be able to facilitate development of new projects. There are levels of detail that are not covered in the primary legislation, and I think you have touched on some of those in relation to exactly how aspects of risk sharing will be undertaken and the role of the regulator, which will be Ofgem—the expertise available to that body, and the fact that transitioning into being able to undertake what is effectively a new role is going to be significantly important. I am not sure those would necessarily be in the primary legislation, but there are aspects of this where there will need to be further information and development before a regulated desktop-based model can be used for nuclear development.
Anthony Browne
Q
Tom Thackeray: From the CBI’s perspective, we do not have any significant concerns around what is included in the Bill, but as has been noted previously, there is a framework for the establishment of a regulated asset base model, and the details around designation and the risk-sharing profile are things that will be worked out on an individual project basis further down the line, which should be the case when legislating in this way.
Anthony Browne
Q
Tom Thackeray: Yes, from our members’ perspectives, they are comfortable with that way of operating.
Anthony Browne
Q
Rebecca Groundwater: I would echo what previous panellists have said. We have engaged with our members on this and, although the Bill is a framework and there will be more detail going forward, they are happy with how things are at the moment. There are no big gaps for them as the Bill currently stands.
Anthony Browne
Q
Tom Thackeray: I think that the Bill recognises the particularities of the nuclear sector and the state that we are in, in terms of having built the first of a kind at Hinkley and the next stage of that process, with the RAB being the apt model for this technology at this time. The RAB has potential in other parts of the energy mix. Carbon capture and storage is one of those areas where we might look to expand it, although we are probably not at that stage of development just at the moment. Across the energy mix, others have tried-and-tested routes to market through the contracts for difference regime. So this adds another piece to the puzzle in providing the diverse energy mix that businesses want to see. The Bill provides a useful framework that could be replicated if we wanted to use the RAB model in other forms of energy generation in the future.
Rebecca Groundwater: I think the funding model here works for nuclear because of the investment required. At the moment, the other energy sectors are working in their own areas and they have the strategies, the legislation and the sector deals that are working for them and helping them to get to the point where they need to be. The Bill is very sector-specific, and it works for nuclear. I agree with Tom that, if and when it gets to that stage, it can be rolled out further. If you look at this in terms of the nuclear energy system, it works, and it is okay to look at each one in silo while having a holistic view of how all energy systems work together to get us to net zero.
Anthony Browne
Q
Tom Greatrex: This is a really important part of it. We have had policy under successive Governments for a while now for new nuclear capacity. It should not be a surprise to anyone that our current fleet is coming towards the end of its generating life, even after life extensions. The barrier that has existed to a number of different projects that were cited in the Second Reading debate, for example, has been about the financing regime, given the long lead time to develop an asset that then lasts for a very long time. So this is the biggest single thing.
I think that what needs to go alongside it—to be fair to the Government, we have seen this in recent times—is a commitment in words of the need for nuclear to be part of that future mix. All those things help to give investors, potential investors and developers confidence that this decision will not be changed on a whim. That clarity of purpose is important. The financing framework has been the thing that has scuppered various projects, and I think it will be vital in getting our capacity levels back up again.
Anthony Browne
Q
Rebecca Groundwater: This model provides certainty, and I know that the supply chain needs that certainty. We have been speaking to our members, and we engage with them. We know that they are diversifying out of energy. They are just not sure, despite what is needed, where the actual pipeline of projects coming down is from. They are not entirely sure what to go into. A lot of work has been done around the nuclear sector and with the supply chain. It is there and it is viable, and this commitment towards investment, and showcasing that it is seen as part of reaching net zero and part of that commitment to getting there, provides the stability for the industry to commit properly to it and to drive not just the local capability but the export capability, which UK businesses are very good at doing. I think this is a very welcome piece that we can move forward with.
Anthony Browne
Q
Tom Thackeray: I think this is a really important step for the nuclear industry and could establish our credentials as world leaders once again. From the business customer side of this, obviously, the bulk of the CBI’s membership are people who are concerned about energy from an energy bill perspective, and they are all setting net zero targets for their own operations. That is not going to be achieved unless we decarbonise the energy supply, and that cannot be achieved unless we have the roll-out of nuclear over the years ahead, and in quick time. From the point of view of UK credibility towards net zero and business leading the way generally, outside and inside the nuclear industry, it is a really important step.
Matthew Pennycook
Q
Tom Greatrex: I am sorry, but you cut out slightly. I think you were referring to clause 1 and designated companies, but I missed the question.
Matthew Pennycook
Sorry, Tom. From what you have seen, is there enough detail and clarity in the Bill about who designates a nuclear company and whether that is appropriate, and is there enough in there to be clear about whether we are designating the appropriate type of company?
Tom Greatrex: Thank you; I understand the question now. The detail of the designation process is set out in subsection (3) of clause 1, on procedure. I am not absolutely sure that it necessarily gives the full, detailed approach to the designation and who the designation will be of. As this is a framework Bill, we work on the assumption that the detail of that will be set out in regulations subsequently. We are quite comfortable with that being the approach. The broad principle is set out in the Bill, and I think that gives us enough to go on for now.
Rebecca Groundwater: The transparency piece and the openness of the process was mentioned by our members, but the assumption is that the detail will follow.
Tom Thackeray: I don’t think we have picked up strong views from our membership worrying about the level of detail in the Bill at present. I note from the previous comments that political statements and backing are really important in this industry, and making sure there is no ambiguity around the backing that the Government provide. Perhaps that leads us to a decision on who should do the designating, with Secretary of State-level backing for it. We can take further soundings from members on that.
Matthew Pennycook
Q
Tom Thackeray: I think we are comfortable that the Climate Change Committee’s analysis in the balance pathway is a reasonable assumption. We think nuclear will be a strong part of the energy mix in the years ahead. Obviously, we will need a much bigger electricity capacity up to 2050. As we learn more about the process and the cost of technology starts to drop, there might be slight adjusting of those assumptions in years ahead, but at the moment we do not diverge markedly from what the CCC has said.
Rebecca Groundwater: We are aligned with the CCC report. I have nothing further to add.
Tom Greatrex: It is important to underline that the CCC scenario is for 2035 and towards the sixth carbon budget. I think it is broadly in the right area. The 2050 net zero modelling that was published alongside the energy White Paper has a broader range to 2050. We have to bear in mind, looking beyond 2035 towards 2050 and net zero overall, that the overall proportion of our energy that will come from electricity will be high. It is reasonable to assume that we will be beyond 10 GW by 2050, although 10 GW by 2035 is probably the right ballpark figure.
Virginia Crosbie
Q
Rebecca Groundwater: I would go back to that stability and the pipeline of opportunities that are viable. The supply chain is ready and equipped with the people, skills and capability. It is world class. We have a brilliant energy sector here in the UK. In the market forces piece, it is unclear which one will take the lead out of all the technologies. It has caused uncertainty, and that is not what the supply chain needs. When we talk about the supply chain, we are talking about the breadth of it. Each organisation has different needs, but they need that investment piece; they need to know where to upskill and when; they need to know the timescales.
That is why this legislation going through quite quickly is helpful, because it showcases that decisions can be made now to drive forward investment in what is needed. That ongoing dialogue and conversation—the message, “This is serious, and we’re taking it forward,”—will give that stability and the ability to the financial markets to come in. We know they are talking about the sustainability goals and we know that parts of the supply chain are struggling with how to implement them and what that will mean for them, depending on their size. That wider conversation now needs to start to break down a little, so that we are looking at how that impacts each of the different sectors. That way, we can drive it forward and bring it all together.
Tom Greatrex: All the things you mentioned have been important, significant and welcome for the sector over the last period. This legislation is key, as I mentioned previously. As for what else we need, we know that development of the taxonomy is ongoing—the Treasury has an expert group leading on that. It is important that the taxonomy is objective and avoids some of the mess the Europe-level taxonomy has managed to get into, in terms of setting a framework for investment in infrastructure that will contribute to a low-carbon future and to net zero. The requirement will be to pace delivery of agreements, to enable projects to go forward—for example, negotiations are ongoing between EDF and Government on Sizewell C, although that goes beyond the scope of the Bill, and with others on the SMR programme; last week’s announcement was very welcome. A number of things are in the purview of Government to deliver—siting, for example. We need all those things to happen. If I were to characterise what is needed in one phrase, it would be: an appropriate sense of urgency, given the urgent situation of our current and future power mix requirements.
Tom Thackeray: I would echo many of the points the others made: detailing objective, sustainable finance taxonomy for the UK including nuclear will be really important over the next few years. More holistically, there is the extent to which the Government can build out their export and skills strategy, taking advantage of the technology developments we are making in a lot of the clean areas. I have a slight concern, not in the nuclear sector but potentially in other green economy areas, that there will be a squeeze on the labour market, with multiple industries going after the same labour pools, which will probably put a brake on our capacity. We need to think really strategically about some of that stuff.
You invited general comments about the 10-point plan. In some areas, there is a need to detail the routes to market for things like the hydrogen economy. That goes back the points the other Tom made about pace of delivery and urgency. However, having just come back from Glasgow, I think it really hit home how far advanced the UK is in some of these plans compared with others. We can always ask for more, but I think we are genuinely world leading in a lot of these areas.
Virginia Crosbie
Q
Tom Thackeray: I think it will be a huge opportunity, particularly if we generate those fleet opportunities in the year ahead. One of the great risks of not moving ahead with the RAB model straightaway is that you lose supply chain capacity, you lose innovation, and you lose the skills you have in the supply chain. There is a fantastic opportunity to build out an industrial strategy approach around the supply chain that we built up through Hinkley and will continue through Sizewell C, and to look at how we can use that in international markets as well. In addition to that, we have the exciting developments around small modular reactors, where UK-developed technology is exciting clients around the world. That will obviously be a huge part of the UK’s potential in the years ahead.
Rebecca Groundwater: I agree. I think this helps to anchor the UK as a model on which the expert piece really comes into play. We have been mapping where the proposed capacity is coming from, looking at new build projects from 2021 to 2080. With the RAB model, if this goes ahead and everything falls into place, we will be one of the top investors in nuclear. That allows us to then export that to the other countries that are coming up behind us. If you want, I can pass on the data that we have from our members on the international market piece.
Tom Greatrex: I underline the point that this mechanism will enable projects to happen. When projects happen, you have a supply chain that is engaged. Just think about some of the announcements made in the run-up to and in Glasgow over the last couple of weeks from other places—France, Canada, the USA and Japan—in terms of restarting. There is a whole load of potential opportunities there. If the UK is ahead on developing and delivering through its supply chain, those export opportunities become real. I echo the point that the other Tom made: if we leave it and do not do it, the danger is that those opportunities will be lost.
Virginia Crosbie
Q
Tom Greatrex: There is a distinction to be made between the technology. Sizewell C is obviously effectively a Franco-German technology by origin, and the amount of UK content in the supply chain at Hinkley is about 65%. That is likely to increase if Sizewell goes ahead. One of the opportunities that a RAB model opens up is interest from a greater pool of investors because of the way in which the returns will accrue. People will have mentioned, I am sure, long-term infrastructure investors, pension funds and various others, who use and have used RAB models in other infrastructure that they have been investors in, and have made it clear that they are interested in potentially doing that with nuclear. It broadens the scope of investment, which may then have some impact in terms of where some of the other financial stakeholders that you alluded to in your question are.
Rebecca Groundwater: Some of our members feel that the RAB model provides more opportunity for the UK supply chain content to increase. With investment coming in, there may be greater options for the supply chain.
Tom Thackeray: I echo the points already made, and note that we have a great history of private investment in infrastructure. Deployment of the RAB in other infrastructure assets has been hugely successful, and the examples are well known. That means that we have a mature investor base here in the UK, who are looking at other opportunities to spend their money. The opportunity to invest in environmental, social and governance is growing. Providing that opportunity in nuclear through the RAB model is a welcome next step.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence.
Examination of Witnesses
Mycle Schneider, Professor Stephen Thomas and Doug Parr gave evidence.
The Chair
Q
Mycle Schneider: Hi there. This is Mycle Schneider. I am an independent analyst and consultant on energy and nuclear policy based in Paris. I am the co-ordinator and publisher of the annual World Nuclear Industry Status Report, and it is in that capacity that Members have invited me. Thank you very much for the opportunity.
For people who are not familiar with the World Nuclear Industry Status Report, it is a multi-indicator analysis that is elaborated annually by an international team of interdisciplinary experts that I have co-ordinated since 2007. The 2021 edition had a dozen researchers from a number of quite outstanding think-tanks and research institutions, including the Harvard Kennedy School of Government, Chatham House, the Technical University of Berlin, the University of British Columbia, Nagasaki University and so on—just to give a quick overview.
The Chair
Thank you very much. We can also hear from Professor Stephen Thomas. Doug Parr will join us when he can. Professor Thomas, would you like to introduce yourself?
Professor Thomas: My name is Stephen Thomas. I am emeritus professor of energy policy at the University of Greenwich in London. For the past 40-plus years, I have been an independent energy policy analyst, first at Sussex University and more recently at Greenwich University.
Alan Brown
Q
Mycle Schneider: Thank you for the question. I believe that if we are talking about the climate change emergency, it implies two things: to be able to reduce greenhouse gas emissions as quickly as possible and at the largest rate—that is the combination of effectiveness in terms of quantity and time. If we spend, whether it is a pound, a euro or a dollar, we have to see which options give us results that are large and fast.
If we are looking to nuclear power as an option for reducing greenhouse gas emissions, it is pretty much clear today that the options that are available, whether it is efficiency or non-hydro renewables, are more climate efficient than nuclear. That is not only because, if you look at the cost estimates from institutions such as Lazard bank, about a quarter of the cost is needed to generate electricity by solar and wind, for example, compared with nuclear. It is also about five times slower to implement than other options. Again, I am referring essentially to efficiency and newer renewables. Actually, what we hear about possible investment over the longer term will, if ever, provide these services only in the longer term. That means beyond 2030, and far beyond that for some of the options we are talking about. In my opinion, that is much too slow.
The Chair
Stephen, do you have any comments on that?
Professor Thomas: Yes, I would like to pick up on the point about the need for reliable baseload plant. I can see the intuitive logic of that, but the National Grid’s scenarios—I trust the National Grid more than others on what it takes to run a reliable grid—say nothing about reliable baseload plant being needed. It has three scenarios to reach net zero by 2050, and in only one is Sizewell C required; the others do not require it. It seems entirely comfortable with the availability and cost of batteries. If National Grid does not see the need, I am not sure why I would. It is a non-sequitur that you need baseload plants.
Clearly, there is a baseload—in other words, a level of demand that we never go below—but I do not see the reason why we would need a dedicated set of plants to meet that baseload. It is like saying, if you have a factory that operates 24 hours a day, seven days a week, you need a set of workers that will work seven days a week, 24 hours a day. It is simply a non-sequitur.
Alan Brown
Q
Professor Thomas: It is not the right technology. Both renewables and nuclear power are not flexible options. Nuclear power only makes any sense—if it makes any sense at all—if it is operated round the clock, with baseload at the maximum level it can work at. If the wind is not blowing, there is nothing you can do with a nuclear power plant to fill in the gap. Clearly, whichever way you go, nuclear or renewables, you will need flexible plants, which will probably be batteries and perhaps some demand-side response, to fill in those gaps. The worst thing of all would be to mix two inflexible sources, because you will get a time when nuclear is not available and renewables are not available, and then you will be in much worse trouble.
Mycle Schneider: There is this myth about nuclear power providing electricity 24/7. We have done a very detailed analysis of the French nuclear fleet for 2019—the year before covid—and it turned out that, basically, when the operator, EDF, starts an outage for maintenance and refuelling, it entirely loses control over the date and time it restarts. There are cases where there are 40 versions for the restart date and time. That does not really indicate that this is a 24/7 electricity-generating source. On the contrary, it means that even if we stick to the example of 40 revised dates and times, five of those were in the last 24 hours of that period. So not even 24 hours ahead was it possible for EDF to predict when 1,300 MW would be available to the grid or not. On the other hand, I think the whole concept of baseload is flying out of the window. As Stephen has said, what we need is flexibility. If we build up solar and wind massively, it means that a lot of that so-called baseload is already covered by those sources. It therefore becomes a competitive environment for certain times during the year and for certain times during the day. We need to fill in the gaps.
As the court of accounts has shown in its sensitivity analysis of the costs of nuclear power, the highest sensitivity is the productivity of the nuclear power plants. If the production levels go down, you increase costs significantly. We have seen over the past few years in France, but also obviously in the UK, lower production rates and therefore increased costs. That means that these reactors have become much less reliable. We have calculated that the average increase in 2019 over the expected outage time was 44%. It can be a planned outage of a week, and it turns out to be six months. That is not an exaggeration, we have cases like that.
Alan Brown
Q
Mycle Schneider: I think I will pass that one on to my English-based colleagues who are better suited to answer.
Doug Parr: There are certainly opportunities in tidal energy, and, at a minimum, I would hope that the Government would seek to pursue them in the next renewable auction round. I think there are a variety of technologies, certainly including tidal and geothermal. In terms of the subject of the Bill, nuclear energy is seen to be always on, but the overall competition for the grid is going to be between dispatchable and available power, which ideally should be flexible as well, and the provision of storage from cheap renewable power. In that sense, we are talking about green hydrogen, alongside these other renewable sources; but in terms of my personal preference, yes, I would certainly want to see tidal as part of the mix.
Professor Thomas: We cannot prejudge whether tidal would be a useful technology until we have tried it out. We can look at nuclear and see that costs have gone up rather than down, and on the other hand we can look at offshore wind, and see that five years ago the cost was £140 a megawatt-hour and now we are down to £40 a megawatt-hour. I think it is an option that we need to test. Whether it will be a success, I do not know; we cannot judge that in advance. If it was a guaranteed certainty, I guess we would have done it, but we must try out all these options.
Dr Whitehead
Q
Mycle Schneider: Yes, I can briefly comment. I think you are referring to the V.C. Summer plant in South Carolina. It had a similar scheme to RAB, which basically allowed it to pass on cost overruns to electricity customers. Construction started in 2013. Westinghouse was the technology provider. The plants were supposed to come online in 2017. By 2017, the cost estimate had increased by 75%, and I believe that there were nine rate increases for ratepayers up to that point. Finally, in July 2017 the construction was abandoned. Obviously, this was one of the consequences of the fact that Westinghouse filed for bankruptcy, and one of the main reasons for that was the V.C. Summer AP1000 project.
It might be interesting for the Committee to spend some time studying this case because it also involved some very problematic criminal activity. The federal grand jury has charged the former senior vice-president of Westinghouse Electric Company, Jeffrey A. Benjamin, for his role in failing to report accurately the status of the construction of these nuclear sites. It is worth noting that he served as senior vice-president for new plans and major projects, and was therefore directly responsible for all new projects worldwide for Westinghouse during the period of the V.C. Summer project. He has been charged in a federal indictment with 16 felony counts,
“including conspiracy, wire fraud, securities fraud, and causing a publicly-traded company to keep a false record.”
That is a quote from the Justice Department. He is only one of four top managers who had criminal charges filed against them in this affair. The former chief executive officer of SCANA, the utility that was building the plant, pleaded guilty to federal felony charges and was sentenced to two years in jail, which will start in December. The case had major implications.
Obviously, the ratepayer is left with the ruins of concrete and steel, and with no kilowatt-hours. Apparently, reportedly this affair is not over. It has cost the ratepayers billions, and reportedly it will cost more over the 20 years to come.
The Chair
A number of Members want to ask questions, so could we keep them as short as possible?
Professor Thomas: I wanted to add that what marked out the Summer project and a similar project in Georgia from those in all other states of the United States was that they were allowed to recover money from consumers before completion of the plant. That is a central feature of the RAB proposal. The Summer experience shows clearly the folly of making consumers pay for a plant before it is complete.
