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Christian Matheson (City of Chester) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
The Government are committed to protecting jobs across the energy sector, which already employs over 700,000 people across the UK and is creating thousands of new jobs through our net-zero strategy.
Christian Matheson
I refer to my entry in the Register of Members’ Financial Interests as a member of Unite the union, which tells me that OVO Energy has a tangled web of companies into which £40 million has been salted away without any clear indication of what the money is or where it is coming from. Meanwhile, it is making 1,700 of its employees—a quarter of its workforce—redundant and its boss Stephen Fitzpatrick has said that they should keep warm by doing star jumps and that he is doing them a favour by sacking them because of the jobs market. Does the Secretary of State agree that it is about time that OVO stopped threatening to sack so many of its employees and opened up its books so that we can see where all the money is going?
Kwasi Kwarteng
I agree with the hon. Gentleman. I speak to the operators of energy suppliers the whole time, as does my right hon. Friend the Minister for Energy, Clean Growth and Climate Change, and we have had many concerns about the practices of some of these businesses and are very mindful of some of the accusations being made against OVO. I speak to Mr Fitzpatrick on a regular basis and I will absolutely pass on the hon. Gentleman’s concerns to Mr Fitzpatrick directly.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
The other day I noticed that the Government said they were going to help and encourage people to invest more in the gas industry and help to produce more, but then I heard a statement contradicting that from my right hon. Friend’s Department. Will my right hon. Friend clarify whether the Government are prepared to see more gas extracted and greater licences?
Kwasi Kwarteng
I and my right hon. Friend the Minister for Energy, Clean Growth and Climate Change have been very clear about the course we want to pursue. We do not believe it is the right thing simply to switch off the oil and gas sector. Unlike many Opposition Members, we do not believe in simply an extinction of the oil and gas sector; we think oil and gas is critical not only to energy resilience but to developing new technologies such as carbon capture and blue hydrogen production. We have maintained that position consistently for the nearly three years I have been a Minister in this Department.
Stephen Flynn (Aberdeen South) (SNP)
We have to admire the audacity of the Secretary of State in talking about protecting jobs in the energy industry when of course his Government have presided over the loss of some 35,000 jobs in Scotland’s North sea industry over recent years alone. It gets worse, because this is the same Government who opted not to fund carbon capture and underground storage in the north-east of Scotland, costing some 20,000 new jobs. Can the Secretary of State clarify why on earth the public should trust the Tories when it comes to jobs?
Kwasi Kwarteng
I will make three points about that. Acorn was an excellent project, and we want to see it developed very soon in the next wave, which we want to accelerate. There is an extraordinary arrogance in Members of the Scottish National party giving us lectures about energy when they are not committed to nuclear and are in bed with the Greens who simply want to flick the switch to turn off oil and gas in their own country. I am very happy to compare our record as job creators with the hon. Gentleman’s Extinction Rebellion approach to the North sea.
Stephen Flynn
I am afraid the Secretary of State does his reputation no good whatsoever by propagating such unfounded garbage. If he wants to talk about records, let us talk about records, because despite energy being reserved to this place, it is the Scottish Government who have delivered the £62 million energy transition fund; it is the Scottish Government who have just delivered £30 million to Aberdeen South harbour; it is the Scottish Government who have just delivered £15 million to the Aberdeen hydrogen hub; and of course it is the Scottish Government who have just delivered a £500 million just transition fund for the entire north-east of Scotland. After taking out some £375 billion from Scotland’s natural resources, when are the Tories going to give back?
Kwasi Kwarteng
I am not going to take any lectures from the hon. Gentleman about energy policy. His party is committed to a job-destroying coalition with the Greens, who want to switch the lights off the North sea. Everybody knows that; that is why investment is very difficult to attract, and our job is to militate against their Extinction Rebellion approach and encourage investment, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, in our North sea.
Mark Pawsey (Rugby) (Con)
Jobs in the energy sector depend on an effective market, and that depends on consumers exercising their choice to change supplier, but switching fell by 73% in the year just gone compared with the previous year. What steps is the Secretary of State taking to ensure that we get back to an effective energy market?
Kwasi Kwarteng
There has been a critical issue with very high wholesale prices, which as I speak are about 200p a therm, whereas at the beginning of last year they were 50p a therm or lower; there has been a quadrupling of the price. The energy price cap has protected consumers, but we are talking to Ofgem all the time about how we can refine the cap to make it more sensitive to wholesale prices in the market.
Caroline Lucas (Brighton, Pavilion) (Green)
Today marks the start of International Energy Week, formerly International Petroleum Week. The Secretary of State was billed to open the event, and he will know that, despite the rebrand, the lead sponsors include fossil fuel giant BP, which is investing just 2.3% of annual capital expenditure into the jobs-rich green energy sector. When will the Government end their cosy relationship with the fossil fuel dinosaurs and replace the outdated duty to maximise economic recovery with a duty to minimise the extraction of North sea oil and gas and to maximise clean, green jobs instead?
Kwasi Kwarteng
The hon. Lady will know that we have committed to the “Net Zero Strategy”, which was lauded across the world as a world-beating document. She also knows that, as I have said repeatedly and my right hon. Friend the Minister for Energy, Clean Growth and Climate Change has also said, we are committed to a transition, not extinction. We have to work with fossil fuel companies and the industry to transition to a net zero future, and that is exactly what we are prepared to do.
Aaron Bell (Newcastle-under-Lyme) (Con)
Nick Fletcher (Don Valley) (Con)
Robin Millar (Aberconwy) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
As part of our step-change increase in investment in science research an innovation—an increase of 30% over the next three years to £20 billion a year—we are putting levelling up at the heart of our investment through clusters around the country. That is why we are putting £200 million into the strength in places fund for 12 projects across the UK; making the groundbreaking pledge that 55% of BEIS funding will go outside the greater south-east; launching three innovation accelerators in Glasgow, Manchester and the west midlands; and extending eight freeports, with two in Scotland.
Aaron Bell
I thank the Minister for his answer. In Newcastle-under-Lyme, Keele University plays a substantial role in levelling up north Staffordshire through its work with local authorities and its Keele deals addressing economy, health, culture and social inclusion. There is also the enterprise zone, including the science and innovation park, which provides a home and support mechanism for more than 50 companies, with more to come. Will the Minister confirm that universities’ role in such work will be supported as part of our levelling-up agenda, as we get more money spent outside the south-east?
George Freeman
My hon. Friend makes an excellent point. I pay tribute to his work and that of Keele. The enterprise zone is first class—similarly, the work of Keele University. I confirm that we are taking into account the very important role of universities in innovation and levelling up. He will see that reflected in the allocation of £40 billion to UK Research and Innovation and Innovate UK in the next three years.
Nick Fletcher
The advanced manufacturing research centre at Sheffield University would like to open an innovation facility at Doncaster Sheffield airport, which may bring the likes of Boeing and hybrid air vehicles to Doncaster. It needs just £24 million to do that. I have met the Minister on the subject before. Will he come to Doncaster and meet all the stakeholders to see if we can get the project moving forward and let the real levelling up begin?
George Freeman
I pay tribute to my hon. Friend, because this is the third time that he has raised this matter with me. He makes in important point. The Boeing interest in Doncaster Sheffield airport is part of our plan to grow an aerospace cluster around the whole of the UK. I very much welcome the opportunity to visit him and meet Boeing and local stakeholders.
Robin Millar
Last September, Llandudno in Aberconwy was identified as having the fastest economic recovery in the UK and, last week, an analysis of Companies House filings identified it as the start-up capital of the UK. I pay tribute to the entrepreneurs and businesses for making that happen. Will my hon. Friend the Minister join me in Llandudno with some of those entrepreneurs to see how we can nurture those green shoots, secure the growth and turn Llandudno into a growth and enterprise hub for north Wales?
George Freeman
With pleasure. My hon. Friend makes an important point: the Welsh dragon is roaring not just on the rugby pitch and in tourism, where Llandudno is the queen of Welsh resorts, but in the science, research and innovation economy. With the north Wales energy corridor, the south Wales life sciences cluster and plant health at Aberystwyth, Wales is a science and innovation engine that we intend to support. I pay tribute to his work in the area and look forward to visiting the Llandudno cluster as part of our work on supporting clusters around the UK.
Tim Farron (Westmorland and Lonsdale) (LD)
The Minister may be aware that many rural parts of the north feel that levelling up does not really apply to them, but of course it must and it should. The Minister may be aware of Cumbria’s energy coast. We are a country with plenty of wind, plenty of water and plenty of coast. We should bear in mind that, after Canada, the UK has the second largest tidal range on planet earth and we are making use of nearly none of it. Will he commit to making sure there is a tidal, marine and hydro-energy hub in Cumbria, based in Kendal where Gilkes is so wonderfully based?
George Freeman
I absolutely agree. As a rural MP, I do not need to take any lectures from the Liberal Democrats on the importance of rural innovation. I will address the specific point about tidal power: we have just put £30 million into it. It would be good hear the hon. Gentleman—and his party—applaud the nuclear industry, which is an important part of that region.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers. With reference to university places for those from low-income backgrounds, will he consider greater financial aid for STEM subjects—science, technology, engineering and maths—for students from any part of the United Kingdom of Great Britain and Northern Ireland to find their passion and long-term career?
George Freeman
The hon. Member makes a really important point that is at the heart of our £100 million innovation accelerator pilot programme. We have chosen the locations—Glasgow, Manchester and the west midlands—for the initial tranche, because we want to invest in places where there is strong world-class research and development and innovation cheek by jowl with lamentable deprivation. I very much hope that over the next few years we can extend it out to areas, including parts of Northern Ireland, where that similar pattern of excellence alongside deprivation is sadly still present.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Levelling up, really? The Campaign for Science and Engineering has shown that the proposals in the White Paper simply freeze the current proportion of regional science spend, with the golden triangle of Oxford, Cambridge and London continuing to receive the majority of public sector science spend. When it comes to private sector science spend, London’s share has actually doubled under Conservative Governments, because they will not give our towns and cities the powers and investment they need to build strong science economies. Will the Minister say whether the proportion of public science spend going to the regions will actually increase as a consequence of the levelling-up White Paper, or is this just more broken promises from the department for funny numbers?
George Freeman
I suggest the hon. Lady reads the levelling-up White Paper. If she reads it, she will see that it is a very substantial document that deals with precisely the points she has just made. [Interruption.] I will deal with the specific question she asked about devolution and extending investment around the country. That is why we have made a pledge—a pledge that the Labour party never made, by the way—to increase R&D spending outside the greater south-east. Our Department, the Department for Business, Energy and Industrial Strategy, which is responsible for 75% of R&D, will move to being 55% outside the south-east. The point she misses is that we do not level up this country by destroying the golden triangle; we level up by building the clusters, moving from a discovery economy to a development economy. As a Member for the north-east, I thought she would be applauding the phenomenal growth in the north-east as a result of our policies.
Jake Berry (Rossendale and Darwen) (Con)
Obviously, I welcome the targets to increase investment through levelling up in our regions, but the thing that really matters is not what the Government say in White Papers, but how the money gets to those businesses, particularly in Rossendale, Darwen and east Lancashire more widely. Will the Minister commit to publishing an easy guide for local businesses to work out how, through their innovation and their own R&D, they can access some of that new funding? Trash-talking levelling up by those on the Opposition Benches does not go down well in east Lancashire or anywhere in the north, because we believe in this programme.
George Freeman
My right hon. Friend makes a really important point. It was surprising to hear the Opposition not mention the phenomenal investment that is pouring in. In the end, levelling up will be achieved by the businesses of this country investing in partnership with us. I welcome the Bentley £2.5 billion investment and the Aston Martin investment in Wales. That is happening right now. My right hon. Friend’s point is well made. As part of our significant increase in Innovate UK funding, we are looking at how we can ensure small businesses find it easier to access grant funding. We are dramatically increasing Innovate UK funding. The key test will be whether small businesses around the country can access it.
Liz Twist (Blaydon) (Lab)
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
Delivering our landmark net zero strategy is well co-ordinated across Government. The Prime Minister chairs the Climate Action Strategy Committee, which, along with the Climate Action Implementation Committee, provide two ministerial forums to drive co-ordinated action across Government.
Liz Twist
The UK’s credibility as COP President over the next year rests on demonstrable climate action at home, but the Government’s net zero strategy has been torpedoed by the Treasury. Without the scale of investment needed to support households and industry, the Government cannot guarantee that they would put us on track for their 2030 or 2035 targets. Labour would invest £28 billion every year until 2030. What representations is the Minister making to the Treasury to get us back on track to meet our targets and deliver the benefits of a green transition?
Greg Hands
I thank the hon. Lady for her question and for her engagement on this, but the basis of her question is not quite right. Actually, BEIS had more capital uplift in the spending review than, I believe, any other Department. We have doubled the amount of money going into international climate finance. My right hon. Friend the COP26 President is working tirelessly to show UK leadership in this space. In the time that we have had the presidency, the amount of the world’s GDP covered by net zero commitments has increased from 30% to more than 90%.
Jane Hunt (Loughborough) (Con)
Tim Loughton (East Worthing and Shoreham) (Con)
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
We are delivering on the hydrogen strategy that was published last August and will soon launch our £240 million net zero hydrogen fund and the first £100 million allocation round for electrolytic hydrogen projects and publish our sector development action plan.
Jane Hunt
Intelligent Energy in Loughborough is keen to build a hydrogen fuel cell gigafactory, hopefully in the east midlands freeport. How will my right hon. Friend help to promote hydrogen fuel cell technology and production in the UK so that we can lead the world in that technology, harness green jobs and growth and avoid having to play catch-up?
Greg Hands
I thank my hon. Friend; it is always brilliant to get a question about that great hub of innovation and science in Loughborough, and it is brilliant to hear about Intelligent Energy’s plans to build a hydrogen fuel cell gigafactory in the east midlands. That is the kind of investment that will support highly skilled jobs in the UK’s nascent hydrogen economy and the Government’s levelling-up agenda. The Government provide support for fuel cells through various funds, including the Advanced Propulsion Centre and the automotive transformation fund, which have already committed over £38 million to 16 projects with a total value of almost £85 million.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Onshore and offshore, my constituency has more wind turbines than I can shake a stick at. Does the Minister not agree that we should generate hydrogen where the electricity is being made? Perhaps if he came to have a look at the wind turbines in my constituency, he would get the same delicious scones that I promised the Prime Minister when he comes to see the first space launch.
Greg Hands
I thank the hon. Gentleman for that question; I think I have an existing commitment to go to his constituency. In fact, in my five months in this job, I think I have been four times to Scotland, and one of those visits was to the Whitelee wind farm, just south of Glasgow, to look at precisely what he mentioned . It is the UK’s largest onshore wind farm, which generates extra energy to produce hydrogen on-site, which will hopefully power Glasgow’s buses and dustcart fleet for years to come.
Ian Paisley (North Antrim) (DUP)
Does the Minister believe that the best way to stimulate the UK hydrogen strategy is to build hydrogen products that the public ultimately use, such as buses, trains and heavy goods vehicles? Will he commit to joining that up to the Department for Transport and encouraging it to get on with hydrogen bus development that will stimulate the entire economy?
Greg Hands
The hon. Gentleman and I know that Northern Ireland has an incredible capability and tradition in bus making. He is absolutely right that hydrogen-powered buses have a big future. I mentioned Glasgow City Council’s commitment to move to hydrogen buses, thanks to the Whitelee wind farm; I imagine that we will want to do something similar in Northern Ireland. I look forward to further engagement with the Northern Ireland Executive on the topic.
Scott Benton (Blackpool South) (Con)
Mark Menzies (Fylde) (Con)
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
The Government have announced a £120 million future nuclear enabling fund to support new nuclear and are aiming for a final investment decision on at least one more large-scale nuclear project in this Parliament, subject to value for money and relevant approvals.
Scott Benton
Springfields nuclear fuel manufacturing facility employs hundreds of people on the Fylde coast. I thank the Minister for recently visiting the facility and for his personal interest in protecting the operations there. Will he commit to continuing to work with colleagues to explore the opportunities for developing operations at the site and protecting the hundreds of jobs that it sustains?
Greg Hands
My hon. Friend is a passionate supporter of local jobs in Blackpool. He is right: in December, I visited Springfields, which is just outside his constituency. It reminded me of the strategic national importance of our fuel industry, which is why we secured £75 million in the spending review to preserve and develop the UK’s nuclear fuel production capability. That funding will support the UK supply chain to power the reactors of today and advanced nuclear in the future.
Mr Speaker
Let us go to the constituency that Springfields is in. I call Mark Menzies.
Mark Menzies
Thank you, Mr Speaker. Fracking has proven itself wholly unsuitable for the Fylde coast, with seismic events in Fylde twice forcing national moratoriums. Will my right hon. Friend assure my constituents and me that he agrees that to deal with the energy crisis, we need to look to technologies of the future such as next- generation nuclear, powered by Fylde-manufactured nuclear fuel?
Greg Hands
My hon. Friend is the MP for Springfields, as you rightly point out, Mr Speaker, and is a passionate backer of our nuclear industry. New nuclear is crucial to our plans for a low-cost, low-carbon resilient electricity system. On fracking, the Government’s position is unchanged: fracking will not be allowed to proceed in England unless compelling new evidence is provided that addresses concerns about the prediction and management of induced seismicity.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Nuclear Decommissioning Authority has rejected proposals aimed at increasing transparency and accountability. There is wide disparity from plant to plant in engagement with local communities on concerns about safety issues such as breakdowns. What does the Minister make of the NDA’s rejection of increased transparency? What steps is his Department taking to reassure communities?
Greg Hands
I am not aware of any rejection by the NDA of increased transparency. I am happy to look at what the hon. Lady has to say; my experience from quite a few meetings with the NDA is that transparency is very good, but I am happy to engage with her if she has a specific concern in relation to transparency in any nuclear plant in or near her constituency.
Wera Hobhouse (Bath) (LD)
To deliver the Government’s ambitious roll-out of renewables such as solar—but also nuclear electricity, if that is what the Government want—we need to proactively develop grid capacity. Why have the Government still not reformed the remit of Ofgem, which is a real barrier to increasing grid capacity?
Greg Hands
The hon. Lady is right: we have to make sure that our grid capacity is good for the big expansion of renewables, and indeed for the big expansion of nuclear, which is what this question is about. By the way, she might have a conversation with some of her colleagues, two of whom have recently mentioned support for nuclear— against Lib Dem party policy, it would seem. We and Ofgem are looking very actively at grid capacity: a lot of reviews are going on and there is a lot of action to ensure that grid capacity is in place, not least for the quadrupling of our offshore wind capacity.
Sir Edward Leigh (Gainsborough) (Con)
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
My officials have regular discussions with DEFRA about the deployment of low-carbon solar photovoltaics on farms. Many solar farms are constructed with raised panels that enable the continued grazing of livestock. Solar energy can also help farmers to increase their revenue streams from land less suited to higher-value crop production.
Sir Edward Leigh
A planning application has been submitted for a giant solar farm around Gainsborough, with an area equivalent to 5,000 football pitches. It is designed to be a so-called national infrastructure project in order to bypass all local planning. Local people will have no control; this development will enrich a few local landowners, and some entrepreneurs in London. Is it not time for an urgent discussion throughout Whitehall about how we can stop these companies bypassing local planning and secure proper community gain and the protection of agriculture, and, for instance, ensure that there are buffer zones around villages?
Greg Hands
As my right hon. Friend knows, I am unable to comment on potential planning applications. Solar projects developed through the nationally significant infrastructure project planning process are subject to strict controls to protect local communities and the environment, including requirements for environmental impact assessments and public consultations. The Government recognise the importance of preserving the most productive farmland. Planning guidance is clear: where possible, large solar farms should use previously developed land, and projects should be designed to avoid, mitigate, and where necessary compensate for impact.
Valerie Vaz (Walsall South) (Lab)
May I start by paying tribute to Sir Richard Shepherd, who has sadly died? He was a fantastic parliamentarian in the constituency next to mine, and he was very kind to me when I first came here.
There is a plan to build a battery energy storage system on green belt land. We appreciate that such a facility is needed to provide capacity for green energy, but will the Minister give a commitment that it will not be built on green belt land?
Greg Hands
Let me first join the right hon. Lady in her tribute to Sir Richard Shepherd. I share her sadness at his passing, of which I was not aware. He and I used to overlap with each other, and enjoyed a number of very productive times together.
I do not know whether the right hon. Lady is referring to a specific planning application, in which case it may be difficult for me to comment on it. What I will do is agree to meet her to discuss it, and if it does relate to a specific application in or near her constituency, I will ensure that I have officials there to hear what she has to say about the proposal.
Gareth Davies (Grantham and Stamford) (Con)
A large number of solar farm applications are being processed in Lincolnshire. Some are comparatively small in scale, but others, such as the Mallard Pass development, are significant and are causing great concern locally. Can my right hon. Friend assure me that the Government have a strategy to ensure that solar farms will be spread evenly across the country, so that rural areas such as mine do not see a disproportionate amount of development?
Greg Hands
We are committed to ensuring that solar developments are carried out with local community support. That is the most important consideration. We recognise that in some cases solar farms can affect the local environment, which is why applicants must complete an environmental statement as part of their planning application, including assessments of the impacts on wildlife, land use and biodiversity. However, well-designed solar projects have been shown to enhance biodiversity.
Angela Crawley (Lanark and Hamilton East) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
We have engaged extensively with stakeholders, both formally and informally, on a range of reforms to our employment framework, and will continue to do so in order to ensure that they deliver on our plan to build a high-skill, high-productivity, high-wage economy.
Angela Crawley
May I first express my thanks for the Minister’s kindness to my partner and me when our son was born last month?
This week the Northern Ireland Assembly gave a commitment to legislate for miscarriage leave, and the Scottish Government have given a commitment to introduce three days’ paid leave in the public sector. Will this Government give a commitment to introducing paid miscarriage leave in the Employment Bill?
Paul Scully
I congratulate the hon. Member and her partner on their fantastic news. It was a pleasure to meet her to discuss her private Member’s Bill on the subject that she has raised. We recognise that losing a baby at any stage is incredibly difficult, and we encourage employers to be compassionate. There is no statutory entitlement to leave for women who lose a baby before 24 completed weeks of pregnancy, but those who are unable to return to work may be entitled to statutory sick pay, and women are protected against workplace discrimination due to any pregnancy-related illness, including illness caused by miscarriage. That protection extends to two weeks after the end of the pregnancy.
Mrs Maria Miller (Basingstoke) (Con)
The Government have already taken important steps to stop the abuse of non-disclosure agreements in universities. Will my hon. Friend look at how he can take this forward in his Employment Bill by talking to organisations such as Can’t Buy My Silence, which are doing important work on ensuring that non-disclosure agreements are not misused in the workplace to cover up criminal allegations?
Paul Scully
I congratulate my right hon. Friend on her work in this and many other areas. I would happily meet her and that organisation to continue our conversation on NDAs.
Justin Madders (Ellesmere Port and Neston) (Lab)
I wonder if the Minister has done any stakeholder engagement with the new Minister for Brexit Opportunities and Government Efficiency, the right hon. Member for North East Somerset (Mr Rees-Mogg). I ask that question because in The Times at the weekend the new Minister said:
“Sometimes the employer would think they need more protection from the employee.”
That view is wrong. Too many people are in precarious employment and do not have strong workplace rights, and the Employment Bill is a chance to begin to address that. Does the Minister agree with us that it is employees who need more protection, or does he agree with his colleague that it is the employers who need more help?
Paul Scully
We will bring forward changes to the employment framework in due course. While we are working on that, and when parliamentary time allows, we are working on employment. That is why we have record numbers of people on payroll—men and women and people from all backgrounds, abilities and situations.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
The Government strongly support flexible working. Only by championing a flexible and dynamic labour market will we grow our economy. I would like to thank the hon. Member for her response to the consultation we closed in December and I look forward to publishing our response in due course.
Tulip Siddiq
I have listened carefully to what the Minister has said and I am pleased that the Government are talking about making flexible working the default, but their proposal merely makes the existing right to request flexible working available from day one in the job. I am sure the Minister knows that that will do nothing to address the fact that a third of all requests for flexible working are rejected, which puts single parents and carers at a considerable disadvantage in the workplace and affects the recruitment process as well. What legislation will the Government undertake to address the fact that unscrupulous employers can pick on a range of often pathetic, unfair and broad reasons when they want to reject a request for flexible working? Will the Government be introducing any actual legislation, because that is what the Opposition want to support?
Paul Scully
The hon. Member has reflected her consultation response in her questions. The consultation stuck to the principle that there is no one-size-fits-all approach to flexible working. We support the “right to request” framework, which facilitates an informed two-sided conversation but ensures that employers have the right to refuse requests that are unworkable within their business operations. Clearly, that will need to be robust if they feel that they need to reject a request because of the business situation.
Mary Glindon (North Tyneside) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
We recognise the impact that rising energy prices will have on businesses of all sizes. To understand the challenges that they face and explore ways to protect consumers and businesses, Ofgem and the Government are in regular contact with business groups and suppliers.
Mary Glindon
Given that the Federation of Small Businesses has said that small business confidence in the north-east is now at minus 64%, can the Minister say what consideration he is giving to the measures put forward by the FSB to support small businesses in the energy crisis, including scrapping the planned national insurance contributions increase and extending the household rebate to be matched by an equivalent business rate rebate?
Paul Scully
I met representatives of the FSB and other organisations yesterday, when we touched upon energy for businesses. We will always listen to those representative organisations. Clearly we want to ensure that the £408 billion of support in the last two years to protect businesses, livelihoods and jobs will help us to shape the recovery, with ongoing support from this Government—the Government for business.
Yvonne Fovargue (Makerfield) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
We are working hard to design this scheme at pace. We acknowledge that delivering the bill reduction for this payment mechanism will require a special focus, and that is why we are engaging with consumer groups and Ofgem to work out how best to design the mechanism.
Yvonne Fovargue
People on prepayment meters will see their bills rise by £708, which is £46 more than for those who pay by direct debit. How will the Secretary of State ensure that people do not self-disconnect, leaving them without heat and means to cook? How will that be monitored? What thought has been given to private renters so that they do not lose out on the rebate due to the frequent tenancy changes in that sector?
Kwasi Kwarteng
We are constantly engaging with Citizens Advice, Ofgem and a huge range of stakeholders about how to protect the most vulnerable consumers. The package announced by my right hon. Friend the Chancellor only a couple of weeks ago includes £350, which goes halfway towards addressing the increase that the hon. Member for Makerfield (Yvonne Fovargue) describes. The warm home discount is being extended from 2 million people to 3 million people, and the uplift will be to £150.
Dr Alan Whitehead (Southampton, Test) (Lab)
The 4 million pre-payment meter customers in this country will be profoundly unimpressed by the Secretary of State’s answers this morning. Not only are they paying far more than the £693 increase on the price cap for customers with accounts, but it is uncertain whether they will have access to the £200 Government scheme to lend customers their own money, as they do not have accounts through which to do this. Indeed, many of them will miss out on the council tax rebate, too.
Would it not have been much more straightforward and fairer for prepayment meter customers if we had levied a windfall tax on companies that are profiting from high gas prices and provided those customers with a direct and non-refundable discount on their bills through their meter?
Kwasi Kwarteng
That is why we have £155 million that can be applied discretionally, particularly to protect these vulnerable consumers. Labour’s whole approach to energy security has been woeful. Labour destroyed the nuclear industry we had, without any progress, and it has created massive uncertainty in energy supply through its proposed windfall tax, which is not the way to produce energy supply that secures low-cost energy for our people.
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I am grateful for the hon. Gentleman’s question on the importance of research into neurodegeneration and Parkinson’s, a cause I was proud to champion as Minister for life sciences. We are investing £20 million a year, including £14.8 million through UK Research and Innovation and another £6 million through the National Institute for Health Research. We continue to fund the UK Dementia Research Institute, and in the autumn we announced another £375 million for neurodegenerative diseases over the next three years.
Mr Sharma
More than 150,000 people in the UK will have Parkinson’s by 2030. Parkinson’s UK is clear that, to accelerate the search for a cure, research must be supported by improved infrastructure, including the use of digital technology and better clinical trial design. Will the Minister meet me and Parkinson’s UK to discuss how its proposal for a challenge fund could help to defeat Parkinson’s?
George Freeman
Yes, I would be delighted to meet the hon. Gentleman. He makes an important point. The truth is that the next frontier in neurodegenerative science will be a mixture of neural pathways, neural mapping, digital science and deep-tissue phenomic and genomic science, which is why I was recently in Switzerland at the institute of neuroscience in Lucerne to see whether we can establish a collaboration.
Ian Levy (Blyth Valley) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)
The Government support growth by offering the automotive sector certainty, by making clear statements about our intentions regarding petrol and diesel vehicles and by supporting investment, innovation and a resilient supply chain via a taxpayer subsidy through the automotive transformation fund and the Advanced Propulsion Centre.
Ian Levy
Following the recent announcement of £100 million of Government funding for Britishvolt in Northumberland, does my hon. Friend agree that this is only the beginning of the transition to a clean, green economy and that my constituents in Blyth Valley, as well as many others across the north, can look forward to a bright and prosperous future?
Lee Rowley
I pay huge tribute to my hon. Friend for all the work he has done on Britishvolt, as a passionate advocate for his constituency. This will bring new skills, jobs and opportunities to Blyth Valley, and I congratulate him on it.
Bill Esterson (Sefton Central) (Lab)
Yesterday, the Prime Minister said that he wanted British workers to be more like German workers. Let us be more like Germany: it has increased the number of manufacturing jobs by 1 million since 2010, whereas this Government have presided over a fall of 93,000 jobs. The difference is that this Conservative Government do not have a plan, whereas in Germany there is a plan for manufacturing. The Labour party has a plan in our country, too, so if Ministers really want to support manufacturing, why do they not use Labour’s plan to make, buy and sell more in Britain?
Lee Rowley
I am not sure that Members on these Benches will take any lessons from a Labour party that decimated manufacturing between 1997 and 2010. Before the pandemic in 2019, we had seen an increase in employment in manufacturing, and the expansive and multiple investments in manufacturing announced in just the past few months—at Nissan, Stellantis and Britishvolt—demonstrate this Government’s commitment to manufacturing for the long term.
Topical Questions
Darren Henry (Broxtowe) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
As we all know, rising energy bills are a cause for concern for people up and down this country, but we have stepped in to give families some breathing space, with our energy bills rebate and council tax discount. Our supply of gas is secure; unlike many European Union countries, we are not dependent on Russian gas. Much of our supply comes from British territorial waters and from reliable import partners, such as Norway. The UK is the fastest growing economy in the G7, unemployment is down to record low levels and wages continue to rise. There are challenges ahead, but Britain is bouncing back from the pandemic.
Darren Henry
Will the Secretary of State outline what steps the Department is taking to help low-income households in my constituency deal with the energy crisis?
Kwasi Kwarteng
My hon. Friend will appreciate the excellent statement made by my right hon. Friend the Chancellor of the Exchequer a couple of weeks ago. There was a range of measures totalling £9.1 billion, which included the council tax rebate for bands A to D and a £200 reduction in energy bills, totalling £350 to reduce bills. As I alluded to earlier, there was also an extension of the warm home discount.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Secretary of State omitted to mention that inflation is now at its highest level for 30 years. Energy costs are spiralling and the private sector has yet to recover to pre-pandemic levels. Does he acknowledge that the Chancellor’s very large rise in national insurance, coming in April, will make a bad situation for British businesses even worse?
Kwasi Kwarteng
I am delighted to hear Members from the Opposition parties so bullish about our economy, given that we are the fastest growing economy in the G7! The hon. Member for Sefton Central (Bill Esterson) mentioned Germany; I was very struck by the Bundesbank saying that Germany was facing recession, but we do not hear about that. We are creating more jobs, we have announced record investment and the Government’s plan is working in terms of bouncing back better from the pandemic.
Seema Malhotra
The Secretary of State did not answer the question, because he knows that this is a high-tax Government because they have created a low-growth economy. May I also raise his recent claim that fraud is not something that affects people day to day? Fraud is estimated to cost the British economy as much as £52 billion a year, so will he accept that he has got this wrong? Will he apologise to the 4.6 million people who are victims of fraud each year, and tell the House today what steps he will take to do better?
Kwasi Kwarteng
I will tell the hon. Lady exactly what steps I will take to do better. I will constantly and always fight against Labour’s socialism, its windfall tax, its inability to plan ahead and its total lack of remorse for the fact that it destroyed manufacturing jobs in the time it was in government.
David Johnston (Wantage) (Con)
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
I thank my hon. Friend for his long-standing and passionate interest in community energy. I was delighted to meet him and colleagues just before the recess. Through the introduction of UK-wide growth-funding schemes such as the towns fund, the Government are enabling local areas to tackle net zero goals. We intend to publish an updated retail energy market strategy in due course.
Peter Dowd (Bootle) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
I will happily talk to the hon. Member offline about the extensive vaccine pipeline that we are in the process of procuring. It includes next-generation mRNA vaccines for both flu and the next phase of covid. We are ahead of the curve on the next phase, as we were during the pandemic.
Aaron Bell (Newcastle-under-Lyme) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)
My hon. Friend highlights the amount of opportunities that are coming to constituencies such as his in Staffordshire. I would be delighted to meet him to talk more about them.