We have to be careful with the idea that we need to take measures to prevent unfinished plants from being abandoned. We have a very good example in Britain in the Dungeness B plant: it took 24 years to get from start of construction to commercial operation, and over its 32 years of operating life, its availability was well below 50%. It is very clear that the plant should have been abandoned before it was completed.
The Chair
Doug, do you have any comments?
Doug Parr: I am not sure that I have much to add. I read that the Summer plant added 18% to bill payers’ bills in South Carolina at one point, which is obviously a very considerable amount. I am not saying that those numbers are translatable to the UK context. It chose to expose the consumer to those considerable risks.
The Government really need some kind of independent evidence base for their judgments if they are going to enter bilateral negotiations with a plant builder who, on the basis of the plant builder’s word, can expose consumers to very considerable risks; Dr Schneider alluded to that. We see that with the RAB mechanism, the Government have a bilateral negotiation mechanism, and those do not have a happy history in almost any sector, including for the various networks. I am not quite sure how you establish that.
One thing that has been missing from nuclear policy as it applies to renewables and other mechanisms, such as the capacity mechanism, is the element of competition. The information asymmetry is potentially very strong. It gives a lot of cards to the nuclear seller—the nuclear provider—without giving the Government any backstop with regard to understanding what is going on. When there is competition via a reverse auction of the kind that we find in renewables, you factor those risks out, but consistently over the years—decades, in fact—this kind of discipline has not been applied to nuclear policy. With the RAB-type mechanism, those risks potentially land on the bill payer, not the provider of nuclear stations.
Dr Whitehead
Q
Doug Parr: I am not sure that I am across the detail enough to give a good answer to that one, I’m afraid. I would need to come back to the Committee on that, if that is all right.
Dr Whitehead
Q
Professor Thomas: I think the problem is not the need for a special administrative regime to rescue things if it all goes badly wrong in the construction phase. I think the problem is the RAB mechanism that is putting consumers’ money at risk, and if we look at the impact assessment, we are looking at a plant that will not be completed until something like 2037 to 2041, so I will be paying into this plant for quite a long time and I probably will not live long enough to see any power from it. The special administrative regime is a way to try to solve a problem that is better solved by simply not using this RAB mechanism.
Anthony Browne
Q
Doug Parr: I do not think I have ever made any secret of the fact that there are attendant risks that come with nuclear that do not apply to other forms of zero-carbon and low-carbon generation. What I would ask, in the light of the climate crisis—it is not an insignificant challenge that you have put there—is why UK Governments of all colours have continued to emphasise nuclear policy over and above other ways of cutting emissions. For example, the last time I saw figures on Department for Business, Energy and Industrial Strategy civil servants and where they were working, there were more people working on nuclear than on renewables and clean building heat put together, so when it came to two of the big-ticket items that are going to be absolutely essential—lots of renewable power and lots of clean heat for buildings—there were fewer civil servants working on those than on nuclear.
Nuclear is a bit-part player in this. All sensible, cost-effective models show that nuclear will not be a big piece of the pie, in terms of delivering what we need to deliver, and there are considerable problems with delivering heat, as members of the Committee will know. There are some substantial issues with delivering the amount of renewable power that we need, yet what we have is a Bill for delivering nuclear, and more civil servants working on it than on other things. I emphasise that this is a distortion that has been in place over years, and it is becoming quite problematic, because every time people are working on nuclear and not working on these other things—not putting energy and money into other things—we lose our ability to deliver what we need to deliver.
Anthony Browne
Q
Mycle Schneider: The question has to be: if I spend money today, what is the most climate-effective option that is available? There is absolutely no doubt, wherever it is, that it is impossible today to build a new nuclear plant as quickly as many other options, and at a cost that is competitive. Every dollar, euro or pound put into new nuclear is making the climate crisis worse. There is no doubt about that; it is very clear. It is straightforward. Existing nuclear power plants are a bit of another story, because they are there.
Anthony Browne
Q
Mycle Schneider: That is their problem. We have a very precise view about what nuclear power has actually delivered. Nuclear power is not a new technology. It was 70 years ago that construction started on the first nuclear power reactor. We have long experience, but the strange thing is that the nuclear industry always claims a “first of its kind” situation. It is surprising because whether it is Olkiluoto—an EPR in Finland—Flamanville in France or Hinkley Point C, every time the industry claims it is the first of a kind. How many times can it do that? We see that each time, costs skyrocket and the nuclear industry does not deliver.
By the way, the nuclear industry is not delivering on existing reactors, either. It is not a coincidence that Standard and Poor’s downrated EDF Energy to junk last year. For me, as an outside observer, that is a strange situation. Basically, the business as it is run by EFD Energy is judged by the credit rating agencies as not investment grade. In fact, the EDF Group has been downgraded as well. It is still investment grade, but only because they get additional notches from extraordinary state support. The RAB scheme suggests bringing down financing costs—making borrowed money cheaper—but the way EDF runs its business is judged to be so bad by credit rating agencies that it is rated non-investment grade.
All of those things have to be taken into account, and the question for me—having listened to much of the industry’s presentations today—is about how incredibly confident it is about what it will deliver in the future, when what it has delivered in the past is way off its own targets.
Anthony Browne
You are based in Paris and 70% of France’s electricity comes from nuclear. France has consistently lower carbon dioxide emissions per capita than the UK. Presumably you agree that that is because of the size of its nuclear sector.
Mycle Schneider: Of course that is a substantial part of it, at this point. The problem is that in 2020 the production of nuclear power was the lowest it had been in 17 years, and the share of nuclear power in the French system was at its lowest since 1985. That does not sound like a very reliable source of electricity. Basically, the French reactors were down to zero production for 115 days in 2020. That means that for every two reactors you need one in reserve, because they do not generate power for a big part of the year.
Do not forget that France has created a very distorted energy system. The peak load in the winter is historically more than 100 GW, while the lowest load day is about 30 GW. To give you an idea, Germany is about 80 GW at the peak, but it has 20 million more people. France has distorted the system with electric space heating.
The nuclear sector provides just over 60 GW, and those 60 GW are never all available. So what happens in the winter is that France often imports power from Germany. As we know, quite a bit of that peak power from Germany is coal, so one has to look at the carbon footprint and not only the grand gigawatt-hour.
The Chair
Order. We are drifting a little from the scope of the Bill. Can we get back to questions that relate to the Bill, please?
Mark Jenkinson
Q
Professor Thomas: As I said, I do not think there is a case for the need for firm baseload power. If the National Grid Company does not think there is a need for it, who are we to tell it that it does not know how to operate a system reliably?
Mark Jenkinson
Q
Professor Thomas: I would trust the National Grid Company over the Climate Change Committee on matters of reliability of the grid.
Mark Jenkinson
Q
Professor Thomas: Yes, I am saying that it is wrong. If the National Grid Company does not say that there is a need for firm baseload power, I will trust it. If that means that the Climate Change Committee is wrong, so be it.
Mark Jenkinson
Q
Doug Parr: There is a difference between firm and baseload. We absolutely need firm power because there will be spells when we do not have much wind and solar. That is where there is a need for firm power, and I do not believe that anybody who thinks about it for a moment would dispute that. The question is what forms that. As I hinted earlier, on the question about where nuclear fits in the overall system to deliver a cost-effective and secure system, it is now a race between cost-effective storage of renewable power on the one hand and something like nuclear on the other. We can see that the existing deployment of green hydrogen and the money that is flowing into it will bring that cost down sharply. The Climate Change Committee has already assumed that there will be cost reductions. How fast they will go is still not certain, but we know that those costs will come down pretty quickly.
Mark Jenkinson
Q
Doug Parr: No, we are not. We are saying that there needs to be a storable medium for energy, and that is the gas that I would be talking about. There needs to be a firm dispatchable form of power, and that is what it is, because there will be times when there will be an excess of renewable power, which will be convertible. In the first instance, it will be exportable. Then it becomes importable, and usable in the form of stored energy. I take the point about what the committee says is necessary for system security, but as Steve said, the National Grid does not see that as being baseload; it is about something that can be flexible to accommodate the other aspects of the system, and it needs to be looked at as a system.
Mark Jenkinson
I just want to pick up on hydrogen specifically, because we heard that it is incredibly inefficient.
The Chair
Order. Mark, I am going to move on. There are two more people, and you have had a long time. I call Kirsty Blackman.
Kirsty Blackman (Aberdeen North) (SNP)
Q
Doug Parr: I think we need to really get a shift on with deploying renewables as fast as possible. I know it is said that we are already deploying them. Sure, but are we deploying them at the speed we need to? I think the answer is no. We need to get a move on with that. That in itself will not take up a lot of money but, as the previous conversation alluded to, there need to be alterations to the electrical system that allow that to be best accommodated. That is where some of the money goes.
We also need much greater interconnection with the continent, because that allows the flows to be balanced much more easily, and we definitely need a shedload of money going into making our buildings and appliances more efficient, because the best and most secure energy is the stuff that you do not need. Those can all be done at scale in the 2020s, so well before Sizewell will ever get going.
Professor Thomas: I do not think that you can possibly argue that nuclear is the best option to pursue. As Doug said, energy efficiency can be implemented very quickly, and it has the double pay-off that, whereas expensive new power sources will increase bills, energy efficiency measures will reduce both emissions and bills. It will have a welfare pay-off for low-income consumers as well as reducing our carbon emissions.
Mycle Schneider: Most of it has been said. We need to schedule priorities by availability and cost. The combination of time and cost together makes climate effectiveness.
Kirsty Blackman
Q
Doug Parr: I would not be, no.
Kirsty Blackman
Q
Doug Parr: Yes. I have always been very clear that there are particular hazards around new nuclear developments, whether it is waste, the terrorist threat, what to do with them or security issues. That is why I think, as a society, it is worth avoiding those hazards and, if necessary, paying a bit more. In practice, there are models out there by, for example, Imperial College that say that no more new nuclear is on the cost-effective pathway, given the cost of renewables. Theoretically, I can say that. In practice, I am not sure that is the situation we are facing.
Matthew Pennycook
Q
“to enable a final investment decision for a large-scale nuclear project in this Parliament, and the government remains in active negotiations with EDF over the Sizewell C project.”
What is your understanding of what that means and can you comment on potentially the use of that £1.7 billion as it relates to the RAB funding mechanism? It is a very different two sets of scenarios, if we are talking about whether that £1.7 billion is for a buy-out of the CGN minority stake or potentially put in as part of a pot of money alongside the funds generated from RAB.
Professor Thomas: If we go back to the 2016 agreement, CGN agreed to take a third of the Hinkley Point C project: the construction and the operation of the plant. It agreed to take 20% of the Sizewell B/C project up to final investment decision. It has an option to take 20% of the construction and operation of the plant if it goes ahead and for Bradwell, there is the 66% of CGN and 33% of EDF. EDF and CGN have spent about £0.5 billion developing the plans to the point they have reached so far. Let us say it is going to take another £0.5 billion to get to final investment decision—that is at the most. So £1.7 billion seems a bit too much for that. The wording of the £1.7 billion is very vague. Some people have assumed it will be an 8.5% stake, or whatever £1.7 billion works out as.
In terms of how you would get CGN out of Sizewell C, I think it is really dependent on what happens to Bradwell B. It is clear that CGN’s presence in the UK is for only two reasons. First, to build the Bradwell B plant, and the price for that is its involvement in Sizewell C and Hinkley Point C. The other is to get the British safety regulator’s endorsement of its technology. If it is not going to be allowed to build Bradwell B, I cannot see why on earth it would be interested in putting money into Sizewell C. It is not CGN’s technology, it would provide nothing and it would not be particularly profitable. So if Bradwell B is abandoned, the Sizewell C CGN problem will solve itself. Can you briefly repeat me the gist of the second part of your question?
Matthew Pennycook
Q
Professor Thomas: The CGN EDF consortium have spent about £0.5 billion so far, and they have some more money to spend to get to the final investment decision. They would then expect to sell that work to the company that actually builds and operates the plants, so they would get their money back. If Sizewell C goes ahead, it is sort of alone. It seems to make more sense to see it as a stake in the plant, which might encourage institutional investors to go in. If they saw Government involvement, they might think that it will probably not be allowed to collapse, but it is up to the Government to provide a bit more clarity about what they expect the £1.7 billion to do.
Alan Brown
Q
Professor Thomas: I think there is a lot of missing detail in the RAB proposal, and one of the biggest elements of missing detail is how much the surcharge for consumers will be during the construction phase. The Government have said that it will be a maximum of about £10 per year per consumer. That makes no sense, because it would yield about £6 billion. In the context of a project that the Government said would cost between £24 billion and £40 billion, plus financing costs, £6 billion is a nice little present, but it will not be much of a game-changer. We need to see much more clarity about what that cost will be, because if it is to make a big change to the cost of power from Sizewell C, it has to be quite a significant surcharge. We also need to include that in the price of power. At the moment, we are talking about £60 per megawatt-hour and completely forgetting the £6 billion, or however much it will be, that consumers will put in during the construction phase.
In terms of what happens if the plant has to close early, there is a big problem with decommissioning. Decommissioning funds work on the basis of discounted cash flow—in other words, a liability that falls due in 50 years. You have to have enough money in place now, plus the interest it would earn for 50 years, to pay off the debt. If the plant closes early, you do not earn all that income and you have to bring forward the process of decommissioning, so there will be a big hole in the decommissioning funds.
I remind members of the Committee that the decommissioning funds that we have in the UK have continually failed. Consumers have paid three or four times over, only for the money to disappear and not be available for decommissioning. Decommissioning is a very serious issue. It appears to disappear because of the belief that you can invest a sum of money at 2.5% or 3%, in real terms, for 100 years. That is not the case, I am afraid—not on the historical evidence.
Alan Brown
Q
Professor Thomas: The only people who can pay are taxpayers. If the company goes bust, unless you have powers to pursue the companies back to their parents, and the parents are still there to pay off, you will be left with the taxpayers. We are talking about a process that happens something like 100 or 120 years after the plant starts up. The chances of an entity that owns the plant at the start still being around in 120 years’ time seems to be very slight, so I do not think that you will be able to pursue companies and you will end up with taxpayers having to foot the bill, as is the case with the Magnox plants now—that is being funded entirely by taxpayers.
Alan Brown
Q
Professor Thomas: That is a fairly rash decision, to go for 60 years. There are plants that are just about reaching their 50th birthday, but a lot of plants have retired well before that, so 35 years—as for Hinkley Point—is the very maximum I would want to go to.
The Chair
Doug, did you want to come in on that?
Doug Parr: Only as a rejoinder to what Stephen said about the risk of underperformance, if not early closure. Remember that the EPR that was constructed in Taishan is offline at the moment, because of a fuel issue. It has been offline for about three months, I think, and that is only three years into its operation. Underperformance, if not early closure, is a tangible issue even with that model of reactor.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence. Thank you very much for attending. That brings us to the end of our oral evidence session today. The Committee will meet again on Thursday to begin line-by-line scrutiny of the Bill, meeting at 11.30 am in Committee Room 11.
Ordered, That further consideration be now adjourned. —(Craig Whittaker.)
Subsidy Control Bill (Tenth sitting)
(2 years, 5 months ago)
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The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 23, in clause 70, page 40, line 12, at end insert—
“(c) the Welsh Ministers,
(d) the Scottish Ministers, or
(e) a Northern Ireland department;”.
This amendment intends that devolved administrations are included as interested parties regarding calling in of subsidy decisions.
The Chair
With this it will be convenient to discuss amendment 71, in clause 70, page 40, line 12, at end insert—
“(c) the Scottish Ministers,
(d) the Welsh Ministers, or
(e) the Department for the Economy in Northern Ireland.”
This amendment would include the Devolved Administrations within the definition of an interested party.
Kirsty Blackman
Thank you, Ms Nokes, for your forbearance in continuing to chair these sittings for us; we appreciate it.
It strikes me that there are three really important things in the Bill. The first question is this. What is a subsidy, and when can and cannot a subsidy be awarded? Actually, we have had not much disagreement across the Committee about what constitutes the answers to those points. The second question, which we have raised a number of concerns about, is this. How do we know what has been awarded? Specifically, we have raised a number of issues about transparency, how transparency will work and whether the transparency measures being suggested are adequate. The third question is how subsidy decisions can be challenged. The Bill and this system, the subsidy control regime, will not work if there is not a mechanism for a challenge to be made. That seems to me to be the third of those three important areas.
We have suggested amendment 23, which is specifically about the definition of interested parties. The Bill says that “interested party” means
“a person whose interests may be affected by the giving of the subsidy or the making of the subsidy scheme in respect of which the application under subsection (1) is made, or…the Secretary of State”.
The Minister has been clear a number of times that being too prescriptive about some things and including too many things risks suggesting that we are not including others. If the measure includes a, b and c, potentially an imaginary d would be excluded, because it explicitly says a, b and c.
The legislation talks about “interested parties” as those people who have been affected, but it also includes the Secretary of State, so presumably, in the Government’s eyes, the Secretary of State has a specific role whether or not he or she has an interest or the Government have an interest in whatever it is that has been subsidised. The Secretary of State has the ability to request a call-in whether or not they have an interest. The Minister has spoken at some length—indeed, a number of people have—about the asymmetry of the legislatures in the UK, and there is an asymmetry of legislatures. Westminster has reserved powers and, as we have seen in the United Kingdom Internal Market Act 2020 and various other power grabs, the ability to override some of the devolved competencies. We are not disagreeing that there is an asymmetry, but there is a requirement and a recognition that we have devolved legislatures that have a very important role to play in not just the economic development but the wellbeing of their citizens under whatever the devolved competencies are.
Kevin Hollinrake (Thirsk and Malton) (Con)
Is the hon. Lady not defining that exactly as the legislation is set out? The devolved legislatures have an important role to play. Therefore they are an interested party. That is the point; it does not need to be set out specifically.
Kirsty Blackman
In that case, it does not need to be set out specifically that the Secretary of State is an interested party. There would be no need to include the Secretary of State if the Bill applied equally to any of the devolved legislatures whether or not they had a direct interest or whether or not their interests would be affected. It may be the case that the Scottish Parliament’s or the Scottish Government’s interests are not affected by something but that the interests of a significant number of businesses in Scotland are affected, in which case it would be completely reasonable for the Scottish Government or Scottish Ministers to be included, as we have suggested in the amendment; we have also referred to Welsh Ministers and “a Northern Ireland department”. The aim is specifically to catch the issue that has just been made clear. Sometimes the devolved institutions will not have a direct interest that affects the operation of their Parliament, but they might have an interest on behalf of the wellbeing of their citizens or the economic development of the places they represent. Subsection (7)(a), which defines interested parties, does not go far enough to allow those institutions to raise concerns about potential issues. If the concern does not affect them directly, it seems they are excluded from raising it.
I understand the point made earlier by the Minister about the Competition Appeal Tribunal and how it may define interested parties, but there is a definition of interested parties in the Bill. I feel it is too narrow to include other interested parties such as Scottish Ministers, unless they are directly affected.
Legislatures need to be responsible. We need to take action on behalf of our citizens, and to be able to take that action. Given that these institutions are democratically elected and there have been votes that resulted in the creation of the institutions, we must recognise that the devolved legislatures have a stake and a responsibility—a place to fill in supporting their constituents. This is not about trying to say that the Scottish Government are better than the Westminster Government—I mean, they are, obviously, but the amendment is not about fighting to change the power structure of the UK. It would simply allow Scottish Ministers, Welsh Ministers and the relevant Northern Ireland Department to take their place and be able to exercise their right to protect the people, the businesses and the countries they are elected to represent.
If the term “interested parties” covers everybody, including those who have an indirect interest, then it does not make sense to include the Secretary of State in the definition. However, if the term “interested parties” does not include Scottish Ministers, the Welsh Ministers and the relevant Northern Ireland Department, we have a really big problem. This is not how devolution is intended to work; it is intended that those institutions can support their constituents.