Joanna Cherry (Edinburgh South West) (SNP)
Kwasi Kwarteng
I assure the hon. and learned Lady that we fully support the transition in the North sea transition deal and the oil and gas sector, whereas her party and the Greens are seeking to destroy it and destroy jobs. That is the fact that I want to raise here.
Antony Higginbotham (Burnley) (Con)
Greg Hands
Energy security is an absolute priority for the Government. Our exposure to global gas prices underscores the importance of not only our own UK North sea gas production but building a strong renewables sector to reduce our reliance on energy imports in the first place. To that end, we recently published both a comprehensive net zero strategy and the North sea transition deal.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Kwasi Kwarteng
The hon. Gentleman will appreciate that issues of settlement and asylum are ably dealt with by my right hon. Friend the Home Secretary. I engage with her constantly in respect of employment schemes for people who wish to come into this country.
Dr James Davies (Vale of Clwyd) (Con)
Greg Hands
As the current energy Minister and the former exports Minister, I agree entirely with my hon. Friend on the export potential of the Rolls-Royce SMR technology, which has the potential to provide levelling-up jobs precisely in areas such as north Wales, as he so ably urges.
Janet Daby (Lewisham East) (Lab)
Last week was the ninth anniversary of the death of Ella Adoo-Kissi-Debrah, a nine-year-old girl who died following an asthma attack brought on by toxic air on a busy road on the South Circular. Our towns and cities need low and non-carbon transport solutions. We all know that electric cars are expensive, but second-hand electric cars are seldom available, which means that each car needs to be purchased from new. The current maximum Government grant for part-purchasing a new electric car is just not enough.
Greg Hands
The death of the hon. Lady’s young constituent bears heavily on all of us as London Members of Parliament. I remind her that the principal responsibility for air quality in London rests with the Mayor of London. On the action that we are taking to encourage more low-carbon and zero-carbon vehicles, we have announced: the phasing out of petrol and diesel-driven cars; a big investment in our electric vehicle charging infrastructure; and a big move to hydrogen-powered vehicles. Work in these areas will see low and zero-carbon vehicles become the future of urban transport in this country.
Mr John Whittingdale (Maldon) (Con)
George Freeman
My right hon. Friend makes an important point, which I would be keen to talk to him about. Although that is a Department for Digital, Culture, Media and Sport lead, we are tightening up on the intellectual property provisions, and we are minded to proceed with that legislation.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Unscrupulous employers have used the pandemic to slash their loyal workforce’s terms and conditions and threaten them with the sack. Court cases have been lost by Uber and more recently by Tesco, yet all we have from this Government are platitudes. They have done absolutely nothing to stop brutal fire and rehire practices. Will the Government’s much-fabled Employment Bill finally ban them once and for all?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
This Government have been really clear that such practices should not be used as bully-boy negotiating tactics. Employers should refer to the strengthened ACAS guidance that sets out that dismissal and re-engagement should be considered only as an option of last resort.
Mrs Sheryll Murray (South East Cornwall) (Con)
George Freeman
My hon. Friend is an outspoken advocate for the Cornish cluster, which is growing fast. In addition to our groundbreaking pledge to increase investment in R&D outside the golden triangle to 55%, we are specifically investing in the South West Centre of Excellence in Satellite Applications, the Newquay Spaceport and work with the University of Exeter and Virgin Orbit. This is an exciting time for the Cornish economy.
Andy McDonald (Middlesbrough) (Lab)
Yesterday, the Prime Minister said that workers in the UK should learn from Germany, where workers do not have a habit of going into work when not well. Will the Minister learn from the German Government and bring in statutory sick pay that covers 100% of workers’ salaries instead of the measly 90% that is covered in the UK, which leaves so many workers in the terrible position of having to do the responsible thing of isolating while being sick and not being able to put food on the table? On that point, will the Minister take this opportunity—
Mr Speaker
Order. Mr McDonald, I gave you the privilege of getting in. Questions are meant to be brief. There are two other people who have to come in as well; it is not just about you.
Paul Scully
During isolation, we made it easier to claim statutory sick pay. We also changed universal credit to make it easier to claim and more generous. We continue to support people as this pandemic becomes endemic.
Robert Largan (High Peak) (Con)
Last year I organised the first ever High Peak jobs and apprenticeships fair, working with organisations such as Buxton & Leek College and fantastic employers such as Tarmac, Breedon Group and Ferodo. It was a huge success, with hundreds attending and many reporting that they had found jobs as a result, so I am delighted to announce the second High Peak jobs and apprenticeships fair, and I would love to invite the Minister to attend.
Lee Rowley
I am very grateful to my hon. Friend and will be delighted to attend if I can.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The Government hate a monopoly, so can the Minister come to the Dispatch Box and tell my constituents who are former employees of Together Energy why his Government are using the energy crisis to create an energy monopoly by the big players, as opposed to small and medium-sized providers?
Kwasi Kwarteng
As I have maintained on a number of occasions, the hon. Gentleman’s party is a jobs destroyer in the energy sector, refusing to countenance any investment in the North sea, and in alliance with the Greens, who want to destroy jobs in the sector.
Ukraine
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Boris Johnson)
With permission, Mr Speaker, I will make a statement about the situation in Ukraine. Last night, President Putin flagrantly violated the Minsk peace agreements by recognising the supposed independence of the so-called people’s republics of Donetsk and Luhansk in eastern Ukraine. In a single inflammatory speech, he denied that Ukraine had any “tradition of genuine statehood”, claimed that it posed a
“direct threat to the security of Russia”,
and hurled numerous other false accusations and aspersions.
Soon afterwards, the Kremlin announced that Russian troops would enter the breakaway regions under the guise of peacekeepers, and Russian tanks and armoured personnel carriers have since been spotted. The House should be in no doubt that the deployment of these forces in sovereign Ukrainian territory amounts to a renewed invasion of that country. By denying Ukraine’s legitimacy as a state and presenting its very existence as a mortal threat to Russia, Putin is establishing the pretext for a full-scale offensive.
Hon. Members will struggle to contemplate how, in the year 2022, a national leader might calmly and deliberately plot the destruction of a peaceful neighbour, yet the evidence of his own words suggests that is exactly what President Putin is doing. I said on Saturday that his scheme to subvert and invade Ukraine was already in motion before our eyes. The events of the past 24 hours have, sadly, shown this to be true.
We must now brace ourselves for the next possible stages of Putin’s plan: the violent subversion of areas of eastern Ukraine by Russian operatives and their hirelings, followed by a general offensive by the nearly 200,000 Russian troops gathered on the frontiers at peak readiness to attack. If the worst happens, a European nation of 44 million men, women and children would become the target of a full-scale war of aggression waged, without a shred of justification, for the absurd and even mystical reasons that Putin described last night. Unless the situation changes, the best efforts of the United States, Britain, France, Germany and other allies to avoid conflict through patient diplomacy may be in vain.
From the beginning, we have tried our utmost—we have all tried—to find a peaceful way through this crisis. On 11 February, my right hon. Friend the Defence Secretary and the Chief of the Defence Staff, Admiral Radakin, paid the first joint visit to Moscow by the holders of their offices since Churchill, who was also Defence Minister at the time, travelled to Russia with General Alanbrooke in 1944. They held over three hours of frank discussions with the Russian Defence Minister, General Shoigu, and the chief of staff, General Gerasimov, demonstrating how seriously we take Russia’s security concerns, how much we respect her history and how hard we are prepared to work to ensure peaceful co-existence.
My right hon. Friend the Foreign Secretary delivered the same messages when she met her Russian counterpart in Moscow on 10 February. I have spoken on a number of occasions to President Putin since this crisis began, as has President Biden, while President Macron and Chancellor Scholz have both visited Moscow. Together we have explored every avenue and given Putin every opportunity to pursue his aims by negotiation and diplomacy.
I tell the House: we will not give up—we will continue to seek a diplomatic solution until the last possible moment—but we have to face the possibility that none of our messages has been heeded and that Putin is implacably determined to go further in subjugating and tormenting Ukraine. It is because we suspected as much that the UK and our allies repeatedly sounded the alarm about a possible new invasion, and we disclosed much of what we knew about Russia’s military build-up.
Britain has done everything possible to help Ukraine to prepare for another onslaught: training 22,000 soldiers, supplying 2,000 anti-tank missiles, and providing £100 million for economic reform and energy independence. We will now guarantee up to $500 million of Development Bank financing. I travelled to Kyiv to meet President Zelensky on 1 February and I saw him again in Munich at the weekend. I spoke to him last night, soon after President Putin’s speech, and assured him—as I am sure the whole House would agree was the right thing to do—of Britain’s unwavering support for Ukraine’s sovereignty and territorial integrity.
Now the UK and our allies will begin to impose the sanctions on Russia that we have already prepared, using the new and unprecedented powers granted by this House to sanction Russian individuals and entities of strategic importance to the Kremlin. Today the UK is sanctioning the following five Russian banks: Rossiya, IS Bank, Genbank, Promsvyazbank and the Black Sea bank. And we are sanctioning three very high net worth individuals: Gennady Timchenko, Boris Rotenberg and Igor Rotenberg. Any assets they hold in the UK will be frozen, the individuals concerned will be banned from travelling here, and we will prohibit all UK individuals and entities from having any dealings with them.
This is the first tranche—the first barrage—of what we are prepared to do, and we hold further sanctions at readiness to be deployed alongside the United States and the European Union if the situation escalates still further. Last night, our diplomats joined an emergency meeting of the UN Security Council, and we will raise the situation in the Organisation for Security and Co-operation in Europe.
Let me emphasise what I believe unites every member of this House with equal determination: the resolve of the United Kingdom to defend our NATO allies is absolute and immovable. We have already doubled the size of our deployment in Estonia, where the British Army leads NATO’s battlegroup, and when I met President Levits of Latvia and Prime Minister Kallas of Estonia in Munich on Saturday, I told them that we would be willing to send more British forces to help protect our allies if NATO makes such a request.
We cannot tell what will happen in the days ahead, but we should steel ourselves for a protracted crisis. The United Kingdom will meet this challenge side by side with our allies, determined that we will not allow Putin to drag our continent back into a Hobbesian state of nature where aggression pays and might is right. It is precisely because the stakes are so high that Putin’s venture in Ukraine must ultimately fail—and must be seen to fail. That will require the perseverance, unity and resolve of the entire western alliance, and the UK will do everything possible to ensure that that unity is maintained.
Now our thoughts should turn to our valiant Ukrainian friends, who threaten no one and who ask for nothing except to live in peace and freedom. We will keep faith with them in the critical days that lie ahead, and whatever happens, Britain will not waver in our resolve. I commend this statement to the House.
Keir Starmer (Holborn and St Pancras) (Lab)
Yesterday was a dark day for Europe. The Russian President denied the right of a sovereign nation to exist, unilaterally recognising separatist movements that he sponsors and that seek to dismember Ukraine. Then, under the cover of darkness, he sent in troops to enforce his will. Putin appears determined to plunge Ukraine into a wider war. We must all stand firm in our support for Ukraine. We support the freedom of her people and their right to determine their own future without the gun of an imperialist held to their head.
There can be no excuses for Russia’s actions. There is no justification for this aggression. A war in Ukraine will be bloody, it will cost lives, and history will rightly scorn Putin as the aggressor. Putin claims to fear NATO expansion, but Russia faces no conceivable threat from allied troops or from Ukraine. What he fears is openness and democracy. He knows that, given a choice, people will not choose to live under the rule of an erratic and violent authoritarian, so we must remain united and true to our values across this House and with our NATO allies. We must show Putin that we will not be divided.
I welcome the sanctions introduced today and the international community’s efforts to unite with a collective response. However, we must be prepared to go further. I understand the tactic of holding back sanctions on Putin and his cronies to try to deter an invasion of the rest of Ukraine, but a threshold has already been breached. A sovereign nation has been invaded in a war of aggression based on lies and fabrication. If we do not respond with a full set of sanctions now, Putin will once again take away the message that the benefits of aggression outweigh the costs. We will work with the Prime Minister and our international allies to ensure that more sanctions are introduced.
Russia should be excluded from financial mechanisms, such as SWIFT, and we should ban trading in Russian sovereign debt. Putin’s campaign of misinformation should be tackled. Russia Today should be prevented from broadcasting its propaganda around the world. We should work with our European allies to ensure that the Nord Stream 2 pipeline is cancelled. Whatever the sequencing of these sanctions, this will not be easy. Britain must work with our European allies to handle the disruption to the supply of energy and raw materials. We must defend ourselves and our allies against cyber-attacks. We must bring together the widest possible coalition of nations to condemn this action against a sovereign UN member state.
Ukrainians are defending their own country and democracy in Europe. We must stand ready with more military support for Ukraine to defend itself, and we must stand ready to do more to reassure and reinforce NATO allies in eastern Europe, but we must also get our own house in order. The Prime Minister said that the lesson from Russia’s 2014 invasion of Donbas is that we cannot just let Vladimir Putin get away it, but until now we have. We have failed to stop the flow of illicit Russian finance into Britain. A cottage industry does the bidding of those linked to Putin, and Russian money has been allowed to influence our politics. We have to admit that mistakes have been made, and we have to rectify them.
This must be a turning point. We need an end to oligarch impunity. We need to draw a line under Companies House providing easy cover for shell companies. We need to ensure that our anti-money-laundering laws are enforced. We need to crack down on spies, and we have to ensure that money is not pouring into UK politics from abroad.
Russian aggression has now torn up the Minsk protocol and the Budapest memorandum, but even at this late hour we must pursue diplomatic routes to prevent further conflict, so can the Prime Minister tell us what international diplomatic efforts are going on and what role the UK will have in that process? We know Putin’s playbook. He seeks division; we must stay united. He believes the benefits of aggression outweigh the consequences, so we must take a stand, and he believes the west is too corrupted to do the right thing, so we must prove him wrong. I believe we can, and I offer the support of the Opposition in that vital endeavour.
The Prime Minister
Can I thank the right hon. and learned Gentleman, the Leader of the Opposition, for the clarity with which he has just spoken and the support that he has given to the UK’s strategy in dealing with this crisis in Europe? I think, if I may say so, that that will be noted, and the change in the approach taken by the Opposition over the last couple of years is massively beneficial—[Interruption.] I think a fair-minded person would acknowledge that.
The right hon. and learned Gentleman has raised some important questions, and they relate to the ways in which we clamp down on Russian money in the UK, and indeed throughout the west. This country was the first to publish a register of beneficial ownership, this country has led the way in cracking down on wealth that is unexplained and we are bringing forward an economic crime Bill to take forward further measures. The House should understand that it is absolutely vital that we hold in reserve further powerful sanctions, as I think the right hon. and learned Gentleman acknowledged, in view of what President Putin may do next.
We want to stop Russian companies being able to raise funds in sterling or indeed in dollars, we want to stop them raising funds on UK markets and we want to strip away the veil that conceals the ownership of property in this country, and indeed throughout the west. We will work with our friends and partners around the world to achieve that, and the sanctions we are implementing today are very tough. Promsvyazbank is a top 10 Russian bank, which services 70% of state contracts signed by the Russian Ministry of Defence, but the measures we have prepared are much tougher still, and we will have absolutely no hesitation in implementing them.
We will get on with the business of diplomacy, and the right hon. and learned Gentleman is absolutely right to draw attention to the importance of diplomacy now, in spite of everything that is happening on the borders of Ukraine and now in Donbas. There is a G7 meeting straight after this statement, and we will be holding meetings in NATO, in the P5 and in every forum where it is relevant and possible to bring President Putin to understand the gravity of what he is doing.
The UK will continue to offer support to our Ukrainian friends, and I do think it has been right for us to be out in front in offering military assistance—defensive military assistance—to the Ukrainians. I think that has been the right thing to do. I spoke last night to President Zelensky, who made further requests, and we will consider them. We are doing everything we can to offer support in the time that we have, and we will do that, and I am glad that the right hon. and learned Gentleman seemed to support that as well.
It is absolutely vital at this critical moment that President Putin understands that what he is doing is going to be a disaster for Russia. It is clear from the response of the world to what he has done already in Donbas that he is going to end up with a Russia that is poorer as a result of the sanctions that the world will implement: a Russia that is more isolated, a Russia that has pariah status—no chance of holding football tournaments in a Russia that invades sovereign countries—and a Russia that is engaged in a bloody and debilitating conflict with a fellow Slav country. What an appalling result for President Putin. I hope that he steps back from the brink and does not conduct a full invasion, but in the meantime we must implement the tough package that we have put forward, and we will continue to offer the Ukrainian people all the support that we can.
Mrs Theresa May (Maidenhead) (Con)
I welcome my right hon. Friend’s statement and also the UK’s unwavering support for Ukrainian sovereignty at this gravest of times, which shows we can never take our eyes off Russia. But does my right hon. Friend share my concern that while the focus today is rightly on protecting Ukrainian independence and territorial integrity, what lies behind this is a wider worldwide trend of authoritarian states trying to impose their way of thinking on others, and that the battle in which we now must now engage is nothing more nor less than the defence of democracy itself?
The Prime Minister
My right hon. Friend is entirely right, and that is what is at stake. What is happening in Ukraine now is being watched around the world and the echoes will be heard in Taiwan, east Asia and throughout the world.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I thank the Prime Minister for advance sight of his statement and thank the National Security Adviser, who has briefed Opposition leaders.
This is a dark day for the people of Ukraine and for people right across our European continent. Europe stands on the brink of war as a consequence of Russian aggression. It is a day that communities across Scotland, right across these islands and indeed across Europe desperately hoped would never come to pass. But although that sense of darkness defines today, how we now collectively respond will define the days to come.
This Chamber has, especially during recent months, seen fierce debate and disagreements, but today it is important to say, in the face of Russian aggression against Ukraine, that in this House we all stand together: we stand together and stand with our partners across Europe and indeed across the globe. But more importantly, we stand with the Ukrainian people, who are now under assault. A European country—an ally—is under attack. We should be very clear about what is now happening: this is an illegal Russian occupation of Ukraine, just as it was in Crimea. Russia has effectively annexed another two Ukrainian regions in a blatant breach of international law. This effectively ends the Minsk process. It is a further violation of the sovereignty and territorial integrity of Ukraine. No one should even repeat the Russian lie that this is about peacekeeping; this is warmongering, plain and simple. President Putin must hear the call from here and elsewhere to draw back before any further escalation can take place.
I and my party welcome the sanctions that are now being brought forward, but it is deeply regrettable that the delay has allowed many Russian individuals to shift dirty assets and money in the last number of weeks. However, may I ask the Prime Minister specifically if the Russian state and individuals will be immediately suspended from the SWIFT payments system? Just as economic sanctions against Russia are welcome, Ukraine needs immediate economic and indeed humanitarian support if required. When will economic and humanitarian support be enacted and what will it entail? Can the Prime Minister also confirm that there will be exemptions for partners of UK citizens residing in Ukraine to come to the UK? They need that certainty and they need it today.
In the days ahead we can no doubt expect a barrage of disinformation from the Russian media and its proxies. So can the Prime Minister update us on how the United Kingdom Government intend to combat that threat? This is also the moment to end the complacency in implementing the Intelligence and Security Committee’s Russia report; will the Prime Minister now commit to its full implementation and update the House accordingly?
Can I also ask the Prime Minister, after the UN Security Council’s brief meeting last night, when it will next meet and what co-ordination is happening across all international organisations to force President Putin to step back from the brink before it is too late?
Finally, let President Putin hear loudly and clearly that he must now desist from this act of war, this attack on a sovereign nation. Let us all demonstrate that we stand with the people of Ukraine.
The Prime Minister
I wholeheartedly thank the right hon. Gentleman for the terms in which he has just spoken and the unity and resolve he has just shown, in common with the right hon. and learned Gentleman the Leader of the Opposition. The spirit this House is showing today is absolutely invaluable.
The right hon. Gentleman is right to raise questions about the speed with which we have been able to sanction various individuals. We brought forward the Magnitsky sanctions, as he knows, and he was important in that last year. We are bringing forward the registry of beneficial ownership faster than any other country, stripping away the veil on Russian dirty money. He asked about support for Ukraine; as I mentioned in the House, we have given £100 million-worth of support particularly for Ukraine’s energy crisis and also for other economic needs, plus the further $500 million I announced just now.
The diplomatic effort is now intensifying. The right hon. Gentleman asked about the forums in which it is taking place; there are more meetings in the UN. But ultimately, as he rightly says, this is up to Vladimir Putin: he and he alone can decide whether or not to halt what seems to be an absolutely irresistible march towards tragedy. It is down to him; it is in his head.
Several hon. Members rose—
Mr Speaker
Order. I am expecting to run this statement until around 2 o’clock, so short questions and pithy answers would certainly be helpful.
Tom Tugendhat (Tonbridge and Malling) (Con)
I welcome my right hon. Friend’s statement today and the actions of him and his Government over recent weeks. I pay particular tribute to the Defence Secretary, whose unfailing efforts in preparing not just the people of Ukraine but our allies in NATO for this aggression has been exemplary.
As we are talking about sanctions today, and rightly so, will my right hon. Friend the Prime Minister also commit to a foreign agents registration Act? We have seen the insidious work of the United Front for China, and indeed of different outfits for Russia, to undermine our democracy and threaten our way of life. Will he please bring in that Act, and while he is doing it will he finance much more the Russian service of the BBC so the Russian people can hear the truth, not the lies being spread by their own Government?
The Prime Minister
I thank my hon. Friend very much. The Russian service of the BBC has done an invaluable job and it is important that it continues to be financed. I will look at the details of its package. On his proposal for a foreign agent registration law, we are indeed considering what more we can do to counter threats to this country from within.
Dame Margaret Hodge (Barking) (Lab)
According to expert legal advice I have seen, there are serious flaws in the new sanctions regime: it may not affect oligarchs close to Putin who do not hold an official position in a company or who own less than 50% of shares; it is too narrow in defining the individuals it covers; unlike US legislation, it is limited in how we can sanction Russian Government officials; and the definition of “Government of Russia” excludes the legislative branch, including the Duma. That means that kleptocrats who have stolen from the Russian people and support Putin would not be caught. Of Navalny’s list of 35, only 13 would be caught: Abramovich, Usmanov, Timchenko and Deripaska would escape. Will the Prime Minister look again at the sanctions regime so that, in the words of the Foreign Secretary:
“Nothing is off the table”?—[Official Report, 31 January 2022; Vol. 708, c. 56.]
The Prime Minister
I understand the right hon. Lady’s concern but believe she is in error in what she says, because we can certainly target members of the Duma, Abramovich is already facing sanctions and in the announcements I have made today Gennady Timchenko, to whom she just referred, is specifically targeted; he is on the list, as are Boris Rotenberg and Igor Rotenberg. These are people who are very close to the Putin regime, but, as I said to the House, they are just part of the first barrage.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome the Government’s efforts today, but Russia’s actions move us into a new and more dangerous phase of the crisis and require us to adopt a more robust, long-term approach to defending European security outside NATO’s borders. Sanctions alone will not be enough. Indeed, untargeted sanctions may play into Putin’s plan to pivot Russia ever closer to China. So would the Prime Minister agree that NATO must not be benched? It was created to uphold European security, and we must now consider how we utilise our formidable hard-power deterrence in responding to Ukraine’s calls for further help, not excluding the formation of a potential no-fly zone.
The Prime Minister
My right hon. Friend is absolutely right to place the emphasis he does on NATO, which has proved its value in the last 70 years. It is the pre-eminent, most successful alliance in history. It is a defensive alliance and we are now reinforcing it all across the eastern perimeter. What NATO is not doing—no NATO country is currently considering this—is sending combat troops to Ukraine, and he will understand the reasons for that, but that does not preclude support by NATO countries for Ukraine, including military support.
Ed Davey (Kingston and Surbiton) (LD)
It is time to start treating Russia like the rogue state it is. I strongly welcome the Prime Minister’s statement in this darkest of moments and recognise the Leader of the Opposition for his strong cross-party support. In that cross-party spirit, I urge the Prime Minister to go further today and commit to the following. First, freeze and begin seizing the assets of every single one of Putin’s cronies in the UK and expel these oligarchs from our country as part of a much stronger sanctions regime. Secondly, recognise the existential threat posed by Putin to our NATO allies by immediately cancelling his misguided decision to cut our armed forces by 10,000 troops. Thirdly, no longer tolerate international sporting or cultural events hosted in Russia. Will he confirm what I think he implied in answer to a previous question, that he will push for this year’s champions league final to be moved from St Petersburg? President Putin has made a terrible decision. Will the Prime Minister ensure that he pays a terrible price?
The Prime Minister
Yes. Again, I am grateful to the right hon. Member and the Liberal Democrats for their support of the position that we are taking. We are indeed cracking down on ill-gotten gains in London and on the cronies of Vladimir Putin, as I detailed, and there is more to come. On defence spending, the right hon. Member should acknowledge that the recent increase was the biggest since the end of the cold war. On his point about sporting events, as I said, I think it inconceivable that major international football tournaments can take place in Russia after the invasion of a sovereign country.
Dr Julian Lewis (New Forest East) (Con)
Does my right hon. Friend accept that too many NATO Governments and political parties have accepted energy dependence on Putin and financial dependence on dodgy donations from Russian oligarchs? Given that we spent between 4.5% and 5% of GDP on defence throughout the 1980s until the end of the cold war, will he now accept 3% of GDP on defence as a suitable future benchmark?
The Prime Minister
My right hon. Friend is completely right to say that we have failed to wean ourselves off dependence on Russian hydrocarbons since 2014. That has been a tragic mistake by European countries. In the UK, we are in the fortunate position of having only 3% of our gas coming from Russia, but other European countries have learned that they have much more to do. By the way, I salute the decision of the German Chancellor, Olaf Scholz, to cancel Nord Stream 2. It is a brave step by Olaf and the right thing to do. On my right hon. Friend’s point about defence spending, actually we are up at 2.4% of GDP—I think that is one of the highest figures in NATO—and we are the second biggest contributor and military power in NATO already.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
America is key in all this. It is the largest economy and has the largest forces in NATO. We were honoured yesterday to have Nancy Pelosi in the Gallery. She is very close to the President of the United States. Did the Prime Minister have a chance to talk to her? It is wonderful to have cross-party unity in the House, but that is not enough. We need the United States to be firm in leadership with us.
The Prime Minister
I did have a chance to talk to Nancy Pelosi and her bipartisan delegation. The sentiments expressed by Members of this House today were very much shared by that delegation of Congressmen and women.
Dr Liam Fox (North Somerset) (Con)
I welcome my right hon. Friend’s statement. The UK Government have behaved with integrity and honour throughout the crisis. I echo his welcoming of Chancellor Scholz’s brave decision today to freeze Nord Stream 2. However, sanctions can only achieve so much when dealing with an undemocratic state and someone like Putin. What we are witnessing is the real-time cannibalisation of a European democratic state bite by bite. Ultimately, we will have either to ensure that Ukraine is given the means to defend itself from future aggression, or give some sort of security guarantee. Otherwise, we will find Russian troops on the borders of Poland, Slovakia, Romania and Hungary, which would be an absolute failure of western policy.
The Prime Minister
My right hon. Friend has recently written and spoken powerfully about the subject and he is completely right that we will have to dig in for the long term to support Ukraine in every way that we can: economically, diplomatically, by the provision of military support in the way that we are already. It will take time, but to return to the point I made in my statement: it is vital that President Putin should fail. I believe that he will fail because the giant facts are against him. He is taking on Ukrainian national feeling and in the end he will not succeed. We will help the Ukrainians to succeed.
Tony Lloyd (Rochdale) (Lab)
The Prime Minister will know that part of the calculation of the Kremlin and President Putin is that the west will lose interest, as unfortunately we have in the past. Can he make it one of his key tasks to ensure that our allies are there for the long run? We have to be there until this is brought to a proper conclusion.
The Prime Minister
The hon. Member is completely right. The biggest threat is apathy and indifference. That is why what my right hon. Friend the Member for Maidenhead (Mrs May) said was so important. This is about not just Ukraine but democracy and the security of many other European countries—indeed, countries around the world. That is what is at stake here today.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my right hon. Friend and his colleagues for their stalwart action so far. The fact is, Mr Lavrov said today that Ukraine does not have a right to sovereignty, so the scale of the ambition is surely clear to anyone who doubted it. I commend what he has done so far but, if we are going to hit them with sanctions, we need to hit them hard and hit them now. They need to feel the pain of the first part of this decision. Secondly, what is the ultimatum to them now? If they move further, are we going to take further action? We are facing the growth of the axis of totalitarian states. China will watch this and look at Taiwan. How we behave now and what we do as an alliance will dictate what happens in the far east.
The Prime Minister
We are hitting them hard now and we will hit them harder in the future. With every day that goes by on which Russia violates the sovereignty and integrity of Ukraine, we will continue to punish Russia. In the end, I do not believe that President Putin has thought this through and I do think that he will fail.
Chris Bryant (Rhondda) (Lab)
Putin, as I have been saying for many years, is a bloodthirsty liar. When his ambassador came to the House a couple of weeks ago to talk to the all-party parliamentary group on Russia, he said it was absolutely preposterous that anybody could possibly suggest that any Russian troops would be going into Ukraine. That was a lie—not an inadvertent lie, a deliberate lie. But my anxiety is that we are not going anywhere near far enough today. In 2014, we were spineless in the end. We did not show enough resolve across the west or in the UK. We did not close down the dirty money process coming into the UK. I do not think Abramovic has been sanctioned, incidentally, just to correct the Prime Minister. I do not think he has been sanctioned yet at all. What the former leader of the Conservative party, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), just said is really important. Everybody in this House will work closely with the Government to deliver far more effective and secure sanctions if the Prime Minister asks, but they have to be now. We have to close the dirty Russian money down.
The Prime Minister
The Government are already implementing a draconian package of sanctions and we will go further. We are bringing forward the economic crime Bill and the register of beneficial interests. In addition to all the things I have announced today, we will be bringing forward further measures to hit Russian individuals and Russian companies of strategic importance to Russia, stopping Russian companies from raising money on London markets and stopping them even trading in pounds and dollars. These will bite, these will hurt and these will make a huge difference. But the House also needs to understand that President Putin’s failure will not just be caused by sanctions implemented by us and by our friends. His failure will also result from the determination of the Ukrainians to resist. In that, we will support them.
Alicia Kearns (Rutland and Melton) (Con)
I welcome the sanctions and the Government’s significant efforts to expose false flag operations, but rouble by rouble we must rid our nation of Putin’s dirty money because of his acts overnight and those lives already lost. I urge my right hon. Friend to blacklist all Russian banks, to ban the City and law and accountancy firms from servicing all Russian state firms, to work with Turkey to deny the Russian navy access to the Bosphorus and to ensure we have an atrocity prevention strategy in place for when the paramilitaries go in alongside the peacekeepers.
The Prime Minister
That is exactly why the UK has been out in front of our European friends in dealing with Russian dirty money and in implementing the toughest possible package of sanctions. As I told the House, we will go further.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
These are perilous times for our friends in Ukraine, a democracy within our continent. Short of sending British troops there, we must provide them with every possible support. I am glad the Prime Minister is talking tough and taking a strong stand against continued Russian aggression and imperialism, but when will he stop playing tennis with Russian oligarchs in exchange for money for the Conservative party? Instead of talking about sanctions abroad, when will he finally help to clean up things closer to home, including fully implementing the recommendations of the Russia report?
The Prime Minister
The Government, as I said, are way out in front of our European friends and partners in what we are doing to implement sanctions on Russian entities. That is the right thing and I think that is where the House is today. We will continue to do that. Yes, it is absolutely vital that nobody should contribute to a political party in this country unless they are a UK national. That is what this Government insist upon. But may I just respectfully say—I have been listening to some of the contributions this morning—that we should not allow our indignation and rage at what is happening in Ukraine to spill over into casual Russophobia? I do not want to see us discriminating against Russians as people or simply on the basis of their nationality.
Sir William Cash (Stone) (Con)
I commend my right hon. Friend for his prescience and resolve on Ukraine, and also that of the Defence Secretary. Can he confirm that escalating economic sanctions against Russia and fully effective defensive support for Ukraine can never be allowed to fail, given that Russia and President Putin’s aggression affects all its European neighbours and has an ever-increasing global reach, including even in places such as Africa?
The Prime Minister
My hon. Friend is completely right. The threat is not just to Europe. The threat from an aggressive and expansionist Russian agenda is everywhere, including in Africa from the Wagner group. It is up to the UK now to push back and that is what we are going to do.
Dame Angela Eagle (Wallasey) (Lab)
Will the Prime Minister tell the House now whether the sanctions he has announced will actually put into effect the Intelligence and Security Committee’s Russia report, and whether he has full confidence that they will close down the so-called London laundromat, which is laundering dirty Russian money straight through the City?
The Prime Minister
The hon. Lady will have understood from what I said earlier that what we are proposing to do will go further than that report. We are cracking down today on Russian banks and individuals. We are proposing to stop Russian companies even raising money in London and to stop them trading in sterling. That was not recommended by the report she mentions, but that will do real economic damage where it is necessary to do it.
Johnny Mercer (Plymouth, Moor View) (Con)
I welcome the Prime Minister’s statement and the sanctions against Russia, but does he agree that we cannot continue to relearn the lessons of the past when it comes to drawing a line and being willing to hold that line militarily? He has increased defence spending beyond the level it has been for many years, and I congratulate him on that, but the argument has always been that it must be tailored to meet the threat. As the German Chancellor mentioned this morning, that threat is changing. Will the Prime Minister commit to keeping an eye on defence spending to ensure that if we are asked to do so, we can hold a line and lead NATO in the way that I know he wants to lead it?