I would appreciate it if the Minister will look at the issue. It is likely I will consider pressing the amendment, because it is such an important issue. As I said, this is one of the three most important parts of the Bill. The devolved legislatures absolutely should have the right to have subsidy decisions called in. This is not a power that is going to be used every five minutes. It is not like anybody is going to be challenging the decisions or looking for assessments on a regular basis—that is not how it is going to work. If the UK Government are committed to levelling up and the principles in the Bill of looking at competition throughout the United Kingdom and the effects of subsidies, it is really important that the three devolved Administrations have this power.
Kevin Hollinrake
Does the way that the amendment is drafted not mean that Scottish Ministers, Welsh Ministers and the relevant Northern Ireland Department could interfere or be an interested party even though they had no interest? For example, a Scottish Minister could intervene in something that was happening in Wales, which has no relevance—they would have no interest at all. Is that the intention—that a Scottish Minister can intervene in a subsidy scheme in any part of the United Kingdom, even though it does not directly affect Scotland?
Kirsty Blackman
Yes, because that is the point of the Bill. The point of the legislation is to make sure that we do not have those subsidy races. As was made clear on Second Reading, Members want a situation in which there are not subsidy races and in which they can ensure that the best decisions are being taken for their area. If the hon. Gentleman, the local authority in his constituency or the Secretary of State felt that something in his constituency was being affected negatively because of the actions of the Scottish Government or the Northern Ireland Department in granting a subsidy, I would expect the Secretary of State to consider calling that in. If the hon. Gentleman made representations to the Secretary of State on behalf of organisations in his constituency that might not want to go through the process of employing lawyers to get it called in, but are genuinely affected, surely that is one reason why the Secretary of State may be included.
Kevin Hollinrake
The hon. Lady makes my point for me. If something were affecting North Yorkshire, I would be an interested party already, because that is how it is defined.
Kirsty Blackman
No, the hon. Gentleman would not be an interested party, because the Bill states that an interested party is
“a person whose interests may be affected by the giving of the subsidy or the making of the subsidy scheme”.
The hon. Gentleman’s interests are themselves not affected. His constituents’ interests are affected—
Kirsty Blackman
It is not the same thing, and that is the point that I am making. That is why either the definition of an interested party needs to change, or we specifically include those people whose direct interests may not be affected but whose indirect interests—whose responsibilities towards their constituents and their country—are affected as a result. In such circumstances, therefore, the hon. Gentleman would not be an interested party. I cannot see how his interests possibly could be affected, going on the reading of the legislation, although his constituents’ interests would be affected. If that is how we want the measure to operate—which is how I would like it to operate—I would very much like it to operate in the way that he is suggests.
Kevin Hollinrake
My interests are my constituents’ interests, and vice versa, so why would my interests not be affected if my constituents’ interests were affected?
Kirsty Blackman
The Bill states:
“a person whose interests may be affected by the giving of the subsidy”.
The hon. Member’s interests would not be affected by the giving of the subsidy, his constituents’ interests would be. If the Minister, when he speaks, confirms that a Member’s interests cover all the interests of his constituents, can define the interests of the Scottish Government, Welsh Ministers and the Northern Ireland Department or can say absolutely that, for example, a Northern Ireland Department’s interests cover the interests of businesses and constituents within its jurisdiction, I will be delighted that the hon. Member for Thirsk and Malton is correct. That is what I would like it to say but, as drafted, that is not what the Bill says.
There is therefore a gap, an issue with not enough people being able to make that challenge and in those democratic institutions not having that right. As the Minister said, it is not a foregone conclusion that such things would go through, that the CAT would look at the subsidy decision and say, “Oh, the Secretary of State has referred this, so they are definitely correct and the subsidy is definitely wrong.” That is not how it would work. The CAT is an independent organisation and it will be making those decisions.
On the specific point about people who have the ability to refer subsidy decisions, however, I think that those people with indirect interests on behalf of their constituents or the areas that they represent should have the right to make that referral—and for the CAT to make the decision after that. Again, that will not lead to a significant increase in the number of challenges to come forward, but if the Government are committed to levelling up and to the Subsidy Control Bill regime working as it is intended to work, changes have to be made to the clause. Amendment 23 was the best way that I could see of making the changes to ensure that those interested parties with indirect parties would be able to fulfil adequately their roles to work on behalf of the people who elected them.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Nokes. I thank the hon. Member for Aberdeen North, who laid out some very strong arguments for amendment 23. I will speak briefly to amendment 71, which is very similar.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure to serve under your chairmanship, Ms Nokes. I appreciate the contributions of the hon. Members for Aberdeen North and for Feltham and Heston. As we have heard, the amendments are almost identical in effect, so I will discuss them together.
Who has standing to challenge subsidy decisions is an important question that we considered carefully when drafting the Bill. The definition of an interested party, which covers any person whose interests may be affected by the subsidy or scheme in question, is intentionally broad and in many instances could capture the devolved Administrations. As I said in relation to the previous amendment, the rule on standing in the clause is not intended to exclude any party whose interests may genuinely be affected by a subsidy.
None the less, I hope that hon. Members will agree that it is necessary to have some limit on who can bring a challenge, so that the CAT can dismiss various challenges, whether they are vexatious or not. That is necessary to ensure that useful subsidies are not held up without good reason. The absence of a list or further explanation is not intended to exclude any party whose interests may genuinely be affected by a subsidy. On the contrary, the broad definition gives the CAT the maximum discretion so that, whatever the facts of the case may be, it can deem the right people to be interested parties. Depending on the case, that could certainly include one of the devolved Administrations.
Opposition Members have suggested that because the Secretary of State has default standing to bring a challenge there is an unequal situation that prejudices the interests of Scotland, Wales and Northern Ireland. That is simply not right. The Secretary of State has not been designated an interested party to act in the interests of one part of the UK. It is therefore not necessary that there should be some sort of balance, with other actors also having default standing. This is a reserved policy area and, as such, the Secretary of State’s responsibilities and interests are UK wide.
The Secretary of State is always deemed an interested party so that they can challenge any subsidiary they feel would be incompatible with the subsidiary control framework and because, as a member of the UK Government, they are responsible for the compliance of subsidies granted in all parts of the UK with our international obligations. The Government expects that the Secretary of State would use this ability only in exceptional circumstances where, in their view, a subsidy would threaten the integrity of the subsidy control framework, which protects competition and investment within the UK and helps to meet our international obligations. It is just as likely that the Secretary of State would challenge a subsidy given by an English local authority that prejudiced a Scottish business, as it is that they would challenge a Welsh subsidy that prejudiced an English business.
The intention of the clause is to allow a default right to stand as an interested party to challenge subsidies, while reserving a specific role for the Secretary of State to oversee the whole system and ensure compliance with international agreements. It is not appropriate or necessary for any other public authority to have the same standing. I have talked a lot about devolved Administrations, but to cover the point made in the exchange between the hon. Member for Aberdeen North and my hon. Friend the Member for Thirsk and Malton, an interested party could be any of those public authorities, including local councils or any awarding body. As we discussed in the previous group of amendments, that interest is wider than direct financial interest. For that reason, I ask the hon. Lady to withdraw her amendment.
Kirsty Blackman
The Minister has not really answered the key question that would be helpful in order to ensure that interested parties are as broad as the hon. Member for Thirsk and Malton and I think it should be. Does a devolved Administration’s interests include indirect interests? Let us say that the Scottish Parliament was to come forward to the CAT and ask for something to be reviewed on the basis that it would affect seven businesses throughout Scotland. Is that included in the definition of persons of interest who may be affected? What if a number of organisations in their jurisdiction are potentially affected by a subsidy given? That subsidy may be given in Scotland; this is not necessarily an inter-nation argument. It could be that a local authority in Scotland gives a subsidy and the Scottish Government are not happy about it because it could negatively affect seven different businesses. Is that included? Is that covered by the definition of interested parties?
Paul Scully
Yes. I would say that is a direct interest rather than an indirect interest. Public authorities, including devolved Administrations, may be interested parties. That is why we are keeping the definition wide—because it includes their responsibilities as well as a direct interest for the public authority or the devolved Administration itself.
Kirsty Blackman
The Minister has made the clarification to say that it includes responsibilities. Obviously, the devolved Administrations have responsibilities for lots of things in various areas. That is incredibly helpful. I still would like to see amendment 23 in the Bill and I would like to press it to a vote.
Question put, That the amendment be made.
Paul Scully
The clause enables interested parties to apply to the Competition Appeal Tribunal, or the CAT, to challenge decisions by public authorities to give subsidies or make subsidy schemes. The CAT has the advantage of being a UK-wide tribunal with specialist expertise in competition and in hearing judicial reviews in the field of economic regulation. It is well regarded by practitioners and the Government’s consultation demonstrated strong support for its performing this role.
Any interested party who is aggrieved by a subsidy decision will be able to apply to the CAT to review that decision. The clause defines an interested party as any
“person whose interests may be affected”
by the decision in question. The Secretary of State is also explicitly defined as an interested party, which does not mean that the Government have the intention of challenging a large number of subsidy decisions by other public authorities. Instead, it provides a safety valve allowing the Secretary of State to challenge subsidy decisions that might harm competition and investment within the UK or cause concerns to be raised by one of the UK’s trading partners under the terms of our international agreements.
The clause provides that the CAT must apply judicial review principles when determining applications to review subsidy decisions, which means that the tribunal will determine whether the decision was lawful, including whether the requirements set out in the Bill have been met. The tribunal will not be capable of reviewing the merits or effectiveness of a subsidy or subsidy scheme.
Seema Malhotra
I thank the Minister for his comments. We have no further comments on the clause beyond what we raised on the amendments. We support clause 70 standing part of the Bill.
Question put and agreed to.
Clause 70 accordingly ordered to stand part of the Bill.
Clause 71
Time limits for applications under section 70
Seema Malhotra
I beg to move amendment 74, in clause 71, page 40, line 31, at beginning insert—
“Except where subsection (1A) applies,”.
This amendment is linked to Amendment 75.
The Chair
With this it will be convenient to discuss amendment 75, in clause 71, page 40, line 33, at end insert—
“(1A) Where a public authority has not complied with its duties under section 33(1), an application to the Tribunal under section 70 in respect of a subsidy decision must be made by sending a notice of appeal before the end of six months beginning with the date on which it is established that the section 33(1) duty has not been complied with.”
This amendment provides for an extended period of challenge where a public duty has not complied with its section 33 duties.
Seema Malhotra
The clause amends the Competition Appeal Tribunal rules to establish the time limits for making an application to the CAT for a review of a subsidy control decision. Interested parties must send their notice of appeal to the CAT within one month of the relevant date. The tribunal may not extend the one-month time limit unless there are exceptional circumstances.
As we have already stated, we believe very strongly that public authorities should have a clearer statutory duty to upload full and accurate information to the subsidy database. Where a public authority fails to comply with that duty, there should be consequences. The regime requires a better incentive for public authorities to upload accurately and fully. Evidence from DWF, which I will not repeat at length again, revealed how many of the entries currently uploaded to the database are far from complete or accurate.
Amendments 75 and 74 would provide a statutory consequence where a public authority has not complied with its duty to upload information to the database, as set out in clause 33(1): namely, an extended challenge period of six months from the date on which it is established that the clause 33 duty has not been complied with. In our view, that would create a strong incentive for public authorities to upload information to the database promptly, comprehensively and accurately. Transparency is central to the new regime, and protecting it is at the heart of the amendments.
Paul Scully
Clause 71 sets out the time limits for an interested party to apply to the CAT for a review of a decision to grant a subsidy or make a subsidy scheme. It is important to strike a balance between allowing sufficient time for a subsidy scheme or award to be challenged and giving confidence to the subsidy beneficiary that the subsidy decision can no longer be challenged, and that they can make use of that subsidy.
The Government believe that the appropriate balance is the one-month limitation period, generally counted from the date on which the subsidy or subsidy scheme is published on the database. The hon. Member for Feltham and Heston has tabled amendments to that general time limit, which we will discuss later. I understand that the amendments are intended to extend the period for challenging a subsidy when a public authority has not properly fulfilled its transparency obligations. It may be useful to begin by clarifying how the clause would work in cases where the transparency requirements are not met.
Clause 71 already provides a powerful incentive for public authorities to properly fulfil their transparency obligations. If they do not, there is no transparency date for the purpose of rule 98A subsection (2), so there is no limitation period for when an interested party can seek a review of the subsidy in the CAT. In other words, if there is a non-trivial failure to comply with the transparency obligations in clause 33, the subsidy or scheme could not just be challenged six months after it is made; it could potentially be challenged at any time.
Seema Malhotra
I thank the Minister for his comments—I think he picked up on some of the issues that we were raising. He gave the example of a public authority not acting in line with its duties, meaning that those in receipt of a subsidy could end up waiting for longer. That could be administrative error, and nothing to do with the subsidy, but we would not know.
I think it is fair to say that the amendment is not perfect, but we wanted to make a general point about time limits, which we want to look at in the round, and about how the whole regime can work fairly. On this occasion, I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Seema Malhotra
I beg to move amendment 73, in clause 71, page 40, line 33, leave out “one month” and insert “three months”.
This amendment would extend the period for interested parties to submit an application for review of a subsidy to three months.
The amendment would extend to three months the period for interested parties to submit an application for review of a subsidy. We think that is extremely important, because as it stands, interested parties would have one month from the publication of a subsidy or scheme on the database, or from receiving requests for information from the public authority in respect of a subsidy or scheme, to bring a challenge before the CAT.
That is an extremely short timeframe. Uploads to the database could be made on July 22, for example, or on December 16, when we rise for recess. I do not want to suggest that there might be attempts to reduce opportunities for scrutiny and challenge by timing uploads to the database, but at the end of July, for example, there are school holidays, and even Parliament does not return until September. One month can be a very short time for scrutiny and challenge, especially at particular times of the year, and it is about what is chosen to be published and when.
Labour recognises the importance of giving subsidies legal certainty in this quicker, more flexible regime. However, given that public authorities will have six months or even a year to publish subsidies on the database, why will interested parties be given only one month to challenge them? Once the one-month period has elapsed, there will be no other routes for challenging subsidies and schemes. That means that if interested parties are not given the appropriate amount of time to consider new subsidies and schemes, damaging subsidies or schemes will face no risk of challenge. That seems extremely risky, and I hope the Minister recognises that.
Jonathan Branton, a lawyer at DWF, summarised this and said:
“I think one month is too short, because that requires people to be extremely alert about checking things.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 52, Q73.]
People can get busy and have other deadlines for two, three or four weeks. It seems to be an extraordinarily short time that may create inefficiencies in other areas, as people ask, “What subsidies have come out? How quickly should I be checking?” This is about making sure there is a fair, well-scrutinised and effective regime. We need to get the balance right between providing legal certainty and ensuring damaging subsidies can be effectively challenged. It feels as if the balance is not right at the moment in the context of this regime and how it is designed in the Bill.
We propose to correct the balance in amendment 73, which would give interested parties three months to bring a subsidy or scheme before the CAT. In doing so, there would be more time to consider subsidies and their effects. It would give interested parties and public authorities a fair chance to ensure a challenge can be brought, still within a limited amount of time, and the balance between that and legal certainty can be effective.
Paul Scully
The clause sets out the time limits in which the interested party must make an application to the CAT to challenge the subsidy. It is important to set that limit so that we can give legal certainty to public authorities and subsidy beneficiaries. Ongoing lack of legal certainty can be a strong disincentive for public authorities giving legitimate subsidies and for the enterprises agreeing to receive them.
For example, a subsidy could take the form of a loan guarantee for a capital investment, such as buying new machinery. Members will appreciate that a beneficiary would be naturally reluctant to go ahead with buying that machinery for as long as there is a possibility that the subsidy decision could be quashed and a recovery order made.
It is right that subsidies can be challenged and that interested parties have sufficient time limits to consider that challenge, but we must not create such prolonged uncertainty that it acts as a brake on legitimate subsidies. That is the balance that we have struck in the Bill with the limitation period, which is generally one month from the date the subsidy or scheme is uploaded on the transparency database.
It is also important to note that an interested party can make a pre-action information request to a public authority. The limitation period is then extended until one month after the public authority has responded. Since the pre-action information request gives the public authority up to 28 days to respond, in practice, the limitation period can run for two or three months after the publication of the subsidy or scheme on the database.
Clause 71 also makes it clear that in exceptional circumstances, the tribunal may extend the time limits for bringing a challenge, but this amendment would extend the general window for bringing a challenge from one month to three months. That is too long. It is longer than the challenge periods available in other areas where business decisions are dependent on the decisions of public bodies, such as procurement and planning decisions, where the limitation periods are 30 days and six weeks respectively. In those areas, the harmful effects of prolonged uncertainty have been recognised through the shorter challenge periods available. The same reasoning applies in the subsidy control context. If the general limitation period for challenging subsidy decisions were extended to three months, as the amendment proposes, public authorities and subsidy beneficiaries could, in practice, have to wait as long as five months before having reasonable legal certainty about a subsidy. That is far too long. It is important to allow sufficient time for those affected by subsidy decisions to submit their claim, while ensuring that public authorities and beneficiaries can proceed to implement subsidy decisions with certainty once they are made. The Government believe that the timings provided for in the clause strike an appropriate balance between those two objectives. I therefore request that the hon. Member withdraw the amendment.
Seema Malhotra
I thank the Minister for his comments. I was intending to press the amendment to a vote, but there is a wider question about how we improve the balance regarding how this amount of time is used within the framework of the Bill. Should public authorities be given a shorter time in which to upload, to allow more time for a challenge to be brought? The same amount of time would have elapsed, but that could be a far better framework for the regime.
In the light of the comments made and the consideration that we need to look at this as a whole, I will not press the amendment to a vote today, but we intend to return to this. It will be important for the certainty that we want to see and the transparency we need. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Kirsty Blackman
I rise to speak to amendment 31 in clause 71, page 40, line 36, leave out ‘one month’ and insert ‘6 months’.
This amendment allows CAT referrals a longer period to be made.
This is a pretty similar amendment, as it is about extending the length of time in which a challenge can be brought before the CAT. I wholeheartedly agree with what the shadow Minister has just said. If the Minister’s greatest concern is ensuring that the period of uncertainty is not increased, there remains an issue about the balance. We could ensure that that level of uncertainty existed for the same length of time but the balance was correct, so public authorities could upload these things very quickly, making the total challenge period shorter. That balance needs to be changed.
On amendment 31, the Opposition have made pretty much all the arguments I was going to make, so I will not take up too much of the Committee’s time. More than one amendment has been tabled on the matter, as well as on the database and its timings, and a number of comments were made in the witness sessions about the balance in the Bill not being right. I hope that the Minister will take on board the strength of feeling and give consideration to changing that balance by reducing the amount of time available for people to put things on the database and increasing the amount of time allowed for organisations to challenge. I therefore have no wish to move the amendment.
The Chair
The hon. Lady does not wish to move her amendment. Does the Minister wish to comment?
Paul Scully
I will just say that I always take on board and reflect on everything that the hon. Member for Aberdeen North says—and, indeed, other colleagues as well.
The Chair
The amendment is not moved.
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause amends the Competition Appeal Tribunal Rules 2015 to set out the time limits in which an interested party must make an application to the CAT to review a subsidy decision. It is important to provide for time limits within which a challenge may be brought against a subsidy decision. It is important to allow sufficient time for those affected by subsidy decisions to submit their claim, while ensuring that public authorities and beneficiaries can proceed to implement subsidy decisions with certainty once they are made. We believe that the timing provided in the clause strikes the appropriate balance between those objectives.
The one-month limitation period starts only once the subsidy or scheme is published on the subsidy transparency database, but the limitation period for challenging decisions can be extended in certain circumstances. The first is where an interested party makes a pre-action information request. That will give the interested party a further month to bring their challenge, starting from when the pre-action request is responded to. Clause 76 enables an interested party to gather more information before deciding whether to challenge a subsidy decision and gives the public authority the opportunity to explain its decision, which may cause the interested party to decide that litigation is unnecessary.