The Prime Minister
I thank my hon. Friend very much; he is absolutely right to draw attention to defence spending. It is great that the German Chancellor also now sees the importance of that. For a long time, my hon. Friend and I have been campaigning for Germany to shoulder more of the cost of defence in Europe, and that is a good thing. We have seen massive increases in our defence spending, but we want to make sure it is targeted on things such as tackling cyber and disinformation and all the modern forms of warfare in which Putin specialises.
Stewart Hosie (Dundee East) (SNP)
I welcome the sanctions announced today on the five banks and the three named individuals. However, the Prime Minister will be well aware that there are many, many oligarchs who would, at face value, have huge wealth and huge assets in their own names, but that that wealth and those assets are absolutely in the gift of the Russian state and at the beck and call of the Russian state. Will he confirm that the sanctions we will be discussing and agreeing later today intend to ensure that those trusted custodians of Russian state money are able to be sanctioned in the way the three individuals named today are being sanctioned?
The Prime Minister
Yes. We will be able to sanction oligarchs, associates of President Putin and companies of strategic importance to the Kremlin.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I really welcome the Prime Minister’s statement today and in particular the level of cross-House agreement that we must stand up to Russian aggression. I also welcome the decision by Chancellor Scholz to suspend Nord Stream 2. It always was an incredibly risky project, allowing great exposure to Russian gas. Will my right hon. Friend assure the House that he is already considering what more can be done to protect our allies and friends in eastern Europe from the inevitable consequences of the risky position in which we find ourselves, in the dead of winter, with so much dependence on Russian gas?
The Prime Minister
The answer is that we need to work together to wean ourselves off and end the dependency on Russian gas. The House knows all the things we are doing to support our eastern European allies militarily, but we also need to share technology, particularly in renewables, to allow them to find a different future.
Hilary Benn (Leeds Central) (Lab)
Whether the sanctions that the Prime Minister just announced will “hit Russia…hard”, as he said this morning, only time will tell, but he also said:
“there is a lot more that we are going to do in the event of an invasion”.
The Prime Minister has just told the House that he regards what happened overnight as a renewed invasion of Ukraine. If that is the Government’s view, why is he waiting and not imposing full sanctions on Russia now?
The Prime Minister
The right hon. Gentleman makes a couple of points. The House will have heard me on this issue several times; I have been very clear that we wanted to have the biggest possible package of sanctions ready to go in the event of a Russian toe-cap crossing into more sovereign Ukrainian territory. We will also make sure that we implement the waves of sanctions in concert with our allies; that is what we are doing.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
While thanking my right hon. Friend for his statement, may I ask him to reflect on the fact that President Putin has already achieved so much of what he set out to achieve? He may have no intention of launching a full-scale invasion of Ukraine, but he has already committed the crimes that deserve the most severe punishment from the free world. What are we going to do to continue to strengthen and unify NATO, which is exactly what he did not want his policy to achieve?
The Prime Minister
My hon. Friend is completely right. What Putin has succeeded in doing is to greatly unify NATO and produce a much bigger commitment by not just the UK but other major European powers to the reinforcement of NATO’s eastern frontier. The French are doubling down in Romania. We are doubling down in Estonia. He is going to get much more NATO, not less.
Sir George Howarth (Knowsley) (Lab)
For over a decade, Russia has been mounting cyber-attacks on our critical national infrastructure and commercial interests, and there were no consequences. For over a decade, Russia has been swirling dirty money around the City of London, and there were no consequences. In order for Vladimir Putin to understand that he has now gone too far, he needs to be certain that if sanctions and diplomatic means do not succeed, there will be consequences. Does the right hon. Gentleman agree that those consequences need still to be on the table and that Vladimir Putin needs to understand that they will be used?
The Prime Minister
The right hon. Gentleman is completely right. We need to make it absolutely clear to Russia that as a result of this ill-conceived and disastrous venture in Ukraine, Putin’s country will end up, as I said, poorer, more encircled by NATO, engaged in a disastrous conflict with fellow Slavs and as a pariah state. That is what President Putin is willing on his people: a pariah state—that is what it will become.
David Morris (Morecambe and Lunesdale) (Con)
There is more at stake than just sanctions; we have various international protocols that have been drafted literally over decades, going back to the last war. Where does this incursion into Ukraine leave us with those protocols and how can we enforce any further measures against any breaches of them?
The Prime Minister
My hon. Friend is completely right, because this action tears up the 1994 Budapest memorandum. It makes an absolute nonsense of the whole Minsk process—the agreement of 2014. That is ripped up, too. International law has been mocked by what President Putin has done, and that is what is at stake: democracy and the rule of law across the world.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Putin last night confirmed that he is a ruthless imperialist posed to destroy Ukraine’s sovereignty and self-determination. I, too, am grateful for the briefing from the National Security Adviser. We must now hit Putin where it hurts. As of this morning, BP’s website proudly proclaims that it is
“one of the biggest foreign investors in Russia”,
owning nearly 20% of Russia’s oil giant, Rosneft. Rosneft also has a secondary holding in London. Will the Prime Minister commit to imposing legally mandated divestment by UK firms in Russia, and if not now, when?
The Prime Minister
We have to recognise the lesson of 2014, which is that we have to move away from a dependence on Russian hydrocarbons, and the Government will pursue policies to that end.
Richard Drax (South Dorset) (Con)
I congratulate my right hon. Friend and the Defence Secretary on their brilliant work at this very difficult time. Mr Putin is a bully, and bullies recognise only one thing: military force. If we are to fight for the freedom that we claim to hold so dear, we have to pay to defend it. Will my right hon. Friend go back to the EU and NATO, in particular, and say that we have to raise our spending budgets to at least 3% to have more planes, more ships and more men to deter Russia and not to wage war, but to prevent one from happening?
The Prime Minister
My hon. Friend is completely right. The British Government are continually exhorting our European friends to exceed the 2% threshold. It would be a great thing if we could get some of them up to 2%, never mind 3%.
Mr Kevan Jones (North Durham) (Lab)
I thank the Prime Minister for his statement and welcome the sanctions against the three individuals that he has named. However, the regulations that he referred to, which will be discussed later today, will be effective only if there is the political will to implement them. Proposed new regulation 6(4) of the Russia (Sanctions) (EU Exit) Regulations 2019 defines an individual as being
“involved in obtaining a benefit from or supporting the Government of Russia”.
The right hon. Member for Dundee East (Stewart Hosie) said—and this is a fact—that oligarchs who are operating in this country with property are supporting the Russian Government financially and politically. Will we bring sanctions against those individuals? The Prime Minister named Abramovich, but he is one of many.
The Prime Minister
Yes. We will target any individual or company of strategic importance to Russia.
Sir Robert Buckland (South Swindon) (Con)
I warmly welcome my right hon. Friend’s statement and I commend the west for seeing through the Orwellian doublespeak of Putin and his cronies. I agree with my right hon. Friend about a staged approach to sanctions, but now that we have an incursion into Donetsk and Luhansk, is not the next stage to demand an immediate withdrawal by Russia from those regions? If there is not one, further sanctions must follow as a direct consequence.
The Prime Minister
Yes; my right hon. and learned Friend is completely right. There should be an immediate withdrawal by Russia. I wish I could be confident that that will happen, but I am afraid that all the omens are pointing in the opposite direction, and I think that the House will need to consider a much bigger package of sanctions and further measures of all kinds.
Nadia Whittome (Nottingham East) (Lab)
The Polish Government have said that they must be prepared to accept up to 1 million refugees displaced by conflict or fleeing for fear of persecution, yet last week, when our Foreign Secretary was asked about accepting Ukrainian refugees, she said that
“we can’t make any commitments about any refugees at this stage.”
Amid conflict, we must always put direct support for people first, so will the Government commit today to accepting all Ukrainian refugees who wish to come to the UK as well as those persecuted in Russia for their resistance to war and Putin’s regime?
The Prime Minister
I thank the hon. Lady very much for her question. We are helping the countries that are directly vulnerable to an exodus of refugees from Ukraine. We have put another 1,000 troops on stand-by, and this country will continue to do what it has always done and receive those who are fleeing in fear of persecution. That is what we will do.
Jeremy Hunt (South West Surrey) (Con)
I strongly support the robust approach that my right hon. Friend has taken, and that indeed he took as Foreign Secretary, but Putin will have predicted and discounted western sanctions long ago. Does my right hon. Friend agree that if we are not to be behind in the diplomatic chess game, we need to do some things that Putin is not expecting? First, we need a sustained increase in western defence capability and spend. Secondly, we need a sustained reduction in the ability of the Russian state to finance its own armed forces. We need economic and financial sanctions that last not just until the next Government decide to have a reset, but if necessary for as long as this dangerous man remains President of Russia.
The Prime Minister
We have seen a 10% increase in defence spending in this country, and we will sustain that increase in defence spending. My right hon. Friend is absolutely right about the financing of Putin’s armed forces; the tragedy is that they have been financed from the proceeds of the sale of Russian oil and gas to western European nations. That is what has got to end.
Caroline Lucas (Brighton, Pavilion) (Green)
It is vital to stand in solidarity with Ukraine, in the face of outrageous Russian aggression, with robust, far-reaching sanctions and by closing down London’s money laundering machine now. Frankly, sanctions on five banks and three oligarchs are not anywhere near enough.
We must also recognise the extent of Russian meddling in our own politics. Will the Prime Minister stop studiously ignoring the Intelligence and Security Committee’s “Russia” report, which found credible evidence of attempts to interfere with the UK’s election processes? Will he finally commit to an independent and comprehensive investigation?
The Prime Minister
We are going further than the “Russia” report in implementing sanctions against Russia. Of course we will do anything to root out any foreign influence in any UK election, but I am not aware of any.
Shailesh Vara (North West Cambridgeshire) (Con)
I welcome the Prime Minister’s statement. Tough sanctions require tough compliance. He said that UK individuals and entities should not have any dealings with the banks and Russian individuals that he mentioned. Will he therefore give this House an assurance that for any UK individuals or institutions who have dealings with such banks and individuals, there will be the severest of penalties?
The Prime Minister
Yes, indeed. Those who abet sanctioned people, help them to evade anti-money laundering provisions or help them to conceal beneficial interests will of course be breaking the law themselves.
Mr Ben Bradshaw (Exeter) (Lab)
The three oligarchs whom the Prime Minister has sanctioned today have been sanctioned by the United States for four years. We need to do better than that. Will the Prime Minister re-examine the operation of unexplained wealth orders, not a single one of which has been issued since he became Prime Minister? Will he publish a list of all the Russians who have obtained fast-track visas for residency, as he referred to earlier, by giving cash to the UK Exchequer?
The Prime Minister
The National Crime Agency is pursuing many investigations against people, on unexplained wealth orders. On the right hon. Gentleman’s point about visas, we are stopping tier 1 visas from Russia.
Mr Mark Harper (Forest of Dean) (Con)
May I press the Prime Minister a little on his answer to the right hon. Member for Leeds Central (Hilary Benn)? I welcome the Prime Minister’s statement, its robust approach and his confirmation that what President Putin has done amounts to an invasion of Ukraine, with the necessary measures that follow. In answer to the right hon. Gentleman, however, the Prime Minister seemed to suggest that if what Vladimir Putin has done is limited to these alleged breakaway republics, that is a line, and he has to do something else to trigger further sanctions. Will the Prime Minister confirm that what President Putin has already done means that we will follow up with further and stronger measures even if he does no more?
The Prime Minister
I think that it is inevitable, given what is happening in Ukraine and on the borders of Ukraine, that we will be coming forward with a much bigger package of sanctions. What we have today is an opening barrage that we are doing in common with our friends and allies.
Dan Jarvis (Barnsley Central) (Lab)
The Prime Minister’s focus will rightly be on the here and now, but when he finds a moment to reflect on the recent failures in Afghanistan and the overwhelmingly clear fact that Russia was, is and will continue to be the greatest threat to peace and security in Europe, I wonder whether he might conclude that the Indo-Pacific tilt, as outlined in the integrated review, will need to be reassessed.
The Prime Minister
I am glad that the hon. Gentleman brings up the integrated review. He will see that very early on in it we say clearly that the Euro-Atlantic theatre is our No. 1 issue of concern.
Mr John Baron (Basildon and Billericay) (Con)
I welcome the statement and commend the Prime Minister and his Government on their robust approach, but I hope that he will take away from today’s exchanges the strong cross-party support for tougher sanctions now, because they are what is needed. Given the Russian invasion of Ukraine and the fact that we have now entered a new era in the battle for democracy globally, will he now consider a substantial and sustained increase in defence spending, well above the 2.4% that is required to ensure stability and peace in our time? Jaw-jaw, if indeed there is room for it in future, will be more effective with stronger armed forces.
The Prime Minister
I am proud of the very substantial uplift that we have been able to provide in our defence spending. We are the fastest-growing economy in the G7 as a result of the measures that this Government have taken. I am confident that we will be able to continue to give our armed forces the investment that they need.
Sarah Champion (Rotherham) (Lab)
Ukraine has been experiencing conflict since 2014, which has created a crisis of 2.9 million people in need. Will the Prime Minister please confirm that the UK stands ready to work with the Government of Ukraine and with international partners in providing humanitarian assistance should the conflict be exacerbated?
John Howell (Henley) (Con)
I welcome my right hon. Friend’s statement. I am calling today for the suspension of Russia from the Council of Europe. It cannot be right for a country to have violated the human rights of another member of the Council of Europe so profoundly. Will he support my actions?
The Prime Minister
I thank my hon. Friend for everything that he does in the Council of Europe and for the robust positions that he takes in that body. I wholeheartedly support what he has just said.
Stewart Malcolm McDonald (Glasgow South) (SNP)
Russian disinformation networks, including RT—the Leader of Opposition makes the right call on RT’s licence—are critical not just to justifying Russia’s aggression internationally, but to maintaining it. How much longer will this country continue to pretend that outfits such as RT are some kind of benign equivalent of the World Service or France 24? They are not. It is time they went.
The Prime Minister
I think that the hon. Gentleman’s view will be widely shared, although perhaps not by everybody on the Opposition Benches, but we have an independent regulator of the media. We do not live in a country where politicians can close down media outlets. It is up to Ofcom to rule.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
Following on from the question of my hon. Friend the Member for Henley (John Howell), the Prime Minister is well aware that I am a group leader in the Council of Europe. Our group has Ukrainians who are now under threat, and whose families are under threat. They will be on the list that the US has now given, with—dare I say it—intelligence on what will happen to them. We must stand by those democrats. They are good people. I have worked with them for 10 years and have nothing but praise for them. Does the Prime Minister agree that the Council of Europe and other such organisations need to stand up for democracy and stand up for democrats?
The Prime Minister
Yes. I thank my hon. Friend for everything that he is doing in the Council of Europe. We should stand by democratic Ukrainian politicians. We all know them; we have all met them. All they want to do is live in peace and freedom, and we should work together to ensure that they can.
Alison McGovern (Wirral South) (Lab)
Many Syrians will know that the continuation of Putin’s aggression was not only predictable, but predicted on both sides of this House. Does the Prime Minister agree that, as was true in relation to Syria, the only response to aggression is co-ordinated international resolve matched by every possible action at home, including each of the actions explained by the Leader of the Opposition?
The Prime Minister
I think the lesson from Syria is that it is not possible to will the end of a regime without being willing to will the means. That is what this Government are prepared to do, and if that is what the Leader of the Opposition is now committing Labour to, so much the better.
Mark Pritchard (The Wrekin) (Con)
Ukraine is not NATO’s border yet; it is not the EU’s border yet; but it is democracy’s border today. As you will know, Mr Speaker, having met the Ukrainian President some months ago here, the House stands in full solidarity with our counterparts in the Rada and the people of Ukraine, including the people of Donetsk and Luhansk.
The Prime Minister mentioned NATO members. May I ask him what further reassurance and practical support we can give NATO members such as Poland and the Baltic states, which today are just a little bit more fearful?
The Prime Minister
My hon. Friend is right to draw attention to the Baltic states and Poland. As he knows, in Poland we have increased our support with another 350 Royal Marines from 45 Commando, and in Estonia we have doubled our presence in Tapa to 2,000. We are doing more in the high north, as well as in Romania and elsewhere, and we will continue to keep all these projects under constant review, but we and other European countries are stiffening the eastern frontier of NATO.
Layla Moran (Oxford West and Abingdon) (LD)
Five banks and three of Putin’s cronies are being sanctioned, but two of those have already been sanctioned by the United States. This is not us working in concert—this is us already behind. The Prime Minister has said that there will be more sanctions to come, so can he be clear with us: what is the trigger?
The Prime Minister
I think it inevitable that there will be more sanctions to come, because I am afraid I think it inevitable that Vladimir Putin will continue his flagrant violation of international law. What we are doing today is the first barrage that we are orchestrating in concert with our friends and partners, while keeping something in reserve, because there must still be the possibility that we can avert a hideous outbreak of bloodshed in Ukraine.
Mr Peter Bone (Wellingborough) (Con)
The Prime Minister is right to say that Ukraine has been invaded by Russia. I think that Members on both sides of the House were expecting stronger sanctions to be announced today, and I think that perhaps that is what the Government wanted to do, but the Prime Minister said that he had to move in lockstep with our other allies. Was there resistance from other allies to the introduction of full sanctions today?
The Prime Minister
Different countries have different priorities and considerations. It is considerably easier for us to impose economic sanctions, and it is difficult for some other countries to impose sanctions to block hydrocarbons, but I am very pleased by the progress that the German Government have made.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
This is a day of infamy in Russian history, but the truth is that we are here today because our strategy of deterrence has failed. President Putin has built an arsenal of kleptocracy—he perverts history for his pretexts, and he perverts science for his weapons—but the risk is that today’s slap on the wrist will not deter him from doing anything further. Apart from the Magnitsky sanctions, sanctions for economic crimes have not been proposed since 2014; the oligarchs listed have been sanctioned by the Americans since 2018; and missing from the list were VTB, VEB, Alfa and Sberbank. The Prime Minister has to recognise that pulling our punches does not work with President Putin. We need to punch harder, and if we are not prepared to send bombers, we should at least take on the bankers.
The Prime Minister
We certainly are taking on the bankers. We are hitting Russia’s financial interests, and we will continue to hit them harder.
Michael Fabricant (Lichfield) (Con)
Eighty-five years ago, a predecessor of the Prime Minister talked about “a quarrel in a faraway country between people of whom we know nothing”. Does not the concordance between both sides of the House today demonstrate that that is not the case when it comes to Ukraine?
The Prime Minister
My hon. Friend is so right. I think that everyone who knows people in the Ukrainian community in Britain, which is so large and so active and makes such a fantastic contribution to our life, feels a huge amount of sympathy for the people of Ukraine today. This is a country with which we have familiarity and which we understand. It is a country that is a democracy and shares our values. That is what is at stake today.
Jim Shannon (Strangford) (DUP)
I thank the Prime Minister for his statement, and for all he has said today. As we have woken to the disturbing news of Russian aggression, does he not agree that economic sanctions, while welcome, will not be enough? Is he prepared to underline the steps that have been taken with NATO allies to assess the situation and to stress that membership of NATO is not a prerequisite for us in the United Kingdom of Great Britain and Northern Ireland to support democracy in whatever way is deemed necessary?
The Prime Minister
The hon. Gentleman is right: it is up to the people of Ukraine to decide what alliance they aspire to join. NATO’s open-door policy should remain absolutely inviolate.
Robert Halfon (Harlow) (Con)
I strongly support the Government’s approach. As my hon. Friend the Member for Lichfield (Michael Fabricant) said, this is not a faraway country of which we know nothing. However, may I ask what assessment the Government have made of the impact of the war on energy prices and oil prices, and the subsequent impact on people at home? What measures can they introduce to mitigate those factors, given that, as we know, the war is likely to increase the cost of living for ordinary folk throughout the country?
The Prime Minister
My right hon. Friend is right: one of the risks of Putin’s venture is that there could be a spike in gas and oil prices. We in the Government will do everything we can to mitigate that and to help the people of this country, but it is one of the reasons why the whole of western Europe must end its dependence on Russian oil and gas.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
May I ask the Prime Minister to place on record his respect and admiration for those brave men and women, the OSCE monitors who for eight years have been on the border with Ukraine and who now face an impossible position, with a democratic member state under attack from a fellow member state? May I also ask whether he can predict where we will be by July, when we speak as a member of the UK delegation to the OSCE Parliamentary Assembly? We will be the host nation at the big jamboree in Birmingham. Two of the Russian delegates are on our sanctions list. If not now, when? The Prime Minister needs to act.
The Prime Minister
I thank the hon. Lady very much for what she is doing with the OSCE and the monitoring operation. I have met members of the OSCE monitoring unit, and I think they do an amazing job. Sadly, because of the threat and the duty of care that we have to them, we have asked them to step back temporarily. Let us hope we are in a better position by July—let us hope—but at the moment things are not looking good.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I strongly welcome my right hon. Friend’s resolute and clear-sighted statement. Does he agree that one of the things that Putin is looking for at the moment is any hint or sign of division or variance among members of the western alliance, and that it is therefore important right now to invest the time to go the extra mile and ensure that our allies, across Europe and including America, speak with one voice in the same way that we have spoken with one voice from the House this afternoon?
The Prime Minister
I thank my right hon. Friend for what he has said. There has been a lot of commentary today about whether we should have gone further and gone with the whole package of sanctions unilaterally today, but one of the reasons we wanted to work in lockstep with our friends was to reinforce that message of unity and resolve in the west.
Stephen Farry (North Down) (Alliance)
I do think it is the majority view in the House that the Government should be going further today on the level of sanctions, but may I press the Prime Minister on the issue of refugees? In the event of further Russian aggression in Ukraine, we are likely to see a surge. Can the Prime Minister assure me that that will not be left purely to the neighbouring countries of eastern Europe and that there will be a genuine effort throughout Europe, including the UK, to provide assistance—including assistance here—and that there is proper contingency planning in Whitehall as well as consultation with our allies?
The Prime Minister
The best way to avoid a refugee crisis is for President Putin to de-escalate, and the best way to get him to de-escalate is for the west to be united. That is why we are implementing the package of sanctions that I have described, together with our friends.
Mr John Whittingdale (Maldon) (Con)
Is my right hon. Friend aware that just eight years ago this month 100 Ukrainian citizens died under sniper fire in the Maidan protest against the pro-Russian corrupt Administration of Viktor Yanukovych? Does he agree that the courage and the willingness of Ukrainians to give their lives in the fight for freedom and democracy in their country demonstrates that any further invasion is bound to lead to horrendous bloodshed on both sides?
The Prime Minister
My right hon. Friend is right. Since those demonstrations, 14,000 Ukrainians have died fighting for their freedom. He knows that country well, and he knows that it will continue to defend itself and fight for liberty.
Mr Clive Betts (Sheffield South East) (Lab)
The simple truth is that whatever else Putin does in the next few days he has already invaded another sovereign country. The Prime Minister has spoken about this being a first round of sanctions with potentially more to follow. Can we be absolutely clear that that further round of sanctions is not dependent on Putin going into western Ukraine and attacking there, that it is simply a matter of trying to co-ordinate with our allies on this and that we can expect that further round of sanctions in the next few days?
The Prime Minister
Just to be absolutely clear, I know that the House wants us to hit Putin with absolutely everything that we have today, but what we want to do is prioritise unity among the alliance and among our friends and work in lockstep with them. There will be more to come.
Craig Whittaker (Calder Valley) (Con)
I welcome the statement from my right hon. Friend, because sanctions from countries all around the world will without question hurt Russia. However, given the events overnight, Russia appears to feel that this is a price worth paying. Will my right hon. Friend confirm that, with increased deployments to Poland, Estonia and Cyprus, we will do whatever is necessary—including militarily, if needed—to support NATO and our friends in Ukraine as this crisis develops?
The Prime Minister
Yes of course we will, because what is at stake is not just the future of Ukraine but our principles and our values.
Mr Toby Perkins (Chesterfield) (Lab)
I come back to the questions asked by my hon. Friend the Member for Sheffield South East (Mr Betts) and the right hon. and learned Member for South Swindon (Sir Robert Buckland). The Prime Minister has been resolute about how wrong President Putin is in the actions he has taken, but it feels as though the message President Putin will be hearing from us is that the incursions that have gone on so far have had a proportionate response and that nothing else will happen unless he goes further. The Prime Minister is already speaking about an expectation that he will go further. Should we not instead say that further sanctions will be coming unless we get a withdrawal of the invasions that have already taken place? Should not that be the message that he takes from this House, given that there is clearly widespread support for it?
The Prime Minister
Of course. I want to be clear that the reason we are doing it in this way is because I think that the unity of the west is the priority.
Jason McCartney (Colne Valley) (Con)
I am proud to represent a vibrant Ukrainian community across Huddersfield and my own constituency. I know that, as we speak here today, they will be deeply fearful for the safety and democratic freedoms of their friends and families back in Ukraine. Will the Prime Minister commit to unleashing the toughest possible sanctions on Russia and continue to support our NATO allies militarily in eastern Europe?
The Prime Minister
Yes, I can certainly make that commitment, and I know that that has the support of the whole House.
Cat Smith (Lancaster and Fleetwood) (Lab)
The Prime Minister is right when he says that democracy is at stake, including our democracy. The Intelligence and Security Committee’s Russia report sets out the challenge clearly. Can I ask the Prime Minister specifically what he proposes to bring forward to ensure that Putin’s dirty money is not filling the pockets of UK political parties?
The Prime Minister
As the hon. Lady knows, you cannot give money to UK political parties if you are a foreign national.
Mike Wood (Dudley South) (Con)
Without the courage and ambition of Franklin Roosevelt’s lend-lease programme, Britain and the Soviet Union might not have been able to resist Nazi aggression in 1941. Can the Ukrainian people depend on the United Kingdom and our allies in Europe and north America to provide similar extensive support so that they might be able to resist further Russian aggression?
The Prime Minister
Yes, and in every conversation I have had in the last few weeks and months about Ukraine, we have focused on this issue of supporting the Ukrainian economy. One of the reasons that Volodymyr Zelensky has been so reluctant to accept the idea of even the possibility of an invasion is precisely because of the threat to Ukrainian economic stability. We must shore up that country, and that is why I announced a further $500 million of support today from the UK Government.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thank the Foreign Office and the Minister for Europe and North America for helping me last week when my constituents Alice Wood and Ben Garratt were stuck in Ukraine and needed to get back with their baby son Raphael and were issued with emergency travel documents. Following on from that, can I ask the Prime Minister whether he has made an assessment of the safety of British nationals who are stuck in Ukraine and whether he will relax immigration laws and expedite visa applications to ensure that they can return home safely if they wish to do so?
The Prime Minister
I am glad that the FCDO was able to help out. We have a dedicated helpline for family members and anybody who is concerned. I think there are about 1,100 currently still in Ukraine, and there is a helpline that people should ring. I will read out the number. It is 01908 516666. There you go!
Alun Cairns (Vale of Glamorgan) (Con)
I pay tribute to the Prime Minister for the robust steps he has taken and for the co-ordinating role that he is playing across the western world. Does he agree that last night’s events should be seen in the context of Crimea, Salisbury and cyber-attacks as well as of the threat of gas supply restrictions? Can he reassure us that he will continue to play a co-ordinating role to ensure that the western world is absolutely as one in its response?
The Prime Minister
Absolutely. We already have a huge range of sanctions. I think that there are 275 Russian individuals who are already sanctioned, including many of those who were responsible for or linked with the Salisbury poisonings, the illegal activity in Chechnya, the poisoning of Alexei Navalny and other episodes.
Christian Matheson (City of Chester) (Lab)
I welcome the Prime Minister’s statement, but Russia is a mafia state and Putin is the godfather—the capo di tutti i capi. He will not change until his capi—his under-bosses—force him to change, and they will not do that until we pull the financial rug from under their feet. We are in a unique position to do that. If the Prime Minister is not willing to put further sanctions at the forefront now, will he at least confirm to the House that he has asked the relevant agencies to ensure that we are bang up to date on all Russian assets, not just dirty ones, so that we can put those sanctions on as soon as he decides to do so?
The Prime Minister
Yes we are, and we are in a position to impose considerable economic cost on Putin. The question is whether he will care enough about it, because he is plainly in an illogical and irrational frame of mind.
Nickie Aiken (Cities of London and Westminster) (Con)
I welcome my right hon. Friend’s statement, and his and this Government’s leadership in defending democracy and freedom and standing by our Ukrainian allies, showing what global Britain is all about. Sadly, my constituency is home to too much Russian dirty money and I welcome the further sanctions. As the children of Ukraine are set to suffer in fear of war, will my right hon. Friend consider whether the children of Russians connected to the Kremlin, who may be in schools in this country, should be sent home to Russia and not allowed to benefit from an education in this country?
The Prime Minister
I know that my hon. Friend shares my concern about beneficial ownership of properties in London, which we will now be exposing. I am grateful for her support for that. When it comes to children, maybe I am not quite there. The sins of the fathers—or indeed the mothers—should not be visited on their children, in my view.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
There is increasing nervousness about the risk of cyber-attacks from hostile states, particularly on our vital public services. Can the Prime Minister outline any additional protections the Government will put in place to ensure that our public services do not fall victim to Russian aggression?
The Prime Minister
The hon. Lady is completely right. One of the things that this House will have to consider in the weeks ahead, as we continue to lead the world in our support for Ukraine, is the blowback for this country. We must be absolutely frank that there will be cyber-attacks. We must understand that and be prepared for it, which is why we are investing massively in cyber-preparedness, with another £2.6 billion to help fortify our defences. As the House knows, there are many vulnerable parts of our system, and we must protect them.
Fay Jones (Brecon and Radnorshire) (Con)
I commend the Prime Minister’s statement. There are significant numbers of UK armed forces personnel in Estonia as part of Operation Cabrit, and I know that everyone in this House is enormously grateful to them for their work. I am reassured that we have already increased our forward presence in Estonia, but will my right hon. Friend confirm that he will continue to give our armed forces all the resource they might need over the coming weeks and months?
The Prime Minister
Yes, we certainly will. It was very good to talk to Prime Minister Kallas of Estonia the other day about Operation Cabrit and the UK troops at Tapa. She warmly welcomes them and the increase in their numbers, and she says that they are impeccably behaved—they are now, anyway.
Several hon. Members rose—
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
Three weeks ago, the Prime Minister said that sanctions would
“come down like a steel trap in the event of the first Russian toecap crossing into more sovereign Ukrainian territory.”
I wonder whether he will answer me and the First Minister of Scotland, who believe that it appears that they will not. If this is the first tranche, there need to be further tranches with much tougher action soon.
The Prime Minister
I am grateful to the hon. Gentleman for accurately reciting what I said, because that is what we are doing. We are now sanctioning them very heavily for what they are doing in Donbas, where Russian activity has long been present. Together with our friends and partners, we are going to bring forward further measures that I think will hit the Russian economy very hard. I understand the House’s desire to do everything on day one, but we should make sure that we work in unison with our friends and partners, because what Putin wants above all is to divide us, and in that he must not succeed.
Points of Order
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. I hope that the Prime Minister will stay for a brief moment, as this point of order relates to what he said about Roman Abramovich. [Interruption.] I do not think that it is a courtesy to the House when the Prime Minister leaves in that way.
The Prime Minister said that Roman Abramovich has been sanctioned. As I understand it, that is not true. I am sure that the Prime Minister was completely inadvertent in giving a false indication, but it would be helpful if he were able to correct the record. I wonder, Mr Speaker, whether you can make sure that he either does so or puts a letter in the Library to correct the record. These are important moments of fact.
Mr Speaker
As the hon. Gentleman knows, I am not responsible for the answers given by Ministers. Those sitting on the Government Front Bench have heard his point of order. If a correction is necessary, I am sure that it will be forthcoming, ASAP.
Rob Roberts (Delyn) (Ind)
On a point of order, Mr Speaker. On 11 February, the hon. Member for Cardiff Central (Jo Stevens) paid a visit to my constituency. Try as I might, I looked for notification but received none. I wonder whether you might be able to give some guidance on the appropriate protocol for such occasions. It is worth pointing out that, in the last couple of moments, I have just received an email from the hon. Lady to apologise for the administrative error. I wonder whether hon. Members might benefit from a reiteration of the proper protocol.
Mr Speaker
I think the problem has been sorted, for once, which makes my life so much easier. What I will say to hon. Members is that if you visit another Member’s constituency, please inform them of your visit.
Bill Presented
House of Lords (Retirement Age) Bill
Presentation and First Reading (Standing Order No. 57)
Jerome Mayhew presented a Bill to introduce a retirement age of 75 for members of the House of Lords; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 18 March, and to be printed (Bill 256).
Commonwealth Parliamentary Association (Status)
Tuesday 22nd February 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate Commonwealth Parliamentary Association (Status) (No. 2) Bill 2021-22 View all Commonwealth Parliamentary Association (Status) (No. 2) Bill 2021-22 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
I beg to move,
That leave be given to bring in a Bill to provide for corporate status of and for certain privileges and immunities to be accorded to the international inter-parliamentary organisation of national and sub-national legislatures of Commonwealth countries known as the Commonwealth Parliamentary Association and to its Secretary-General; and for connected purposes.