The limitation period will also be extended where the Secretary of State refers the subsidy or scheme to the subsidy advice unit under clause 60. The interested party will then, again, have a further month to bring its challenge, starting from when the post-award referral report is published. Finally, the CAT has the discretion to extend the time limits set out in clause 71.
Seema Malhotra
Notwithstanding our concerns that the right balance has not been struck, we will not vote against clause stand part.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Clause 72
CAT powers on review: England and Wales and Northern Ireland
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause gives the Competition Appeal Tribunal the ability to grant the same forms of relief as are available to the High Court on an application for judicial review in England and Wales and Northern Ireland. The tribunal must likewise apply the same principles as the High Court in deciding whether to grant relief, and the remedies granted by the CAT are, where relevant, the same as those currently available to the High Court.
It is important that these remedies are available to the tribunal when it determines that a decision to give a subsidy or make a subsidy scheme was unlawful. That will ensure that the subsidy control principles, prohibitions and other requirements can be effectively enforced through the tribunal and, in turn, incentivise compliance. It will also ensure that the UK meets its commitments under its international agreements.
The clause works intrinsically with the clauses that follow it. Clause 73 makes equivalent provision in relation to Scotland. That is necessary because Scotland is a separate jurisdiction and has a different set of remedies for applications to the supervisory jurisdiction of the Court of Session, which is the judicial review equivalent. Clause 74 gives the CAT the power to award an additional form of relief—a recovery order. That will give the CAT the ability, should it deem it appropriate, to order a public authority to recover a subsidy, in part or in whole, to rectify any adverse impacts on competition and investment in the UK caused by its award.
Seema Malhotra
The Minister has outlined in some detail what the clause does. It grants the CAT power to give certain forms of relief, similarly to the High Court. The CAT may grant a mandatory order, a prohibiting order, a quashing order, a declaration or an injunction. We recognise the importance of these powers, so we will support the clause.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.
Clause 73
CAT powers on review: Scotland
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause gives the CAT the power to grant equivalent forms of relief as are available to the Court of Session in an application to the supervisory jurisdiction of that Court. When reviewing a case in Scotland, the CAT will be required to apply the same principles as the Court of Session would in those cases.
It is necessary to make separate provision for when the CAT is reviewing an application in Scotland as compared to England, Wales or Northern Ireland because, as the Committee is already aware, Scotland has a separate legal jurisdiction and its own system of judicial review, which differs from that in England and Wales and Northern Ireland. The clause therefore ensures that the tribunal has appropriate and effective remedial powers when it is hearing Scottish cases.
Seema Malhotra
We have no further comments on the clause, which we support.
Question put and agreed to.
Clause 73 accordingly ordered to stand part of the Bill.
Clause 74
Recovery orders
Seema Malhotra
I beg to move amendment 76, in clause 74, page 43, line 34, at end insert—
“(4A) The annual report prepared by the CMA under section 25(4) of, and paragraph 14 of Schedule 4 to, the Enterprise and Regulatory Reform Act 2013 must contain details of all recovery orders made in the relevant period including the names of the public authority and beneficiary and the amount to be recovered.”
This amendment provides for the CMA’s annual report to provide details of all recovery orders made the by the CAT in the relevant period.
Seema Malhotra
The clause confers a power on the CAT to make a recovery order if it has granted relief in respect of a subsidy decision and found that the decision was in contravention of the subsidy control requirements in chapters 1 and 2 of part 2 of the Bill. A recurring theme in the Bill is the lack of transparency baked into how the Government confer subsidies and the subsequent management and reporting of those subsidies, with subsidy referrals, exemptions for certain subsidies from the regulations, and the blocking, rather inexplicably, of transparency for smaller subsidies.
In our view, clause 74 represents the latest example of poor transparency. It confers a power on the CAT to make a recovery order if a subsidy is found to be in contravention of the control principles. A recovery order requires a public authority to recoup an amount of the subsidy from the beneficiary of the subsidy. This clause therefore creates a provision to allow any losses that the Government face when they mistakenly confer a subsidy on a business or industry that is in contravention of their own regulations to be recouped.
Does it not make sense, then, that parliamentarians and the public should be able to scrutinise subsidies that have been inadvertently conferred, to make sure that does not happen again? Indeed, as we seem to keep needing to remind Members, there should be adequate public oversight of the spending, or potentially mis-spending, of public money. Professor Rickard noted in her evidence to the Committee:
“The benefits of transparency, and more of it, outweigh the costs.”
She went on:
“I would encourage Members to think carefully about the ways in which we could further increase the transparency to ensure that the UK was a world leader in transparency in subsidies and so as to help to provide consistency and certainty for business and accountability to taxpayers”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 19, Q22.]
Transparency, and more of it, is a good thing. Imagine for a moment that an individual in charge of awarding a subsidy has taken the decision to corruptly award a subsidy to a business or sector from which he or she may gain direct financial benefit. If we are lucky, which we would need to be without adequate transparency, perhaps someone internal to their organisation would discover the malpractice. Without a publicly available report or register where the public can scrutinise which subsidies have been recalled and for what reason, that individual would get away with it and that malpractice could be swept under the rug.
It was discovered, for example, that Andrew Mills, an adviser to the Board of Trade who miraculously secured a £250 million PPE contract despite never having produced PPE in his life, received a pay-out of £32 million in that deal. That is an extremely large amount of money, which was paid out of the public purse, but that figure was only recently uncovered because one individual leaked it to the press. Transparency is therefore vital. That is why we are proposing amendment 76, which would require the CMA’s annual report to provide the full details of all recovery orders made by the CAT in the relevant period. That is what transparency looks like, that is what ensuring value for public money looks like, and that is why we hope the Government will give due consideration to the amendment.
Paul Scully
In addition to the ordinary judicial review remedies available under clauses 72 and 73, clause 74 gives the CAT the power to make a recovery order. It may order recovery of some or all of a subsidy if it finds that a subsidy or scheme was made in breach of the subsidy control principles, prohibitions and other requirements. The effect of the order will be to require the relevant public authority to recover the subsidy from the beneficiary. The method of recovery, the amount to be recovered and the timeframe for recovery will be for the CAT to determine.
As we have heard, amendment 76 would make it compulsory for the CMA’s annual report to include details of all recovery orders made in that year, including the names of the public authority, the beneficiary and the amount to be recovered. I support the objective of ensuring that the process of reporting and managing recovery orders is transparent and accountable; however, this intent is already met by the process as it stands in the Bill. Recovery orders, by their nature, will be made public, and enforcement mechanisms exist to ensure that they are followed. Accordingly, there is no need to give the CMA this additional reporting duty.
Kirsty Blackman
It would be useful if the Minister clarified how recovery orders are made public and how we can find that information.
Paul Scully
I will happily do so. Recovery orders are given during a hearing by the Competition Appeal Tribunal to a public authority if that public authority is found to have given a subsidy that breached the subsidy control principles, prohibitions and other requirements. The cases heard by the CAT are usually held in public, with any ruling later published on the tribunal website alongside a transcript of the hearing. The names of the public authority and the beneficiary, and the amount to be recovered, would ordinarily all be published within that for recovery orders.
I was at the CAT a couple of weeks ago, and I saw the virtual courtroom where a hearing about the takeover of Newcastle United was recently held. The hearing was viewed by 35,000 people—mainly Newcastle supporters, I suspect. According to the president of the CAT, more people watched it than attend, on average, the games of all but 15 of the premier league teams. There is a good degree of interest in the CAT’s decisions, which will be publicly available.
Kirsty Blackman
I am really glad that the CAT is so open and transparent. It should therefore not be that difficult for the CMA to put in its annual report the results of all the recovery orders that are published on the website.
Paul Scully
I will address that point, but if the tribunal decides to make a recovery order, the public authority in question must recover a subsidy from the beneficiary in accordance with the terms of the order. Recovery orders will be enforceable in the same way as an order made by the High Court or, in relation to Scotland, the Court of Session. The tribunal will hold public authorities accountable for the subsidies that they give. As the process is already transparent and holds public authorities accountable to the regime, it is not necessary to give the CMA a reporting obligation for recovery orders.
The CMA’s annual report would also not be the right place for that information to be collated. The requirement to produce a report under the Enterprise and Regulatory Reform Act 2013 relates to the CMA’s functions. The Competition Appeal Tribunal, not the CMA, is responsible for recovery orders. The CAT already has the reporting systems needed for recovery orders. I therefore request that the hon. Member for Feltham and Heston withdraw the amendment.
Seema Malhotra
I thank the Minister for his comments. He is right that recovery orders are published alongside hearings, but they are not collated, and it is not possible to see them easily in one place in order to understand collectively what is going on. If we want to know where things are not going well and what is happening across the regime from an end-to-end point of view, it is important to have that information not just publicly available, but easily accessible.
Kirsty Blackman
Does the hon. Member agree that it is very difficult for us to know what is coming up in the CAT unless we are looking at its website on a regular basis, so the transparency that we need as parliamentarians to see that the Bill is working effectively is not adequately fulfilled by the CAT’s current reporting duties?
Seema Malhotra
I thank the hon. Member for her comment, and she is right. When we develop legislation and introduce a regime, it has to stand the test of time and last beyond the time we spend in our individual roles. In five or 10 years, the Minister might have become Prime Minister.
Seema Malhotra
Others are starting their campaigns, so perhaps the Minister also will do so.
We need to think about making such information more easily accessible. We thought about whether the CMA should publish it simply because if we have data on the regime as a whole, it should not be too onerous to find a way of reporting some of it, perhaps in partnership with the Competition Appeal Tribunal. To enable us to see what is going on and where there are recovery orders, that would be useful alongside other information that we talked about, such as geographical information, so that we have an end-to-end view.
Kirsty Blackman
I have just one more thing to add on this. Clause 65 covered monitoring and reporting on subsidy control, and the five-year report that will be published. Does the hon. Member agree that if the annual report will not cover instances of recovery orders because they are not the responsibility of the CMA, the CMA’s review of the efficacy of the subsidy control regime would be an appropriate alternative place to report on them?
Seema Malhotra
The hon. Member makes a good point. I come back to our broader discussion about needing to have a clear view and how we can be efficient. Data collection and reporting requires thought and design about what will be most useful for coming forward into reporting and therefore fit for making decisions on. Nobody wants to collect the data for the sake of it; it is always for a purpose. How do we make it as streamlined, straightforward, accurate and quick as possible? It is worth coming back to this issue.
In the light of our earlier conversation about the Minister writing on what he expects to see in the annual report, that would also be an opportunity for us to revisit the issue and making sure that the reporting across the whole system is coherent and effective, as well as what would be annual and what would be in the more periodic reports. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Paul Scully
This clause gives the CAT the power to make a recovery order in addition to the standard judicial review remedies that will be available to the tribunal under clauses 72 and 73. As with the other remedies that will be available to the CAT, the power to order recovery will be at the CAT’s discretion. It will be for the tribunal to decide on a case-by-case basis whether the recovery of the subsidy is an appropriate remedy based on the facts in question. The CAT may decide a different remedy, or a combination of different remedies, is more appropriate depending on the facts in front of it.
The clause gives the tribunal flexibility in how the recovery order is framed to account for different types of subsidy that may need to be recovered. For example, the tribunal would have the power to decide how long a public authority should have to recover the subsidy and the means by which recovery is to be exercised. It will be for the tribunal to decide on a case-by-case basis the appropriate content of the recovery order. In many instances, it will be relatively clear which enterprises benefited from a subsidy that needs to be recovered, and relatively simple to require the public authority to recover the amount in question. However, there may be cases where the subsidy is complex in nature, with the tribunal concluding that it should be left to the public authority to calculate the exact amount to be repaid.
Seema Malhotra
I thank the Minister for his remarks. We support the clause.
Question put and agreed to.
Clause 74 accordingly ordered to stand part of the Bill.
Clause 75
Appeals against decisions of the CAT
Question proposed, That the clause stand part of the Bill.
Paul Scully
The Competition Appeal Tribunal will, in the first instance, determine reviews of subsidy decisions by public authorities. In the rare instances where there are legitimate disputes on the meaning of the law underpinning a decision, it is important there is an ability to seek permission to appeal to a court of appeal. Appeals cannot be made simply because one party to the litigation does not agree with the outcome. There will have to be a genuine ground of appeal citing an error in the application of the law. The clause provides the basis on which appeals can be made as appropriate to the Court of Appeal in England and Wales or Northern Ireland, or to the Court of Session in Scotland. Appeals may be made on any point of law with permission either from the tribunal or the relevant appellate court.
Seema Malhotra
As the Minister said, the clause allows appeals to be made to the Court of Appeal or the Court of Session on any points of law. We support it.
Question put and agreed to.
Clause 75 accordingly ordered to stand part of the Bill.
Clause 76
Duty to provide pre-action information
Seema Malhotra
I beg to move amendment 77, in clause 76, page 44, line 21, leave out
“such restrictions as it considers proportionate”
and insert
“the minimum restrictions that are necessary”.
This amendment provides that restrictions imposed to protect the specified categories of information should be the minimum necessary.
The Chair
With this it will be convenient to discuss the following:
Amendment 78, in clause 76, page 44, line 27, at end insert—
“(5A) The Secretary of State must issue guidance on the restrictions that are necessary to protect the types of information described in subsection (5).”
This amendment would require the Secretary of State to issue guidance on restrictions imposed under subsection (5).
Amendment 79, in clause 76, page 44, line 27, at end insert—
“(5B) The Secretary of State must by regulations make provision enabling a person to appeal against a decision by a public authority to impose any restrictions under subsection (5).”
This amendment would require the Secretary of State to make provision for an appeals process against restrictions imposed under subsection (5).
Seema Malhotra
Clause 76 imposes a duty on public authorities to provide certain information to interested parties about a subsidy or a subsidy scheme. An interested party may request the information for the purpose of deciding whether to apply to the CAT for a review of a subsidy or scheme on the grounds that it failed to comply with the relevant subsidy control requirements. A request must be made in writing and the interested party must state that they are considering applying for a review. The public authority must respond to the request within 28 days and it may impose restrictions that it considers proportionate to protect commercially sensitive or legally privileged information.
Amendment 77 would mean that restrictions should be the minimum necessary when imposed to protect commercially sensitive, confidential or legally privileged information or information whose disclosure would be contrary to the public interest. Let us compare that with the current wording of the Bill, which is that the public authority may impose restrictions that it considers proportionate. The original wording is very ambiguous, provides too little guidance for the public authority and provides little recourse to challenge if it is determined that the restrictions imposed were in fact disproportionate. The restrictions imposed by the public authority should not be overly excessive. It is important that information that should be made public is made public to allow maximum transparency. If we keep the original text, a public authority could choose unnecessarily to make public more than is proper, hampering adequate transparency measures.
Amendment 78 would provide a proper route for challenge if a public authority imposed restrictions under subsection (5) that were found to be excessive. On amendment 79, we consider it proper that where restrictions have been imposed on the release of information to interested parties on the basis of, for example, commercial or legal sensitivities, there is an appeals process to ensure that the decision made was the correct one. That is essential to ensure that a public authority is not able to abuse its powers in deciding which restrictions to impose, and encourages the public authority to choose the minimum restrictions necessary or possibly face an appeals process.
Overall, although we believe that our amendments would substantially improve clause 76, we recognise the clause’s importance in allowing interested parties to make a request for information.
Paul Scully
The purpose of clause 76 is to put a duty on public authorities to provide certain information, at the request of an interested party, about their decision to give a subsidy or make a subsidy scheme. That is so that the interested party can decide whether to apply for a review of that decision at the CAT. The pre-action information request will allow claims to proceed more efficiently, and help to avoid unmeritorious challenges. The public authority must respond to the request within 28 calendar days, but can impose proportionate restrictions, as set out in subsection (5), to protect certain types of sensitive, confidential, legally privileged or other information that should not be disclosed. It is important that a public authority is able to impose those restrictions, as that may be needed to avoid potential legal challenges—for example, if certain information is subject to a legal duty of confidentiality, and to avoid disclosing information contrary to the public interest. Where a pre-action information request has been made, it is very clearly in the interests of the relevant public authority to provide a full return and to use with some caution the restrictions on providing those types of information. For that reason, this trio of amendments is unnecessary.
If a public authority abuses the provisions in clause 76(5) and provides insufficient information to clarify whether its subsidy decision complied with the subsidy control requirements, it is all the more likely that the interested party will proceed to a full challenge. If they do, the public authority may be required to disclose further information in proceedings before the tribunal. The public authority will have gained nothing.
I am very reluctant to agree to produce guidance on what might be the minimum restrictions necessary, because that will depend on the facts of each case. The risk that public authorities misuse the discretion that clause 76(5) gives them seems small and, as I have said, it is not in their interests to do so. That risk is smaller than the risk of producing unhelpful guidance that does not allow public authorities to disclose the right information in the context of each case. The amendments propose taking a sledgehammer to crack a nut. Ultimately, I am confident that, helped by the guidance, there will be a high degree of compliance with the regime and very few occasions when there are grounds for a challenge.
Seema Malhotra
The Minister may be coming to this point, but will he clarify the process he envisages in a case where there is suspicion that, rather than information being commercially sensitive, there is another reason for not disclosing it? Is there a way to challenge that or to appeal? We want to understand this; that is why we tabled the amendments.
Paul Scully
Yes, I will come to that.
I am similarly reluctant to agree that the Government should create a special route of appeal against public authorities’ decisions on what information to provide. There is only a remote chance that such a route would ever be needed, but there is already a route to challenge a public authority’s decision under the clause. Depending on the facts, the general right to judicial review in the High Court or the Court of Session may be available. As I said, however, we can be confident that there will be a high level of compliance, and I am even more confident that public authorities will not act against their own interests and those of subsidy beneficiaries by withholding information unnecessarily in a pre-action information request. It would be excessive to create a special route to challenge the way public authorities comply with these requests.
The Bill makes it firmly in a public authority’s interests to provide a full response to a pre-action information request and to take a sincere and serious approach to imposing restrictions on what information it provides. Inadequate disclosure would increase the chances of a full challenge, and with it the likelihood of further information needing to be disclosed in proceedings before the tribunal. Setting up an apparatus of guidance, regulations and special routes of appeal around the pre-action information request would be wholly disproportionate to the risks that the hon. Member for Feltham and Heston set out. I ask her to withdraw the amendment.
Seema Malhotra
I thank the Minister for his remarks. I am not entirely sure that he has identified an alternative route. On the basis that he thinks there could be a route, and to allow time to review and test that, I will not press the amendments today, but I would be grateful if he replied in writing on one specific point. If an interested party makes a request and, under subsection (5), the public authority imposes restrictions that it has reason to believe are spurious, for example, the Minister says that JR may be available. The question is whether JR is available. I would like him to state where and how there is the equivalent of an appeal mechanism. If he does that, I would be happy to say that we feel that that important issue has been dealt with.
The Minister also says that only in a small number of cases—I forget his exact words—might the provision be misused, but sometimes the point of having law is to make sure that it is there for such occasions. We cannot predict how many times a mechanism for appeal and challenge may be required, but one day, when he is, perhaps not the Prime Minister, but the Secretary of State, he might have reason as an interested party to use it. For the purpose of ensuring that there is a robust regime, it is important that we cover off this point. If such a mechanism is in the Bill, as he hopes it is, it would be good to have clarification in writing.
Paul Scully
I am happy to go again. The public authorities have a statutory duty. They understand their legal position and the legal duties. That is why I believe the number of such cases will be minimal. If public authorities do not provide the correct information, the interested party can go straight to the CAT for a full challenge, but judicial review is available in those circumstances. With three avenues, we do not feel it is necessary to create a specific one for this set of circumstances, but I will put clarification in writing.