I declare an interest as chairman of the UK branch of the Commonwealth Parliamentary Association and as international vice-chairman and acting chairman.
I have been a Member of this House for 21 years. In all that time I cannot recall many ten-minute rule Bills ever becoming law, but I sincerely hope that this one will be different, and for several very good reasons. For a start, the Bill would cost the taxpayer absolutely nothing. In fact, it would probably save public money because the CPA and its London-based international operations already cost very little to run, as Mr Speaker knows.
The contributions of every participating Commonwealth Parliament keep the wheels turning. All 180 branches across the globe chip in with subscriptions that help to finance the work we do, and this work is of the utmost importance as it promotes parliamentary democracy—that is rather what we have just been talking about—and good governance. The motive is to improve the way decisions are taken throughout the Commonwealth.
The CPA runs an extensive range of programmes and activities. We run online courses, workshops, webinars and conferences, as well as publications, toolkits and handbooks. Our values are Commonwealth-centred and seek to uphold the highest principles that the Commonwealth promotes. We are here to mentor and to teach. We offer world-class research and library facilities, and our ethos is to improve and nurture proper understanding of the way things can be done within a parliamentary system.
We are in business to build a wide-ranging perception of parliamentary democracy that recognises every national context and is totally non-partisan and non-exclusive. Through its many different programmes, the CPA sets out to capture the diverse experience of parliamentary democracies across the Commonwealth.
We are talking about a community of 2.4 billion people all over the planet. The Parliaments they elect are frequently young, so the CPA’s focus and ethos seeks to engage young people in a positive way. We have encouraged the sharing of ideas for 110 years, and we recognise the diverse challenges that many Commonwealth jurisdictions face. All our work seeks to strengthen what individual member Parliaments can do. Above all, we are in the business of dialogue at national, regional and pan-Commonwealth levels.
For that reason, the nature of the CPA’s status in law really matters. Increasingly, we operate rather like a non-governmental organisation. Our voice is listened to at the highest levels throughout the Commonwealth, but there remains one legal peculiarity that the Bill seeks to cure. By a curious quirk of tradition, the CPA still qualifies as a charity. When the organisation was founded 110 years ago, it was granted charitable status. Perhaps there was a compelling reason at the time, but as the years have passed and the old empire gave way to the new, young Commonwealth, a growing mood of concern began to spread among CPA members about what it means to be a charity.
For example, questions have been raised about whether it is right that taxpayers’ money from low and middle-income countries should continue to be sent to a UK charity. That is perhaps an arguable point, but it is important. In the spirit of doing what the Commonwealth tries so hard to do, it would be much better if any such argument were removed. Achieving that requires a legal change, with a Bill such as this being adopted and put on the statute book.
I do not believe there is any reason to doubt that such a measure would command widespread, if not overwhelming, support in this House and the other place. The Bill is simple and straightforward, and I believe it enjoys the support of both Houses. The CPA seeks a legal status in UK law that is similar to the one enjoyed by comparable organisations such as the Parliamentary Assembly of La Francophonie. As a group of parliamentary nations that share the French language—a long list of places such as Belgium, Canada, Belize and Cambodia—it is a mini Gallic Commonwealth. Such simple legal recognition would enable the CPA to have yet more positive influence. I do not think that is much to ask.
I am delighted that the former Lord Speaker, Baroness D’Souza, has already introduced a similar measure in the other place. The enthusiasm for change unites all the parties throughout our Parliament. Mr Speaker has been an enormous advocate for what we are trying to achieve and has been helpful in every way.
This would also be a fitting tribute to the patron of the Commonwealth Parliamentary Association, Her Majesty the Queen. If ever such a measure were to be passed, it should be in this year of her jubilee. There is no greater supporter of Commonwealth ideals than the monarch. The respect in which she is held and the influence for good that she continues to wield are vital to the ongoing way the Commonwealth works.
I pay tribute to the Foreign Secretary, and to Ministers and shadow Ministers, for the work they have done to help us in this matter. Of course, there are a lot of things we need to do. Yesterday, I received a letter from the Minister who looks after the Commonwealth, which I will need to read carefully and digest as to any ramifications and things that we may have to address. I know that the Government are listening, and I hope that they will find a time and opportunity suitable to carry this Bill forward, so that we can change this situation. I therefore commend the Bill to the House.
Question put and agreed to.
Ordered,
That Mr Ian Liddell-Grainger, Julie Elliott, Andrew Rosindell, David Mundell, Bob Blackman, Mrs Maria Miller, Harriett Baldwin, Theo Clarke, Steve Brine, Sarah Champion, Chris Elmore and Dr Lisa Cameron present the Bill.
Mr Ian Liddell-Grainger accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 25 February, and to be printed (Bill 257).
Charities Bill [Lords]
Tuesday 22nd February 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate Charities Act 2022 View all Charities Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 January 2022 - (25 Jan 2022)
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)
I beg to move, That the Bill be now read the Third time.
This Bill will increase efficiency in the charities sector by reducing unnecessary administration and bureaucracy, therefore enabling more funds to be used for charitable purposes. It will simplify a number of processes and promote consistency in the law by implementing the majority of the recommendations set out in the Law Commission’s “Technical Issues in Charity Law” report.
There is no doubt that the work of charities touches almost every aspect of British civic life. They inspire, mobilise and unite people to help others, including the most vulnerable in society. Not only do charities provide us with opportunities to volunteer and donate to important causes, but they publish meaningful research to increase awareness of the challenges in society. There is no greater example of the strength of community than that to be found in our great network of charities—we have more than 165,000 registered in England and Wales alone. That is why it is so important for us to recognise some of the challenges faced by charities and bring in regulatory change that will enable them to continue to make a difference.
As charity law can be complex and bureaucratic, it often means that charities incur expensive legal costs, in turn giving them fewer resources and less time to focus on their charitable purposes. The Bill strikes a careful balance between tackling administrative frustrations and maintaining sufficient safeguards to protect charities and their donors. The Bill makes a number of important changes that will be of benefit to the sector. For example, it will simplify the process by which charities amend their governing documents and make it easier for charities to repurpose funds from a failed fundraising appeal.
The Bill also provides trustees with tools to make better use of their permanent endowment, and removes administrative burdens associated with land transactions and mergers. Trustees will also be able to apply for advanced assurance from the courts that the costs of litigation can be paid from a charity’s funds, rather than a charity being discouraged from seeking legal action because the costs would be borne by the trustees personally.
The Bill contains other measures, including some about changes to the names of charities. All these changes are balanced against the need for important safeguards, such as Charity Commission oversight, and will save charities the time and resources involved in having to negotiate through overly burdensome regulation. That is why I am pleased that this important Bill is completing its passage today.
I also recognise the need to give charities a clear timeline, alongside a staggered implementation period, so they are not overburdened by several changes at once. That is why we aim to phase in reforms over a 12 to 18-month period, to ensure that charities have time to prepare for implementation and can fully benefit from the changes. A phased implementation approach is also important for the Charity Commission. We will publish a more detailed implementation plan following Royal Assent. The aim of the Bill is to help charities carry out their purpose even more effectively.
I am honoured to have taken the Bill forward based on the proposals from the Law Commission, to which we are grateful. I must also extend my gratitude to my noble Friend Lord Hodgson of Astley Abbotts and to all those who have contributed to the Bill’s formation. That includes all of the leading experts who have provided input on the legal reforms. The Bill has been rigorously scrutinised and is the product of careful consideration and consultation. I would like to thank all right hon. and hon. Members for their contributions, support and interest in the Bill. I am also thankful to the members of the Second Reading Committee and the Public Bill Committee, who provided support and scrutiny, and in particular the Chairs, my hon. Friend the Member for South West Devon (Sir Gary Streeter) and the hon. Member for Halton (Derek Twigg). I am also grateful to the Opposition, across both Houses, for giving the Bill due consideration and scrutiny, and I am glad we have support from the charities sector, which has been reflected well across the House.
Finally, I wish to put on record my thanks to all those who have carried out exceptional work to enable the Bill to reach its final stages: colleagues from the Law Commission, the Charity Commission, parliamentary counsel, the Department for Digital, Culture, Media and Sport’s policy and legal teams, my private office, and all the parliamentary staff and co-ordinators. I now look forward to seeing the Bill’s successful implementation. I commend the Bill to the House.
Jeff Smith (Manchester, Withington) (Lab)
I thank the Minister for his introduction. The Opposition are proud to support our charity sector, which does such fantastic work for individuals, communities and society. The contribution of charities to our society could not have been shown more clearly than during the coronavirus pandemic, as organisations and volunteers have done fantastic work to support vulnerable people around the country. We owe it to them to provide a legal and operational framework that is clear, efficient and manageable, especially for the large number of small charities with limited staff and resources, and that allows them to concentrate not on bureaucratic technicalities but on doing their work. During the passage of this Bill there has been agreement on all sides that the new measures detailed in it are important progress towards allowing charities to amend the ways they operate and making it easier for them to achieve their core purpose.
The Bill seeks to make a series of changes that will make it easier for charities to navigate the law and carry out their functions effectively, while retaining important safeguards. So the Opposition are pleased today to support the Bill, which takes on board the large majority of recommendations put forward in the Law Commission’s report and makes a number of significant changes for charities. It reduces red tape, including by making it easier for charities to amend their governing documents, such as through small changes to charitable purposes; and by making it easier to dispose of land efficiently, to use the resources of the charity more effectively and to avoid disputes over whether a trustee has been correctly appointed or elected.
I do not intend to detain the House for long, but I do wish to thank the Law Commission and the charity sector for their great work on the Bill. I thank the Lords for their careful scrutiny of what is quite a technical and involved Bill: they did a great job of scrutinising the measures in the other place. I am also grateful for the Minister’s engagement and particularly for his writing to me yesterday to set out an indicative timescale for the implementation of the measures in the Bill. I look forward to more detail on the implementation plan as it comes forward. With that, I am happy to offer the Opposition’s support on Third Reading.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
Public Service Pensions and Judicial Offices Bill [Lords] (Programme) (No. 2)
Ordered,
That the Order of 5 January 2022 (Public Service Pensions and Judicial Offices Bill [Lords] (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the motion for this Order.—(Mr Simon Clarke.)
Public Service Pensions and Judicial Offices Bill [Lords]
Tuesday 22nd February 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate Public Service Pensions and Judicial Offices Act 2022 View all Public Service Pensions and Judicial Offices Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 22 February 2022 - large print - (22 Feb 2022)
16:07 - The House divided: - Ayes: 299 / Noes: 81 - Question accordingly agreed to.
16:21 - The House divided: - Ayes: 198 / Noes: 301 - Question accordingly negatived.
The Chief Secretary to the Treasury (Mr Simon Clarke)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
New clause 1—Guidance to public service pension scheme managers on investment decisions—
“(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) In schedule 3, paragraph 12(a), at end insert ‘including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy’.”
This new clause would enable the Secretary of State to issue guidance to those authorities that administer public sector pension schemes, including the local government pension scheme, that they may not make investment decisions that conflict with the UK’s foreign and defence policy.
New clause 2—Investment decisions in funded schemes—
“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) After sub-paragraph (3) insert—
‘(3A) Scheme regulations must require an authority’s investment strategy to ensure that investment decisions are consistent with the Glasgow Climate Pact 2021.’”
This new clause would require public sector pensions schemes to ensure future investments are consistent with the climate science, ambitions and timeframes agreed at the COP26 UN Climate Summit.
New clause 3—Investment decisions in funded schemes: fossil fuel assets—
“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) After sub-paragraph (3) insert—
‘(3A) Scheme regulations must require the fund to have removed all investment in fossil fuel assets by 2030.’”
This new clause would require public sector pensions schemes to disinvest from fossil fuels by 2030, by removing fossil fuel assets from their investment portfolios, securities transactions and balance sheets.
New clause 4—Review of the impact of this Act on fairness—
“(1) The Chancellor of the Exchequer must commission a review of the impact of this Act on fairness to members in receipt of pensions to which this Part applies.
(2) The Chancellor of the Exchequer must prepare and publish a report on this review within six months of the passage of this Act and must lay a copy of the report before Parliament.
(3) The review under subsection (1) must include an assessment of the impact of the provisions of this Act on women.
(4) The review under subsection (1) must make recommendations as to whether further legislation should be brought forward by the Government to close the public service pensions gap between men and women.”
This new clause would require the Government to report on the impact of this Part on fairness, especially with regards to women.
New clause 5—Guidance—
“(1) Within six months of the passage of this Act the Chancellor of the Exchequer must lay before Parliament a copy of guidance to members of pension schemes affected by this Part.
(2) The purpose of the guidance under subsection (1) is to ensure members are able to make informed choices about their pensions.
(3) The Government must provide a free helpline or online service which members can use to receive further guidance about their pension.
(4) Within six months of the day on which the guidance is published the Government must lay before Parliament a report on its effectiveness in achieving the purpose in subsection (2).”
This new clause would require the Government to publish guidance to members of pension schemes affected by this Part and allows for provision of a helpline or online service to offer further assistance.
New clause 6—Impact on the recruitment of new holders of judicial offices—
“(1) Within 12 months of the passage of this Act the Government must commission an evaluation of the impact of this Act on recruitment of new holders of judicial offices and on the diversity of the judiciary.
(2) The Chancellor of the Exchequer must prepare and publish a report on this evaluation and must lay a copy of the report before Parliament.”
This new clause would require the Government to publish an annual update on progress on recruiting new members to the judiciary and increasing diversity.
New clause 8—Compensation of losses incurred by closure of legacy schemes—
“(1) The Chancellor of the Exchequer must review how a loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—
(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, and
(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme
could be compensated.
(2) The Chancellor of the Exchequer must prepare and publish a report on this review within two months of the passage of this Act and must lay a copy of the report before Parliament.”
This new clause would require the Government to review how losses arising from the “pension trap” could be compensated, and to report on the review within two months of the passage of the Act.
New clause 9—Equality impact analysis of provisions of this Act—
“(1) The Chancellor of the Exchequer must review the equality impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passage of this Act.
(2) A review under this section must consider the impact of those provisions on—
(a) people with protected characteristics (within the meaning of the Equality Act 2010), and
(b) the Government’s compliance with the public sector equality duty under section 149 of the Equality Act 2010.
(3) A review under this section must include a separate analysis of each separate measure in the Act, and must also consider the cumulative impact of the Act as a whole.”
This new clause would require the Government to review the equality impact of the provisions of this Act, and to report on the review within six months of the passage of the Act.
New clause 10—Report on losses incurred by closure of legacy schemes—
“The Chancellor of the Exchequer must consult with the relevant trade unions and other bodies representing pension scheme members and report within 6 months of the passage of this Act on the options available for addressing in a non-discriminatory manner any loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—
(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, but
(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme.”
This new clause would require the Government to consult with the trade unions and other bodies representing members of the pension schemes who are affected by the “pensions trap” and to report on the options available to address this issue without causing discrimination.
Government amendments 1 to 17.
Amendment 24, in clause 92, page 67, line 39, leave out paragraph (c) and insert—
“(c) leave out paragraph (c).”
This amendment removes from the calculation of the employer cost cap the effect of changes in the cost of connected schemes, including the cost of rectifying the unlawful discrimination.
Amendment 22, page 67, line 39, leave out paragraphs (c) and (d).
This amendment removes from the Bill the amendment to Section 12 of the Public Service Pensions Act 2013 that would allow Treasury directions to determine whether the cost control mechanism would operate.
Amendment 23, page 70, line 27, leave out clause 93.
Government amendments 18 to 21.
Mr Clarke
It is a pleasure to open this debate. I wish briefly to remind Members why this is such an important piece of legislation that we must ensure we get right. Our public servants provide vital services on which we all rely and their unwavering commitment has been particularly vital during the covid pandemic. We have an obligation to continue to provide guaranteed pension benefits to reward those workers for their dedicated service, and must do so on a fairer basis and in a way that ensures that pensions are affordable and sustainable in future.
Let me turn to the amendments that I have tabled, which are largely technical ones to ensure the Bill works smoothly. New clause 7 makes it possible for the judicial pension scheme 2022 regulations to be subject to the made affirmative procedure rather than the draft affirmative procedure, which is the usual process for judicial scheme regulations. The Bill closes all current judicial pension schemes to future accrual on 31 March this year, so the change is necessary to ensure that the new pension scheme is in place for all judges on 1 April. There will therefore be no gap in judicial pension arrangements.
The provision in the new clause is an exceptional use of the made affirmative procedure in respect of judges’ pensions. It is limited to scheme regulations for the judiciary that are made within 28 days of Royal Assent, so it will be used only to make the judicial pension scheme 2022 regulations. It will not apply to any other public service pension schemes, which are generally made under the negative procedure, nor will it apply to any future amendments to judicial pension schemes.
The remainder of the amendments that I have tabled are minor and technical, with the aim of ensuring that the Bill is applied effectively and consistently. Amendment 19 relates to the commencement provision and simply ensures that different provisions in the Bill can come into force at the appropriate time.
Amendments 1 to 14 simply clarify the wording in various clauses in chapter 1. Together, the amendments give schemes the flexibility to implement the prospective and retrospective remedy in the way that is most efficient for their members.
Amendment 16 ensures that the remedy applies correctly to local government scheme members who were formerly members of other public service pension schemes. In particular, it makes sure that former members of other schemes are not disadvantaged because they previously participated in a scheme with a lower normal pension age.
Amendment 17 provides that the power under clause 81 for local government new scheme regulations to make provision regarding special cases must be exercised in accordance with Treasury directions issued by either Her Majesty’s Treasury or the Department of Finance in Northern Ireland.
On judicial offices, amendment 18 changes the extent of schedule 3 to ensure that if Welsh Ministers or the Department of Justice in Northern Ireland make subsequent changes to the list of devolved offices in schedule 3 using the power conferred on them by clause 125(1), incorrect text will not remain in statute in other parts of the United Kingdom.
Amendments 20 and 21 change a reference to the Special Educational Needs Tribunal for Wales to its new title, the Education Tribunal for Wales, thereby ensuring that a relevant sitting in retirement office is created in the Education Tribunal for Wales.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The pandemic has underlined the contribution made by the public sector workforce to this country. Public sector workers do so much to keep us all safe. Our brave doctors and nurses and those in the police, fire service and other public service professions deserve security and a high standard of living in retirement, so it is so important that the Government provide decent pensions on a fair and equal basis.
As the Minister knows, we welcome the Bill’s main provisions, and particularly the attempt to bring in a remedy in respect of the discrimination against younger members of the new pension schemes established by the coalition Government between 2014 and 2016. We also strongly support the introduction of reformed scheme-only design, which will mean that the cost of the legacy schemes will no longer be included in the cost control mechanism, along with the Government’s proposal to widen the margin of the cost corridor from 2% to 3% of pensionable pay. Those changes will provide greater certainty for members and for the taxpayer.
However, the Minister will not be surprised to hear that we have a number of concerns about the Bill. It is wide ranging and several Members have tabled amendments. I have a limited amount of time, so I will focus on the Opposition Front-Bench team’s primary concerns about the Bill and speak to the amendments that I have tabled on the Opposition’s behalf to address them.
First, I wish to highlight the concerns of public sector employees and trade unions about the lack of clarity on how the remedy, which I remind the House is estimated to cost around £17 billion, will impact the future value of members’ pension schemes. In the Committee debate on 27 January, the Minister stated that
“no member benefits will be cut and no member contribution rates will increase as a result of the 2016 valuations.”––[Official Report, Public Service Pensions and Judicial Offices Public Bill Committee, 27 January 2022; c. 10.]
That commitment is welcome but, as the TUC and others have said, it does not address the question of whether the remedy will be included in future valuations of the cost control mechanism.
Were the cost to be included at a later date, members could see their benefits cut and their contribution rates increase. I remind the House that the Public Accounts Committee warned that such an outcome would be fundamentally unjust as some of the cost of the Treasury’s £17 billion mistake would be passed on to members. Will the Minister please clarify whether the estimated £17 billion cost of the remedy will be included in the valuations of pension schemes under the cost control mechanism at some later date?
Secondly, I wish to discuss the Government’s proposal to introduce a so-called symmetrical economic check to the cost control mechanism. As the Minister will be aware, many public sector workers and their representative organisations believe that the proposals break the Treasury’s 25-year guarantee that no further fundamental reforms would be made to public service pensions following the 2011 settlement with trade unions. The Minister told us in Committee that
“the Government do not believe that the reforms breach that guarantee.”––[Official Report, Public Service Pensions and Judicial Offices Public Bill Committee, 27 January 2022; c. 36.]
However, I found a press statement issued by the Treasury on 20 December 2011 that makes it clear that the guarantee covered significant reform to the cost control mechanism, and the Paymaster General in the Conservative Government at the time said that it represented a “settlement for a generation”.
Does the Minister recognise that his Government’s proposal for an economic check risks undermining the Bill’s purported aim of restoring public service workers’ faith in their pension schemes? The National Education Union, the TUC and PRS have all warned that the proposals unfairly penalise pension scheme members for public sector pay constraint and lower-than-expected life expectancy. In practice, this will likely mean that any downwards breach of the cap will trigger the economic check. It seems the economic check is unfair, so will the Minister now accept that the Government must go back to the drawing board and rethink their proposals? I will be grateful if he addresses that issue.
Robert Jenrick (Newark) (Con)
I rise to speak to new clause 1, which is in my name. The new clause empowers the Secretary of State to issue guidance to authorities that administer public sector pensions schemes that they may not make investments that conflict with the United Kingdom’s foreign and defence policy.
The new clause will resolve a long-standing issue that arose out of the Public Service Pensions Act 2013 and the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016. The issue was whether the Secretary of State had, under their general power to issue guidance provided under the 2013 Act, the ability to guide those who administer pension schemes, particularly local government pension schemes, away from making investment decisions that were contrary to the United Kingdom’s foreign and defence policy.
In 2020, the Supreme Court found by a split decision that the 2013 Act did not confer on the Secretary of State the necessary power to issue that guidance. The purpose of the new clause is to change that by explicitly laying out in law the Secretary of State’s power to offer the guidance to administrators of pension schemes within the public sector, including the local government pension schemes, that investment decisions—by which I mean both investments into a position and divestments from a position—should not conflict with UK foreign and defence policy.
There are multiple reasons for doing that. First and foremost, public service pension schemes that are paid for by the taxpayer by one means or another and underwritten by the state are clearly the preserve of the UK Government and, as such, it is perfectly legitimate that the UK Government have a say in regulating how public pension schemes manage the money that is provided to them by we the taxpayers of the country.
Peter Grant (Glenrothes) (SNP)
May I just probe the right hon. Gentleman’s last point a wee bit? My bank account is stuffed full of what was previously taxpayers’ money. Neither I nor my wife have had any significant income for years that did not come one way or another from the taxpayer. Is he suggesting that the Government should have some say as to how the bank can invest my money to make sure that I get it back when I need it? Is he suggesting that the private pensions that I am lucky enough to have should be subject to Government direction as to where they do and do not invest?
Robert Jenrick
I shall come on in a moment to my own personal views with respect to boycott, divestment and sanctions, but this new clause has no bearing on the actions of private citizens. This is about public sector pension schemes. The broader issue, which I will mention in a moment with respect to tackling BDS within public institutions and the public sector, is all about the public sector; it is not about limiting the freedom of speech or action of the individual.
Robert Jenrick
I would like to make some progress, but I will give way.
Dr Offord
Is my right hon. Friend aware that, only this morning, Hertfordshire County Council was considering a petition submitted by individuals to ask it to divest from its pension scheme? Does he agree that it is the responsibility of elected representatives to ensure that pension schemes have the best and most profitable outcome to allow the members of that pension scheme to receive the best possible income?
Robert Jenrick
Yes, I do, and I will give some other examples of local authorities considering the same actions that my hon. Friend describes.
The argument that I wish to advance is that, for too long, we have seen public pension schemes pursue pseudo foreign policies.
Robert Jenrick
I will make a bit of progress and then I will return to the hon. Gentleman.
All too often, the foreign policy of these public pension schemes is, I am afraid, exclusively focused on re-writing the UK’s relationship with the world’s only Jewish state, Israel.
Christian Wakeford (Bury South) (Lab)
Will the right hon. Gentleman give way on that point?
Robert Jenrick
I will come back to the hon. Gentleman. I appreciate his interest.
The latest example of the politicisation of public pension schemes is by Wirral Council, which is currently considering realising almost £5 million-worth of investments in seven companies. This pet project of a small minority who seek to hijack the money of hard-working taxpayers for their own political ends is of no interest to the public pension scheme holders of the Wirral, or indeed, I suggest, to the public pension scheme holders and rate payers of Hertfordshire.
The politicisation of public sector pension schemes, such as that seen by Wirral Council, is also to the detriment of the UK Government’s relations with states abroad. Supreme Court Justices Lord Arden and Lord Sales established in their judgments that, because the schemes are managed by councils that are part of the machinery of the state, receive taxpayer funding and are underwritten by state regulation outlined in the 2013 Act, they are liable to be identified with the British state. It is perfectly reasonable for an individual, an organisation or a nation abroad to look to these decisions and believe that they are the British state’s intentions. It would be wrong that, owing to a minority of an extreme and well-organised clique, the UK Government’s relationship with an ally has the potential to be undermined. Ultimately, central Government must reclaim their constitutional responsibility for the conduct of the UK’s international affairs. It is for this House to be the place in which those decisions are debated, as I am sure we will see later today. Public service pension scheme trustees must return to their primary duty of achieving maximum returns for scheme members.
Andy Slaughter
The right hon. Gentleman said earlier that this is public money. He will be aware that the Supreme Court, in making a judgment on the previous guidance, specifically said that it is not public money when it is employee or employer contributions; it comes from the rightful employment of the employees themselves. Why does he think that his new clause is different from that? As he has gone on to the specifics, while I am not talking about BDS here, does he think there is a possibility that decisions on investments, say, in illegal settlements, which the Government advise against on economic grounds, could also be caught by his new clause?
Robert Jenrick
The hon. Gentleman makes an important point. The Supreme Court raised two central arguments. One was whether the 2013 Act explicitly gave the Secretary of State the power to issue guidance with respect to investment decisions that conflicted with UK foreign and defence policy. The second point that some Supreme Court Justices raised was whether it was within the remit of the Secretary of State to speak to all public service pension schemes, including those that are funded and unfunded, particularly the Local Government Pension Scheme.
This new clause explicitly provides the Secretary of State with the power to issue that guidance. Were it to pass, and were this ever to be litigated and reach that court, I expect that the Supreme Court Justices would see clearly the intention of this House, which is that the Secretary of State should be able to issue guidance and that that guidance should be applicable to all public service pension schemes. I hope that answers the hon. Gentleman’s point, which is an important one for us all to be clear on if the new clause is passed.
The new clause does nothing to stop private individuals making individual choices about their consumer habits. They remain at liberty to invest in or divest from, purchase from or boycott whichever companies they wish and for whatever reason they so choose. It does, however, make a distinction between the liberties of the private individual and the obligations of public bodies in receipt of public money, and it is grounded in the principle that public money should be spent in accordance with the wishes of the UK Government as expressed by this House.
Christian Wakeford
I am one of those fortunate Members who sit on a local pension board. One of the issues that is often feared, particularly by smaller Jewish communities, is that, rather than focusing on community cohesion, it is about bringing in foreign policy matters that often bring division, when they really want to be settled and to be able to progress and thrive within their local community. Does the right hon. Gentleman agree that the worst thing that could happen would be for the BDS movement to have a say within pension boards and pension funds, and that the best thing we could do is to accept this new clause and bring stability to Jewish communities across the country?
Robert Jenrick
I am grateful to the hon. Gentleman for his support for this new clause, as I am to all those hon. Members across the House who have indicated theirs, and for his long-standing interest in the issue. He makes an extremely important point.
Let me be clear: it should not be assumed that someone expressing their support for Palestine is antisemitic. Of course that is not the case. Many are genuinely moved by the cause of Palestinian statehood and are concerned at Israeli settlements and the actions of the Israeli Government. It is the policy of this Government to pursue a two-state solution. However, one does not have to look very hard to find a pattern of antisemitic behaviour in connection with campaigns promoting a boycott of Israel.
Successive studies have shown that the single best statistical predictor of anti- Jewish hostility is the amount of BDS activity, which comes as no surprise when one inspects the ethical inconsistency within the movement. Why does its concern for humanity, and for the welfare of Muslims in particular, expire at the Jordan river? The BDS movement is mute on neighbouring Jordan or Lebanon, where the Palestinian minority really are second-class citizens, and fell silent when thousands of Palestinians were killed at the hands of the murderous Assad regime.
There has been no call for a boycott of ICICI Bank in response to the egregious human rights abuses being committed against Muslims in India, or for divestments from Huawei following the verdict by an independent tribunal in London that a genocide is being committed against the Uyghur Muslims. That selective concern for humanity, and specifically for the welfare of Palestinians, poses some alarming questions. Why is Israel held to a higher standard than every other country in the world?
Robert Jenrick
I will give way to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and then to my hon. Friend the Member for Brigg and Goole (Andrew Percy).
Stephen Crabb
My right hon. Friend is making a powerful speech and I commend him on how he has gone about bringing forward this new clause to close a specific loophole on public sector pensions. In the context of his point about the wider boycott, divestments and sanctions movement, does he agree that it is a pernicious movement that singles out Israel time and again, to undermine the UK-Israel bilateral relationship and the very notion of the integrity of the Israeli Jewish state? I very much hope the Government will accept his new clause, but does he also accept that there is a need for a broader piece of work by the Government to address the BDS movement in its entirety when it comes to public sector choices?
Robert Jenrick
My right hon. Friend makes a series of powerful points, which I entirely agree with. In particular, I agree that, were this new clause to pass, it should merely be the beginning of a wider effort to tackle BDS within the public sector and that we as the Government should make good on our manifesto commitment to a full BDS Bill, which I hope will be in the forthcoming Queen’s Speech.
Andrew Percy
My right hon. Friend is making an excellent speech. The founder of the BDS movement is, of course, somebody who denies the right of Israel to exist—an antisemitic act in and of itself, given that Israel exists in international law. My right hon. Friend says that BDS is the biggest single indicator of antisemitism in this country; I take him back to last year, where we saw the highest number of incidents of antisemitism ever recorded in the UK. The biggest month for those was May last year, following the flare-up of the Israel-Gaza issues. That is a worrying trend, and one that is in part promoted by those who do exactly as he says: single out Israel for treatment they do not apply to other countries and support the BDS movement. That is why we must see this new clause passed and why the Government must move forward quickly on those other issues.
Robert Jenrick
I am grateful to my hon. Friend for his intervention and for the work he does on antisemitism. He is absolutely right that we cannot stand idly by and see levels of antisemitism in this country continue to rise. We must take every opportunity to tackle the issue, and this is one way that we can do so—there are many others. None of us wants to see month after month pass with the Community Security Trust reporting ever higher numbers of egregious antisemitic attacks in this country.
I will make two final points. First, the BDS movement does absolutely nothing to advance the cause of peace. It is because it sees Israel as a colonial endeavour that it views the Israel-Palestine question as an insurmountable framework of conflict between the occupiers—in their eyes—the Israeli Jews, and the occupied—in their eyes—the Palestinian Muslims. That is why it apportions blame for the conflict entirely at Israel’s door and denies the agency of other actors such as Hamas and Hezbollah, both of which we as a country have rightly chosen to proscribe. The sad reality is that many who practise BDS have no intention or interest in brokering a two-state solution.
Scott Benton (Blackpool South) (Con)
My right hon. Friend is making an excellent speech and I commend him on tabling this new clause. Does he agree that the BDS movement has consistently opposed efforts from Israelis and Palestinians to negotiate a peaceful settlement? He referred earlier to Wirral Council and its pensions committee; does he agree that it would be entirely inappropriate for a local authority to be judge and jury on such complex matters as where businesses should and should not invest in contested territory in the middle east?
Robert Jenrick
I agree strongly with both my hon. Friend’s points. On his second point, the motion before Wirral Council is to ask its pensions officer to be the arbitrator of which business it should or should not be investing in within Israel and within settlements. Pity this poor individual, who, instead of going about his normal work as a respectable, hard-working local government officer, must suddenly spend hours, days, weeks or months attempting to understand the intricacies of the Israel-Palestine question and provide advice to a committee of local councillors. It is frankly an absurdity and an abuse of that individual. We should not be seeing this. These questions should rightly be taken forward by the United Kingdom Government.
BDS is ultimately yesterday’s war. In the middle east today things are rapidly changing, and thank goodness for that. As a result of the Abraham accords, we see Arab nations—Gulf states—coming forward to recognise the state of Israel and work with it through science, technology, education and commerce. If Bahrain, the United Arab Emirates, Jordan, Egypt and other nations can do this—even those countries, such as Saudi Arabia, that have not explicitly recognised the state of Israel but are none the less working with it on security matters and other issues—then we as a country should not be tolerating this kind of activity, and certainly not within the public sector. I urge hon. and right hon. Members across the House to support the new clause. I am grateful to the Government for indicating their support. I hope that in the Queen’s Speech later in the spring we will see a wider BDS Bill that makes the UK one of the first countries in the world to really grapple with this issue.
Peter Grant
As I said on Second Reading and in Committee, the SNP supports the intention behind this Bill and we will support it on Third Reading. The intention is to clear up a mess of the Government’s making. I also repeat that, as I said in Committee, I do not have any doubts at all about the sincerity of the Ministers who have led for the Government at various stages of the Bill. I am convinced that they want to get it right and to finish up with an Act that is as fair to everyone as it is possible to be. However, my concern with the Bill currently before us is that even after the Government’s amendments are added in, sizeable numbers of current or former public sector employees will lose out. Given where we have been forced to start from and the scale of the mess that the Government made of this previously, I am not sure that it would ever be possible to produce a Bill that would be fair to absolutely everyone, but the Bill as it stands can still be improved. To that end, we will support such amendments as Opposition Front Benchers want to press to a vote, particularly new clauses 8 and 9.
One of the issues I raised on Second Reading has certainly come to pass: the extraordinary number of amendments the Government had had to table to their own legislation during its passage through the House of Lords. We now know that including the 61 amendments they tabled in Committee and the 28 further amendments tabled today, by the time the Bill gets its Third Reading later on the Government will have had to amend their own legislation no fewer than 212 times. In fact, Members who attended the Bill Committee will have seen the spectacle of the Government tying themselves in knots trying to remove two entire clauses from the Bill and replace them with two entirely new clauses. It was only the speedy intervention of the Clerks and the Chair that prevented the Government from presenting us with a Bill that had all four clauses included despite the fact that some of them were completely contradictory to the others. Eventually the Government had to whip their own Members to vote down two clauses that the Minister had already moved, presumably by mistake.
That incident served only to highlight what many of us on the Opposition Benches have been saying from the beginning—that the Government still cannot reassure us that they are genuinely fully in control of this Bill. I worry that they are very quickly running out of last chances to put it right. There is still a danger that the Bill that receives its Third Reading later today will have flaws and weaknesses that neither the Government nor anybody else have spotted yet. Most of today’s Government amendments are part of the process of picking up flaws or ambiguities in the original Bill, and we will not oppose them. We have some concerns about new clause 7, which provides for a lessening of parliamentary scrutiny in some cases. The Minister has not yet convinced me that that is an appropriate thing to do. I hope that when he winds up he will explain why new clause 7 is appropriate and why, in some cases, parliamentary scrutiny should be diluted in any way.
As I indicated earlier, we will support new clauses 8 and 9 in the name of the hon. Member for Hampstead and Kilburn (Tulip Siddiq). New clause 8 would provide a means of compensating scheme members who, through no fault of their own, stand to lose out as a result of the Bill. The Bill rights a wrong for a very large number of people in public pension schemes but goes in the opposite direction for some, and we should not forget about them. The new clause does not commit the Government, or indeed the scheme employers, to any additional expenditure, but it would require the Chancellor of the Exchequer at least to recognise that this is an issue and to look at whether there are realistic and reasonable ways of resolving it.
New clause 9 would require the Government to review how the Bill operates in the real world—as opposed to the assessment, as with any Bill, before discussions on it began—with regard to equalities. Given how many substantial changes the Government have already had to make to the Bill, it is prudent to accept that, once it comes into force, it might have consequences that the Government have not foreseen, which the new clause would attempt to protect against.
New clause 1, in the name of the right hon. Member for Newark (Robert Jenrick), is a different matter altogether, and the SNP is minded to oppose it. We have heard some of the arguments in favour of it—they are similar to comments made on Second Reading—which simply do not wash. I will not get into an argument now about the BDS movement. If the Government genuinely think that that organisation is a threat to peace and stability in the middle east or elsewhere, they could bring forward legislation to address it—they have had over two years of this Parliament to do so, and they still have time—but this is not the Bill for that.
Richard Burgon (Leeds East) (Lab)
Does the hon. Gentleman share my concerns that the new clause tabled by the right hon. Member for Newark (Robert Jenrick) risks barring ethical investment decisions across the board—for example, in relation to Saudi Arabia? Given that future Governments might decide to support regimes that abuse trade unionists, for example—as we have seen in Colombia in recent years, or in Chile in the past—the new clause would be not only anti-democratic but would risk ethical investment decisions and human rights policies around the world.
Peter Grant
The hon. Member is absolutely right. If the new clause was intended purely to limit the activities of the BDS movement as a precursor to possible further restrictions later on, a very different new clause would have been tabled, and it might have been possible to word it in a way that we would not have significant problems with, but this new clause is far too wide. It could give the Secretary of State—any Secretary of State—the power to prevent any public pension fund from considering any kind of ethical, sustainability or other factors simply because they decide that they are contrary to UK foreign or defence policy.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The hon. Gentleman is making an interesting argument about why the new clause is too wide. Is there not also the problem that it risks investments themselves due to a chilling effect for investors who might not withdraw from an investment when it is economically advisable to do so because of fear of breaking the rules under the new clause, so we could end up with the devaluation of pension schemes?
Peter Grant
I will come on to that later. We need to remember, in all of this, that the trustees of any pension scheme have an absolute fiduciary duty to those who rely on the performance of the fund for their current or future pension. We do not want anything that ties their hands, such as someone saying they should go only for very low-yield investments because that person has objections to the activities of companies that might give a higher yield. There are times when we must question whether it is right to put trustees under that kind of pressure. It is also wrong to suggest that pension trustees, in addition to or instead of their absolute duty to pension scheme members, should have some kind of duty to be a mouthpiece for the British Foreign and Commonwealth Office or the British Ministry of Defence. They are not an arm of Government; these are legally independent trustees, and they have to have that legal independence properly protected.
Stephen Crabb
I am listening closely to the hon. Member’s argument, but I am afraid I just do not accept the points he is trying to string together in what is a fairly strange argument. The reason this amendment is so important and the reason we do not expect council chambers to be dabbling in foreign, defence or security policy is precisely that they are not given the competences over those policies. It is the same for the Welsh Senedd, and the Scottish Government have a limited number of competences. Yes, we want them to exercise their powers fully in those areas where they are given competence, but it is a complete diversion of activity and attention to say that we want councils to be getting involved in incredibly sensitive and complicated subjects of the kind that my right hon. Friend the Member for Newark (Robert Jenrick) has already described.
Peter Grant
I certainly cannot agree with the right hon. Gentleman. As I have made perfectly clear, how the British system works is that Ministers have the authority to take policy decisions, and Parliament is right to hold Ministers to account for that. Parliament has the ultimate right to decide what becomes law. If nobody else is allowed to discuss it, and councils are not allowed to express views in the interests of the people they are there to represent, the whole system starts to fall flat on its face.
It is as plain as the nose on my or anyone else’s face that decisions on foreign policy can easily have a disproportionate impact on residents in some parts of these islands. Certainly, decisions on defence policy can have a significantly greater impact on some places than others. Remember that councils are directly democratically elected by local people to represent their views. Are we suggesting that they should not be allowed to debate matters of foreign policy simply because they do not have the right to take the final decision? If that is what Government Members are saying, why is it that almost every Tory MP who pops up on their hindlegs at Prime Minister’s questions to ask a planted question invites the Prime Minister to interfere in local democratic decision making? We have had two examples today, with the right hon. Member for Newark expressing his views on possible decisions by councils that, with respect, are nothing to do with him, because they are not the council area he represents.
I do not know whether Wirral Council or Hertfordshire will take the right decision, but I am happy to trust the good people of the Wirral and Hertfordshire to sort out councillors who get it wrong too often. That is what local elections are about. I do not like to see the Government, having substantially stripped back the powers of local authorities, then deciding to give local authorities the power to take decisions they agree with, but taking away the power for local authorities to do things that might go in a different direction.
Among all this, we are losing sight of the vital fact that as a matter of law, the trustees of a pension fund are a completely different organisation and a completely different entity in most cases from the organisation whose current and former employees are members of that fund. My wife has for many years been a trustee of the Fife Council pension fund, as well as having clocked up nearly 30 years as a councillor. The decisions that the trustees of the pension fund make are completely different from the decisions many of the same people will take as members of Fife Council. Nobody believes that the decisions of the pension fund reflect the views of the council; the council is not allowed to try to whip pension trustees, for example.
Robert Jenrick
As a matter of law, what the hon. Member is saying is not correct. Pensions within the public sector, as elsewhere, are regulated. They were regulated by the Public Service Pensions Act 2013, and they will be regulated by this Bill. He has been speaking for more than 15 minutes, and it is not clear to me whether the SNP is in favour or against BDS. It is important that he makes clear his position.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am keen that we do not just have a whole debate about BDS. I want the amendments to be addressed, and there are a few other speakers trying to get in.
Peter Grant
I made the point much earlier that the amendment is not about BDS; BDS is not mentioned anywhere in it. Going back to the question of whose money it is, we can go round in constitutional or legalistic circles, but morally that money belongs to the people who rely on it for their pensions. If members of the pension scheme want to make strong representations to their trustees, saying, “I do not want to profit in my pension from investments that benefit countries that act in breach of international law”, why is it such a bad thing for pension scheme members to be allowed to make those representations to the trustees? Why is it such a bad thing for the trustees to be allowed to say, “At the request of our members, we will take a decision that might not deliver quite such a high yield for the pensioners, but the pensioners are happy to accept that, because they will be comfortable in their consciences about where the money is going and where the profits are coming from”?
We cannot support new clause 1, and we are minded to divide the House on it later. My final point is that every pension fund trustee has a duty entirely to look after the interests of their pensioners and future pensioners. I do not want to see anything being done that gets in the way of that. We will support the Bill on Third Reading, but I hope it will come to Third Reading without new clause 1 included. The fundamental point is that the £17 billion mistake was made by the Government. If we eventually pass the Bill into law to be an Act of Parliament that makes pensioners or their employing authorities pick up part of that tab, it has not done enough. I fear that by tonight we will still have a Bill that has not done enough and that the Government will not be made to take full responsibility for a mistake entirely of their making.
John McDonnell (Hayes and Harlington) (Lab)
I declare an interest in that I am a member of the local government pension scheme. I want to address the amendments standing in my name—new clause 10 and amendments 22 and 24—but I would also like to comment on new clause 1.
On the debate about whether or not this is public money, I thought, as a member of the local government pension scheme, that the Supreme Court was pretty clear that this is not public money in the sense that would enable the Government to issue guidance. However, I have to say that new clause 1 goes further than guidance; it actually includes directions as well. I work on the basis, as I did when I was employed in local government, that the money I earned and the money forgone to invest in my pension scheme was my earned income; it was not public money under the control of the Government.
I think there is a lesson for us all here in that I believe that only in extremis—only in extremis—should the state interfere in one’s own privately earned income. I say that because, in the pension scheme regimes we have at the moment, we have an element of representative democracy with the trustees often being representatives of the workforce and other experts. That reassures me that, as a member of the pension fund, I have an element of say in what those trustees do, if they are appointed, and that enables me and other members of the pension fund to exercise an element of control over decision making, but also to exercise an element of conscience.
Andy McDonald (Middlesbrough) (Lab)
Does my right hon. Friend agree that the clumsy way in which new clause 1 has been worded will create a chilling effect on risk-averse pension scheme managers in fulfilling their fiduciary duties and other responsibilities? Does he also agree that it will significantly incapacitate the ability of pension schemes to invest ethically, and the rights of pension scheme members and pension schemes to express and have ethical views taken into account in the investment of their own money?
John McDonnell
I agree with the first point, but let me take up that last point, because I just want to explain to other Members where I am coming from and get it on the record.
On moral grounds, I have argued very strongly within my own local government pension scheme—so far, I have to say, unsuccessfully—that I do not want the money I have earned, and part of my pension is my earned income, to be invested in a number of states. They include Saudi Arabia, because of its involvement in Yemen. In fact, I have organised demonstrations when there were visits from various representatives from Saudi Arabia to this country. I have argued that I do not want my pension invested in China because of the treatment of the Uyghurs. Again, I have engaged in demonstrations on that, and also on the moral ground that a number of trade union friends I have worked with over the years are currently in prison as a result of the operation undertaken by the Chinese state in Hong Kong. Yes, I have argued against investments going into Colombia because of the murder of trade unionists, and I have also argued against investments going into Israel because I do believe—according to the Amnesty human rights report, and many Jewish institutions—that it is an apartheid state in the way it treats the Palestinians.
That is my position: on moral grounds, I want to be able to influence the investments. I do not want my pension invested in armaments or fossil fuels either, and I believe that that is my right. I do not believe it is the role of the state to ride roughshod over my moral choices without extremely good reason. Given the threat of climate change and other matters, there may well be, in extremis, reasons for the state to act, but I do not think that this new clause is in that context.
Chris Stephens (Glasgow South West) (SNP)
If this new clause had been in legislation in the 1980s, it would have covered South Africa, and the right hon. Member will remember that local authorities drove the anti-apartheid movement, while the UK Government refused to impose sanctions.
John McDonnell
I was chair of finance at the Greater London Council at that time, and I would regularly turn up with my shares with regard to Barclays bank. When Mandela came here—some Members will have been there when he spoke—he and others, including the late Archbishop Tutu, commended those who argued for disinvestment from South Africa in order to bring about a change in that regime, and it worked.
The point I am making—I will finish on this element of it—is that I do not believe it is the role of the state to interfere in this way. Parliament can decide to expand the role of the state, but I think it begins to strain the limits of parliamentary democracy. I have listened to Conservative Ministers warn us in this Chamber about elective dictatorships, so I just warn hon. Members on both sides of the House that once these precedents are set, other Governments will be tempted to follow and, in some instances, go much further. I think this adds to the slow erosion of our civil liberties, freedom of choice and, indeed, human rights.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
On the right hon. Gentleman’s point about his own pension fund, I do not think there would be many countries left in which it could invest. I understand his concerns about pension funds making ethical investments, but the pension fund also has a fiduciary duty to sustain the fund, and to make investments in that respect and for future pensioners who will draw on it. How can he reconcile the two positions?
John McDonnell
I was once, in my callow youth, an adviser to the mineworkers pension scheme, and then I was an adviser at the TUC, working with Lord Bryn Davies, who is one of our colleagues in the Lords at the moment, and there was never a problem with our fiduciary duty of maximising the income to the pension fund itself because of the range of investment opportunities available to us. I think we found in the past that exercising such moral judgment can prove effective in the long term, because it ensures that the fund is not investing in countries that may in the longer term become unstable as a result of the actions they take. I would just say, and I am making a personal point, that I think new clause 1 flies against my ability to exercise my moral duties about investments by my pension fund.
Lloyd Russell-Moyle
Is there not a problem with this, in that it leaves the Secretary of State to decide what the foreign or defence policy might be in an arbitrary way, rather than requiring pension funds to set an ethical policy in which they can say that they do not want to invest in countries where there are human rights abuses? We would still have to treat all countries equally, so they could not target one country or another, but there would be an ethical framework, and this new clause does not allow an ethical framework.
John McDonnell
I would also come out fairly pragmatically and say that there may be some countries that, according to the Government, were not appropriate to invest in a few years ago but now are. I do not want a little red book to be thrown at me again, but I would just cite the fact that the relationship the Government have had with China has changed over the years and, I hope, is changing again at the moment with regard to the Uyghurs.
Let me move on to the new clause and amendments in my name. New clause 10 is a simple reflection of new clause 8, tabled by my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq), on the pensions trap. I want to echo what I think she said really eloquently in Committee and today about how the dialogue on this issue must continue, because there is an unfairness at the heart of the legislation we are pushing through at the moment. This affects firefighters, police superintendents and so on, who feel aggrieved, and I feel that a bit more dialogue may enable us to find a solution and restore their confidence in the pension scheme itself. That is why I support new clause 8.
My new clause 10 is simply more explicit about ensuring that there are consultations with the trade unions and other employee representative bodies, and that we seek to overcome the problem so that we have a non-discriminatory approach that does not fall foul of the law.
I turn to my amendment 24, which addresses a complex issue. It reminds me of the debate we had on the d’Hondt proportional representation system, as there were only two people who understood it: Mr d’Hondt, who died, and Jack Straw. Let me just go straight to the point on this matter. I am sorry if I go into some detail. The Chief Secretary to the Treasury said in Committee that
“it is vital that we establish now, for the avoidance of any doubt, that no member benefits will be cut and no member contribution rates will increase as a result of the 2016 valuations. Any benefit improvements due will be honoured, but no additional costs will be imposed. I reassure the hon. Lady”—
my hon. Friend the Member for Hampstead and Kilburn—
“on her important question, that the costs of our remedy genuinely sit with the Exchequer, not scheme members.”––[Official Report, Public Service Pensions and Judicial Offices Bill [Lords] Public Bill Committee, 27 January 2022; c. 10.]
This is complicated stuff. There is a confusion of two issues here. The Government did make a mistake and were challenged in the courts. I fear that that cost burden will now fall on to members of the pension fund, if it is included in the cost mechanism as an employee cost. That is the issue.
I turn to two points in that regard. First, there is the cost to the scheme of giving members the option to choose which benefits—old or new—they want to accrue during the remedy period. Some members will choose benefits that are better for them than they would have received before the McCloud and Sargeant judgments. The scheme will clearly have to meet the cost of paying those benefits—fine. We got the assurance from the Minister that the money will flow—we think it is £17 billion; that is the last estimate—and the burden will not fall on to the members themselves, but that is not what we are talking about here. The issue here is what impact the cost of the remedy should have on the cost control mechanism. I remind Members that this is the mechanism for deciding whether members’ benefits should be changed or, alternatively, whether contributions could be changed.
There is no doubt that treating the cost of the remedy as an employee cost for the purposes of the cost control mechanism leaves members worse off than they would have been had it been treated as an employer cost. I draw the Chief Secretary’s attention to the helpful report from the House of Commons Library entitled “Public service pensions: the cost control mechanism”, which tells us that if we go back to the initial results of the 2012 scheme valuations, which were reported in 2018, the Government said that
“the protections in the new cost cap mechanism mean public sector workers [would] get improved pension benefits for employment over the period April 2019 to March 2023.”
It is those improved benefits that I believe are now at risk if the cost of the remedy is included as an employee cost and not an employer cost.
What does this mean? The improved benefits were required because members had suffered a reduction in the value of their expected benefits over the period 2012 to 2016 because of lower than expected pay increases and because longevity had not increased by as much as had been expected. In other words, the changes would not make members better off; they would simply maintain the value of the benefit package at the level that had been agreed. I apologise to Members, because this is complicated stuff, but it has to go on the record if we are to get redress on this, either today or in subsequent legal actions.
Given the requirement under the cost control mechanism, the respective scheme advisory board then set about agreeing the necessary changes in benefits. In other words, because the pay settlements had not been as large as predicted, and because people were not living as long as the predicted life expectancies, the cost burden on the scheme was less, which should have been reflected in benefits given back to members. The scheme advisory board started looking at what those benefits would be, and the Library report gives an example of packages of changes proposed for the civil service scheme, which included
“a reduction of member contributions; reform of the current contribution rate structure; and increased death benefits.”
The other schemes reflected similar sorts of benefits, so members would gain significantly as a result of this unfortunate situation—unfortunate because they never got enough pay settlements and never had the increase in life expectancy. Nevertheless, because those costs never fell on to the scheme, they should have been paid back to members.
In December 2018, the Court of Appeal ruled that part of the reforms amounted to unlawful discrimination. That was followed by the decision by the then Chief Secretary that the cost control element of the 2016 valuations should be put on hold. In other words, the members were to gain those benefits because of the cost control mechanism, the court decision took place, and the Government then froze the whole process. Eventually, the Government restarted the process and published the Treasury directions in October last year. The problem with the directions is that they treat the cost of remedying the Government’s mistake, as calculated for the purposes of the cost control mechanism, as a member cost, not an employer cost.
The important point to understand is that there is nothing inevitable about the remedy as a member cost. It has always been accepted that there are certain elements in the calculation involved in the cost control mechanism that are regarded as member costs that will impact on the cost control mechanism itself, but there are also other elements in the calculation that are employer costs and do not impact on the cost control mechanism. For example, the impact of changes in pay increases and mortality are obviously member costs, but changes in the discount rate and price increases are the employer costs. It is strongly argued by the trade unions, completely understandably, that mistakes made by the employer—that is, the Government—are employer costs.
What has never been discussed is how to treat the cost remedy incurred by the Government’s own error, and that is what needs to be addressed today. It was the Government’s mistake to have age discrimination in the scheme. The Minister in Committee said it was reflected in trade union representations, but as has been said by the Public Accounts Committee and others, the Government are the Government; they should have foreseen that there was the potential for discrimination. It is the Government who introduced the measures. It is the Government who are responsible for the Treasury directions and any legislation. It was a mistake by the Government. It is therefore logical that the cost of the remedy should be treated as an employer cost for the purposes of the cost control mechanism.
I apologise to hon. Members for the complexity of this, but it is important that we get on the record very explicitly that members of these pension funds should not have to pay in the long term for Government mistakes and should therefore have gained the benefit of either reduced contributions or enhanced benefits, because that is contained in what the Government agreed a number of years ago as the cost control mechanism.
Christine Jardine (Edinburgh West) (LD)
This is an important Bill, but Liberal Democrats believe there are still several serious concerns that need addressing. More support is needed for individuals in making decisions; perhaps a helpline would be useful. There are implications for women—the pensions gap. There is also the potential negative impact on diversity in the judiciary, which is currently dominated by a generation of older white men.
I will focus on Liberal Democrat new clauses 4, 5 and 6, but first let me say that the Liberal Democrats will not be supporting new clause 1, tabled by the right hon. Member for Newark (Robert Jenrick). That is nothing to do with BDS; it is because the wider implications and unintended consequences could be significant in cases such as Xinjiang, where we believe a genocide is taking place. That is not Government policy, so what would the Government direction be in that case? Our concern is the wider implications and unintended consequences.
New clause 4 would require the Government to review the impact of the Bill on fairness. It calls a review of fairness and just treatment, particularly with regard to members of current schemes. It is important to ensure that members of current schemes are not caught in the pensions trap. Women are more likely than men to have taken time off work for caring responsibilities. Under some of the new schemes, which are based on age, they will have to work longer. The issue of gender in pensions is not new, and this would not be the first time the House made a misstep.
The gender pension gap is the percentage difference in pension income between female and male pensioners. The latest research showed that it had increased to 37.9%; we must be aware of that. The deficit will continue, so the amendment seeks to highlight the importance of this issue and the need for urgent measures to address it.
New clause 5 is about access to information and would require the Government to publish guidance to members of affected pension schemes and allow for provision of a helpline or online services to offer further assistance in important decisions for people’s futures. It is important that we think of the Bill in terms of individuals—the people whom it will affect—and their futures, what guidance and support will be provided to each person, how that will be resourced and how the Government will signpost that. That is key. We have seen with pensions for women born in the 1950s that when decisions and timings were not signposted, that had a massive impact on them when they found that their pension age had changed. We must not do that again—and we still have not rectified the first mistake. The Government have already accepted that people with complex tax issues can have financial advice. The same should be the case for millions of public sector workers who will have to make such choices, so the Government should put a helpline in place for that.
New clause 6, would require the Government to publish an annual update on progress in recruiting new members to the judiciary and on increasing diversity. It is important that our senior judges in the Court of Appeal and the Supreme Court reflect the society in which we live if they are to be respected. They must be seen as part of the current era, to reflect society’s trends and understand those trends, but there is perhaps a perception that they do not, and we are all concerned about that.
Although the proportion of judges who are women continues to increase gradually, women remain under-represented in judicial roles. That is particularly the case in the courts, where 32% of all judges and 26% of those in more senior roles are women, compared with 47% of all judges in tribunals. I am sure we would all like to see those figures addressed. The situation with black, Asian and minority ethnic judges is worse, with the figures being 4% for High Court judges and above compared with 8% of all court judges and 12% of tribunal judges. Surely that is far from acceptable. The new clause would ensure that the Government published an annual update on progress in this important area.
This is an important Bill and it is important that we address the issues in it. However, we must do that properly and ensure that there are not unintended consequences.
Zarah Sultana (Coventry South) (Lab)
I rise to speak to new clause 1. The year was 1985. After a campaign lasting decades, 123 councils answered the call for solidarity with the South African anti-apartheid movement and adopted policies opposing that injustice, including 39 councils that had divested from companies operating in South Africa and Namibia. While the Prime Minister, Margaret Thatcher, was calling the African National Congress and Nelson Mandela terrorists and Young Conservatives were proudly wearing badges calling for him to be hanged, local authorities were on the right side of history, standing up to the horror of apartheid. Of course, the Conservative Government could not tolerate that, so, a few years later, to weaken the anti-apartheid movement, they brought in laws making it illegal for local councils to boycott South African and Namibian goods. Looking back, it is crystal clear who was on the right side of history and who was on the wrong side.
The new clause, in the name of the right hon. Member for Newark (Robert Jenrick), would ban local councils from taking such a stand. Had it been in place back in 1985, because the Conservative Government supported apartheid South Africa—let us not forget that—local councils, no matter the strength of local feeling or the righteousness of the cause, would have been prevented from divesting pension funds from apartheid South Africa. They would have been compelled to be complicit in injustice.
Government Members may argue that that is history and things are different now. I contest that the facts say otherwise. The House knows that British-made weapons and diplomatic support are integral to the Saudi war in Yemen. Even as that war has claimed the lives of more than a quarter of a million people, pushed more than 20 million into absolute destitution and resulted in grave violations of international law, British complicity has continued. The new clause could deny councils the right to divest from arms companies whose bombs rain down on the people of Yemen. Similarly, if a local authority wanted to align its pension fund with international law and divest from companies operating in illegally occupied Palestinian lands, the new clause risks denying it that right, too.
Lloyd Russell-Moyle
The Israeli Labor and Meretz parties, our sister parties in Israel, have both written to the leaders of the Labour party and to all of us to say that they want divestment from companies that invest in the occupied territories. Israeli Members of Parliament are asking us to do this. New clause 1 goes against what they are asking us to do, does it not?
Zarah Sultana
Yes, it does, and I was proud to stand on a Labour manifesto committed to that policy, too.
With the rapidly accelerated threat of climate catastrophe and the need to consign the fossil fuel industry to the dustbin of history, new clause 1, at the worst possible moment, risks outlawing councils from standing up for climate justice and banning divestment of pension funds from companies that are setting our planet on fire. [Interruption.] The hon. Member for Brigg and Goole (Andrew Percy) laughs, but this is an actual threat. I am not sure if he is a climate denialist, but he should really look into that.
These are just some of the blatant affronts to local democracy and ethical investments. New clause 1 is so vague and so badly worded that it would have a chilling effect on public sector pension investments. It could be weaponised against any human rights campaign that raises concerns about pension investments in any company that is not formally on a UK sanctions list. As Amnesty International and Human Rights Watch warn, it is so badly worded that, in fear of committing an offence, pension scheme managers could be forced to break their fiduciary duties.
In 1959, an anti-apartheid campaigner and Nobel peace prize winner called Albert Lutuli put out a call for global solidarity. In Britain, hundreds of thousands of campaigners responded, launching a boycott of South African goods. People across the country did what they could do to end the injustice. In my city of Coventry, the local Labour party led the fight, distributing leaflets, holding public rallies and even displaying a large poster in the city for a whole month, publicising the boycott and raising awareness about apartheid. As so often in history, it was the actions of local people, anti-racist campaigners, trade unionists and local councils that led the way, counteracting Westminster’s complicity.
Those actions, while small in themselves, were part of a global anti-apartheid movement that was instrumental in bringing an end to this injustice. We should learn that lesson. I strongly encourage Tory Members to learn the lessons of history. We should empower local councils to make democratic ethical investment decisions, not outlaw them, as new clause 1 does. [Interruption.] I therefore encourage Members on the Government Benches, especially the very enthusiastic hon. Member for Brigg and Goole, to vote against it.
Andy Slaughter
Perhaps I should begin by following the example of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) in declaring my association with a local government pension fund. I chaired the pension committee of my local authority for a number of years. I am pleased to say that since I stopped doing that it has become much more ethical. I can now tell the House that the pension fund now has the lowest percentage of its fund invested in fossil fuels of any local authority in the UK, with the aim of net zero by 2030. I take no credit at all, other than the fact that it is now chaired by my researcher.
I should also say that I used to be member of the local government pension scheme, but I moved the tiny amount of money I had in that to the MP scheme, so I do not know whether I should declare that. I wonder if we should all be declaring that fact, given that although the MP scheme is not subject to the McCloud judgment, its trustees have said they will follow the McCloud judgment. For the avoidance of doubt, I put all that on the record. I do not think I have much time left now, but let us see.
I generally support the Bill, which is undoing mistakes that the Government made which were exposed by the McCloud judgment. I do, however, have a slight reservation. Nobody has mentioned the matters relating to judicial retirement ages. I see exactly the force of why they need to be increased, although I share the reservations of the Law Society that going from 70 to 75 will actually set back diversity in the judiciary, hopefully only temporarily, because of those who will be eligible to stay on in their roles. However, we are in such a parlous state in relation to the shortage of judges and the crisis in the courts that I can see the force of the argument.
I will be brief because, in a way, by talking too much about new clause 1, we are giving it more credibility than it deserves. It does not really deserve a place in this Bill. I suspect that the right hon. Member for Newark (Robert Jenrick) knows that, and actually, we should congratulate him on managing to squeeze it into the long title of the Bill. I felt that it was slightly surreal to be listening to a speech about the Abraham accords in relation to a technical Bill about pensions. We will have, hopefully, a three-hour debate on recognition of the Palestinian state on Thursday in this Chamber, in which it might fit, although that might be stretching it a bit as well. Perhaps he will speak in that debate as well.
Chris Stephens
I will be brief, having been on the Bill Committee. First, I should probably declare that I am a member of the Scottish local government pension scheme. I have always taken the view that a pension is deferred pay. In the past few weeks, university lecturers have taken industrial action because of the threats to their pension schemes; I have been very proud to visit their picket lines and offer my solidarity and support.
I wish to raise a couple of issues. I view new clause 1 as a Trojan horse. The main points that I want to raise are my support for the amendments tabled by my good friend the right hon. Member for Hayes and Harlington (John McDonnell), and the effects on employees and workers. In Committee, the Chief Secretary assured me that discussions were ongoing with trade unions to fix the issues. I hope that he will update the House on any discussions that have taken place since then and on the progress of those talks.
A basic principle that has been identified in relation to many of the amendments is that workers should not be penalised financially for mistakes that have been made in calculations by the Government or employers. It is a clear principle for many of us on the Opposition Benches that no worker should be penalised for such mistakes and that their pensions should not be affected. I therefore support the Opposition amendments in that regard.
Mr Simon Clarke
I thank all right hon. and hon. Members who have spoken today. I appreciate the constructive way in which all Opposition parties have handled the Bill. Today’s debate has focused on several important themes, which I will address in turn.
One central theme was the clarification requested by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and other Members about whether the estimated £17 billion cost of remedy will be included in future valuations of the cost control mechanism for unfunded schemes. The answer, definitively, is that it will not. The Government will reform the cost control mechanism to a reform scheme-only design for future valuations. I hope that that reassures the House.
Mr Clarke
Very briefly, but I am conscious of the need to make progress.
John McDonnell
I just need the Minister to say that it will be an employer cost, not a member cost.
Mr Clarke
The cost of remedy sits with the employer, namely the Exchequer.
John McDonnell
Let us be absolutely explicit. With regard to the cost control mechanism, is it the case that this will be not a member cost but an employer cost? Just nod, Minister: that is all you have to do.
Mr Clarke
I will ensure that it is on the record.
My right hon. Friend the Member for Newark (Robert Jenrick) raised the important issue of guidance for the local government pension scheme which will, in effect, prevent bodies from engaging in boycotts, divestment and sanctions activities. In our manifesto, we committed ourselves to stopping public bodies running their own direct or indirect boycotts, and the wider BDS movement. I am grateful to my right hon. Friend for the all the hard work that he has done to draw the House’s attention to this important issue. I also pay tribute to Lord Pickles for his work.
Mr Clarke
I am sorry, but I must make progress.
The Government have been paying particular attention to the arguments that my right hon. Friend has put forward, and I assure him that we take this issue very seriously.
The BDS movement has nothing to do with pensions and everything to do with politics. It has had the chilling effect of legitimising antisemitism among the hard left, leading to kosher food being taken from supermarket shelves, Jewish films being censored, and the disgusting spectacle of Jewish university student societies being threatened with bans.
Paula Barker
I thank the Minister. He has been very generous. Can he confirm that new clause 1 has nothing to do with BDS, a point to which you alluded, Madam Deputy Speaker?
Mr Clarke
On the contrary, it has everything to do with BDS, because, rather than promoting co-existence, debate and dialogue, it sows hatred and alienation. There is evidence of divisive BDS campaigns in public bodies, including too many Labour-led local authorities attempting to declare boycotts. Only this week we saw concerning, but sadly unsurprising, reports of a councillor in Wirral leading demands for Wirral’s pension committee to pass a BDS motion. Even under the leadership of the new Leader of the Opposition, Labour politicians continue to endorse the Palestine Solidarity Campaign and call for boycotts of Israel.
Andrew Percy
I thank the Minister for confirming that the new clause does indeed have everything to do with BDS—as it should, because it is an important contribution to making Jewish people in this country feel safe. I am afraid that we heard some embarrassing comments from Opposition Members earlier, featuring the false narrative of “Everything good is always on the left, and everything bad is always on the right.” As the Minister says, we see Labour activists and Labour councillors endorsing what is a fundamentally antisemitic campaign. I thank him for his words today, and I hope the Government will accept the new clause, because it is so important to fighting the scourge of antisemitism.