Seema Malhotra
On the basis that I expect a letter from the Minister, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause imposes a duty on public authorities to provide certain information to interested parties about a subsidy or subsidy scheme. An interested party may request the information for the purpose of deciding whether to challenge the subsidy or subsidy scheme on the ground that the public authority failed to comply with the principles, prohibitions and other requirements in the Bill. To avoid being timed out on bringing a challenge, a request should be made before the expiration of the one-month challenge period, in writing, and the interested party musts state that they are making the request for purpose of deciding whether to review a subsidy or subsidy scheme decision. The public authority must respond to the request within 28 calendar days, but can impose proportionate restrictions to protect certain types of sensitive, confidential, legally privileged information or other information that should not be disclosed because that would not be in the public interest. The purpose of the duty is to ensure that interested parties can make a well-informed decision on whether to commence a challenge against a subsidy decision.
Seema Malhotra
Having explained how we believe our amendments would have improved the clause, we acknowledge its importance in allowing interested parties to request information and therefore support its standing part of the Bill.
Question put and agreed to.
Clause 76 accordingly ordered to stand part of the Bill.
Clause 77
Misuse of subsidies
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause confers on public authorities the right to recover a subsidy that has been used for a purpose that is different from the one for which it was given. Public authorities give subsidies with a specific purpose in mind. They will determine whether the subsidy complies with the subsidy control principles in the Bill. They will reference the purpose for which the subsidy has been given. Many public authorities award subsidies through a written contractual arrangement that sets out the terms and conditions under which the financial assistance is being given; this is likely to state the purpose for which the assistance is being given.
Kirsty Blackman
I am sorry to interrupt the prospective Secretary of State mid-flow, but I have a question. Does the clause apply to subsidies below the de minimis threshold?
Paul Scully
I will come to that in a second.
It is good practice for the contractual arrangements to contain a mechanism allowing public authorities to recover a subsidy if the terms and conditions are breached, including whether the subsidy is misused. However, not all subsidies are given through contractual arrangements, and those may not have a mechanism to recover the subsidy if it is used for a different purpose. Public authorities may have other private law rights that enable them to recover the subsidies in those circumstances. The clause is designed to avoid any uncertainty by conferring on public authorities a right to recover subsidies used for a purpose other than that for which they were given. The new right to recover is enforceable as if it were a contractual right and does not affect any other remedies that might be available to the public authority with respect to the award of the subsidy in question.
Seema Malhotra
I am grateful to the Minister for his comments and to the hon. Member for Aberdeen North for her question, which is important.
As the Minister outlined, the clause gives public authorities the power to recover subsidies used for purposes other than the purpose for which they were given. That is an extremely important stipulation. Subsidies should be used only as intended, in line with the subsidy control requirements, and as agreed between the public authority and the recipient. We will support the clause standing part of the Bill.
Paul Scully
May I write to the hon. Member for Aberdeen North on her question? I am not sure whether the clause will apply, but I will write to her.
Kirsty Blackman
Thank you.
Question put and agreed to.
Clause 77 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Michael Tomlinson.)
Animal Welfare (Kept Animals) Bill (Fourth sitting)
(2 years, 5 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 8 - Wheeler, Mrs Heather
The Committee divided: - Ayes: 8 / Noes: 8 - Wheeler, Mrs Heather
The Committee divided: - Ayes: 8 / Noes: 8 - Wheeler, Mrs Heather
The Chair
Good afternoon. I remind Members that they are expected to wear masks when they are not speaking, in line with current Government guidance and that of the House of Commons Commission. Please also give each other and members of staff space when seated and when entering and leaving the room. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
Clause 20
Guidance
Question proposed, That the clause stand part of the Bill.
The Minister of State, Department for Environment, Food and Rural Affairs (Victoria Prentis)
It is a great pleasure to serve under your chairmanship again, Mr Davies. The clause indicates the intention that the Secretary of State will give guidance to local authorities in respect of their functions under this part of the Bill. With that guidance, local authorities will be better able to fulfil their functions in a consistent way. Where keepers are unable to provide for primates’ welfare needs, local authorities can be confident that Government guidance can advise them how best to improve the situation for primates in their area.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve with you in the Chair, Mr Davies. I may have inadvertently given my speech on this clause before lunch. I feel no need to test anyone on whether they noticed, nor any need to repeat it, other than to say that we feel that the Government really ought to do provide this guidance, and it ought to be a “must” rather than a “may”.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21
Information
Amendments made: 20, in clause 21, page 11, line 16, leave out “Secretary of State” and insert “appropriate national authority”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 21, in clause 21, page 11, line 17, leave out “Secretary of State” and insert “appropriate national authority”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 22, in clause 21, page 11, line 24, leave out “Secretary of State” and insert “appropriate national authority”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 23, in clause 21, page 11, line 26, leave out “Secretary of State” and insert “appropriate national authority”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 24, in clause 21, page 11, line 27, leave out “Secretary of State” and insert “appropriate national authority”—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The information required under the clause will enable the Government to build a national view of how different local authorities use their powers under the Bill. It will also provide information on the number of primates being kept under licence. It will help to ensure that the legislation is implemented and enforced effectively and consistently.
Question put and agreed to.
Clause 21, as amended, accordingly ordered to stand part of the Bill.
Clause 22
Power to extend Part 1
Amendment made: 25, in clause 22, page 11, line 31, leave out “Secretary of State” and insert “appropriate national authority”.—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Victoria Prentis
I beg to move amendment 26, in clause 22, page 12, line 1, leave out from beginning to second “provision” in line 2 and insert
“The consequential, supplementary, or incidental provision that may be made under this section includes”.
This amendment is a drafting change that is consequential on the new clause about regulations.
The Chair
With this it will be convenient to discuss the following:
Clause 23 stand part.
Clause 38 stand part.
Clause 49 stand part.
Government amendments 56 and 58.
Government new clause 3—Regulations.
Victoria Prentis
New clause 3 brings provisions relating to the parliamentary procedures that must be used when making regulations under parts 1, 2 and 3 into one clause that will be inserted into part 4. At the appropriate times, I will move that clauses 23, 38 and 49 should not stand part of the Bill. Amendment 26 makes minor changes, all of which are consequential on the removal of clauses 23, 38 and 49 and the introduction of new clause 3.
Daniel Zeichner
I find this set of amendments baffling. I would welcome an explanation from the Minister as to why it was necessary to bring forward these amendments to the Government’s own Bill and what that means, not least because clause 22 seems to give the Government permission to extend the licensing system to any other kind of wild animal. I am not sure why they want that power. It is important that that is explained. As I argued earlier, the fact that everything will be done by regulation leads us to wonder what is planned and how it might be challenged in future. An explanation would be welcome.
Members of the Committee may have read the memorandum to the Delegated Powers and Regulatory Reform Committee. It is quite helpful on this Bill. I am struck by the fact that these amendments are subsequent to that memorandum. Is there a revised memorandum, and when might we see it?
Victoria Prentis
I may have misunderstood the hon. Gentleman, but I fear that he may have got ahead of himself again in talking about clause 22. With your permission, Mr Davies, I will deal with clause 22 stand part later. New clause 3 and amendment 26 merely bring the Bill into line with itself, as amended. Clauses 23, 38 and 49 will be removed, so we have made insertions to make that operable. I fear that the hon. Gentleman was talking about the power to introduce regulations to regulate the keeping of other wild animals. Is that right?
Victoria Prentis
On the clauses that we are now discussing, we have carefully considered the parliamentary procedures. All powers to make regulations should be subject to the affirmative procedure. I hope that the hon. Gentleman and the rest of the Committee are happy with that.
Amendment 26 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
I have heard what the hon. Gentleman said. This clause provides the Secretary of State with a power to introduce regulations to amend part 1 of the Bill to regulate the keeping of other wild animals. The power will allow the provisions to be extended to other kinds of wild animals that are not normally domesticated in Great Britain. The use of this power would be dependent on our gathering significant evidence in support of extending the primate provisions to another type of kept wild animal. It is quite clear that the Secretary of State is required to consult appropriate persons before making regulations.
The Government do not have any immediate plans to extend the measures in the Bill to other wild animals, and the power will be used only when there is evidence to show that Government intervention is necessary to ensure that the complex welfare needs of an animal are met. It is in the Bill that the Secretary of State will consult relevant experts before using the power, which ensures that we can prevent other wild species from suffering as pets and being kept in inappropriate conditions. We can ensure that any further regimes are in line with the primates licensing regime. Environmental non-governmental organisations have expressed considerable support for the extension of this regime to other kept wild animals, should the need arise.
Daniel Zeichner
I am grateful to the Minister for her explanation. To go back to points I made earlier, we seem to be designing a licensing system for a relatively small number of cases and then, at the end of the discussion, saying, “Ah, yes. This can also be used in wider circumstances.” That seems to be the wrong way round, and I think we will have the same discussion a bit further down the line on the extensive changes to the regulations applying to dogs. Although I do not necessarily have any objection to that, it is a curious way of proceeding. To some extent, it would have altered the discussion on Second Reading or more widely if people had known that the Government were setting up a new system, which is fine, but this started off being about primates.
Although we will not oppose the clause, I observe that it seems, from my conversations with organisations in the world outside, that they are not entirely clear what the provision is about. As one always says in these circumstances, I have no doubt that Ministers are well intentioned, but not all their successors may be. There is a considerable power to set up a new system for a whole range of animals well beyond primates.
Question put and agreed to.
Clause 22, as amended, ordered to stand part of the Bill.
Clause 23 disagreed to.
Clause 24
Meaning of “keep”
Amendment made: 30, in clause 24, page 12, line 28, after “England” insert “and Wales”.—(Victoria Prentis.)
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause defines the meaning of the word “keep” in part 1. It is necessary to ensure that the provisions apply to the right people. A person does not “keep” a primate if they are in temporary possession of a primate in order to prevent it from causing damage, in order to transport it on behalf of somebody else, or when providing it with vet treatment. The clause also confirms that a person who ceases to be in possession of a primate while it is in England or Wales will continue to be treated as the keeper until another person takes possession of the primate.
Daniel Zeichner
I repeat what I said earlier: we do not think that people should be passing, keeping or transferring these creatures. We just think they should not be kept.
Question put and agreed to.
Clause 24, as amended, ordered to stand part of the Bill.
Clause 25
General interpretation
Amendments made: 31, in clause 25, page 12, line 31, at end insert—
““appropriate national authority” means—
(a) in relation to England, the Secretary of State, and
(b) in relation to Wales, the Welsh Ministers;”.
This amendment relates to the application of Part 1 to Wales. See the explanatory statement to Amendment 3.
Amendment 32, in clause 25, page 13, line 1, after “authority”” insert “, in relation to England,”.
This amendment limits the existing definition of “local authority” to England, in consequence of the application of Part 1 to Wales by Amendment 3.
Amendment 33, in clause 25, page 13, line 3, after “council” insert “in England”,
This amendment is consequential on Amendment 32.
Amendment 34, in clause 25, page 13, line 7, at end insert—
““local authority”, in relation to Wales, means a county council or county borough council in Wales;”.
This amendment relates to the application of Part 1 to Wales and provides for a definition of “local authority” for Wales.
Amendment 35, in clause 25, page 13, line 21, at end insert—
“(2) Where any premises are partly in the area of one local authority and partly in the area of another local authority, the premises are treated for the purposes of this Part as being in the area of the local authority in which the major part of the premises is situated.”—(Victoria Prentis.)
This amendment provides that where premises are partly in one local authority’s area and partly in another one’s, they are treated as being in the area of the local authority where the major part of the premises is situated.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause provides definitions of the terms used in the primate provisions in the Bill. It confirms that “primate” means an animal of any species other than man that belongs to the order of primates.
Question put and agreed to.
Clause 25, as amended, accordingly ordered to stand part of the Bill.
Clause 26
Offence where dog attacks or worries livestock
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause provides that a person who owns or is in charge of a dog will be guilty of an offence if the dog attacks or worries livestock on any agricultural land or a road, path or verge thereof. The clause explains under what circumstances a person does not commit an offence even if a dog attacks or worries livestock. An owner will not commit an offence if they can prove that the dog was in the charge of another person without their consent—for example, if the dog had been stolen. The penalty for the offence is a fine up to level 3 on the standard scale.
Daniel Zeichner
We have moved beyond primates. [Hon. Members: “Hooray!”] Exactly. We are into a new part of this curious Bill. I start by welcoming the Government’s decision to update the Dogs (Protection of Livestock) Act 1953, which I had the pleasure of reading over lunch. It is extraordinary how much more succinct the legislation was in those days. It did it all in three pages—and, apparently, for thruppence. The Act has been on the statute book for a long time, and although it has been updated periodically, it clearly needs bringing into the modern period. We are all aware of the horrific impact that livestock worrying can have and the concern it creates for livestock owners across England and Wales.
Equally, we all welcome the increased access to the countryside that there has been in recent years and that many of our citizens have made good use of, particularly in the past couple of years. We also recognise the economic impact that those people bring to the rural economy. That is a positive. However, if more people are coming into such areas and walking in the countryside with their dogs, and if they are not well informed about the need to behave responsibly—and, sadly, some do behave irresponsibly—there is always the risk that the owners will fail to take good care of their dogs when they are close to livestock. This has clearly had an harmful impact on a number of communities. When the all-party parliamentary group for animal welfare looked into livestock worrying, I am told that it estimated that about 15,000 sheep had been killed by dogs in 2016. In 2019, NFU Mutual stated that livestock worrying cost the sector £1.2 million. The National Sheep Association’s annual survey on livestock worrying in 2020 found that 95% of its respondents had experienced livestock worrying on their farm, with the average cost being more than £1,000. As you would expect me to observe, Mr Davies, at a time when farmers are open to being undercut through the trade deals being cut by the Government, every single penny counts.
Livestock worrying also leaves dogs open to harm. SheepWatch UK has told us that in 2016 at least 49 dogs were shot and killed for chasing or killing sheep. These are complicated issues, and we know just how much distress can be caused to a huge range of people—the owners of the livestock, those who witness such events, and the emergency services who have to turn up and deal with the problems. It causes great pain and distress and, sadly, often death to the attacked animals. It also puts the life and health of the dog and the owner in danger, as horses and cattle, for example, are quite capable of causing harm not only to a dog that is attacking them, but to the people with them. I am sure that we will discuss that later.
I welcome the Government’s decision to take action in this area, but we believe that there is scope to improve the measures, and we have a number of amendments, which we will come to this afternoon, that would do that. A final point on this introductory clause to part 2: we are slightly disappointed that there no mechanism for compensating victims of livestock worrying. A later amendment of ours may address that issue. On that basis, I am quite happy with the clause.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clause 27
Seizure and detention of dogs
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause targets reoffending—cases where either the same dogs are found attacking livestock repeatedly, or where an owner has several dogs that worry livestock. It is important to bear in mind that about two thirds of livestock worrying incidents happen when an owner is not with their dog, and it has escaped or run away from them. Under the clause, the dog can be detained until the owner has claimed it and paid any associated expenses. The police will be able to seize and detain a dog if they have reasonable grounds to believe that it has attacked or worried livestock, or may make further attacks on livestock.
Daniel Zeichner
We have come to a series of clauses that get into the detail of how we address this issue in the new world. We have no objection to much of the detail, but as I said earlier, we seem to be designing new systems for dealing with dogs—and their owners, in some cases; we will look at that further in other clauses. I wonder a bit about how the measures will work and overlap with existing legislation. There are frequent debates in Parliament about the Dangerous Dogs Act 1991, for instance. I worry that we are designing a new system that starts from livestock worrying, but that could cover many other aspects of how dogs behave, and we could be duplicating measures, or creating a system that will be extrapolated from to cover other circumstances. Obviously, livestock worrying is an important issue in itself, but a whole range of things follow from it that it may be relevant to discuss and consider in the round in another way. However, when it comes to how one might deal with livestock worrying, there is nothing in the clause that we object to, and we are happy to proceed with it.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Collection of samples and impressions
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause introduces powers to improve the ability of the police to investigate incidents of dogs attacking or worrying livestock. In creating the Bill, we worked closely with the police, and the provisions have very much been co-designed with them, so that they have the tools that they need in the modern world to enforce the legislation. This clause enables a police constable to take samples or impressions from a dog, livestock, or, sadly, the body of a livestock animal if it might be evidence of an offence committed under clause 26. The police say that that is a very welcome development that will really assist in prosecuting this offence.
Daniel Zeichner
I am afraid I will be making the same point consistently on these clauses. I am glad to hear that the measures were developed in consultation with the police, but I suspect that the powers could also be used in other circumstances. That is my ongoing concern about the way we are proceeding, although as far as we can see these are sensible proposals.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Clause 29
Power of justice of the peace to authorise entry and search
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
Clause 29 enables a justice of the peace to authorise the police—again, this has been asked for—to enter and search premises in connection with offences where a dog is believed to have attacked or worried livestock. That includes the power to take a sample or impression from the dog.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clause 30
Control order upon conviction under section 26
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
Clause 30 enables the courts to make control orders after conviction of an offence under clause 26, if the dog was found not to have been under proper control at the time of the offence. The control order must specify one or more measures that the offender or the owner of the dog, or both, must take to ensure that the dog is kept under proper control in the future. The owner of the dog, as well as the offender, may appeal against a control order to the Crown court. It is an offence to breach a control order; the penalty is a fine not exceeding level 3.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Destruction order upon conviction under section 26
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
Clause 31 introduces a power for the court to order that a dog be destroyed after a person has been convicted of an offence under clause 26, if the court is satisfied that there is a risk that the dog could attack or worry livestock again. The offender and the owner, if different, have the right to appeal against a destruction order to the Crown court.
Daniel Zeichner
We are working here with a series of proposals to deal with these very difficult cases. No one wants to see a dog destroyed.
My question is about whether any work has been done to consider how many control orders the Government anticipate being used under these proposals and how many destruction orders might follow. When we come to discuss the orders in future debates, in Westminster Hall or wherever, people may be rightly concerned that the orders have led to too many dogs being destroyed unnecessarily. Possibly it will be the other way round: perhaps the orders will not have been used strongly enough to deter people from behaving irresponsibly—if that is the purpose of this legislation, which I hope it is.
Victoria Prentis
Destruction orders are, of course, already available to the courts in relation to dogs that are dangerous and not kept under proper control, including in some cases—through other legislation that is already enforced—when a dog has worried livestock. It is important to remember that we are designing these changes with proportionality very much in mind. The ancillary orders being brought under this legislation would be available to a court only post-conviction. The courts will of course need to consider proportionality when making any control, disqualification or destruction orders.
The Bill gives additional powers to the police—particularly in the collection of samples or DNA, for example. That will help them prosecute these serious crimes.
Daniel Zeichner
I apologise for my lack of detailed knowledge about the complex interrelationship between existing laws and the new proposals. I suppose what I am trying to get at is the problem that the Government are seeking to solve through this new legislation given that, from my limited understanding, there is already legislation that could be used to achieve something that looks broadly similar.
Victoria Prentis
As the hon. Gentleman has said, legislation has been in place since 1953. It was amended substantially in 1981 and is operable at this point. The new legislation, following our close work with the police, works on ways to make things easier and on modern tools and technologies, such as DNA sampling, to ensure that the police can prosecute the offences. As we have seen, the police will have that power, having had the authorisation of a JP to enter and search a premises in order to take a sample from or, where necessary, seize a dog.
This part of the Bill is designed to make existing powers more operable—easier and better to prosecute, giving the police extra tools to use in the prosecution of their duties. Yes, that is true of many of the powers, including the power to destroy a dog where necessary, although rehoming is also very much on the cards in many cases. Destruction, where that is decided to be necessary, however, is already an option. Such options remain in place, but this part of the Bill will help the police go about the course of their duties.
Daniel Zeichner
That is a helpful explanation, but only up to a point. I am left concluding that the Government seem not to be taking away the existing legislation and necessarily improving it, but adding additional legislation, which creates potential confusion. I understand the need to collect samples or use new technologies—absolutely right—but I am not clear why the destruction orders in particular need to be added to with this extra legislation in the Bill. I am not objecting; please do not—
Victoria Prentis
I might be able to help. I am trying to find the right clause, but I reassure the hon. Gentleman that one of the clauses repeals the 1953 Act. Much of the wording is the same, but the Bill will replace the 1953 Act. The legislation has been put into this Bill. I hope that is clear. While I am on my feet, the other thing I should have said earlier is that we have extended the meaning of “livestock” in the Bill to include species that were not kept routinely in 1953, but now are, such as alpacas.
Daniel Zeichner
I am grateful. It was clause 41—I am sure we are not expected to commit these things to memory. I was aware of that, but I am still not entirely clear whether all the existing legislation stems from the 1953 Act. In this case, I am not sufficiently knowledgeable to pass judgment on that, but I suspect that it may not be, so my continuing concern is that when we look at other things, such as the Dangerous Dogs Acts 1989 and 1991, we will find overlapping and duplication that it might have been a good idea to sort out in general. As a general proposition, the clause provides a framework for dealing with livestock worrying, and we support that.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
Disqualification order upon conviction under section 26 or breach of control order
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause allows the courts to make a disqualification order if a person is convicted of an offence of a dog attacking or worrying livestock, or of breaching a control order imposed by the courts under clause 30. A disqualification order may disqualify the offender from owning dogs, keeping dogs, or both. A person that breaches such an order commits an offence.
Daniel Zeichner
This is becoming a fascinating exchange. What is being done here is the putting in place of a range of measures, whether that is control orders, disqualification orders or destruction orders. A structure—though not necessarily a new one—is being created to deal with that set of issues. Again, I can see nothing wrong with the structure, but how it will interact with others bothers me.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clause 33
Seizure and disposal of dogs in connection with disqualification order
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause makes provision for the seizure and disposal—we hope by rehoming, where possible—of dogs in connection with disqualification orders introduced in clause 32. The clause also clarifies the right of appeal in relation to orders made in respect of dogs kept by a person to whom a disqualification order applies, whether or not that person is the owner.
When a court makes a disqualification order, if the person to whom the order applies owns or keeps a dog, the court may order that the dog can be taken away from them. If the owner is not the offender, they may appeal to the Crown court against the order made for the disposal of their dog.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Termination of disqualification order
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause provides further detail on how the disqualification orders introduced in clause 32 will be put into practice. The clause sets out the rights of the offender to apply for the order to be terminated and explains the rights and responsibilities of the applicant and the court.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clause 35
Sections 31 and 33: supplementary
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause provides further detail on how the disqualification and destruction orders will work. A person who fails to comply with the requirement to deliver up a dog as imposed under a disqualification order or a destruction order commits an offence and is liable upon conviction to pay a fine not exceeding level 3. Directions given by the court may specify how a dog is to be disposed of or delegate the decision about this to a person appointed under the order.
Question put and agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clause 36
Control, destruction and disqualification orders: appeals
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
The clause ensures that control, destruction and disqualification orders are not acted upon until the offender or dog owner has had the opportunity to appeal and had that appeal determined. The clause lists possible arrangements that the court can authorise, including directions for the dog to be taken into possession. It is an offence not to deliver up a dog subject to arrangements made by the court. Any expenses incurred in relation to the care of the dog can be recovered as a civil debt.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clause 37
Crown application
Victoria Prentis
If the Committee wants to know a fun fact, the Crown is not bound by the Dangerous Dogs Act 1991. Corgis are not dangerous—well, certainly not under that Act, anyway.
Victoria Prentis
And they are Welsh—yes, indeed. From Pembrokeshire, not from the Gower.
The clause sets out how part 2 binds the Crown. The Crown should be bound by clauses 26 to 41 on livestock worrying in due respect for the duty to keep dogs under proper control and to mitigate the risk of harming the welfare of livestock. In the interests of national security, powers of entry in this part may be restricted in relation to Crown premises and are restricted in relation to Her Majesty’s private estates.
Daniel Zeichner
I found the clause slightly puzzling. I am not entirely sure what it means, as usual. Maybe the Minister will be able to elucidate. I am not sure whether it is referring to land owned by the Crown, although of course Crown premises apply to extraordinary places—I believe some Cambridge colleges are considered to be Crown premises. I am not sure—I could get myself in trouble here, couldn’t I?
Victoria Prentis
Crown premises are defined as
“premises held, or used, by or on behalf of the Crown.”
Daniel Zeichner
There is a serious point here, which is that there seem to be some exceptions being made that relate to certain land, possibly even to certain animals. I am not entirely sure why that is in place. Can the Minister explain?
The Chair
There are two types of corgi. I know one in Pembrokeshire and one in Carmarthenshire.
Victoria Prentis
You are of course right, Mr Davies.
This part of the Bill is trying to bind the Crown—to ensure the Bill applies to the Crown. As I said in a slightly tongue-in-cheek way, the Crown is not bound by the Dangerous Dogs Act 1989 or the Dangerous Dogs Act 1991, but this Bill will apply to the Crown, as set out, with the exemption of national security, which I highlighted earlier. I hope that assists the hon. Gentleman.
Daniel Zeichner
I am grateful to the Minister. That is reassuring. I am thinking about my old college, King’s, and the cows grazing outside it. I certainly would not want to see them being troubled by dogs. Our understanding is that this clause is fine.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Regulations
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
I ask that clause 38 does not stand part of the Bill. New clause 3, in my name, will bring the parliamentary procedures for all regulation-making powers in the Bill into one place.
Question put and negatived.
Clause 38 accordingly disagreed to.
Clause 39
Meaning of “worrying livestock”
Daniel Zeichner
I beg to move amendment 90, in clause 39, page 23, line 9, leave out
“or a pack of hounds”.
This amendment would remove the exemption for working packs of hounds from provisions covering livestock worrying.
We now move on to some of the definitions. As we have already heard, some of the wording has been lifted from the 1953 Act. There are probably some in the Government who wish we were still living in 1953. Looking at the events of last night, some of them still are living in 1953 in my view, but the world has moved on and our amendment reflects that fact.
I know that hunting with dogs is a controversial issue. It is something that I and colleagues on the Opposition Benches have sought to stop over many years. We are pleased that many on the Government Benches have come to that conclusion too. The Conservative manifesto in 2019 was quite clear:
“We will make no changes to the Hunting Act.”
“Good,” we say, but we would like to see that strengthened and the wordings, which have come from legislation from a different era, should reflect the new realities we now live in. The inclusion of hunting dogs in the list in clause 39 is part of that reference back to a different world.
With trail hunting, which is clearly now the only form of acceptable hunting, there is absolutely no need for the trail to be taken close to livestock. If that is happening, we have to ask ourselves why. It should not be happening, so we do not think this exemption is necessary and we would like the phrase taken out. We will press this amendment to a vote.
Victoria Prentis
The hon. Gentleman is right. We have carried over the existing language from the 1953 Act relating to assistance and working dogs. I listened to what he and colleagues said on Second Reading about the wording of this section generally, and I am certainly prepared to look at it. I think we need to look again at the language. It might, for example, be simpler to make a general exemption for working dogs while they are being worked, which is the situation in the Scottish legislation that was passed relatively recently. I also believe that “assistance dogs” is the modern terminology for guide dogs, although I would need to look at that further. Of course, assistance dogs, when they are being used, are usually—although perhaps not always—on the lead in any event. I feel that further work needs to be done on the wording, and I am happy to consider that before Third Reading. In those circumstances, I ask the hon. Member to withdraw his amendment.
Daniel Zeichner
I am grateful to the Minister. I think that is a sensible compromise, and I am very tempted by her offer, but on something as totemic as this I am afraid that we still have to press the amendment to a vote. What we have before us is what we have before us, and we do not think it should be in the Bill.
Question put, That the amendment be made.
Daniel Zeichner
I beg to move amendment 89, in clause 39, page 23, line 12, at beginning insert
“where keeping a dog on a lead of 1.8 metres or less would pose a risk of harm to the person in charge of the dog,”.
This amendment would broaden the definition of “at large” dogs, by requiring non-exempt dogs in fields with relevant livestock present to be on a lead to be deemed under control unless keeping the dog on a lead poses a risk of harm to the person in charge of the dog.
During the evidence sessions on the Bill, much of the debate on this topic came down to whether a dog should be on a lead or not, and we heard many people give their view on that question. As we understand it, the position in the Bill is that it is acceptable for a dog to be in a field with livestock without a lead as long as the owner is aware of its actions and reasonably confident that the dog will return to the person on command. We heard a number of people discussing that, and I think many of us feel that that is not always likely to be the situation. Certainly, the majority of wildlife organisations feel that it is time to make a change here. The Royal Society for the Prevention of Cruelty to Animals, Dogs Trust, the Kennel Club, Blue Cross, the Canine and Feline Sector Group and many more have come out in support of a provision that would require dogs to be on leads when in a field that contains livestock.
Ultimately, dogs on leads are not in a position to run off from their owners and attack livestock, so, in my view, keeping them on a lead protects farm animals. That seems fairly straightforward to me. I appreciate that there may be more complexity, but that is the basic proposition. Given the serious financial and mental hardship that livestock worrying has been causing farmers, the need for someone to keep their dog on a lead does not seem to me to be a major sacrifice.
This was probably the issue that came up most in the evidence sessions. So far as I recall, most witnesses wanted dogs to be on a lead, and we agree. We recognise that near cattle, there is a risk to human life should the person with the dog not be able to release it swiftly. However, by my reading—I am willing to be corrected—clause 39(4) defines the relevant livestock for those purposes as
“poultry, enclosed gamebirds or sheep.”
The memo to the Delegated Powers and Regulatory Reform Committee is helpful, referring on page 6 to the relevant livestock:
“It covers animals that will respond to being scared by a dog by running and clumping together, which can result in these animals getting trampled and smothered, sometimes leading to fatalities.”
While keeping the dog on a lead may not stop that altogether, I cannot help thinking that it would help.
When preparing for the Bill, Baroness Hayman—who worked on Labour’s 2019 animal welfare manifesto, and who is a guiding light for us—told me that requiring dogs to be kept on leads could, in some instances, result in harm to the dog owner. Most notably, if a dog on a lead attacks a herd of cows, they may decide to protect themselves by attacking the dog. When a dog is off the lead, it can run away fast enough to avoid danger.
I think that the Government have solved the problem. Amendment 89 strikes the right balance between the two issues. It requires dog owners to keep their dogs on a lead in fields where the relevant livestock are present, except in instances where doing so would pose a risk of harm to the person in charge of the dog.
Ben Lake (Ceredigion) (PC)
It is a pleasure to serve under your chairmanship for what I believe is the first time, Mr Davies. I rise to speak briefly in support of the amendment tabled by the hon. Member for Cambridge.
Last week, we heard quite a bit of convincing evidence on the need to curtail and clarify the definitions in this regard. Mr Rob Taylor from the police force explained that although the Bill, as worded, might not necessarily cause a problem for the prosecution or investigation of such crimes under the Bill, such clarifications might help public understanding—so that people know, when walking in the countryside where there are livestock in the fields, that they need to keep their dog on a lead.
Furthermore, we heard from both the National Farmers Union and Dr Hazel Wright of the Farmers Union of Wales that such clarifications would perhaps embolden farmers to look at their signage and keep it current. Dr Wright mentioned that, as the law stands, farmers do not always feel encouraged or, indeed, incentivised to keep signage up to date, especially when it pertains to whether livestock are present in a particular field. Her argument was very convincing: if we were to clarify and strengthen the law so that it is clear when a dog needs to be kept on a lead, farmers would react positively and make the effort to keep their signage current and up to date. That would benefit those wishing to enjoy the countryside and be in the interests of farmers.
Representing a rural constituency, I have sadly had to see many photographs of the consequences of a dog attack. If we were able to clarify the law in this regard, it would not only greatly benefit farmers, but improve public understanding. Ultimately, that is the only real way to tackle and reduce instances of dog attacks. I again place on record my support for amendment 89.
Victoria Prentis
Diolch yn fawr. The debate has been useful and thoughtful, and I thank the hon. Members for Cambridge and for Ceredigion for their contributions. I am afraid that we will not accept the amendment, but I have no doubt that the debate will continue in order to find the way to get the balance right.
To avoid committing the “at large” offence, a dog walker would need to be aware of their dog’s actions and ensure it stays in sight. The person must be confident that their dog will come back promptly on command. It is not enough for the dog walker to merely think that their dog will come back when called. There are dogs who come back when called—not ones that have ever been members of my family, but I do know of such dogs—but for the rest of us, I would refer us very firmly to the recently refreshed countryside code. That document, which advises dog owners on how to walk their dogs responsibly, is worth a google when Members are out of Committee.
That document is supported by a public awareness campaign, which we tried to ramp up during lockdown because we found that there were many new dog owners who needed to be told very firmly that unless their dog was really under control, it needed to be on a lead. In the majority of cases, of course, if a person’s dog is not under control, they would be caught under the chasing offences in the Bill that we have just discussed, so it is very rare that this particular “at large” offence will be needed. I also remind the Committee once more that two thirds of livestock worrying attacks are by unaccompanied dogs, who are clearly not on leads because they do not have an owner with them. Their owners would be caught by the “at large” offence, but we do not think it is sensible and proportionate to catch responsible dog owners whose dogs are not on a lead and are not at risk of worrying livestock.
We will continue to work to raise public awareness. The countryside code is quite clear that owners should keep their dog under effective control,
“always keep your dog on a lead or in sight”,
“be confident your dog will return on command”,
and, on open access land and at the coast, owners must put their dog on a lead during periods of the year that are effectively lambing season. I therefore ask the hon. Member for Cambridge to withdraw his amendment.
Daniel Zeichner
I am disappointed by the Minister’s response, because I thought that the evidence we were given was pretty overwhelming. I think the concern that a number of people have expressed to us about the potential danger with cattle has been dealt with by the Government themselves in their definition of relevant livestock. I was grateful for the hon. Member for Ceredigion’s expertise and knowledge, and his point about the signage—which was strongly made in the evidence session—was well made.
I suggest to the Minister that people of my generation, and possibly hers, grew up with many of the promotions about the countryside code and so on. It was drummed into people, but I am not convinced that younger generations have got that message in quite the same way. Sometimes, when I see accounts of some offences by younger people, I am struck by the fact that what would seem obvious to me does not seem obvious to them. One of the most difficult things for a person to do is to put themselves in other people’s shoes. Particularly during lockdown, people went out with dogs for the first time, and we know that on a whole range of issues—not just livestock worrying—people behaved in ways that were challenging to many of the authorities.
Ben Lake
In support of the point that the hon. Gentleman is making, one of the most surprising aspects of lockdown was how few people understood that they needed to close gates, which can cause a whole host of issues, both for the farmer and for the local communities that find a herd of cows or a flock of sheep going down the road. Those of us who are well versed in the countryside perhaps have a higher sensitivity to things such as the countryside code, but the younger generation and also, perhaps, those visiting or enjoying the countryside for the first time would respond with a very bemused expression if the countryside code was ever raised with them.
Daniel Zeichner
I am grateful to the hon. Gentleman. Listening to his comments, I realise that I am in danger of stigmatising younger people. I do not think it is their fault at all. It is partly because we have moved away from some of the public health and public information campaigns that we used to have.
Victoria Prentis
I absolutely understand the tenor of what the hon. Gentleman is saying. Precisely for that reason, I refer him to the new and refreshed countryside code that was put out by Natural England during the last pandemic period. It is genuinely done in a way that is accessible and fresh for a new audience, so I politely suggest that members of the Committee have a good look at it and promote it wherever possible.
Daniel Zeichner
I gently reflect that, in the modern information age, that is sometimes more challenging for those of us who grew up on a diet of three channels on black and white TV. I am sorry to give away my age. However, you could not get away from a lot of the public information messages. In the modern world, there is far more. It is just my sense that there are a lot of people who have come into the countryside—and that is good; we want people to come and understand—but they do not necessarily understand. The message has to be simple and very clear.
Dr Neil Hudson (Penrith and The Border) (Con)
We are reaching a degree of consensus about this, in terms of the importance of education. Like the hon. Member for Ceredigion, I represent a rural constituency and we have had a lot of access to the countryside during the pandemic.
I take on board the Minister’s comments about the new countryside code. We have a spirit of agreement across the Committee and we encourage the Government, the Department for Education and the Department for Environment, Food and Rural Affairs to advocate the countryside code going into schools. That way, it becomes part of the education process for the next generation so that people appreciate the countryside, appreciate how and where food is produced and how to be respectful of that countryside that we all enjoy. We are in agreement and we just need to get the message out there, into schools and into the education system.
Daniel Zeichner
Everyone would agree with all that, but that is for the future. We are dealing with a generation now. It is not just a generational issue, but groups of people are going into the countryside who are either not cognisant of those recommendations, or just not behaving very well, frankly. I am afraid there are people who do not. That is why we think a simple measure like this one would help alleviate the problems that people in the countryside face. We think that the amendment is important and quite straightforward, and on that basis, we will put it to a vote.
James Grundy (Leigh) (Con)
I declare my interest as I did before: I live on a working family farm. Some people might be surprised to learn that Leigh is a county constituency and it has large rural parts. The Metropolitan Borough of Wigan, in which it sits, is also rural.
I have seen the aftermath of a dog attack on sheep. As the hon. Member for Ceredigion said, it is grim. I have immense sympathy on the issue, but believe the amendment as worded may prove to be a blunt instrument. However, I hope that, by the time we take the Bill to the next stage, the Minister will have some reassurance for those of us who have firm concerns on this issue and believe that dogs should be on a lead around sheep, poultry and other animals that would be at risk if they were let off the leash, given the terrible consequences that can happen when dogs become out of control in those circumstances.
Daniel Zeichner
I am sure the Minister has heard the strong words from her own side.
Olivia Blake (Sheffield, Hallam) (Lab)
I speak in support of my hon. Friend the Member for Cambridge, who set out well why we think the amendment is necessary. I want to pick up on something the Minister said. The confidence people have around being in control of their dogs is interesting and has definitely taken hold of some internet memes. Dare I say the word “Fenton”? I wanted to have more understanding of that element. I take the point that two thirds of dogs are unattended. However, the amendment is important because in that third of cases in which they are with their owner, should we not push for as much control as possible over an animal in the presence of the relevant livestock?
Victoria Prentis
I remind the hon. Lady that it is not enough for the dog walker merely to think their dog will come back when called. The dog must actually come back when called.
Question put, That the amendment be made.
Victoria Prentis
The clause defines exactly what constitutes worrying livestock and sets out the exemptions.
Daniel Zeichner
Without re-rehearsing the previous discussion, we would have liked the clause to be strengthened, but our amendment has been rejected, so let us go forward.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
The Chair
Order. I am suspending the Committee for six minutes for a comfort break. We will have a new batch of clauses to go through when we return.
Victoria Prentis
I beg to move amendment 37, in clause 40, page 23, line 32, at end insert—
“‘enclosed deer’ means any deer so long as they are being kept for business purposes on land enclosed by a barrier intended to prevent their escape;”
This amendment and related Amendment 42 are drafting changes.
The Chair
With this it will be convenient to discuss the following:
Government amendments 38 to 42, and 44 and 45
Amendment 88, in clause 42, page 25, line 17, at end insert—
“(f) adult poultry.”
This amendment would add adult poultry to the list of livestock species that may not be exported for slaughter.
Amendment 87, in clause 42, page 25, line 17, at end insert—
“(7A) An appropriate national authority may by regulations extend the definition of ‘relevant livestock’ in subsection (7).”
This amendment would enable an appropriate national authority to extend the list of the livestock species that may not be exported for slaughter.
Victoria Prentis
Government amendments 37 to 42 make minor and technical drafting changes to the definition of “livestock” that applies in part 2 of the Bill. The definition is intended to cover the types of animals that are kept in agricultural settings and may be vulnerable to attacks from dogs.