Mr Clarke
I thank my hon. Friend for what he has said, and I can confirm that we will be accepting the new clause. It will have the Government’s support this afternoon.
The hon. Member for Edinburgh West (Christine Jardine) raised a number of important points, but I will deal first with her new clause 4, which relates to fairness for members of public service pension schemes. This is also relevant to the point raised by the hon. Member for Hampstead and Kilburn.
Let me begin by reassuring the hon. Member for Edinburgh West that equal treatment and fairness for all members, including those with protected characteristics, remains a central tenet of the Bill. The Government have conducted a full equalities impact assessment of the Bill, which was published when it was introduced. In addition, when making the necessary changes in the scheme rules to deliver remedy, bodies will carry out any appropriate equalities analysis for their specific schemes, in compliance with the Equality Act 2010. Indeed, many schemes are currently concluding public consultations on the changes in scheme regulations to implement the prospective remedy. The Government intend that a similar exercise will take place when it comes to schemes making further changes in their scheme regulations to implement the retrospective remedy, prior to 1 October 2023.
The Bill also provides that, from 1 April 2022, all public service workers who remain in service will do so as members of the reformed schemes, which provide career average, or CARE, benefits. CARE schemes offer fairer outcomes to those who experience lower salary progression over the course of their careers. A number of women and those with other protected characteristics are likely to be better off under CARE schemes, on average. Moving on to guidance for members, I wholly agree that clear, accessible and accurate guidance—
Tulip Siddiq
I am grateful that the Minister is answering all the questions that I posed in my speech, but I want to go back to the question that my right hon. Friend the Member for Hayes and Harlington (John McDonnell) asked. The Minister has said that he will write to us. Can he write both to me and to my right hon. Friend, and can he be explicit that this will be not a member cost but an employer cost? Can he confirm that he will be explicit when he writes to us on that particular point?
Mr Clarke
The cost sits with both members and employers, but the liability rests with the Exchequer in relation to the £17 billion cost of remedy. That is how this sits. I will indeed commit to writing to clarify all these points, and I will write to the hon. Lady and the right hon. Gentleman.
Judicial diversity and recruitment were the next issues raised by the hon. Member for Edinburgh West. I emphasise that this is an important measure for ensuring that we deal with the covid backlog in our courts, which is why we need to look at raising the mandatory retirement age. We are conscious of the need to consider the wider issues around judicial diversity and to ensure that we have a judiciary that is truly representative of the public that it serves. The Ministry of Justice publishes annual official statistics on this issue that provide a detailed annual picture.
I would like to assure members that the potential impact of what is being done is small. Compared with retaining the current mandatory retirement age of 70, a higher retirement age is projected to result in a 1% to 3% decrease in diversity growth in the medium to long term. I emphasise the word “growth” there. Overall, judicial diversity is still forecast to improve, and this measure would not reduce diversity overall. There would be only a slight reduction in the trend growth, which is going in a positive direction. We remain committed to increasing judicial diversity, and we have just launched an ambitious new magistrates recruitment plan to bring in younger and more diverse candidates. The MOJ plans to recruit 1,000 judges a year over the next few years, and 4,000 magistrates over that period. There will be a lot of change to the make-up of the judiciary.
The so-called pensions trap—the losses incurred by public service pension scheme members due to the closure of the legacy schemes—has been discussed at length throughout the passage of the Bill. The new clauses tabled by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and the right hon. Member for Hayes and Harlington appear to be intended to require the Chancellor to devise a way to compensate scheme members with remediable service for any reduction in future pension benefits resulting from the prospective McCloud remedy legislated for in clause 80. As I have noted, it is important to stress that the Government must not take action that would be contrary to the intention of the Bill to remove the discrimination identified by the courts and to ensure that all members are treated equally from 1 April this year by accruing service regardless of their age.
The Government must also safeguard the purpose of the reforms proposed by Lord Hutton and ensure that public service pension schemes are put on a sustainable fiscal footing. The Independent Public Service Pensions Commission stated that
“allowing current members to continue to accrue further benefits in the present schemes for many decades would be unfair and inequitable to the new members coming behind them.”
Compensating or carving out members with remediable service for the difference in pension age between their legacy and reformed schemes would effectively leave a protected class of public service pension scheme members beyond 31 March 2022, which could perpetuate the discrimination identified by the courts or give rise to new discrimination. It is worth noting that the Home Office is looking at this issue as we speak and will respond to its full consultation, in which the issue has been considered at greater length. I look forward to seeing the results of its work.
I turn to the contribution from the right hon. Member for Hayes and Harlington on the reforms to the cost control mechanism. The cost control mechanism is designed to ensure a fair balance of risk between public service pension scheme members and taxpayers with respect to the costs of the schemes. These reforms resulted from recommendations by the Government Actuary, and the Government are seeking to implement them following a full public consultation process. They are the reformed scheme-only design and the economic check. The economic check is essential to ensure stability and consistency across the scheme. It is also important to improve the higher bar for benefit reductions or contribution increases if the country’s economic outlook changes.
On the point about the 25-year guarantee, the Government do not believe that these reforms breach that guarantee. The elements protected by the 25-year guarantee were set out in legislation, and the cost control mechanism is not included there. The Government are making these changes following a detailed review of the mechanism by the Government Actuary and a full and open consultation process.
Amendments 22 to 24, tabled by the right hon. Member for Hayes and Harlington and the hon. Member for Hampstead and Kilburn, seek to reverse two decisions. The first reflects the cost of remedies in the mechanism of the 2016 valuation, and the second prevents the waiving of any ceiling breaches of the 2016 valuations that may occur. As I have already noted, the cost control mechanism is designed both to protect the value of schemes to members and to protect the Exchequer from unforeseen costs. At each scheme valuation, the mechanism assesses the benefits that have accrued and are accruing to members, to determine whether future benefit levels or member contribution rates need to be adjusted to meet the costs of the scheme.
The Government are clear that the remedy, by giving eligible members a choice between two sets of benefits, will increase the value of schemes to members, and this increase in value has therefore rightly been included in the mechanism for the 2016 valuations. The Government have decided that it would be inappropriate to reduce member benefits based on a mechanism that may not be working as intended, and clause 93 will therefore ensure that no member’s benefits will be cut or contribution rates increased as a result of the 2016 valuations.
Amendment 23, which would delete clause 93, would therefore reverse a decision that will protect members and would lead to significant cuts to member benefits for any schemes that breach the ceiling of the 2016 valuations. It is therefore important that clause 93 is preserved.
I am grateful to all hon. and right hon. Member for their contributions. With the exception of new clause 1, I hope I have demonstrated the reasons why I cannot accept these new clauses and amendments, and I hope hon. and right hon. Members will agree not to press them to a vote.
Question put and agreed to.
New clause 7 accordingly read a Second time, and added to the Bill.
New Clause 1
Guidance to public service pension scheme managers on investment decisions
‘(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) In schedule 3, paragraph 12(a), at end insert “including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy”.’—(Robert Jenrick.)
This new clause would enable the Secretary of State to issue guidance to those authorities that administer public sector pension schemes, including the local government pension scheme, that they may not make investment decisions that conflict with the UK’s foreign and defence policy.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Simon Clarke
I beg to move, That the Bill be now read the Third time.
I would like to make a short statement about our involvement with the devolved Administrations. Officials worked closely and collaboratively with the devolved Administrations throughout the Bill’s passage, and I am pleased to report that the Scottish Government, the Welsh Senedd and the Northern Ireland Assembly have each passed a legislative consent motion. I am grateful for their continued engagement.
It has been a great pleasure to lead on the Bill’s progression through the House. I extend my thanks to hon. Members across the House for their engagement, particularly of course the members of the Public Bill Committee. This is an important Bill that consolidates and strengthens the legal framework for pensions across all our main public services—the NHS, the judiciary, the police, firefighters, the armed forces, teachers, local government and the civil service. The Bill will ensure that those who deliver our public services continue to receive guaranteed retirement benefits that are among the best available on a fair and equal basis.
The Bill also addresses the resourcing challenges facing the judiciary, recognising the unique constitutional role of judges. It is clear that we are agreed across the House about the principles of fairness and equal treatment for public servants. Furthermore, a number of important amendments have been made, most notably to the provisions that cater for local government workers, which I am pleased have enjoyed cross-party support.
I extend my thanks in particular to my right hon. Friend the Member for Newark (Robert Jenrick), my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the hon. Member for Hampstead and Kilburn (Tulip Siddiq), the right hon. Member for Hayes and Harlington (John McDonnell) and the hon. Member for Glenrothes (Peter Grant) for their detailed engagement throughout the Bill’s passage. I also convey my gratitude to the noble Lords in the other place, whose excellent contributions have helped ensure the Bill is as robust as possible.
Finally, I thank the Bill team, the Office of the Parliamentary Counsel, officials across Her Majesty’s Treasury, the Ministry of Justice, the Department for Levelling Up, Housing and Communities, all Government Departments with responsibilities for public service pension schemes, and the devolved Administrations for their extensive support. There is a lot of technical detail in the Bill, and the team’s guidance and expertise has been exemplary.
Sir Robert Buckland (South Swindon) (Con)
Will my right hon. Friend give way?
Sir Robert Buckland
On a point of technical detail, I do not wish to put my right hon. Friend on the spot, but can he assure me that early commencement provisions will be brought into effect with regard to the judicial retirement age matters? It is a matter of real public importance that we bring those measures into force as soon as possible, rather than waiting for the usual two-month gap between Royal Assent and them coming into effect? Can he give me that assurance?
Mr Clarke
Further to my opening speech, I can confirm that that is the case.
In conclusion, this Bill recommits to the principle of greater fairness between lower and higher earners and for the taxpayer, as well as the future sustainability and affordability of public service pensions. I am pleased to see the Bill reach Third Reading, and I am grateful to all Members for their contributions today.
Tulip Siddiq
I echo all the thanks that the Minister has given, and I thank him for meaningfully engaging with me on this topic. I thank the shadow Treasury team, who helped a lot, all the Clerks who helped, my hon. Friend the Member for Reading East (Matt Rodda), who gave me a lot of support throughout the Bill, and my hon. Friend the Member for Hammersmith (Andy Slaughter), who made a sensitive speech during a difficult time. I might not have agreed with everything that my right hon. Friend the Member for Hayes and Harlington (John McDonnell) said, but he made an extensive and important speech.
I hope that the Minister will reply to me in writing, being explicit about how the cost will be shouldered. This mistake is being rectified by the Government, which is why we support the Bill, but we still have some concerns about it, so we would like to hear explicitly from the Minister about how the costs will be managed and that they will not be pushed to any of the members. Finally, I thank all the public sector workers who have kept us safe through all the years, and especially during the pandemic.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Mr Toby Perkins (Chesterfield) (Lab)
On a point of order, Mr Deputy Speaker, the Government announced that they were doing a review of level 3 qualifications, with a view potentially to producing a list of level 3 qualifications that would no longer be funded. That list has not yet been produced, but the sector has the impression that it will be produced very soon. It is a matter of huge interest to many right hon. and hon. Members, so I wonder whether you or Mr Speaker have had any notification from the Government of their intention to come to this House and make a statement, and whether inquiries could be made to ensure that the list is not sneaked out at 5.30 pm on Friday, as has sometimes been the case, but is announced first to the House.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Member for his point of order and his notice of it. I have been given no notification that there will be any statements today, but that could change tomorrow or in the rest of the week. Should that happen, the House will be informed in the usual way.
Louise Haigh (Sheffield, Heeley) (Lab)
On a point of order, Mr Deputy Speaker. The bus covid recovery funding will expire at the end of the financial year, and we have had no notification as to whether the Government intend to continue it. Tomorrow is the deadline by which operators will have to notify their local transport authorities if they intend to cut services as a result of that covid funding expiring, and operators are warning that it could lead to a reduction of a third in bus services. This time last year, the Prime Minister, with his “bus back better” strategy, promised great bus services for everyone, everywhere. Instead, we are looking at managed decline. Have you had any notification of a statement from the Secretary of State to reflect the urgency of the situation?
Mr Deputy Speaker
I thank the hon. Member for her point of order and her forward notice of it. Again, I have received no notification that there is going to be a statement today, but clearly that could change for the rest of the week. Fortunately, the Leader of the House is sitting in his place and will have heard both points of order, and I am sure he will be reflecting on them during the rest of the day.
Business of the House (Today)
Ordered,
That, at this day’s sitting, notwithstanding the provisions of Standing Order No. 16(1) (Proceedings under an Act or on European Union documents), proceedings on the motion in the name of James Cleverly relating to the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 123) shall be brought to a conclusion three hours after the commencement of proceedings on the motion for this Order; the Speaker shall then put the Question necessary to dispose of proceedings on that motion forthwith; such proceedings may be entered upon, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Mark Spencer.)
Sanctions
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Europe and North America (James Cleverly)
I beg to move,
That the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 123), dated 10 February 2022, a copy of which was laid before this House on 10 February, be approved.
The statutory instrument before us was laid on Thursday 10 February under the powers provided by the Sanctions and Anti-Money Laundering Act 2018—the sanctions Act. We laid the instrument to strengthen our response to the grave situation we see in Ukraine.
My right hon. Friend the Prime Minister has set out today the implications of Russia’s actions, and he has also set out our initial response via the sanctions regime. Russia’s actions are threatening innocent people in Ukraine, violating its sovereignty and undermining its security and stability, as well as the security and stability of Europe. President Putin must be halted in those ambitions, and we will use every lever under our control to that end. We will continue to work with our allies and partners to force him to halt the path of aggression.
We are acting in four ways. First, we are providing direct support to Ukraine, and in our view this is a moral duty. We have already sent defensive weapons to Ukraine, and we have trained over 22,000 troops through Operation Orbital. We are considering what further acts of support we can provide, including through our new trilateral partnership with Poland and Ukraine. We are also providing economic support. Last week, my right hon. Friend the Foreign Secretary announced that we will be increasing our support to Ukraine by £100 million. We are working closely with partners to ensure that we can quickly provide emergency humanitarian assistance if that is needed. Sadly, we could see a large-scale loss of life, a large-scale displacement of people and the destruction of vital civilian infrastructure, including schools and hospitals, so it is vital that the humanitarian response is ready to go, and we will continue to lead on this effort.
Secondly, we are providing political support to Ukraine, and we are working diplomatically to condemn Russia’s aggression at every level.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I am grateful that the Minister has emphasised the need for humanitarian support very early in this debate, because we are dealing with punitive actions. The Prime Minister himself said in his statement that, in a worst-case scenario, 44 million people could get pulled into a very aggressive war, which would mean a refugee crisis. What specific support are the British Government and their partners offering to provide to the neighbouring countries that would have to deal with the displacement of such individuals leaving Ukraine?
James Cleverly
I am unable to give specifics at this point, but we are liaising closely—I have spoken to our ambassadors in neighbouring countries, and the Foreign Secretary has been holding regular conversations with her opposite numbers in the region and beyond—and we are ready to respond with what could be a range of options depending on whether we, as the international community, are successful or otherwise in deterring further incursions into Ukraine.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
May I follow up the question that was well posed by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) earlier? On the package of sanctions announced today, what specifically is that designed to deter, and what is the ultimatum that is being sent to the Russian Government today?
James Cleverly
I will come to more details of the sanctions package and what we hope to achieve with it, but ultimately we are looking to prevent further territorial encroachment and aggression into Ukraine, and to get Russian troops to withdraw back to Russia, to de-escalate and to move away from the Ukrainian border. As I will say later in my speech, if the House gives me the opportunity to progress, we are working and co-ordinating closely with our international partners in our sanctions response to ensure maximum effectiveness.
Layla Moran (Oxford West and Abingdon) (LD)
I am grateful to the Minister for giving way, because this point is very relevant. I do not mean to put him on the spot—I have the advantage of looking at what the news has just said—but Putin has just now recognised the whole of the Donbas as independent, going beyond the ceasefire line and into the territory now held by the Ukrainian Government. Therefore, what we have announced is already out of date. I appreciate that the Minister may need to confer, but are the sanctions in these regulations appropriate? What is the trigger point for an escalation of sanctions? It was very clear that this House was not satisfied with what was brought forward earlier today.
James Cleverly
The instrument that we are discussing is a framework that allows us to deploy a range of measures. As I will say later in my speech, we are also giving ourselves further legislative vehicles through which we can impose punitive sanctions on Russia.
Mr Toby Perkins (Chesterfield) (Lab)
Everything we have heard today has suggested that the Government have started from the point of saying, “Here’s some sanctions. We know you’re going to do more. And when you do more, we’re going to do more.” The message coming from this place could not be much feebler. I appreciate what the Minister has said about the conversations that he is having with partners across the west. Will he ensure that they know that the resolute opinion of this House is that the sanctions that have happened so far are only a start, and that much stronger action needs to come for the sake of Ukraine and for the sake of President Putin getting that message?
James Cleverly
Earlier today my right hon. Friend the Prime Minister spoke in praise of the unanimity of voice that we experienced in the House, and I echo that. I give the hon. Gentleman, the hon. Member for Oxford West and Abingdon (Layla Moran) and other right hon. and hon. Members the absolute assurance that we regard these measures as the start of a range of sanctions that we can escalate in response to what Russia does. Our desire is to deter further aggression. We said right from the start, and in the intelligence that was declassified and put into the public domain, that we were highly concerned that an encroachment purely into the Donbas was not the ultimate limit of Putin’s aggressive ambitions, and that we would act to try to deter further aggression.
James Cleverly
I am going to make some progress.
I assure the House that we will use this and other sanctions legislation that we might bring forward to deter further actions and to encourage Russia to de-escalate.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am very content with the leadership shown, but the point I want to understand more clearly is: is the idea to deter President Putin from doing more or to get President Putin to step back? I am not all together clear. The force of the sanctions is dictated by what we are trying to do, and I would love to hear what we are actually trying to do.
James Cleverly
My right hon. Friend makes a good point. Let me make it absolutely clear: our aim is to prevent further aggression, for Russian troops to withdraw from where they have advanced, and for them to move away from the Ukrainian border and remove that threat from the Ukrainian people. It is a series of events that I will explain further if the House gives me the opportunity.
Tom Tugendhat (Tonbridge and Malling) (Con)
My right hon. Friend will know from his career in the Army that the principle of “clout, don’t dribble” is an important one to ensure that the opposition understands that we are serious. Does he agree that the ratchet could be misinterpreted as giving a free pass at an early stage, rather than drawing a clear line that needs not to be crossed?
James Cleverly
My hon. and gallant Friend makes a point I fully understand, and I can assure him the Government fully understand it too. The pace at which we ratchet up our sanctions response in conjunction with our international partners is very much to not just send a message, although sending a message is important, but to ensure the sanctions are meaningfully felt by the Russian leadership and those people around Vladimir Putin funding him and propping him up.
James Cleverly
I am going to make some progress. Trust me, I will give the hon. Gentleman an opportunity to intervene later.
We are providing political support to Ukraine. My right hon. Friend the Foreign Secretary is in close and regular contact with Ukrainian Foreign Minister Dmytro Kuleba and other friends and allies around the world, and I pay tribute to our ambassador, Melinda Simmons, and her team, who remain in Ukraine operating from the British embassy office in Lviv providing what support we can for British nationals still in the country.
Thirdly, we are leading on the strategic communications response to Russian actions. At every stage, working closely with our international partners, we have exposed President Putin’s plans, lies and false flags activities, and we have exposed them for what they are: a pretext for aggression and an attempt to justify what is in every respect unjustifiable. Last week I highlighted the falsehoods put forward by Vladimir Putin at the United Nations Security Council.
Chris Bryant
I am very grateful. One of the problems with the Government’s argument is that President Putin has already said the whole of the Donbas is now effectively to be either independent or part of Russia. Two thirds of that territory is currently held by Ukrainians and a third by separatists. That is an incursion already. It feels as if what we have announced today by way of sanctions is remarkably puny, yet it feels also as if we are not going to do anything more if the Russians just stick with this. Does the Minister not understand the anxiety there is, I think across the House?
James Cleverly
I have a huge amount of respect for the hon. Gentleman, as he knows—we speak when the cameras are not rolling—but I fear he is putting his prejudice ahead of the statement I am making, because were he to listen to the points I am making and allow me to get to the point in the speech where I am explicit about this, he would understand that the UK Government’s actions are not limited to what the Prime Minister has currently announced. He will hear that we are going to bring forward further legislation to further extend the measures available to us and that we are absolutely not ignoring the fact that there has already been Russian incursion into Ukraine, which we want to halt and reverse and then get those troops away from the Ukrainian border.
Robert Jenrick (Newark) (Con)
The Minister is being very generous in giving way. May I press him on this point? Many of us feel the package of sanctions announced today is comparatively modest. Is the Government strategy that further sanctions will come forward in the days ahead even if Vladimir Putin takes no further steps and acts of aggression against Ukraine, or is it that the further steps that are undoubtedly being planned by the Minister and colleagues within Government will come forward only should there be an additional ratchet in the level of aggression shown towards Ukraine?
James Cleverly
I thank my right hon. Friend for giving me the opportunity to make clear our position. If this has not become clear to the House, let me make it clear now: we intend to escalate these sanctions—to ratchet up these sanctions—in response to what has already happened in order to deter further aggression and in order to stimulate Putin to withdraw the troops from Ukraine, take them away from the border and send them back home to their families and barracks in other parts of Russia.
James Cleverly
I have got to make some progress, but I will give way again.
Mr Djanogly
I thank the Minister for kindly giving way. May I ask him to explain that point a little further? The items of sanction today were under the existing legislation, and what is being proposed today will enable further types of sanction. Obviously they will be worked on with foreign Governments, but will he also be looking at further sanctions from a UK perspective at the same time as looking at this with other countries?
James Cleverly
Yes. I am going to make progress, because some of the points raised in interventions will be covered in my speech. I do recognise the huge level of interest in the House from right hon. and hon. Members, and this will address a number of points raised.
Fourthly, we will use Britain’s economic and financial might to hit Russia’s economy hard. The new sanctions regime that the statutory instrument brings into place is a vital part of that, but it is not limited to that. The legislation follows the made affirmative procedure as set out in section 55(3) of the Sanctions and Anti-Money Laundering Act 2018. It amends the Russia (Sanctions) (EU Exit) Regulations 2019 and allows the Government to impose sanctions on a much broader range of individuals and businesses who are, or have been involved in
“obtaining a benefit from or supporting the Government of Russia”,
which includes those
“carrying on business as a Government of Russia-affiliated entity…carrying on business of economic significance to the Government of Russia…carrying on business in a sector of strategic significance to the Government of Russia”
and those who own, control or act as a director, trustee or equivalent of any of those entities. That is a huge scope of individuals and entities.
Alex Sobel (Leeds North West) (Lab/Co-op)
Last time I saw the Minister, he was about to enter the UN Security Council, and I thank him for how strongly he represented our country at that point.
Are the Government intending to release the Russia report on interference in UK democracy? Surely some of the names contained in it are exactly the people whom we should be sanctioning now. They previously interfered in our democracy and are clearly in hock to the Russian regime.
James Cleverly
As my right hon. Friend the Prime Minister said, we have brought forward measures that go further than the recommendations of that report. I will impose discipline on myself, even if the House is not going to impose discipline on itself, to stay focused on the statutory instrument.
James Cleverly
At this rate of interventions, I do not think we will get there—
Sir Iain Duncan Smith
Before the Minister imposes his discipline, will he give way?
James Cleverly
I will give way first to the hon. Member for Glasgow South (Stewart Malcolm McDonald).
Stewart Malcolm McDonald
I am sure that what the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) would say is entirely agreeable, but can I ask the Minister specifically about what he just said about the statutory instrument? I am slightly concerned that the disinformation networks that Russia relies on—they are of strategic importance to it—including media outlets in this country, are not part of the package. Earlier the Prime Minister said, and admittedly it was correct, that whether RT can continue to broadcast is up to Ofcom, but surely we are all agreed that RT is not a normal news agency in any sense of the words as people understand them. How can we have a sanctions package that allows disinformation networks that are crucial to Russia to be dismantled in the UK?
James Cleverly
I share the hon. Member’s frustration about the level of disinformation put out through Russia Today. However, we should be very careful before we advocate that a Government should close down news channels that they disagree with. We have a well established and effective regulator, and I think the right thing to do is to rely on that regulator to do the job for which it was designed.
Sir Iain Duncan Smith
My right hon. Friend the Minister is making steady progress through his speech. I want to help him slightly, and I have a pen here in my right hand. There is one individual I have heard of before from my hon. Friend the Member for Isle of Wight (Bob Seely), who made a very good case. Will my right hon. Friend write the name of Vladislav Surkov into his statutory instrument? He is the right-hand man to Putin—I think my hon. Friend referred to him as Putin’s Rasputin—who has organised the separatist movement in the Donbas area and continues to do so. Will my right hon. Friend do that to ensure that at least one person responsible for what is going on is sanctioned? The pen is here; if he is able to do it, he can.
James Cleverly
I thank my right hon. Friend for his assistance. We are lucky that both officials in the Box and Hansard note takers in the Gallery have taken note of that individual. I remind the House that it is a long-standing convention that we do not discuss future targets of sanctions designation by name to prevent those sanctions potentially being less effective than they might otherwise be, but I can assure him and the House that that name has been noted.
James Cleverly
I will make progress.
In response to President Putin’s decision last night to recognise sovereign regions of Ukraine as what he claimed—but we do not agree—to be independent states and to order troops into those areas, my right hon. Friend the Prime Minister today announced the initial set of sanctions that with immediate effect will freeze the assets of five Russian banks. Four of those banks are involved in bankrolling the Russian occupation. They include Bank Rossiya, which is particularly close to the Kremlin, the Black Sea bank for development and reconstruction, IS Bank and Genbank.
Kevin Hollinrake (Thirsk and Malton) (Con)
I am very grateful to the Minister for giving way; he is being very generous. I am interested to know the criteria we have applied in choosing those five banks, which are relatively small. He talked earlier about sanctions on entities of economic significance. The big banks in Russia are Sberbank and VTB. Why have we chosen five small banks, rather than the two largest ones?
James Cleverly
I would make the point that the sanctions regime set out today is the initial range of sanctions. We reserve the right to extend the individuals and entities that come under this sanctions package. I will make the point shortly that we do intend to extend the measures available to us.
James Cleverly
I have got to progress. I will be crucified otherwise.
In addition, over the forthcoming weeks, we will extend the territorial sanctions imposed in response to the Crimean incursion by Russia to territory occupied by Russian forces in what they claim to be the breakaway republics of Donetsk and Luhansk. No UK individual or business—no UK individual or business—will be able to deal with them until they are returned fully to Ukrainian control. We also intend to sanction the members of the Russian Duma and the Federation Council who voted for recognition of the independence of Donetsk and Luhansk, in flagrant violation of Ukraine’s territorial sovereignty.
Chris Bryant
I wholly support that if that is what the Government intend to do—
Chris Bryant
I know the Minister said that, but I am just trying to check whether he intends to do that under this proposed legislation. There is a legal argument that he cannot, not least because the statutory instrument lists what is considered to be a member of the Government of Russia and it does not include members of the Duma. However, in proposed new regulation 6(3)(a), I think the Minister is intending to include anyone who promotes a policy or action which destabilises Ukraine. It would just be helpful if he could explain that.
James Cleverly
The hon. Gentleman is right that there is a difference. Those in this House understand that there is a difference between a legislature and a Government. The sanctions regime under which those sanctions have been brought forward is an extension of the pre-existing sanctions regime we brought forward in response to the aggression going into Crimea, rather than this one.
We are also ready to introduce new legislation, putting in place new measures which will prevent the Russian state from issuing sovereign debt on the UK markets. They will curtail the ability of the Russian state and Russian companies to raise funds in UK markets and further isolate Russian banks—touching on the point raised by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—and their ability to operate not just in the UK, but internationally.
This will not end today.
Nick Smith (Blaenau Gwent) (Lab)
I thank the Minister for giving way. The Intelligence and Security Committee report is now nearly three years old. Will the Government please publish it this week?
James Cleverly
That is a very good question, but it has nothing to do with this SI.
Should Russia stage any further invasion into Ukraine, we will not hesitate to implement a comprehensive and unprecedented additional package of sanctions in close co-ordination with our allies around the world. That close co-ordination is important to ensure their maximum effectiveness.
Stewart Hosie (Dundee East) (SNP)
Will the Minister give way?
James Cleverly
I have to get on. These measures will curtail the ability of the Russian state, Russian companies and Russian individuals to raise funds on our markets and will further isolate Russian banks. We will keep ratcheting up the pressure, targeting more banks, more individuals and more companies that are significant to the Kremlin, to touch on the point made by a number of right hon. and hon. Members. Russia—rather, Vladimir Putin—has chosen a path of international isolation. The measures that the Prime Minister announced today demonstrate that it will bear a cost for doing so and, if it does not step back, these measures will only increase.
Russia’s aggression against Ukraine is part of a long- term strategy. We must not give ground now or try to accommodate the illegitimate concerns that Russia has put forward. Its strategy of aggression would not end. It would not stop at Ukraine. Instead, it would be emboldened. President Putin would simply focus on a new target, so we are absolutely resolute in our response. What we do now will shape European security for many years, and it will be viewed by other parts of the world and have an impact on security issues far more widely than in Europe. We must rise to the moment. We must stand shoulder to shoulder with the people of Ukraine in their desire to protect their homeland and to protect their freedom. We must, and we will, stand shoulder to shoulder with them, and I commend the regulations to the House.
Mr David Lammy (Tottenham) (Lab)
I begin by thanking the Government for the confidential briefings that they have provided to the Opposition on this very urgent and pressing situation.
We sit in this Chamber with dark clouds gathering over Europe. For eight years now, Vladimir Putin has illegally occupied Crimea and stoked conflict and division in Donbas. For two months, he has menaced Ukraine’s borders, mustering the largest build-up of military forces in Europe since the second world war. Last night, he recognised the independence of the breakaway entities that he has created in Ukraine in a flagrant violation of international law and yet another rejection of the diplomatic commitments that he has made.
All the while, Putin has spun lies and mistruths, denied reality and fabricated justifications for his actions. In a speech to the Russian people, he sought to deny the legitimacy and sovereignty of Ukraine and the identity of its people. He concocted grievances and manufactured threats to legitimise his aggression. He spouted myriad lies to the people of Russia, with whom we and our NATO allies want only friendship and peace. And now he has followed that with the explicit deployment of Russian military forces into the internationally recognised territory of Ukraine. The prospect of tanks rolling across the borders of European states recalls the darkest moments of our continent’s history. This is a crime against peace; it is an assault on international law. Let us be in no doubt: Putin bears responsibility. There can be no justification for his actions, no defence of his aggression. While the west has sought a way out of this crisis through firm and principled diplomacy, Putin has doubled down.
The dream of Ukrainians—I felt this very definitely on my trip to Kyiv just four weeks ago—is to shape their own future, to decide their own destiny and to choose the sort of nation that they wish Ukraine to be. All states enjoy that fundamental right, which is why we must be very clear that a line must be drawn at this point. Putin’s assault on a sovereign United Nations member state should be condemned not just by the west, but by every single nation that has a stake in the universal principles at the heart of the post-1945 United Nations system, so Britain must build the widest possible international coalition to show Russia that the world will not tolerate this aggression.
The people of Ukraine have our complete and total solidarity. We admire their courage, we will champion their democratic rights and we will support their right to defend themselves and the democracy that they have built.
Alex Sobel
My right hon. Friend mentions the UN. At the UN last week, I met Lesia Vasylenko and Alona Shkrum, two Ukrainian MPs who impressed on me the importance of sanctions on Russian interests in the City of London. They will be disappointed today with the narrow scope of the regulations. I think that many Ukrainian MPs will want to see a far broader set of sanctions than those being proposed.
Mr Lammy
My hon. Friend is exactly right. I have already seen Ukrainian MPs saying today that they are disappointed that our sanctions regime does not go further.
We have sought to send a unified message across this House and to provide constructive opposition in the national interest. It is in that spirit that we approach today’s announcement. As the Minister knows, while we welcome these measures, we believe that they are too limited and too partial—five banks and just three individuals. The Prime Minister recognised at the Dispatch Box today that this move is a further invasion of Ukraine. It is very hard to square the rhetoric with the reality of these measures.
Mr Kevan Jones (North Durham) (Lab)
I have to agree with my right hon. Friend about the limitations of the sanctions on those individuals. However, does he agree that if the regulations’ definition of “involved person”, especially the reference to being
“involved in…obtaining a benefit from or supporting the Government of Russia”,
is interpreted widely with the right political will, it could take in a lot of individuals who have a lot of money salted in the UK, including a lot of the oligarchs who have property or other interests here?
Mr Lammy
My right hon. Friend is exactly right: it could, but it needs enforcement and we need to hear more individuals named. The danger in this debate is that the punishment does not befit the crime. I understand the Government’s desire to maintain a broader deterrent against further escalation, but it is also clear that a threshold has been crossed. The gravity of Putin’s actions requires a broader, firmer and fuller response, otherwise we risk his calculating that the rewards of aggression outweigh the costs.
Liam Byrne
My right hon. Friend is making a brilliant speech. When the new sanctioning regime was introduced, it was all about increasing our capacity to act independently to sanction bad actors. Is my right hon. Friend therefore disappointed that, Magnitsky sanctions aside, we have added only three people to the sanctions list for economic crimes since 2014? That seems pathetic, given the threat we confront.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Will my right hon. Friend give way?
Lloyd Russell-Moyle
It does sometimes seem that the Government play hot and cold with Russia. They accept donations from Alexander Temerko and others, and then do not provide the fullest sanctions possible. This is not a new issue, is it? This is a long-running dispute. We know that Russia has been the aggressor here for a long time. Is there not a danger that this is a bit too late and too little, and is actually a signal to the Kremlin that it can keep getting away with its bully-boy tactics?
Mr Lammy
My hon. Friend has put it very well indeed. We must not fall into the trap of the past in taking actions that are too limited and too late, so Labour will continue to make the case for a fuller and more comprehensive package of sanctions now. President Biden is expected to announce, as soon as today, measures which will go further than those outlined by the Prime Minister. There are also reports that the EU is close to agreeing a package of measures including the targeting of more than 300 Russian Government officials and new restrictions on trading in Russian state bonds. Can the Minister reassure us that we will move in lockstep with our international allies?
Let me now turn to the actual text of the legislation. Although the Opposition of course welcome the spirit of what the legislation is seeking to achieve, we have some major concerns, and some suggestions as to how the Government could go further.
Concerns have been expressed to us that, given how the legislation is currently drafted, oligarchs who are close to Putin will find it too easy to avoid the impact of the measures. Although they may not hold a formal role in a sanctioned bank or company, they may exert significant control behind the scenes. Consequently, some of the most influential and notorious oligarchs—oligarchs who are close to Vladimir Putin, and have purposely structured their enterprises to avoid the appearance of majority ownership and control—would go untouched.
We believe that that is a crucial mistake. We know that Putin could not care less about sanctions laid against his country or the Russian people; that is one of the reasons why sanctions failed after the invasion of Crimea. The only sanctions that he really cares about are those against the richest people closest to him, and that must be the Government’s target. It would be a grave error to provide any loophole that would allow these people to escape sanction.
The Government could easily close that loophole by including a new category of person in the legislation which would encompass any oligarch close to Putin who obtains a benefit from, and supports, the Government of Russia. These designations should be made without fear or favour, and should include individuals with UK interests or even UK passports. In the same way, some of the oligarchs closest to Putin could currently slip through the net cast by this legislation, and so can Russian Government officials who have supported Putin’s regime and its goals. As it stands, paragraph 4 of the legislation would allow sanctions to be laid against individuals on the board of companies with certain links to the Russian Government but it would not enable sanctions to be laid against officials who enable the Russian Government to pursue their policy of aggression in Ukraine. The EU appears to be moving quickly on this, and this Government must keep pace.
It is not just Russian officials who could escape the pain of these sanctions, but also members of the Russian legislature. Paragraph 7 of the legislation defines what is meant by the “Government of Russia”, but it does not include members of Russia’s legislative branch, the Federal Assembly. This seems to be a remarkable oversight, and I would be glad to hear from the Minister what the rationale was for not including members of the Russian legislature in the scope of the instrument. We also have to ask what action the Government are taking to clamp down on assets owned by family members of those subject to sanctions. For example, will the Government also designate businesses that are owned by family members but controlled by a designated person?
Lloyd Russell-Moyle
The Government have yet to enact the registration of overseas entities Bill, which would require property owners and other business owners to show who the real beneficial owners of those overseas entities were. Is that not a huge weakness in our armoury?
Mr Lammy
My hon. Friend is right. Why do we have a system that is so opaque? What is the delay? I have raised this issue at the Dispatch Box at least three times, and I am happy to raise it on a fourth occasion, as my predecessor has done.
At present, this legislation provides for asset freezes of designated persons, but there is space for wider sectoral measures, such as those we have applied to other countries in the past. Will the Government bring forward other legislation to address this?
As Opposition Members have indicated, sanctions on their own are nothing unless they are rigorously enforced by the responsible agencies in the UK. Since the Office of Financial Sanctions Implementation was given powers in 2017, it has imposed penalties on only five occasions. If the Government have designed the most comprehensive sanctions package in our history, as the Minister assures us, it must be backed up by the most comprehensive resources it has ever been given. Will the Office of Financial Sanctions Implementation get those resources? What steps will the Minister take to ensure that enforcement agencies are able to function and take action under these new measures?
As my hon. Friend the Member for Blaenau Gwent (Nick Smith) has already asked, is this not the moment to publish the Russia report? Lay it before the House! Put it in the Library so that we can see its contents, and so that we can act, move forward and worry those in the Kremlin. We believe that we must go further now. Only five banks and three individuals are facing sanctions as a result of the UK Government’s actions today. This is not a big enough punishment for the blatant breach of international law that has already been made. Let us not be too slow to act and fall behind our international partners.
We should be introducing the full set of sanctions that is available to us now. Russia should be excluded from financial mechanisms such as SWIFT—the Society for Worldwide Interbank Financial Telecommunications. We should ban trading in Russian sovereign debt. Donetsk and Luhansk should be subject to comprehensive trade embargoes. Putin’s campaign of misinformation must be tackled by preventing Russia Today from broadcasting its propaganda around the world. We should be working to support our allies in the EU to cancel Nord Stream 2. The Foreign Secretary says that we are in lockstep with our allies, but the reality is that our allies have gone further in sanctioning individuals in Putin’s regime. Why have we not done the same?
This is not simply a matter of individuals, of course; it is about fixing a broken system. Ending our openness to fraud and money laundering, our inadequate regulation of political donations, our lax mechanisms of corporate governance and our weakness to foreign interference requires a barrage of new measures, long called for but as yet undelivered, to shut down the shell companies that obscure the origins of wealth and hide corruption, to lift the veil on who owns property and land in the UK through a transparent register, as mentioned time and again, and to bring forward an economic crime Bill that will target the corrupt elites who store their wealth under our noses.
Sadly, due to Putin’s expansionism, targeting Russia may not be enough. The regime in Belarus is supporting Putin’s aggression, playing host to Russian forces and potentially being set up as a springboard for a wider assault on Ukraine. Are the Government considering expanding the powers they have to designate people in Belarus should a wider invasion take place?
This is not the time for half measures. Putin has made his move, and the wider threat that Ukraine faces is immediate. The consequences for Europe and the west are stark. The effects of this moment will depend as much on our response to this aggression as on the aggression itself. Autocrats around the world are watching to see whether we meet the test of our strength and resolve. The Minister will have seen the strength across the House today. We need to go harder, deeper and broader, and we need to do so now. We stand ready to work with the Government to achieve this.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Quite a lot of people would like to speak in this time-limited debate. At this stage, I suggest not going beyond 10 minutes. I will not impose a time limit, but I want to get everybody in.
Tom Tugendhat (Tonbridge and Malling) (Con)
I welcome the Government’s plans for sanctions and increased action to try to clean up the mess in which we find ourselves here in the UK. This is certainly a welcome step in the right direction, and my right hon. Friend the Minister will remember that the Foreign Affairs Committee set out various options for how we should begin to think about this in May 2018, when we published our “Moscow’s Gold” report.
I welcome the direction we are taking but, along with many others on both sides of the House, I am afraid that I find myself asking, “Why not more? Why not further?” In many ways, we are using the actions of a hostile state in eastern Ukraine to justify something we should have done years ago. The UK, sadly, has for too long been an avenue for money laundering by despots and criminals around the world. For too long and on too many occasions, we have seen our institutions, our City and our service sector used to hide the gains from corrupt practices and criminality abroad.
This has now come to a head because those criminals, those thieves, who raped and murdered the Russian people for 20 years, who did not replace the oligarchs that rose up in Yeltsin’s day but merely nationalised them, have been using those same vehicles and avenues to hide the profits of their crimes—most tragically the theft of an entire country.
That act of naked brutality, that act of violence against an entire nation, an entire culture and an entire people, has sadly been allowed to profit a small number of individuals. That is an absolute tragedy. It is a tragedy for the people of Russia, who have lost so much, but it is also a tragedy for her neighbours, who are now under such pressure and such threat. It is not just Ukraine but the people of Belarus, the people of Estonia, Latvia and Lithuania and the people of Poland. It is a tragedy for those who are being weaponised in the human trafficking that we are seeing from the middle east, through Belarus and into the forests of eastern Europe. It is also, sadly, a tragedy for the people of these wonderful islands, the people of Great Britain and Northern Ireland—the people of the United Kingdom.
It is a tragedy for us because this marks what my right hon. Friend the Member for Maidenhead (Mrs May) mentioned only a few hours ago in this Chamber. We are seeing not just the aggression against Donetsk and Luhansk—not just a raid, an invasion, an opening salvo of a war that President Putin is trying to bring to Europe, in many ways for the first time in 80 years, although of course there was an exception in 2014 when he invaded Crimea and another in 2008 when he invaded Georgia; what he is doing to us, to the people of these islands, is unpicking the values and principles that our grandparents fought for 80 years ago.
President Putin is unpicking the principle that we embedded into the constitutions of the United Nations and the Council of Europe. He is unpicking the principle that the rule of law, that the debate among sovereign peoples, should be the way disputes are settled in this world. He is replacing the rule of law with the rule of force. Sadly, he is demonstrating that it works not only on the ground, but in the wallet; he is demonstrating that a leader can profit politically and personally from the abuses he conducts against his own people and his neighbours. That is why when I asked my right hon. and gallant Friend the Minister, who served with distinction in the Royal Artillery, about the classic gunner phrase “clout, don’t dribble”, what I was actually asking about—and he recognises it—is why do we not say immediately and clearly that what we are seeing today is wrong.
It is wrong for the people of the UK to have corrupt money flowing through our systems. It is wrong to have the profit of crime being laundered through our City and through jurisdictions overseas that depend on us. It is wrong to see the wages of war—quite literally—profiting a small cabal of thieves in Moscow. It is wrong because it undermines our security, it makes us more vulnerable and, sadly, it exposes the people we are privileged to represent to the dangers that we have, thank God, kept at bay for 80 years. It is wrong because it threatens the people of the United Kingdom.
We have set out ways to address that. We have spoken at various points about a foreign agents registration Act and about the exposure of beneficial ownership, not just in our own estates, but in the jurisdictions around the world. We have spoken about cleaning up the Companies House register and giving powers to the enforcement agencies, which could actually start to take action on this. We have spoken about all those things for many, many years, yet still we see names such as Mickey Mouse and Adolf Hitler in the list of directors in Companies House. Still we see the toleration, sadly, of fraud in too many of our institutions. Sadly, we still do not see the resources going into the policing of these different institutions.
Kevin Hollinrake
My hon. Friend is making a superb speech. One thing that often gets missed in this debate about how we crack economic crime is the role of whistleblowers. They are the most likely people to identify wrongdoing in the banks he mentions and bring it to light and to the enforcement agencies. Does he agree that whistleblower protection, and potentially remuneration, should be included in this context?
Tom Tugendhat
I absolutely agree with my hon. Friend on that. He is completely right, as usual, in highlighting that the protection of whistleblowers is an essential part of the exposure to justice of those who have committed crimes. We need to think again about crime. We need to look again at the institutions, law enforcement bodies and agencies that are charged with protecting us and think really hard about their budgets. They are not simply ways of stopping the taxman from getting his hands on a little bit more loot; they are fundamental to our national security and to the protection of our people. We need to think of them as agents of the state in the same way as we think of the armed forces or the intelligence services. We need to think of them on the frontline of the protection of the people we are lucky to represent. Frankly, we need to put the money where so often our mouths have been when we have passed Acts in this House that have not had the resources to make them not just law but actionable law.
Lloyd Russell-Moyle
I am going to bang on about the draft Registration of Overseas Entities Bill. I served on the prelegislative scrutiny Committee on the Bill with several colleagues from different parties. We agreed a set of amendments and the Government accepted them, but they failed to bring through the Bill and the powers for Companies House and the Land Registry. Does the hon. Gentleman agree that it is about not just money but the fact that the Government have been sitting on their hands in respect of powers for the relevant organisations?
Tom Tugendhat
The hon. Member is right that more legislation would help, but fundamentally we need the resources for the agencies.
Let me close by saying that I welcome the direction the Government have taken. I welcome the commitment to do more to defend the people of Ukraine, which the Foreign Affairs Committee was privileged to visit only a few weeks ago. I welcome the fact that we are standing in defence of democracy, freedom and the rule of law. But I urge my right hon. and gallant Friend the Minister to look again at the sanctions, many of which were introduced four or eight years ago by the United States Government—I was just reading the United States Treasury document that listed the subjects of sanctions in, I think, 2014—because we can go further. There is so much more that we can do.
It is of course right that we act in concert with our partners and in tandem with our allies, and that we make sure we do not expose division by acting alone, but one of the great strengths of this Government, this House and this nation is that we have running through the sinews of our economy so much of the world’s finance that it puts a particular responsibility on us to stand up and defend the economic liberties that keep our people safe, enable our prosperity and build the rule of law around the world.
Alyn Smith (Stirling) (SNP)
I am grateful to the Minister for advance sight of the statutory instrument and for our previous discussions and briefings. I exempt him from any personal criticism in what I am about to say, which is very much a criticism of Government policy.
It is worth my stressing our agreement throughout the House: nobody in this House has any fight with the people of Russia. We had a debate a number of weeks ago in which we all agreed on that point. I have always had a long and deep affection for Russia. Scotland and Russia share the same patron saint. I did my masters in Warsaw in central Europe and have always been fascinated by the wider region. My granddad served on the Arctic convoys when we fought with the people of Russia, and was bombed twice in that effort—that is not a reference to the vodka in Murmansk, where I suspect he was bombed more than twice, frankly. We have fought with the people of Russia against fascism. In the same way as Germany’s defeat was its liberation, the people of Russia have themselves been oppressed by their own Government. A successful disinformation and misinformation campaign has them dead afeared of war with us and of war arising from our aggression. In nothing that we do must we give the impression that we have any malevolent intent towards the people of Russia. I do not believe that any of us have done that today.
Equally and at the same time, we stand four-square in solidarity with the people of Ukraine. I was in Kyiv with my hon. Friends the Members for Glasgow South (Stewart Malcolm McDonald) and for Angus (Dave Doogan) just a couple of weeks ago and we met a number of politicians, members of civil society, academics and commentators. The people there are united in their frustration, because this is not a new invasion for them. The situation has been ongoing for eight years. I am troubled to see commentators and the media, and even some people in this House, talk about an invasion as if it was a new thing. It is not a new thing: it is a clear, ongoing, flagrant breach of international law and an act of aggression for which there have been minimal consequences. I am concerned to hear these sanctions being described as new measures that will be ramped up. Where are the consequences for what has gone before? I am worried about moral hazards when we are dealing with this Administration. Mr Putin has proven to be considerably better at salami slicing than we are, so now is not the time for half measures.
The SNP will support these regulations—of course we will. We have called for action on sanctions many times since 2014 in respect of the occupation and annexation of Ukraine. We have called for action on dirty money. We have called for action on Companies House. We have called for action on money laundering and action on Scottish limited partnerships. We have called for action on an economic crime Bill and action on opaque property transactions. We have called for action on tax havens, which are under the substantial control of the UK Government, yet are allowed to do almost anything they like, contaminating our financial system. We have called for action on political donations and action on data transparency. We have called for action to protect our democracy. All those laws are held by this place, not by Scotland, so the Scottish Parliament, in its defence, cannot do much on this, but this House has been notable in its lack of action. We have called for action on misinformation. My hon. Friend the Member for Glasgow South mentioned “Russia Today” earlier. I absolutely stand by his view—it has been my own long-standing view as well— that “Russia Today” is not a normal broadcaster and should not be operating on these islands.
We support this enabling legislation. If anything, I suspect that it needs to go further and will need to be brought back in the fullness of time. I hope that the Minister is taking good notes—I am sure he is—of the genuine concern around the House, from all points of the compass. I have previously criticised the UK Government’s policy on Chinese malfeasance and illegality as being homeopathic. I struggle to find a word for this one other than it is weak tea. It is not nothing, but it is not much, particularly when set against the actions of the German Government in announcing the icing—the cancellation perhaps, but the icing certainly—of the Nord Stream 2 project, a $10 billion project, which has huge implications for their energy security, and indeed ours, given the interconnectedness of the EU and the European energy markets. Set against that, this is really small beer, and I cannot understand it.
The UK seems to be casting about for somebody else’s leadership, because I really do not detect much in the actions and announcements that we have heard today. The UK seems to be being buffeted by events rather than forming any particular leadership.
I will close as I am conscious of time. I hope that I have not made too many party political points in this debate. It is important that we focus on the fact that we agree, and the SNP supports this measure, but there is a smell to this. There is a smell to the fact that the UK Government have allowed our financial and democratic systems to be as corrupted as they are. I was very struck by what the Chair of the Foreign Affairs Committee said in his speech. He said that it is not right that so many things are happening in relation to dirty money on these islands, and I include Scotland in that. There is a smell to this.
I am worried about the credibility of the UK Government in the eyes of the Kremlin. The Kremlin will act on weakness; it will seize on weakness. It will take advantage of weakness where it sees it, and of a lack of integrity, viability, sustainability and resilience. We have seen plenty of that from this Government thus far. Just a few weeks ago—this is almost too far-fetched for satire—as we were deeply concerned about the further incursion of Russian forces into Ukraine, the UK Prime Minister had a call booked with the President of the Russian Republic to discuss these matters and had to postpone it because he had to deal with a report about illegal parties in his office where he was ambushed by cake. What sort of impression is being given by this Government not just to our partners, but to our potential opponents?
The SNP will always support international law. International law is part of our DNA. We have a different world view and a different ambition for Scotland, but we can put that to one side on this, because this is too important. The Kremlin regime is a clear and present danger to international law not just in Ukraine, but everywhere else. What happens in Ukraine will be watched by every autocrat everywhere around the world. We need to act on this, and we need to act properly. The SNP will support further action on this. I hope that the UK Government will co-ordinate seriously with the international community, but we have not seen today anything like what we need to see, and I urge the Minister to redouble his efforts.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am grateful to be called at this particular point, Madam Deputy Speaker. So that I do not end up repeating them, I first associate myself completely with the remarks of my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat).
We can do, we should do and we must do more to root out the dirty money that flows through there. That is not to blame us—in some senses it goes through New York as well—but we should collectively ensure that we target those people. I am told that Putin has squirrelled away more than $250 billion around the world through his oligarchs; they are not actually wealthy individuals, but only nominally wealthy, because it is his money, which he has stolen from the Russian state. We should seek that out and nail it down, collectively, as nations in the free world.
I say to my right hon. Friend the Minister that I appreciate the difficulty the Government are in over this matter. The Government want to play their hand carefully, and I understand that; they want to deliver such that President Putin and co. have to pull back. The question, therefore, is not whether the Government are right to want to do that—we support them in wanting to do so—but whether the means that the Government have willed to themselves are enough.
I also speak as co-chair of the all-party parliamentary group on Magnitsky sanctions, with the hon. Member for Rhondda (Chris Bryant). We have already listed names, and I genuinely and carefully question why my Government had not done more to sanction people already, long before this final crisis erupted—people in Russia, China, the United States and around the world who are clearly identifiable as in need of being sanctioned under the Magnitsky rules that we passed. I am ready to give the Government a list, and I know he feels exactly the same. He probably has it there.
Sir Iain Duncan Smith
I knew he would have it. We want to see that list actioned.
The trouble right now is that we have had the debate about President Putin and the Russians invading Ukraine as though they were about to invade Ukraine. I keep banging on about this: they have invaded Ukraine. They took over Crimea in 2014 and created this nonsense about separatists in the Donbas region, loads of whom we know to be Russian soldiers, dressed up in different uniforms and creating merry hell. There is no way on earth that they would have held the Ukrainian forces off for this long were it not for the fact that they have some very sophisticated support coming in from Russia. There is an idea that somehow the Russians are invading, but they are not—they have already invaded. Therefore, we have the right to do something about it.
The question therefore is what we do about it. In 2014 we let ourselves down: we did next to nothing. I was in Government at the time and I felt concern then, but the reality is that we did not do enough. The problem in dealing with dictators is that if we do not act early and act hard, the lesson they learn is that we will never act and we will always give way at the end. When will those lessons be learned? We have been through it time and again. Dictators have a single purpose. The problem with democracy is that we have many thoughts, many ideas and many people to bring with us, but we too should have a central purpose.
I have some questions for my right hon. Friend the Minister. Much as I really support what the Government have done, I cannot understand why we have not done much more immediately. Going now and going hard should be the way. If there are other things we are planning to do, there are many others we should be sanctioning—I mentioned one individual earlier in an intervention—and many other levers we could pull.
I do not understand—but perhaps my right hon. Friend can explain to me—why we have not driven forward on the SWIFT banking system or the trading of sovereign debt, which would affect the Russians very much. I agree that the Germans have moved swiftly, as we know, to suspend Nord Stream 2—I would like to see them end the whole idea of it—but if they are going to do more, we should be co-operating with them and going in hard ourselves this one time.
Will my right hon. Friend therefore keep this statutory instrument open so that we could even return to it tomorrow, if necessary, to add to the whole process and take it even further? We have to do more and we have to do it harder than we have done now, because President Putin will not take any lessons.
I come back to the question I asked earlier. Bearing in mind that the Russians still sit in Crimea and still have areas of Donbas, which in a way they were unofficially occupying but now have occupied, what I do not quite understand is what this first phase of sanctions is actually meant to do. I am utterly puzzled by it. Is it meant to say, “Thus far and no further”? My right hon. Friend said that it is meant to say, “Get back.” But if so, then we have to hit very hard with everything we have got, such that President Putin and his cohorts around him suddenly say to themselves, “They really mean business. They are united across the democracies.”
Layla Moran
Within 10 minutes of the Minister rising to his feet, the sanctions were already out of date because the Russians had already gone further. During this debate, Putin has already gone further than he had at lunchtime, but we are yet to see any more announcements from the Government about further sanctions. The Russians are already laughing at us, aren’t they?
Sir Iain Duncan Smith
My worry is very much that they know exactly what they are doing, because they know exactly what we will do and they have already prepared the ground for this. They probably think to themselves, “We’ll do a certain amount and then we’ll discuss an awful lot more about what else we might do,” and then at some point a couple of countries will break ranks, go back to Putin and say, “Let’s work out a deal.” After all, the Minsk deal was a terrible deal because it forced on Ukraine the loss of its own territory, not necessarily in perpetuity but saying, “Don’t fuss about this any longer because we just want peace.” Peace at any price is not peace. Ukraine now faces an extended conflict and we see what is happening. A bad deal is a bad deal, and it leads to further pressure. That is what is happening.
I really do believe that the Government have to take this many notches further and hit the Russians very hard—yes, with the cleaning out of some of the Augean stables in the financial services area, but we also need to go on to grander, more supranational sanctions, working with our allies absolutely to cut off supplies of money, such that the Russians and President Putin cannot find a way through this and they feel the pain. When we hit them with these sanctions we must hear them squeal, not see them smile quietly and say, “They won’t get any further.” Let us do that earlier, now.
In conclusion, and returning to a point I made earlier, I genuinely believe that the free world has been half asleep on the watch. We thought that democracy was triumphant. We thought that there was no way, in coalition with the free markets, that the rest of the world would not turn to democracy automatically and embrace it, and we would have a fair and reasonable place. We failed to realise that the idea of totalitarianism—of brutality and oppression—exists and will go on existing. Unless we fight them wherever they exist, they will rise again. In China now, they practise slave labour, they have genocide, and they persecute people and lock them up. They absolutely dominate the citizens of that country. In Russia they are doing the same, as in Belarus, Iran and many other countries that the hon. Member for Rhondda and I have discussed in the APPG. They are on the move. This axis of totalitarianism supports itself across the board. If we do not act on Putin now and with firmness, then in China they will look at Taiwan and say, “They’ll never do anything; it’s even further away.” Then there is Iran and the nuclear weapons, and Belarus looking across at Poland. We must move hard, we must move now, and we must make them squeal. If we do not do that, then we will have failed.
Chris Bryant (Rhondda) (Lab)
I associate myself with everything that the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) has just said; I completely agree with him. Democracy is a very tender flower. We thought it was very robust and it would survive all weathers, but the truth is that it needs watering, care and tenderness. All too often, it is very easy for authoritarian regimes to trample on it and kill it.
I associate myself, too, with the comments of the hon. Member for Stirling (Alyn Smith). We have no beef with the people of Russia. The people of Russia are fine people with not only a strong culture and history, but many strong democratic traditions and understandings of what it is to be a human being and to work in solidarity with others. Our beef is with the regime; it is with Putin.
I agree that we have been recklessly naive for far too long in relation to our relationship with Vladimir Putin. It pains me—I understand why Tony Blair was doing it—that we gave him a state visit so early in his time. We wanted to press the reset button, as did Obama, and it gained us absolutely nothing; it just showed us to be weak. We have been pitiful. We have been puny. We have vacillated. We have been spineless. Quite often we have looked craven because we just want Russian money to prop up our banks, pay our lawyers and keep our consultancy firms going.
Maybe we could forgive the fact that Putin is a thieving kleptocrat—after all, most off the theft is done against his own people. It leaves his own people poorer than they were when he came to power, though. It is maybe just a matter for the Russian people that he has enriched himself beyond the wildest dreams of Imelda Marcos and Muammar al-Gaddafi put together. But three things make him truly dangerous: his territorial ambitions, his excessive use of force, and his lies and misinformation.
Just look at Beslan, where 334 hostages were killed in the end by Russian state actors, including 176 children. Just look at the Moscow theatre siege, where 130 hostages were killed by Russian state actors. Look at Chechnya—I could go on for ages—and look at Georgia. They compare the situation in Donetsk and Luhansk with the situation in Abkhazia and South Ossetia. Of course, it is exactly the same playbook: “Set up a pretext and then move in.” Look at the downing of Flight MH17. Look at the murders of Boris Nemtsov, Sasha Litvinenko, Dawn Burgess, Anna Politkovskaya, Sergei Magnitsky and so many others.
Yes, I am angered by the naivete that I sometimes see in this country. I have seen it often in this Chamber, and I have seen it also from the left. Stop the War said:
“We oppose the deployment of British forces to the borders of Russia as a pointless provocation.”
What utterly stupid naivete. Where on earth is the condemnation of the 190,000 Russian troops on the border, the annexation of Crimea, or the snipers shooting at Ukrainian forces now? This is not just naivete; it is monumental and dangerous stupidity, and we should call it out.
I confess that I was absolutely sickened by Putin’s speech last night. The Minister cannot say it, but I can: the man is deranged, unhinged and a danger to his own people, as well as to the people of Ukraine. I said in this House in March 2014:
“A Russian friend of mine says that Putin is not yet mad. That may be true, but what will our surrendering and our appeasement do for his sanity?”—[Official Report, 18 March 2014; Vol. 577, c. 679.]
We can now see what his madness has done. I am reluctant to use the word “appeasement” too often, but sometimes what has been done has felt like appeasement.
Putin’s argument about Russians and Ukrainians being one people—again, I understand that the Minister cannot say this, but I can—is the same as Hitler’s about the Sudetenland in Czechoslovakia in 1938. Hitler said then that he only wanted to protect the Sudeten Germans. It was a lie. Some people said so in this Chamber in 1938. Some of them laid down their life in the ensuing slaughter, and they have their shields up here. However, Chamberlain bought the lie, and the following spring Hitler took the rest of Czechoslovakia without so much as a by-your-leave. Be in no doubt: this is not a Russian peacekeeping mission; it is an annexation, an invasion and a declaration of war. Putin knows that it will lead to significant bloodshed on a massive scale because the Ukrainians are more determined to fight now than they ever have been. If anything, Putin’s behaviour over these years has reinforced the Ukrainians’ sense of solidarity.
Putin is not just interested in the parts of Luhansk and Donetsk already in separatists’ hands; of course he is not. He wants Avdiivka, which is metres across the demarcation line, where the Foreign Affairs Committee saw Russian snipers pointing at Ukrainian troops just three weeks ago. He wants Kramatorsk, where we met community leaders, including the local priest. He wants Mariupol, and of course he wants Kyiv, Lviv, Kharkiv, Odessa—the whole of Ukraine. He wants to reshape the contours of Europe by force because he thinks that that is to be his legacy.
Of course, I support the statutory instrument and I am glad we are doing this, but today’s sanctions—the ones that have been announced today, which rely on this instrument—are wholly inadequate. I think that is the message from the whole House, and I hope the Government are hearing it loud and clear. They do not match the rhetoric of what the Government are saying, and when actions do not match rhetoric, we undermine that rhetoric and put ourselves in a worse position, not in a better one.
The banks are the small change of the Russian economy, they really are: they are shrapnel down the back of the sofa. The individuals have already been sanctioned for four years by the Americans. This really is netting in the minnows while letting the basking sharks swim freely. As somebody else said, it is taking a peashooter to a gunfight. Putin, frankly, will beat this feather duster away. He will just laugh at us. In effect, Medvedev was laughing at us yesterday, even before we announced anything, because he said that the Russians will be able to wear whatever we throw at them. It is a beautiful irony, is it not, that one of the people who will be sanctioned, when the Government are able to bring their measure in relation to Members of the Duma, is Andrey Lugavoy, who was one of the murderers of Alexander Litvinenko? Incidentally, can I just say that, if anybody has not met Marina Litvinenko, she is one of the most wonderful people who have ever walked the face of this earth?
I think a sanctions regime in this context has to go hand in hand with, first, a proper public register of beneficial ownership of property. I do not understand from the Prime Minister whether it is his intention now to introduce that, because it keeps on being conflated with various other forms. I hope that is the plan, but it has been promised for a long time, so some of us are beginning to get a little bit cynical.
Secondly, there has to be complete reform of Companies House, so that it actually has some powers to interrogate the information given to it. As the Chair of the Foreign Affairs Committee has said, at the moment anybody could say that they are Tom Tugendhat, or Mickey Mouse—or Vladimir Putin, no doubt—with impunity.
Thirdly, there has to be real openness about the review of the tier 1 visa scheme. The Home Secretary has cited “security concerns” about
“corrupt elites who threaten our national security and push dirty money around our cities.”
That is about people who already have tier 1 visas. As I understand it, this review is complete—it was completed some time ago—and it must be published soon. We need to understand what these tier 1 visas did, and where the vulnerabilities are in the British economy. I really hope that the Home Secretary will come to the House to do that very soon.
We need a foreign agents Act, as has been mentioned, and of course we need to reform the Official Secrets Act. We have no means of tackling spies in this country. It is almost impossible to send somebody to prison for spying in this country for the Russian Government.
Tom Tugendhat
Do we not need an update of the Treason Act? A treason charge can be laid only in relation to the person of the monarch, and this Act from 1351 really does need updating.
Chris Bryant
I agree, and on all these promises of legislation, which I think it is being suggested will come in the next Session of Parliament, frankly, we need to get a bit of a bloody—sorry, we need to get a bit of a move on, because all of this should have been in place years ago. Our report came out in 2018, the Intelligence and Security Committee report came out in 2019, and we still have not done any of this. I say to the Minister that we all stand ready to help in that process. We do feel a bit as though we are dragging him to be chased, so do not run away from us, but be chased and help us to bring in the legislation that will put us in a better place.
My final point is that I do not understand the Government’s ratchet decision at the moment. It is a complete mystery to me. There has already been an invasion and incursion, and we said prior to the incursion that we would hit Russia hard with sanctions. That is not what is on offer today. When the Prime Minister resigned as Foreign Secretary, he said that his greatest failure—his biggest mistake as Foreign Secretary—was his relationship with Russia. I think he has a long way to go to rescue what has happened today. We want tougher action and we beg the Government to introduce it.
Bob Seely (Isle of Wight) (Con)
It is a privilege to follow the hon. Member for Rhondda (Chris Bryant). It is quite clear that deterrence has failed and he is right to say that we have been naive. I make no criticism of the Minister, but I do criticise the policy over the past 10 or 15 years. This is too little, too late. In 2007 Putin stood up at the Munich conference—this year’s has only just finished—and said that he no longer recognised the post-war settlement. That was very clear. The same year, he tore up Georgia, and five years later Ukraine. It has been clear for many years that he seeks to dismember Ukraine, shatter the unity of the west and build a new sphere of influence, encompassing the former Soviet Union, including Moldova and potentially the Baltic republics, and that he wishes to ensure that in the eyes of the Russian people, the west is an existential enemy: a physical enemy, but also an enemy in its values.
Again, I make no criticism of the Minister, whom I hold in very high regard—but doing everything in our control? No. Ratcheting up the pressure? Not really. Rising to the moment? I am sorry, but please. Last week, ITV’s “Peston” show explained that £1.5 billion of property in the UK has been bought by Russians accused of corruption or with Kremlin links, and nearly 30% of that is in Westminster. The Russians certainly have a sense of irony. There are 2,100 UK-registered companies involved in Russian laundering and corruption cases, involving a staggering £82 billion.
My central point is that I keep being told that Whitehall now understands the hybrid threats. I am sorry, but I do not buy that. I strongly believe that our leaders need much better to understand the Kremlin’s complex hybrid conflict, which spans politics, economics, propaganda, military force, espionage, culture and religion. In Ukraine now, the frontline is the border. In Germany, the frontline is the gas pipelines. In this country, the frontline flows, like the Thames, along to the City of London. It was great to see the Home Secretary announcing the end of the golden visa scheme, but come on—that horse bolted a long time ago.