I do not believe that amendments 87 and 88, tabled by the hon. Member for Cambridge, are necessary. The definition of “relevant livestock” in clause 42 is drafted to cover all species that might be exported for slaughter or fattening. I have tabled Government amendments 40 and 41 to clarify that definition further.
We carried out a wide-ranging consultation on banning live exports and received no evidence at all that a ban on poultry was necessary. There are no exports of poultry for slaughter or fattening from Great Britain to the EU. Poultry exports are either for breeding or other purposes not covered by the ban, such as exhibition. There have been no such exports of poultry for several years.
There are significant exports from Great Britain to the EU of day-old chicks, however, which are transported for breeding. Those movements do not generate major welfare concerns. The chicks are transported in high-welfare conditions, with a yolk sac or the equivalent gel for them to receive nourishment during the course of their journey. We have looked at this matter extensively and do not have welfare worries about the transportation of day-old chicks.
Daniel Zeichner
I hear what the Minister says, and we appreciate that there are no exports at the moment, but we do not quite see why the Government would not want to cover the export of adult poultry or give themselves the potential to change things in the future, which amendment 88 would allow them to do.
Looking back at our discussions on previous clauses, it is quite clear that the Government want—sensibly, in my view—to future-proof the legislation and give themselves and future Governments the opportunity to amend legislation. In fact, the delegated powers memorandum repeatedly makes the point that one of the problems with past legislation is that it has not been able to keep up with changing circumstances. In the modern world, given the uncertainties around our trading relationships, it is really hard to know how trading patterns will develop.
It is curious that we would not want to include adult poultry, which are just as capable as other animals of suffering poor health and welfare caused by long-distance transportation. I have been advised that a 2017 paper by Wageningen University & Research studied the transportation of live poultry for slaughter. It found that:
“During the transport, birds with broken bones suffer from pain, are not able to stand up and reach water supply, are stepped upon by other birds, and are prone to die”.
Clearly, that is the transport of adult poultry rather than export, but we cannot necessarily conclude that there will be no such trade in future. We have tabled amendment 88 because we cannot see why the Government would not want to include adult poultry. The Minister says that is not needed, but I cannot see why we would not include it when we have the opportunity.
In the future, science may well develop in such a way to show that a number of other species suffer from these problems in transport. Amendment 87 would give the Government the opportunity to future-proof legislation in a way I have suggested. However, these are essentially probing amendments and we will not push them to a vote.
Victoria Prentis
I think I have made my point, which is that there are, in fact, no poultry exports. In many ways it would be lovely if the Government could take all powers on to themselves for evermore, but I fear when we overreach in legislation. The fact that there have been no poultry exports for several years makes me feel that we should not take powers when we do not need them.
Amendment 37 agreed to.
Amendments made: 38, in clause 40, page 23, line 37, at end insert—
““enclosed wild boar” means any wild boar so long as they are being kept on land enclosed by a barrier intended to prevent their escape;”
This amendment and Amendment 41 provide that paragraph (g) of the definition of “livestock” covers only wild boar that are enclosed.
Amendment 39, in clause 40, page 23, line 39, leave out paragraph (a) and insert—
“(a) cattle and other bovine animals,”
This amendment simplifies paragraph (a) of the definition of “livestock”, and ensures that it includes steers.
Amendment 40, in clause 40, page 23, line 40, leave out from “horses” to end of line and insert “and other equine animals”
This amendment simplifies paragraph (b) of the definition of “livestock”.
Amendment 41, in clause 40, page 24, line 5, after “or” insert “enclosed”
See the explanatory statement to Amendment 38.
Amendment 42, in clause 40, page 24, line 8, leave out paragraph (j) and insert—
“(j) enclosed deer;”—(Victoria Prentis.)
This amendment and related Amendment 37 are drafting changes.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause sets out the definitions for terms used in part 2. They include definitions for agricultural land and livestock. The clause also provides the Secretary of State with the power to amend, through regulations, the definition of livestock for part 2 where that might be necessary.
Question put and agreed to.
Clause 40, as amended, accordingly ordered to stand part of the Bill.
Clause 41
Repeal of the 1953 Act in England and Wales
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause repeals the Dogs (Protection of Livestock) Act 1953 in respect of England and Wales. The 1953 Act is replaced by clauses 26 to 40. Much of that Act, as we heard earlier, has been copied over into the new clauses where appropriate.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clause 42
Prohibition of export of livestock for slaughter etc
Victoria Prentis
I beg to move amendment 43, in clause 42, page 25, line 7, leave out “3 months” and insert “6 months”
This amendment increases the maximum term of imprisonment for an offence under this clause committed in Scotland from 3 months to 6 months.
Victoria Prentis
These are minor and technical amendments to clauses 42, 43 and 46, which relate to the prohibition on the export of relevant livestock for slaughter and the power relating to the importation of dogs, cats and ferrets.
Amendment 43 increases the maximum term of imprisonment in Scotland for a contravention of the prohibition on live exports from three months to six months. This change was requested by the Scottish Government and will bring the penalties in line with the penalty that will be available in England and Wales.
Amendments 46 and 53 clarify the regulation-making powers in clauses 43 and 46. They will allow regulations enforcing the prohibition on the export of livestock for slaughter, and regulations prohibiting or restricting the importation of dogs, cats or ferrets on welfare grounds, to provide that summary sheriffs as well as sheriffs and justices of the peace in Scotland can issue warrants to authorise entry into private dwellings.
Amendment 43 agreed to.
Amendments made: 44, in clause 42, page 25, line 13, leave out paragraph (a) and insert—
“(a) cattle and other bovine animals,”
This amendment simplifies paragraph (a) of the definition of “relevant livestock”, and ensures that it includes steers.
Amendment 45, in clause 42, page 25, line 14, leave out from “horses” to end of line and insert “and other equine animals,”—(Victoria Prentis.)
This amendment simplifies paragraph (b) of the definition of “relevant livestock”.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
Clause 42 is essential for ending unnecessary journeys of livestock and horses for slaughter and fattening, and for improving the welfare of those animals. The clause also removes provisions from the Animal Health Act 1981 in relation to the export of horses. The provisions were originally intended to prevent the export from Great Britain of low-value horses and ponies for slaughter on the continent.
Daniel Zeichner
I think we all welcome the end of exports of livestock for slaughter and fattening for slaughter. It has clearly rightly exercised many of our fellow citizens over many years. The numbers have of course declined, but there are still too many. This is an excellent opportunity to do something and we strongly support this part of the Bill. Excessive journey times in the shipment of live animals cause significant welfare harms, including the deprivation of food and water, lack of rest, extremes of temperature and humidity, handling by humans, exposure to novel environments, overcrowding, insufficient headroom and noise. There is still sadly the danger of animals being exported to countries where they are slaughtered in situations with standards that are significantly lower than the standards that apply in the UK. Consequently, the Government’s decision to bring this provision forward is welcome.
We thought that there should have been some additional provisions, and we have already had that discussion. There is more to be done and we are slightly worried— this has been pointed out by the British Veterinary Association—that the focus on exports has perhaps missed the point that the real issue is the length of the journey. I know that the Government are bringing forward measures for consultation to look at that, but that gives me the opportunity to point out—I suspect the Government would strongly agree—that there is a dearth of local abattoirs in this country. Animals are regularly required to travel longer distances to slaughter than many of us would like. That can cause significant harm.
We very much hope that the Minister will look at how best we can tackle that problem by re-establishing a local network of slaughterhouses in this country. On my summer tour around the country, which I am grateful to the Minister and her officials for helping me to secure, I was struck by the number of times that this point was raised. Many farmers across the country would like to find a way of returning to mixed farming, but the lack of a local abattoir is a major disincentive to that. I had exactly this conversation with a former colleague of the hon. Member for Keighley who made the point strongly to me. I suspect that many others have had exactly the same conversation. It is not an easy problem to solve, but it is pretty clear that it will need some sort of Government intervention. We would certainly do that, and I encourage the Government to do so in the meantime.
On that basis, we are delighted to support the prohibition of the export of livestock for slaughter.
Question put and agreed to.
Clause 42, as amended, accordingly ordered to stand part of the Bill.
Clause 43
Power to make provision in connection with the enforcement of section 42
Amendment made: 46, in clause 43, page 27, line 6, leave out “or a” and insert “, summary sheriff or”.—(Victoria Prentis.)
This amendment adds a reference to a summary sheriff, in relation to warrants issued in Scotland.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
Clause 43 provides us with the ability to introduce regulations to implement and enforce the ban on the export of live animals for slaughter and fattening. Powers of entry, inspection, search, seizure and/or detention will enable us fully to investigate any potential breaches.
Question put and agreed to.
Clause 43, as amended, accordingly ordered to stand part of the Bill.
Clause 44
Powers to amend or revoke retained direct EU legislation
Victoria Prentis
I beg to move amendment 47, in clause 44, page 27, line 15, at end insert—
“(b) any instrument containing provision made under section 2(2) of the European Communities Act 1972.””
This amendment enables regulations under section 12(1) of the Animal Welfare Act 2006 to amend or revoke instruments made under section 2(2) of the European Communities Act 1972 (implementation of EU obligations etc).
Victoria Prentis
The amendments make changes to powers under the Animal Welfare Act 2006 and to powers to make regulations under the Animal Health and Welfare (Scotland) Act 2006. As we have heard, both Acts provide powers to promote animal welfare and introduce licensing and registration schemes for the keeping of animals. The amendments allow us to amend or revoke retained direct EU legislation or secondary legislation made under section 2(2) of the European Communities Act 1972.
Previously, the UK shared competence with the EU to make legislation relating to animal welfare. The EU made a number of regulations on welfare matters that now form part of our statute book. The amendments will ensure that we can amend or revoke those regulations when we introduce our reforms. The enforcement of EU law was implemented through the power in section 2(2) of the European Communities Act 1972. The Act was repealed following our departure from the EU, so it cannot now be used to amend or revoke regulations under that power. I should remind the Committee that animal welfare is a devolved matter, and the amendments will enable Scottish and Welsh Ministers to do likewise when exercising their own powers under the 2006 Acts.
Amendment 47 agreed to.
Amendments made: 48, in clause 44, page 27, line 15, at end insert—
“(1A) In Schedule 1 to that Act (regulations under section 13), in paragraph 19 after sub-paragraph (1) insert—
(1A) In the case of consequential provision, the power under sub-paragraph (1) includes power to amend or revoke—
(a) any retained direct EU legislation;
(b) any instrument containing provision made under section 2(2) of the European Communities Act 1972.””
This amendment enables regulations under section 13 of the Animal Welfare Act 2006 to make consequential amendments or revocations of retained direct EU legislation and instruments made under section 2(2) of the European Communities Act 1972.
Amendment 49, in clause 44, page 27, line 19, at end insert—
“(b) any instrument containing provision made under section 2(2) of the European Communities Act 1972.””
This amendment enables regulations under section 26 of the Animal Health and Welfare (Scotland) Act 2006 to amend or revoke instruments made under section 2(2) of the European Communities Act 1972.
Amendment 50, in clause 44, page 27, line 19, at end insert—
“(3) In section 51 of that Act (regulations under Part 2) after subsection (2) insert—
(2A) The consequential provision that may be made (by virtue of subsection (2)(a)) by regulations under section 27 includes provision amending or revoking—
(a) any retained direct EU legislation;
(b) any instrument containing provision made under section 2(2) of the European Communities Act 1972.””—(Victoria Prentis.)
This amendment enables regulations under section 27 of the Animal Health and Welfare (Scotland) Act 2006 to make consequential amendments or revocations of retained direct EU legislation and instruments made under section 2(2) of the European Communities Act 1972.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
Clause 44 provides us with an important power. Section 12 of the Animal Welfare Act 2006 and section 26 of the Animal Health and Welfare (Scotland) Act 2006 enable the UK, Welsh and Scottish Governments to make regulations that promote the welfare of animals. The clause amends those sections, giving us the ability to amend or revoke any retained direct EU legislation and to replace it with new regulations that promote animal welfare. I recommend that the clause stand part of the Bill.
Question put and agreed to.
Clause 44, as amended, accordingly ordered to stand part of the Bill.
Clause 45
Reduction in limit on non-commercial movement of pets
Olivia Blake
I beg to move amendment 1, in clause 45, page 27, line 29, leave out “five” and insert “three”.
This amendment would restrict the maximum number of dogs, cats and ferrets that may enter Great Britain in a non-commercial motor vehicle to three.
Olivia Blake
This is my first Bill Committee as a Front-Bench spokesperson, so I am excited to be here. As a dog lover, this is an issue that is close to my heart. My two rescue dogs are the pride and joy of my life, and I know that many dog owners feel the same.
The amendment is very important. Clause 45 is about puppy smuggling, which we know is a lucrative business. In 2015, the Dogs Trust set up its puppy pilot project to offer support to puppies that have been illegally imported. The organisation calculates the total market value of the puppies that it has helped to be more than £2 million. However, this is not just about puppies, as the clause also covers cats and ferrets. They are in high demand, especially kittens, which provides a huge incentive for illegally importing them.
One way that animal smugglers avoid the authorities is by posing as legitimate owners of the animals as they cross a border. Currently, clause 45 proposes to crack down on this practice by limiting the number of animals that can be transported in a non-commercial vehicle to five, but we are concerned that it does not go far enough. The Government could make the law much stronger and more resistant to abuse by smugglers if they were to agree to our amendment.
As we heard in evidence, five seemed a strange number, given that a survey of a quarter of a million dog owners by the Dogs Trust found that 97.7% of respondents have three dogs or fewer. Others have estimated that around three quarters of dog owners have only one dog; roughly a fifth—18.9%—have two; and only 4% have three, so our amendment to reduce the number from five to three should be considered. Only a tiny fraction of dog owners have more animals than that. The idea that they would regularly travel across borders is a bit strange, given how five animals would fit in one vehicle. Strengthening the law would make it much harder and far less lucrative for puppy and animal smugglers involved in this cruel practice to operate. We should seize the moment that the Bill affords. I hope that the Minister will agree to our amendment today.
The Chair
Are there any other contributions? I know that members of the Environment, Food and Rural Affairs Committee have considered the issue.
Dr Hudson
It is a pleasure to serve under your chairmanship, Mr Davies. I rise as a member of the Environment, Food and Rural Affairs Committee, and as a veterinary surgeon. Opposition Members will probably be relieved that I rise in strong support of what they say. We need an evidence-based response, and the evidence that we on the EFRA Committee took from the Dogs Trust during our inquiry was powerful. I refer Members to our report on the movement of animals across borders, where we looked at a lot of the issues, from farm animals and horses to pets and so on. As the hon. Member for Sheffield, Hallam has said, the research suggests that 97.7% of owners have three dogs or fewer, so if we changed from five to three it would strengthen the legislation and make it a significant deterrent to the unscrupulous people who try to exploit loopholes in the law.
We took evidence from the British Veterinary Association as well. The Government could put in exemptions for people who are permanently relocating—they could apply for a special dispensation—but moving from five to three would strengthen the law.
Victoria Prentis
I welcome the hon. Member for Sheffield, Hallam to her first Committee. I am afraid I am going to resist the amendment while speaking to Government amendment 51. I appreciate the concerns raised about the number of pets that can be moved in a single non-commercial movement. I want to assure hon. Members that we completed extensive engagement with relevant groups, including authorised pet checkers, carriers, animal welfare organisations and veterinary bodies to determine a suitable limit. The aim was to strike a balance between disrupting the illegal trade, which we all want to do, while minimising the impact of genuine owners travelling with their pets—cats, dogs and ferrets. It is already a large change for a traveller to go from five pets per passenger to five per vehicle.
However, we have heard the arguments from across the House, and we would be willing to look at any further evidence that shows genuine pet owners would not be unduly impacted by a decrease to three pets per vehicle. I am particularly concerned about two pet owners travelling together with two dogs each, for example, but I am willing to look at evidence that hon. Members wish to send in, or to discuss it. If we decide to make the change at a later date, we could use the enabling power in clause 46, which allows us to make regulations on the importation of relevant animals on welfare grounds. In these circumstances, I therefore ask the hon. Lady to withdraw her amendment.
Amendment 51, in my name, simply ensures that consequential amendments are made in relation to the relevant Welsh regulations, as they are for Scotland and England.
Olivia Blake
I must say that I am disappointed. I will press the amendment to a vote because we think that the evidence was quite powerful. As was said, the Environment, Food and Rural Affairs Committee have considered the question in a lot of detail and believe that this is the right way to go. I take the Minister’s point about people travelling together, but a balance must be struck between what could be seen as a loophole and a way of allowing this practice to continue, especially when we know how many puppies can come from one dog. There are large concerns around the issue and that this would remain as a potential loophole to allow puppy smuggling. I would ask the Minister to reflect again, but we will press the amendment to a vote.
Question put, That the amendment be made.
The Chair
Bad news. I have the casting vote, but I have an obligation not to vote in favour of an amendment that changes the Bill, even though I am on the Environment, Food and Rural Affairs Committee—Neil, I love you. I will have to vote against the amendment, because I am obliged, as Chair, to do so. Unfortunately, the amendment falls.
Question accordingly negatived.
Amendment made: 51, in clause 45, page 28, line 16, at end insert—
‘(9) In regulation 3(1)(b) of the Trade in Animals and Related Products (Wales) Regulations (S.I. 2011/2379 (W. 252))—
(a) in the English language text—
(i) at the end of sub-paragraph (i) for “or” substitute “and”;
(ii) for sub-paragraph (ii) substitute—
(ii) Article 5(4) of the Pets Regulation does not apply.”;
(b) in the Welsh language text—
(i) at the end of sub-paragraph (i) for “neu” substitute “a”;
(ii) for sub-paragraph (ii) substitute—
(ii) Nid yw Erthygl 5(4) o’r Rheoliad Anifeiliaid Anwes yn gymwys.’—(Victoria Prentis.)
This amendment makes the same consequential amendments in relation to the relevant Welsh regulations as are made by subsections (7) and (8) in relation to the English and Scottish regulations.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
Thank you for your casting vote, Mr Davies. I would like to reiterate that we will continue to look at any evidence, and I am very happy to meet colleagues to discuss further. This is clearly an issue on which there are genuine differences of opinion.
Clause 45 limits the number of dogs, cats and ferrets that may be moved into Great Britain in a single non-commercial movement. There is evidence, as we all know, that commercial importers abuse our non-commercial pet travel rules to bring in lots of puppies at once for sale. The welfare of these puppies, as we have heard many times and as the Environment, Food and Rural Affairs Committee reminded us, is frequently compromised. The clause will help to prevent the misuse of these rules. The new limit will be five per vehicle or three per air or foot passenger. I commend the clause to the Committee.
Olivia Blake
I thought I had just made history with my first amendment. The Minister has obviously heard from across the House how important the issue is and that it warrants further consideration. I am disappointed that we did not win that vote.
Daniel Zeichner
Having moved some hundreds of amendments and never gotten that close, I am extremely jealous. Would my hon. Friend agree that the vote we have seen this afternoon reflects that there are many others in the House who will come to a similar conclusion, and that it would be sensible for the Government to move sooner rather than later on their position?
Olivia Blake
My hon. Friend is absolutely right. On Second Reading we heard many concerns from colleagues across the House. I ask the Minister to look again as quickly as possible to come up with a conclusion. That is all I have to say on the matter.
Question put and agreed to.
Clause 45, as amended, accordingly ordered to stand part of the Bill.
Clause 46
Powers relating to importation of certain dogs, cats and ferrets
Olivia Blake
I beg to move amendment 117, in clause 46, page 28, line 21, leave out “may” and insert “must”.
This amendment would require the banning or restriction of importation of relevant animals which are below a specific age, have been mutilated or are below a specified number of days pregnant.
The Chair
With this it will be convenient to discuss the following:
Amendment 2, in clause 46, page 28, line 23, after “age” insert—
“, with six months being the minimum age”.
This amendment would ban the importation into Great Britain of dogs, cats and ferrets aged six months or less.
Amendment 118, in clause 46, page 28, line 25, after “pregnant” insert—
“, with 42 days being the maximum length of pregnancy for cats and dogs”.
This amendment would prohibit the importation of heavily pregnant cats and dogs.
Government amendment 52.
New clause 14—Commercial movement of pregnant cats and dogs—
“The importation of pregnant cats and dogs for commercial purposes is prohibited.”
This new clause would prohibit the commercial importation of pregnant cats and dogs.
New clause 18—Prohibition on importation of cats and dogs with fashion-based mutilations—
“(1) Cats and dogs with fashion-based mutilations may not be imported into the UK.
(2) For the purposes of this section, ‘fashion-based mutilations’ include—
(a) cropped ears,
(b) docked tails, and
(c) declawed paws.”
This new clause would prohibit dogs and cats that had been subjected to ‘fashion-based’ mutilations such as cropped ears, docked tails and declawed paws being imported into the UK.
New clause 24—Healthcare requirements for imported cats and dogs—
“The Secretary of State must, by regulations, make provision for—
(a) compulsory tick treatment for all cats and dogs imported into the UK in non-commercial movements; and
(b) compulsory rabies blood tests for all cats and dogs prior to importation into the UK.”
New clause 25—Imported cats and dogs: rabies vaccination—
“Cats and Dogs may not be imported into the UK for a 12 week period after receiving a rabies vaccination.”
Olivia Blake
The Bill is a bit of a mixed bag of random measures, but it offers an opportunity to speed up the approach to animal welfare. Amendment 117 is a policy of Labour’s animal welfare manifesto. It is frustrating that the Bill has been half-hearted in its approach. I am afraid that we will be seeing procrastination on the issue even now. Although I welcome the steps in the right direction, the Government could go a lot further, which our amendment seeks to do. We want to see it in the Bill.
Having a firm commitment in the primary legislation is important in order to get to grips with the cruelty inflicted on not only very young and pregnant animals but animals that have been mutilated by their owners. Rather than saying that the Government “may” prohibit or restrict the importation of animals below a specified age that have been mutilated, or that are a certain number of days pregnant, the legislation should say “must”. I am sure that everyone on both sides of the House agrees on the importance of taking action on that issue, so let us get on with it and ensure that it is in the primary legislation.
The demand for pets such as dogs and cats is booming, and some of the biggest profits have been made on very young animals. The number of young animals that are imported legally continues to grow every year. Often puppies, kittens and others have been bred in horrendous conditions, and face further cruelty as they are transported over borders. They can be subjected to long journeys in cramped conditions, and when they arrive few questions are asked about where they have come from, or how they or their mother and father were treated.
The first aim of amendment 2 is to ensure that young animals that are legally imported and sold in the UK have not been subject to cruel practices such as puppy farming abroad. It also affects the illegal international trade of young animals. More and more we are seeing serious organised criminal groups involved in animal smuggling, generating massive profits through illegal imports. Just as in the legal trade, the biggest money is often made from the very young animals because of the cuteness factor, further incentivising smuggling.
For example, puppy smugglers exploit the fact that it is very difficult to tell just by looking whether a very young puppy is over 15 weeks. One outcome of the amendment would therefore be to aid law enforcers in identifying underage puppies, because it is a lot easier to tell the difference between an underage puppy at six months than at 15 weeks. There is also a much smaller market for animals that are around six months old. That makes it less profitable for smugglers to pass off animals at four or five months, because their market value is far less than that of an animal at around 15 weeks.
The amendment would improve the welfare of extremely young animals to ensure that the UK market is not complicit in animal welfare violations, and would make life harder for smugglers. That is why it is backed by a huge range of stakeholders, and is already law in countries such as the USA, which has a ban on imports of puppies under six months old. I hope that the Government will back that element of the amendments, and write it into the primary legislation.
We have discussed the lucrative smuggling market and some of the methods that are used to illegally import animals into the country. In addition to the forms of deception that we have already dealt with, another way of getting puppies into the country is by importing pregnant bitches that give birth to puppies in the UK. Again, it is a very lucrative market. The approximate total market value of the puppies born to pregnant bitches admitted to the Dogs Trust through its puppy pilot scheme, which I mentioned earlier, is around £400,000.
The practice has obvious detrimental impacts on the wellbeing of both the bitch and the puppies. For that reason, amendment 118 calls for the prohibition of importing heavily pregnant bitches, by which we mean those more than 42 days pregnant. That would enhance the welfare of the animals and crackdown on the activities of smugglers, while acknowledging that sometimes the non-commercial movement of animals in the early stages of pregnancy is unavoidable.
I will talk about some of the new clauses—
Olivia Blake
Great. I think Members on both sides can agree that the practice of moving pregnant cats and dogs across borders to avoid checks on the welfare of the puppies or kittens is abhorrent. We have already said that it might be unavoidable in some non-commercial circumstances; however, there is no commercial reason to move a pregnant dog or cat across a border, subjecting it to a long and arduous journey that will, in all likelihood, have a negative impact on its wellbeing and welfare. New clause 14 therefore seeks to end the commercial importation of pregnant cats and dogs. There is no justification for it; the loophole in the law is just being utilised by unscrupulous illegal importers.
People have now got wise to illegal puppy imports and are insisting on seeing the mother of the puppy. That is one of the simple steps that the many people who are seeking to own a puppy can undertake. Unfortunately, that has led to the importation of pregnant bitches to ensure that prospective buyers can see the mother before they buy. It is really quite sad, because the bitch is then returned to her country of origin to breed again. This puppy farm on wheels is a horrific situation for the dogs involved. This new clause would end the practice—a move that we would support fully.
I hope that new clause 18 will be welcomed. It should be uncontroversial; the practices outlined in it are undoubtedly cruel. This new clause seeks to ban the importation of dogs and cats that have been subjected to fashion-based mutilations, such as cropped ears, docked tails and declawed paws. Despite being illegal in the UK, those cruel practices are still carried out in other parts of the world. However, it is currently legal to import a dog that has been abused in that way. That is clearly wrong. It impacts on the wellbeing of animals domestically and can act as a smokescreen for those who illegally mutilate animals in the UK. Unfortunately, we are seeing those kinds of mutilations more regularly. For example, the Royal Society for the Prevention of Cruelty to Animals estimates that calls about ear cropping have risen by 621% since 2015, which is absolutely horrifying. Sadly, it is also the case that fashion mutilations often go hand in hand with other kinds of animal abuse and form part of a pattern of mistreatment. The new clause would stop dog and cat imports fuelling animal abuse internationally and would make it harder for anyone to abuse domestically.
To put it simply, we also support objectives to reintroduce tick treatment and for all dogs and cats to have rabies blood tests prior to being imported, as covered in new clause 24.
Dr Hudson
I rise in support of what the hon. Lady has said, and again I refer hon. Members back to the Environment, Food and Rural Affairs Committee report entitled “Moving animals across borders”. We on that Committee took significant amounts of evidence, and we saw some of that last week on the Bill Committee as well. I understand what the Government are doing with the Bill, and I very much support the Bill and the Government’s wanting to get things on the statute book quickly and then have the powers in secondary legislation to tweak and amend things as we go further on. I firmly believe, when it comes to the health and welfare of animals, that we can crack on and do things. We have left the European Union.
The hon. Member for Sheffield, Hallam made the point about tick treatment. That was stopped in 2014. We have the power to reintroduce that treatment of animals before they come into the country, and that will protect those animals travelling and protect the animals in this country as well. The concept of pre-import screening and checking of animals, before they come into the country, has huge implications for the health and welfare of those animals and animals in this country and also, indirectly, people in this country. As we have seen—we have also taken evidence on this—there are diseases potentially coming in that have zoonotic potential. I am thinking of things such as canine brucellosis. Animals being imported from countries such as Romania and Macedonia are potentially coming in with a disease that can be transmitted to people.
I urge the Government to act on this. I have been submitting written questions, as the Minister well knows. She mentioned the other day that I am quite repetitive on it. I will keep banging on about it. As I said, I have been submitting written questions, and there are no plans to make changes. I really encourage the Government to crack on and do this to protect the animals coming in and protect the animals in this country.
I firmly support the suggestion in the amendment to specify six months in the Bill. Another issue is stipulating what we mean by “heavily pregnant” animals. At the moment, bringing in animals is illegal in the last 10% of gestation; Dogs Trust, for instance, has suggested that we could extend that to the last 30% of gestation. I think that we are all agreed on mutilations, and as I said on Second Reading and many other times in this House. Animal welfare unites us in humanity, and we abhor some of these procedures carried out in other parts of the world, such as the ear-cropping of dogs and the removal of cats’ claws, and are stipulating that those procedures are not acceptable in this country or for animals brought into this country for sale. I very much support that.
Daniel Zeichner
I was tempted to push for a vote just now, but we can continue our discussion.
There is plenty to discuss, and I am grateful to my hon. Friend the Member for Sheffield, Hallam for moving the amendment and then speaking to the group so forcefully and powerfully. However, I am also grateful to the hon. Member for Penrith and The Border, who speaks on the basis of huge knowledge. I think that what he is saying—he said it on Second Reading, as did others from across the House—is that there is acknowledgement of the widespread public interest in and concern about these issues. While I can understand from a kind of technical point of view why the Government might want to do this thing through regulation, the politics of it are very clear: people expect this to be done now. We are giving the Government the opportunity to do it now through these amendments. I have lost count of the number of Government Members who raised these issues, so the Government ought to be able to see what is coming. It is a question of how to deal with this matter in as graceful a manner as possible because, frankly, I do not think there is any dispute about it.
When we consider some of these practices, many of us find them extraordinary. Why would anyone declaw a cat? I do not think that anyone here could possibly imagine why anyone would do that.
One of the issues that we will come back to in some of the later debates is that there has been a lot of emphasis on puppy smuggling—rightly so. However, there is a slight sense on the part of organisations representing cats that there is a danger that those who seek to gain a commercial benefit out of these awful practices will just shift to other practices. I know there is some debate about how likely that is. Nevertheless, we should be mindful of the fact that many of our constituents are looking at this Committee closely and will want to know why we are not being as robust as we could be to guard against all these eventualities.
I do not have the expertise on this issue that some other members of the Committee do, but when I listen to the accounts and to the arguments being put, I find it hard to imagine why we would not want to introduce all the things we are discussing into the Bill as speedily as possible.
We will pursue this matter relentlessly, through every opportunity open to us, because we think that is where the majority of feeling in the House is, so the Government would, as I say, be sensible to move as swiftly as possible. I am interested to hear what the Minister has to say on that, because I cannot see any reason not to do this thing as swiftly as we can.
Victoria Prentis
Neatly done, Mr Davies.
I agree—indeed, it is clear—that there is a great deal of consensus across the House on our manifesto commitment to crack down on the illegal smuggling of dogs and puppies. Where we differ slightly is how to bring that crackdown about. I want to reassure all Members that I am absolutely committed to bringing in further restrictions in regulations.
One of the reasons we are using regulations is to enable Government to act in a way that is relatively nimble. What we have found is that after we restricted the import of puppies, the criminals started to import pregnant bitches instead.
What we need to do is to remain one step ahead of the criminals. We feel that the best and speediest way to do that is through secondary legislation. There is absolutely nothing half-hearted about our determination to crack down on illegal smuggling of dogs and puppies. I am determined to do that in a fair way, but as quickly as we possibly can.
Daniel Zeichner
I hear what the Minister says, and I do not doubt her sincerity, but I do not understand how it can be quicker to do this through secondary legislation, nor do I understand why the two are mutually exclusive. It is quite possible to do both; I encourage her to do so.
Victoria Prentis
We are taking the steps we are taking today, if the Committee votes for them, in the Bill, which we hope will soon become an Act. We have not taken the foot off the accelerator for organising the regulations.
Before we bring forward regulations, we consult with those involved in the sector, to make sure that the regulations hit the spot, in so far as we can. In August of this year, we launched our consultation to seek views on the new restrictions that we are proposing, which are very much in line with the views expressed by hon. Members across the House. The proposals include raising the minimum age that dogs can be imported from 15 weeks to six months, for all the reasons that have been given. It is a lot easier for a Border Control checker to see if a dog is six months old or still a puppy. The hon. Member for Sheffield, Hallam mentioned the cuteness factor. I do not think they lose the cuteness factor, but on the commercial market, puppies areó more saleable than adult dogs. That is absolutely the Government’s intention.
We also stated our proposal to prohibit the commercial importation and non-commercial movement of heavily pregnant dogs, specifically those over 42 days pregnant, into Great Britain. We needed to get that right. I listened with interest to what my hon. Friend the Member for Penrith and The Border said in last week’s sitting and what I have heard him say before—I do not mean that critically—about the difficulty of checking gestation periods. We have to get this right and make sure that it is operable, easy for checkers to check and will deter criminals.
Daniel Zeichner
I am sorry to labour the point. Of course consultation is always a great thing, but I think the Minister has made it quite clear what she believes needs to be done. I am trying to imagine what kind of consultation response it would take to undo all this weight of evidence from so many experts. I cannot see that happening. I am genuinely baffled as to why there is a problem here.
Victoria Prentis
It is true that my Department places a great weight on consultation—indeed, it has to, under the rules set out in various pieces of legislation. I do not think we were wrong to do so in this particular case. There are difficult issues here, the bitch’s stage of pregnancy being one of them. I was just coming on to proposals to prohibit the import of dogs with cropped ears and tails. We all agree that these practices are abhorrent, but we have to make sure that we are not inadvertently making a problem—for example, for dogs that are already owned or rescue dogs that have been rescued from inappropriate ownership. It is important that we consult and get it right, but Members should not take that as any indication that we are going slowly. We really are not.
The evidence that we have seen to date, not least that which was gathered in the consultation, suggests that the import of young, heavily pregnant or mutilated animals is mainly an issue for dogs. We are therefore initially focusing our efforts on dogs, and we consulted on dogs this year. However, I reassure members of the Committee who feel we are being cattist in this matter, that there is an enabling power in clause 46 that allows us to expand the regulations to improve the welfare of dogs, cats and ferrets in future, should we gather evidence that that is necessary.
The consultation closed on 16 October. We are currently analysing the responses and will publish a summary in due course. I hope hon. Members feel reassured by our proposals, which make it clear how seriously we take the welfare issues with this trade. It is important that we consider the views of the public and interested groups before we make a final decision on new restrictions, although I would hope that the text of what we agreed on gives a fairly clear indication of the direction of travel of the Government. We need to ensure that the measures we introduce are necessary and proportionate and that there are no unintended consequences.
Dr Hudson
I appreciate the Minister’s comments that the Government are listening and consulting. I recognise and applaud that, because it provides an evidence base: the Government are casting out for opinions and stakeholders will get back to them.
There is also an evidence base about health treatments for dogs coming in with regards to the tick treatment that was stopped in 2014. There is scientific evidence that a dog in Essex, for instance, picked up a tick and contracted an exotic disease called babesiosis. That particular dog had never travelled out of the country, so another dog must have come into the country, or gone away and come back, with a tick onboard that it shed. The dog then took that tick onboard and contracted an exotic disease.
That evidence base makes it clear that we can act and put in place tighter guidelines to protect our biosecurity. A benefit of being a United Kingdom of islands is that we have a biosecurity barrier that we can and should strengthen for the animal population.
Victoria Prentis
I turn to new clauses 24 and 25, which relate to the health requirements of imports of non-commercial dogs and cats—that was a well-timed intervention. I reassure hon. Members that any regulations needed to introduce preventive health measures necessary to protect animal or public health due to the movement of pets into this country could already be introduced under existing powers to make regulations, including article 19 of the pets regulation—regulation 576/2013 as retained—or section 10 of the Animal Health Act 1981.
In relation to ticks, on which I know that my hon. Friend the Member for Penrith and The Border is something of an expert, it is true that we have seen small numbers of localised infestations of non-native ticks in recent years. It is also true that the Government strongly encourage pet owners to treat their dogs against picking up ticks wherever they can. I look forward to working with him further on the issue and I know that he will be talking to the chief veterinary officer in the next few weeks to discuss his views as to why we need to deal with the problem now.
In relation to rabies, there is already a requirement for all pets entering GB to be vaccinated against rabies, with a minimum 21-day wait period. We operate one of the most rigorous and robust pet travel checking regimes in Europe. All pets entering GB on approved routes undergo 100% documentary checks, which includes checking vaccination status. In addition, recent quantitative risk assessments have concluded that the risk of a pet animal with rabies entering the UK under the pet travel rules is very low. It is obviously good and to be applauded that our rabies status is as it is and I do not consider that further requirements are necessary in this area.
Finally, I turn to amendment 52 in my name, which amends clause 46 to ensure that we can set out exemptions to any prohibitions or restrictions brought in under the clause and set out a permit system through which to issue such exemptions. It will ensure that the new prohibitions do not have an unfair impact on individuals who need to travel with their pet under exceptional circumstances—for example, moving permanently to GB or because of a natural disaster. I ask the hon. Member for Sheffield, Hallam to withdraw amendment 117.
Olivia Blake
It has been an interesting debate, and many concerns have been raised by Members on both sides of the Committee. I completely agree with everything that the hon. Member for Penrith and The Border said about the risk of zoonotic diseases and their increase. Ticks can cause horrific diseases in animals and humans—it is equally important to consider that risk. It is a biosecurity issue that we should take a lot more seriously.
The Chair
I have the casting vote, and I am obliged to vote for no change, which is a vote for the Noes.
Question accordingly negatived.
Amendment proposed: 118, in clause 46, page 28, line 25, after pregnant insert
“, with 42 days being the maximum length of pregnancy for cats and dogs”.—(Daniel Zeichner.)
This amendment would prohibit the importation of heavily pregnant cats and dogs.
The Chair
I have the casting vote, and I am obliged to vote no.
Question accordingly negatived.
Amendments made: 52, in clause 46, page 28, line 25, at end insert—
“(2A) The regulations may—
(a) provide that a prohibition or restriction is subject to specified exemptions, including an exemption in cases where a permit issued under the regulations is in force,
(b) make provision for and in connection with applications for permits and the determination of such applications, and
(c) require a specified fee to be paid on the making of such an application.”
This amendment provides that regulations under clause 46(1) may contain exemptions, including exemptions applying where a permit is held, and may make provision about permits (including applications for permits, the determination of applications and fees).
Amendment 53, in clause 46, page 29, line 37, leave out “or a” and insert “, summary sheriff or”—(Victoria Prentis.)
This amendment adds a reference to a summary sheriff, in relation to warrants issued in Scotland.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
When the UK harmonised its pet movement rules with the EU in 2012, we saw a significant increase in pet movements into Great Britain. Evidence from stakeholders suggests that that also led to a considerable increase in the illegal trade in puppies, whose welfare is, as we heard, frequently compromised. Clause 46 provides the powers to crack down on puppy smuggling and the low-welfare movement of pets. The clause provides powers to introduce restrictions on the importation of pets on welfare grounds, as well as powers to set out the associated enforcement process, including offences with the appropriate penalties.
We have had an interesting and useful debate. We were well informed by our evidence sessions, by evidence submitted in our extensive consultation launched in August, and by the excellent report of the Environment, Food and Rural Affairs Committee. As we move forward, it is clear that Members on both sides of the House are committed to these improvements, which ought to crack down on illegal puppy smuggling. I will look at how we can speed up the work going on alongside the Bill—the reply to the consultation, publishing the evidence received in the consultation, and work on drafting the regulations—to ensure that the twin tracks of the Bill and the regulations go hand in hand, so far as is possible. That ought to provide reassurance across the House that the Government are extremely keen to crack down on this illegal trade.
Question put and agreed to.
Clause 46, as amended, ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Heather Wheeler.)