These sanctions are good, but there needs to be a willingness to use them. Will the Minister tell us how many unexplained wealth orders have been used on Putin’s allies in the UK? The answer is zero. Building on everything that has been said today by the hon. Member for Rhondda and so many others, the Prime Minister has promised an economic crimes Bill. I am going to be a bit repetitive here, because it needs to be said again and again: where is the economic crimes Bill? Where is the reform to beneficial interests—true ownership for offshore properties? For heaven’s sake, is it really in our national interest to have tens of thousands of properties used and owned by offshore shell trusts, hiding organised crime or the world’s kleptocrats? If the Government understand hybrid conflict, what are they doing to deal with this threat?
Alison Thewliss (Glasgow Central) (SNP)
The hon. Member is making excellent points. I sat on the Joint Committee on the Draft Registration of Overseas Entities Bill, and this information was well known four years ago. Does he share my frustration that despite that, there has been so little by way of action to tackle the problem?
Bob Seely
We are 15 years late. It should not take the gravest crisis since world war two for us to get our house in order; this is just good housekeeping that we should have done 20 years ago. I thank the hon. Member for making that point.
Where is the adoption of the recommendations of the Foreign Affairs Committee and ISC reports? One of the most chilling elements of the ISC report was our own National Crime Agency saying that it lacks the resources necessary to take on the oligarchs. We—our own people, the public good—are being silenced in our own country by UK lawyers in the pay of some of the richest and most malign human beings on earth. Where is the tightening of the rules at Companies House? I know we have all said this, but I want to say it again. Banks in Germany, Denmark and Sweden all laundered billions of pounds from Russia but they used UK shell companies to do so. Is it really in our national interest to have a system so open to corruption? If the Government understand hybrid conflict, what are they doing to deal with this threat?
This SI is strong and I support it, but how many foreign lobbying scandals will the UK have to endure before we realise that we need a foreign lobbying Bill, or as some have called it, a foreign agents registration Bill? The US has had one since 1938, the Australians since 2018. The only way we found out about Lord Barker’s work for Deripaska was through The New York Times. Lord Goldsmith, a former Labour Attorney General—I make no political point here—said recently:
“I am sorry to have to take leave of absence, but felt it was the only option open to me given the choice between that or revealing privileged and confidential information.”
I understand he is off to work for the Russians. He keeps his title, but by not sitting in the House of Lords he does not have to declare. In the US or Australia he would be filling out form after form, saying what he was doing; in this country, hasta la vista, he is off to work for the Russians—be it the Russian Government or major Russian institutions—and what do we know? As the Russians would say, “nichevo”— we know nothing. We need a foreign lobbying Bill, and if we were serious about dealing with the Russian problem we would have one.
Where, too, are the measures to stop libel and data protection laws being abused by unscrupulous lawyers? Barely two weeks ago we had a very good debate on lawfare in this country, and we talked about the need for action against SLAPPs—strategic lawsuits against public participation. As the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that is when legal action is used to frighten, harass or intimidate the media or civil society groups. The Government understand hybrid conflict; what are they doing about this threat?
It takes brave authors to deal with the threats from Putin’s oligarchs, people like Catherine Belton and Tom Burgis, and brave publishers like Arabella Pike at HarperCollins, but others, including Cambridge University Press, have been scared away from publishing books about Putin and Russia because of the power of Putin’s cliques in this country. Is it really in our national interest to have a system in which some of the world’s most sophisticated law firms have reduced themselves to offering a one-stop shop of intimidation and dirt-digging to some of the most corrupt people on earth? I do not think any of these things are in our national interest. I think they need to be challenged.
We have all heard about the threat of Putin, and I agree. I feel very strongly that this threat has been obvious for at least a decade and certainly since Crimea. I wish we had taken action then. Yet again, we are doing too little too late. Rather than veering from complacency to panic and back again, being unable to decide if we want to damn authoritarian regimes or suck up to their money, we need a consistent policy that sets out in a robust and intelligent way what our values are and the need to protect our institutions and our values against this growing threat.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to follow that excellent speech.
There is an old saying that no matter how elegant the strategy one should occasionally look at the results. The truth is that this Government threatened sanctions as a deterrent and the invasion proceeded, and this afternoon they have laid out the first of their concrete sanctions and the invasion has just stepped up. So surely the Government have got to recognise that the strategy they have laid out of deterrence has failed and they therefore need to think again and come back to this House with measures that are strong and Russia-stopping, because that is not what we have got today.
What has been so helpful about today’s debate is the wide acknowledgement in all parts of the House that we are now facing an adversary in Russia that has got to be stopped. This is a country that fights us in cyber-space and on the streets of Salisbury. It is a country that meddles in elections and cheats in winning medals. It is reckless in space. It shells its neighbours. Its ambitions are limitless and its tactics are merciless. The question we have to confront is: how much longer are we prepared to tolerate the intolerable?
President Putin is not hellbent on acquiring some kind of Lebensraum. His argument is not about trying to roll forward his borders to create some living space for the Russian people. If anything, his strategy, stated as it is, is more ominous: it is to restore the gory glory of the former Soviet Union and re-imperialise the borderlands across 10,000 km of Russia’s borders. That is not a secret, but we have to stop it. We have to work with our allies to put in place a regime that is going to stop this aggression now and once and for all.
That is why the package announced today is so disappointing. It has been revealing that almost no one in the House today has stood up to commend the package as good enough. Everything we have heard today has said that it is a disappointing package that falls well short of what we think is needed to deter President Putin. It is, as the old saying goes, like being savaged by a dead sheep.
The Government are not short of tools. Actually, after 9/11, one of the great legacies that Labour left was in transforming the architecture for deploying economic sanctions to deter and pursue bad people. However, as Lord Ricketts said in his excellent book late last year, it is no good having the tools if they are left in the shed. The problem we have with the Government today is that the tools are being left in the shed.
Let us look at a simple scorecard of some of the results. As the hon. Member for Isle of Wight (Bob Seely) said, how many unexplained wealth orders have been implemented against friends of President Putin? A grand total of zero. Apart from the Magnitsky sanctions, which were handed to us and relate to a crime back in 2007, how many sanctions against individuals guilty of economic crime have we proposed in this country? None since 2014—in fact, a grand total of just three individuals are on that sanctions list, yet, when the new independent sanctions regime was introduced, we were promised that it would transform our capacity to take on bad people around the world. If that was true, why on earth are we not using it today?
As we have heard, the people on the sanctions list announced today have been on a US list since 2018. None of the major Russian banks has been hit with sanctions, even though they are raising liquidity in London to finance their day-to-day banking operations. If we shut them off from the liquidity of London, they would be forced to go to the central bank in Moscow, putting immeasurably more pressure on the economic structure around President Putin. The truth is that the Government have failed to take aim and target the commanding heights of President Putin’s kleptocracy and that is a mistake for which the people of Ukraine are now paying.
At least 120 oligarchs should be on the Government’s sanctions list. At least four major banks—VTB, VEB, SberBank and Alfa-Bank—should be sanctioned immediately. That is the pressure that we need to ramp up to send a serious message. Today’s failure would not be so serious if it were not part of a much broader failure. Can anyone in the House tell me: who is the Minister responsible for tackling economic crime? It used to be the right hon. Member for Wyre and Preston North (Mr Wallace), who is now the Secretary of State for Defence. He had a title: Minister for Security and Economic Crime. However, that ministerial role has been deleted from the current ranks of Her Majesty’s Ministers. The new Minister is the Minister for Security and Borders.
We are told that the National Economic Crime Centre is comprehensively under-resourced for what it is trying to do. The National Crime Agency, we are told, makes a calculation as to whether it can afford the legal costs of a case before it prosecutes unexplained wealth orders. Literally, it is being scared off by the scale of the lawyers it opposes in court. The regulator Companies House does not check the information that is filed in front of it. We have journalists who are being silenced in English courts, for so long sanctuaries of justice, now arenas for silence. As we have heard so eloquently from others, we have no timetable for the economic crime Bill.
To judge the Government even on their own terms, let us look at the economic crime plan that they put forward. The analysis of the Royal United Services Institute is that 60% of the measures in the plan have not been implemented. Let us go through a couple of the points that are missing in action: clarifying the sanctions supervision powers—not done; reviewing the criminal market abuse regime—not done; developing a sustainable, long-term resourcing model for economic crime reform—not done; improving the policing response to fraud—not done. It would be laughable it was not so serious. This is not a Government who are serious about taking on economic crime and there are people around the world who are now paying the price for that negligence.
We need three things now. First, we need clear leadership. We need a Minister for economic crime, tasked with bringing forward the economic crime plan to this House at the earliest opportunity. Secondly, we need to start using our intelligence capabilities to light up who the bad actors are around the world. The fact that London and New York are the centres of financial transactions worldwide and the fact that we are the home to the SWIFT financial messaging system mean that we have unrivalled insight and intelligence into who is doing what with whom and where. Why are we not bringing those intelligence packages together and tasking them out to pursue these people? Thirdly, we need a final piece of the strategy that is modelled on the counter-terrorism strategy from a few years ago. The Contest strategy is deemed a good strategy. Its four principles—preparing, protecting, preventing and, crucially, pursuing—are good principles. The Government must now bring forward a Contest strategy for tackling economic crime. That is really what we needed as part and parcel of the sanctions legislation the Minister laid before the House today.
It was, as I have said before in the House, 33 years ago, back in 1989, that President Gorbachev went to the Council of Europe in Strasbourg and gave us a vision about a common European home that stretched from the Irish Atlantic coast to Siberia. It should be a place, he said, where there is the rule of law, our great gift to the people of this world. Those days are now gone. From Kaliningrad to Kamchatka, what we now have is a great kleptosphere taking shape. It is a place where might is right, where, as the saying goes, the strong do what they can and the poor suffer what they must. We now have a task to perform in this country. It is a task we perform with our allies for the benefit of billions of people around the world—to take on the kleptosphere in new and aggressive ways. That battle is already under way, but it is time the Minister now stepped up that fight.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Hon. Members have been most disciplined in keeping their speeches to around 10 minutes, but I hope that now Members will keep their speeches to around eight minutes. We have managed without a formal time limit and it would be better if we could continue without one. If people keep to around eight minutes, everyone will have an equal chance to speak.
Robert Jenrick (Newark) (Con)
Thank you, Madam Deputy Speaker. The virtue of speaking late in the debate is that I can keep my remarks mercifully short.
I would like to associate myself with the many excellent and eloquent speeches we have heard, most of which I agree with almost entirely. Today is a sad day—a sad day most of all for the brave people of Ukraine, whose sovereignty is threatened and whose democracy and freedom are undermined. It is a sad day for the order we have known since the 1990s, which many right hon. and hon. Members have spoken of, which now seems shattered, damaged and diminished. It is also a sad day for the people of Russia. I am pleased to associate myself with the remarks of the many right hon. and hon. Members across the House who have said that we wish no ill on them and that we are sad to see the state of their country now. Twenty years ago, I lived and worked in Russia as a lawyer. Back then, Russia was by no means a democracy of the kind that we would recognise, but it was a more hopeful place than the Russia that we see today. It was a country in which one could do business and travel and in which young people were broadly optimistic about the future. After listening to President Putin’s remarks last night, I think we see a very different country, drifting darkly into authoritarianism.
I want to speak about two points and to reiterate those that Members across the House have made. The first is about understanding exactly what the Government’s strategy is today. The Prime Minister spoke of a ratchet. If we are going to take action, we should take action hard now. That is what a dictator such as Putin can understand. Deterrence by way of sanctions thus far has failed. It is probably likely to fail. It does have value, however: it shows resolve and inflicts cost on Russia. If we are going to do that, why would we not do it strongly now?
I do not understand why we would suggest that we will introduce the other measures that the Government are considering only in the event that Russia makes further incursions into Ukraine or makes further serious, egregious assaults on Ukraine or other allies in the region—[Interruption.] My right hon. Friend the Minister shakes his head. If, as I understand it, the Government will introduce those measures in the hours and days to come, perhaps because they require further thought or legislation or because we want to act in concert with our allies—for example, to make sure that the sanctions are synced exactly with those that the United States might bring forward—that is an entirely sensible and defensible policy.
Sir Robert Buckland (South Swindon) (Con)
I am listening with great care to my right hon. Friend’s important contribution. Does he agree that we could go even further and, with international action, impose positive obligations on Russia to withdraw from the regions in question, stating that, otherwise, further sanctions would follow? Would that not seize back the initiative in a positive way rather than passively waiting for things to happen?
Robert Jenrick
My right hon. and learned Friend’s point has a lot to commend it. I suggest to the Government that they introduce further measures as quickly as possible, preferably in concert with our allies.
Bob Stewart (Beckenham) (Con)
My real worry is that Putin has actually been very clever: he has advanced into an area that his forces effectively control already and he will stop there. That would divide our allies—for example, Hungary and Germany may not agree—and we would not be able to get sanctions agreed internationally. That is the real worry and why he is not perhaps as mad as we think. He is actually doing this with purpose and he has a plan.
Robert Jenrick
My right hon. Friend makes a good point. If the scenario that plays out is the first of the ones that I described, there will be little opportunity to introduce further sanctions, because this may be all that Putin intends to do.
I want to make a last point on the specifics of the package that was announced, and I am afraid that I will repeat the comments of right hon. and hon. Members across the House. The banks that have been chosen are relatively minor. I worked as a corporate lawyer, including in Russia, and these are not the primary banks that international institutions, major corporations or the major oligarchs go to to seek finance, so the impact will be relatively limited. I have not seen the latest debates from the United States, but when I last looked at them, our colleagues and friends in the US Senate, for example, were looking at pursuing some of the larger banks such as SberBank. If we were going to make any impact, it would be important to bring forward measures against one, two or more of the larger banks, which are genuinely those that major institutions and the oligarchs whose names have been mentioned in this House today are more likely to use for finance.
Secondly, the list of individuals is very small, and the lion’s share of them have already been sanctioned for a long time by the United States. There are many others we could reach. In my work as a lawyer and in business, as managing director of Christie’s, I had the pleasure—if we can call it that—of meeting a number of the individuals who have been described today as oligarchs. Those individuals are not on the list. There is a much larger group of individuals we could and should now be reaching, and we could tackle them in a range of ways. In many respects, what they most fear is losing the ability to travel—to leave Russia and go skiing in France or Switzerland or shopping in London or Paris. It does not have to be a full sanction, but the list that we are currently considering is far too small.
If we were sitting in the same room as the Russian leadership today, I think we would see a very nonplussed reaction. There is more we can and should do. I hope that further measures will be brought forward in the coming days; I certainly stand ready, as I think all colleagues across the House do, to support them.
Layla Moran (Oxford West and Abingdon) (LD)
It is a pleasure to speak in this debate. I hope that the main thing that we are getting across to the Minister is our collective sense of the urgency of acting and, frankly, our full support for the Government doing so much more than they have done today. I put it on the record that the Liberal Democrats stand with the people of Ukraine and that we stand ready and waiting to impose the greatest possible sanctions on Vladimir Putin, his associates and the Russian economy if necessary.
We have to lead from the front. In that vein, we must take decisions that are going to be painful. So far we have talked the talk, but I am afraid that today’s list of sanctions was thin gruel. I do not think that it has done anything; I do not even think that there is a line in the sand. Within hours of the sanctions being announced, as the Minister rose to his feet just a couple of hours ago, even more had been done by Putin—and, incidentally, even more has been announced by our allies.
We have to do more. If we do not say that enough is enough now, what will be enough? Is it when Russia has invaded Donbas? Is it when it invades Kyiv, Lviv, Tallinn? Which is it and where is the trigger? We have some clarity in this debate, in so far as that if it does not pull back, time seems to be a trigger. That is good, but I am afraid to say that I do not think we have done anything that will have any effect at all.
Putin’s cronies must be subject to the strongest possible sanctions now, because it is through them that Putin and his inner circle keep their wealth. If we go after his associates, we go after him. Actually, we are rather uniquely placed to do so, because they choose London. They live here—it is “Londongrad” to them. That means that we have leverage. However, the reason for that leverage is more difficult for us to swallow: our country’s failure over many years to stand up for what is right has led us to this point. The blind eye turned, the questions not asked, the quick buck or donation made—that is how Putin’s associates have been able to sink their teeth into our society, our economy and indeed our democracy to such an extent.
Late is better than never, so of course I am glad that the Government are now deciding to do more, but there is so much more still to do. Some £1.5 billion of UK property has been bought with suspicious Russian wealth, according to Transparency International, and that is just the tip of the iceberg. I do of course welcome the sanctions announced today, but Germany’s first tranche of sanctions was Nord Stream 2. Up to this point, for the last two weeks, the narrative was about how we had done more than Germany, but this is round one in the boxing match: Germany has brought Nord Stream 2, and we have brought five banks that do not really matter and three people whom the United States had already sanctioned.
We have heard the Foreign Secretary say that the Government want to impose severe sanctions; well, now is the time. Let me be helpful, and say that I think we need to start by heeding the names of those who were identified by Alexei Navalny and his team as “key enablers” more than a year ago. There is a problem, outside this Chamber, with naming those individuals, because many of them have very deep pockets and very expensive lawyers. The speech of the hon. Member for Isle of Wight (Bob Seely) underlined the issues involved, and I am well aware that the Minister knows of them, but I am going to use my privilege to name 35 of those individuals, because I think it important for us to have their names. I can reassure you, Madam Deputy Speaker, that I have already checked this with the Clerks.
Here are those 35 names: Roman Abramovich, Denis Bortnikov, Andrey Kostin, Mikhail Murashko, Dmitry Patrushev, Igor Shuvalov, Vladimir Solovye, Alisher Usmanov, Alexander Bastrykin, Alexander Bortnikov, Konstantin Ernst, Victor Gavrilov, Dmitry Ivanov, Alexander Kalashnikov, Sergei Kirienko, Elena Morozova, Denis Popov, Margarita Simonyan, Igor Yanchuk, Victor Zolotov, Oleg Deripaska, Alexei Miller, Igor Sechin, Gennady Timchenko, Nikolai Tokarev, Alexander Beglov, Yuri Chaika, Andrei Kartapolov, Pavel Krasheninnikov, Mikhail Mishustin, Ella Pamfilova, Dmitry Peskov, Sergei Sobyanin, Anton Vaino and Andrey Vorobyev.
I thank the House for its patience. Some of those people have been named before under privilege, but I believe that it is important for all of them to be named, lest we forget that while Putin’s national security council engaged in that sham discussion—a discussion which, by the way, seemed to have been filmed hours before it was aired—Navalny was being tried, and faces potentially another 15 years in prison. We must be vigilant for any attempt by Putin to use this crisis as a cover for what would be, in effect, the murder of Navalny.
I urge the Government to recognise that now is the time to freeze, and begin the process of seizing, the assets of not just those three individuals, but all Putin’s cronies who are in the UK. We must kick them—and their families—out of this country, and publish the review of the golden visa scheme. Over the weekend the Home Secretary said she would present a statement on that to the House, but we have yet to see it. I hope we will see it this week, because it is time to make it absolutely clear that the era of Russian interference in our society, country and democracy is over.
My final plea, which echoes a plea already made by others, is for the Government to bring forward all the legislation that remains outstanding—legislation which is in the Conservative party manifesto and which Ministers have said from the Dispatch Box that they want to pass. It should not be so difficult to do something that the Government have said time and again that they want to do. Where is that register of beneficial ownership? What has happened to the Registration of Overseas Entities Bill? We know that it is ready; please can the Minister accelerate its passage, and also the passage of the economic crime Bill? We stand ready and waiting for the Government to do more. Our democracy is at risk and so is the international rules-based order. I urge the Minister to heed our calls and do more.
Mr Jonathan Djanogly (Huntingdon) (Con)
Can I say how heartening it has been to hear so much support for the brave Ukrainians who really need our help at this difficult time? When I looked at the regulations, a thought process arose and my key question was if, or to what extent, it was correct for us to amend existing regulations specifically to deal with Russia and especially those connected with Russia. I appreciate that there are some complicated questions to be asked here. For instance, to what extent are the actions of Russia interchangeable with those of President Putin? Can we say that what the kleptocratic dictatorship that he has established and developed, supported by a coterie of sycophantic oligarchs, wants is the same as what Russia wants? I think that most people, on any rational assessment, would say yes. In Russia, civil society, democracy, a free press and financial regulations have all gone to virtually nothing, while corruption, police statism, rotten judges and political gangsterism have reached new heights. It is frankly a brave person who now stands up in Russia to make any kind of criticism of President Putin, who sees himself in place for life.
There are other questions that go to assessing the status of Russian individuals, many thousands of whom live in the UK. Some of them may well be supportive of Putin’s regime, but there are many others who are not. In fact, many Russians are here to escape the clutches of Putin’s regime. On the other hand, the sources of those people’s wealth may lead to yet more questions concerning criminality, albeit criminality that is unconnected to Putin or indeed Ukraine. I urge the use of caution and due process in the way that those Russians here are treated. For instance, just throwing them all in prison, as the UK did with all the Germans resident here at the beginning of world war two, is not going to work and would not enhance our democratic reputation. On the other hand, there comes a tipping point towards war when individual interests are to some degree going to be affected or subsumed just by being a citizen of the country concerned. It seems that these regulations are effectively preparing the ground for that to happen.
I support these proposals and feel that ultimately, in the circumstances, they are appropriate. Moreover, I am ever more of the belief that the lacklustre response of the UK, the EU and the US to Russia’s 2008 invasion of Georgia and its 2014 Ukraine incursion is one of the main reasons that we are here today. It was lacklustre in terms of sanctions and also of military and economic support. Ukraine’s and Georgia’s borders were accepted by Russia—and indeed by the world community—and we should have been much tougher in protecting their integrity and their sovereignty.
The problem with dealing with dictatorships is not a new one. If they see a gap, they will take it; if they see a weakness, they will exploit it; and they can generally move faster than democracies. Russia clearly wants to have a series of weak, poor, corrupt countries along its border and to act like it was still 1980. We cannot let that happen. These regulations will provide the framework for sanctions, but not the sanctions themselves. That will depend on the ability of western-facing democracies to act together. This is now the challenge for our Government, but I have to say that, on their performance so far, I believe that it is one they can and will deliver.
Mr Kevan Jones (North Durham) (Lab)
Like others who have spoken, I welcome the regulations that we are discussing tonight, but I am underwhelmed by the announcement today of the Government’s sanctions. I have to say that I do not really understand the ratchet option. What we need now is a hard stop and tough action against the Russian Government.
These regulations are long overdue. I agree with the hon. Member for Isle of Wight (Bob Seely) that we are closing the stable door after the horse has bolted. What is happening in Ukraine today was summed up well by the right hon. Member for Maidenhead (Mrs May), who said that we are seeing not just an attack on the sovereignty of the independent state of Ukraine, but an attack on our western values and the right of free people to decide their own future.
This has not happened by accident. We had the Foreign Affairs Committee’s 2018 “Moscow’s Gold” report and the ISC’s long-delayed 2020 report on Russia—I sat on the latter Committee—and those reports laid out all the issues. I am baffled by the Government’s reluctance to act against the Putin regime.
I agree with the hon. Members for Tonbridge and Malling (Tom Tugendhat) and for Stirling (Alyn Smith) that we have no problem with the people of Russia. In fact, I would say the Russian people are the victims of Vladimir Putin and his regime. We have to understand that over the past 10 to 15 years this individual has been in control with a group of kleptocrats around him. If we are to get him to wake up and listen, we have to attack those individuals.
The hon. Member for Oxford West and Abingdon (Layla Moran) named some of those individuals, and they are known to people. It is not a great secret, as my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) said. There is an option to identify individuals under proposed new regulation 6(4):
“For the purposes of this regulation, being ‘involved in obtaining a benefit from or supporting the Government of Russia’”.
There is no way that any of these individuals, who are doing business in Russia and have laundered money sitting in this country, could operate without supporting the Government of Russia, so I think there is an option to do it under these regulations. [Interruption.] The Minister is gesticulating that that is the point, and I agree with him, but the big issue is not whether it is in the regulations but whether it will be acted on by the Government. I am sorry, but this Government’s record so far has not been good.
There is an opportunity to do what the hon. Member for Oxford West and Abingdon suggests, and we now need to see action. The Russians will be baffled by the limitations on the sanctions that have been announced, and some of them will be laughing. They will think, “That’s what the UK has announced today. We’ll do a bit more and they’ll do something else tomorrow.” No, we need a hard stop now, and these regulations give us that opportunity, but the Government have to follow through.
Ken McCallum, the director general of MI5, was interviewed for the Daily Mail last week. He is the head of the Security Service, and he was venting his frustration in public that the laws to tackle spying are outdated, that the Official Secrets Act is no good, that the promised espionage Bill is not forthcoming—as someone said, the United States has had such an Act since 1938—and that there are issues with beneficial ownership and the reform of Companies House.
Those things were all laid out in the Foreign Affairs Committee’s report, and reinforced in many ways by the ISC’s 2020 report. We have a Government who seem to be sitting back. The invasion of Ukraine has now focused their attention, but we cannot allow this to continue. As the right hon. Member for Maidenhead said, this is an attack on our way of life and our democracy, which we all take for granted.
We will support these regulations tonight, but we also have to take action. The Government should make legislative time for the economic crime Bill and the other measures, as I am sure they would have united support on both sides of the House to get them on to the statute book. We now need action, not talk.
The Government also have to ensure that their communications are a damn sight clearer than they have been to date, because otherwise we are feeding our enemies who are now threatening the brave people of Ukraine.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is clear that Putin is not afraid to weaponise his foreign policy through his armed forces, and through oil and gas supplies. It is therefore only right that we look to weaponise our foreign policy in this regard using the City of London. It may well be that, as the Minister said, we will go further quickly, but so far we have not gone far enough. Of course it might not be in our financial interests to do this. Some financial interests—some of our domestic financial organisations—might suffer, but their financial interests cannot supersede the national interest.
When we have looked at sanctions on Russia before, not least in 2015, following the invasion of Crimea, we did not go anywhere near far enough. We did not sanction Russia’s oil and gas supplies, which make up 70% of its exports. We sanctioned things such as exports of milk—clearly, that is never going to go far enough. While Russia has been reducing its dependency on our capital markets, because it saw something like this happening in the future, countries in the EU, in particular, have not being doing the same with their dependency on Russian oil and gas exports.
Lots of people have talked today about Nord Stream 2. Obviously, I welcome the fact that there will be a sanction on that, in terms of preventing it from ever—at this point in time—pumping gas. However, we should not forget that no gas is travelling down Nord Stream 2 now and that all the gas comes into Germany on Nord Stream 1. Again, those oil and gas exports will continue into Germany and other nations. Clearly, there is a huge economic need for that gas going into Germany, but it is incumbent on us and on every nation across Europe—every peace-loving nation—to reduce our dependency on Russia in every economic area.
Russia is not a large economy—its economy is smaller than that of Italy—so there are many things we can do to put further pressure on Russia through sanctions. These are things we have not done today—we have not discussed the potential for them today at all. People have talked about the SWIFT payment system. Clearly, Russia has other opportunities and can use other communications systems, but none the less addressing this would help. Preventing Russia from trading in sovereign debt has been mentioned, but what has not been mentioned is access to clearing banks. It would be catastrophic for Russia if we prevented its access to our clearing banks. Instead, we have sanctioned five very small banks. There may be good reason for that; there may be more provisions we need to put in place before we can apply further sanctions to the larger banks, and clearly there is interdependency between Russian banks and banks around the rest of the world.
The banks that we should be looking at are: VEB, which is the Russian development bank; the Russian Direct Investment Fund, which is the sovereign wealth fund; and, as a few Members have mentioned, Russia’s retail banks. SberBank has roughly 36% of SME—small and medium-sized enterprise—lending in Russia, with VTB having 20% of consumer loans. Clearly, we have to do this carefully and it may well be that we act in concert with other parties, not least the US, the EU and others. If we simply put sanctions on today, that could mean that Russian banks avoid having to settle debts to UK banks and banks in different parts of the world. Although we do not want to do anything that would cause systemic risk to UK financial markets, we are talking in the billions of dollars here rather than in the trillions, and there are other ways of shoring up our system to prevent that happening. However, what is important now is that there is no doubt that we need to go much, much further than we have done already.
Bob Stewart
Mr Putin may well have won, because we have not reacted hard enough. Small banks have been sanctioned, but we have not put in place real sanctions. So he will be sitting in Moscow tonight thinking, “I’ve just got to sit this one out and I will be able to play up the gains we have got extremely well to the Russian people.” We are really on dangerous ground by our weakness.
Kevin Hollinrake
That is certainly how it looks to me at this point in time, so it is important that we now move very quickly to take the further measures we have discussed today on the Floor of the House.
There is, of course, a wider context around this debate. Many Members on the Government and Opposition Benches have been calling for an economic crime Bill and talking about the failure to prevent economic crime. It is vital to make sure that measures such as sanctions are not subverted—that our banks follow the rules, basically. That would apply a lot of pressure on banks to make sure that sanctions are properly imposed. I have previously mentioned whistleblowers, the proper resourcing of our crime agencies, and the need to change the rules on unexplained wealth orders so that we can take wealth very quickly from people we identify.
I have outlined some more long-term measures that it will take some time to implement, but we could move very quickly with a register of overseas entities. We have previously had draft legislation—Members have mentioned being on the scrutiny Committees—so we could move really quickly. As has been mentioned, £1.5 billion-worth of property in the UK is owned by Russians who are connected to crime and corruption. Some 50% of that is registered in overseas territories and Crown dependencies, the public registers of which are not supposed to go live until 2023. The reform of Companies House would serve as a check and balance, and the move from register to regulator would mean we could properly establish the identities of directors and shareholders.
All those things I have mentioned could and should be done very quickly. That would have a meaningful effect on people connected to the Russian state. We need to act very quickly—we need action this day.
Stewart Hosie (Dundee East) (SNP)
I am going to do something slightly unusual and speak about the statutory instrument, although I shall make some brief introductory remarks. I welcome the measures, as far as they go. I do not think they go far enough, but I think the Minister will have already picked up that message from around the House. I welcome what he said about working together and being in lockstep with our allies. The problem is that Gennady Timchenko, Igor Rotenberg and Boris Rotenberg were sanctioned by the United States in 2018. With the measures before the House today, we are not even playing catch-up with where we need to be.
I am frustrated, and there is a general frustration, because, notwithstanding what the Minister said today—that he may go further with sanctions on the basis of what Russia has already done—there is a perception that Russia has to do more and worse before we really ratchet up what we are planning to do. Either Russia has invaded the sovereign territory of an independent nation state or it has not. We do not need to see the tanks encircling Kyiv for tough action to be taken. Russia has already invaded and annexed parts of a sovereign state.
The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said—I think I caught him correctly—that perhaps $250 billion had been sloshed about outside Russia. I fear that does not come close to the mark. In 2017, the US National Bureau of Economic Research suggested that $800 billion had been stashed offshore since the collapse of the Soviet Union. Some people will have moved their money for good reasons. Some people will have been terrified—there will be fear. There will be crime involved and fraud and all sorts of things happening. However, a great deal of that money may well have been placed overseas, in the hands of trusted custodians and friendly overseas businesses—the modus operandi of the KGB prior to the collapse of the Soviet Union.
This is where I will ask the Minister a question about the instrument itself. When it comes to sanctioning individuals and to freezing cash or other assets that are at the beck and call of the Russian state, no matter whose name they appear to be held in, will this legislation actually do what is required? The explanatory notes suggests that an “involved person” now includes a person who is or has been involved in
“obtaining a benefit from or supporting the Government of Russia.”
Regulation 4 says:
“For the purposes of this regulation, being ‘involved in obtaining a benefit from or supporting the Government of Russia’ means”—
among other things—
“owning or controlling directly or indirectly…or working as a director (whether executive or non-executive), trustee, or equivalent, of…a person”.
The word “trustee” is interesting. Will this legislation allow the Government to freeze an asset if it is held in the name of an individual who appears to be completely clean, but who the Government have information to suggest is a Russian-trusted custodian of what is, for all intents and purposes, a Russian state asset?
Can we have clarity on this? I think that this goes back to the point that the right hon. Member for North Durham (Mr Jones) made earlier. Will this instrument actually allow the Government the tools that they need to freeze the assets that are required to be frozen to punish Russia for the invasion of Ukraine?
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate, and I congratulate all right hon. and hon. Members on their contributions.
I want to make it clear that, having come from a place where I have lost loved ones to terrorism, where I have grown up with the threat of attack, where I have experienced the righteous anger when I have learned of senseless death, I am not a person who wants to see any community facing this. I do not want to see Ukraine facing this either. My heart is with the decent people of Ukraine whose lives are nothing more than pawns in a game, who will potentially lose their homes, their jobs and their loved ones as they seek simply to retain the ability to live their lives as Ukrainian citizens.
One of my very vivid memories as a child is seeing images of the six-day war, during which untrained women and young children took up arms to defend their nation. I remember thinking that this was amazing. It was only when I grew older that I realised that war is no place for anyone, let alone for untrained civilians, children and families.
Never did I imagine that I would again be at home watching a TV screen with images of elderly women and young teenagers being taught the rudimentaries of taking up arms to defend themselves, their homes and their nation against unacceptable aggression. This image did not inspire me as it did when I was a child. Instead, it saddened me that life for that lady will never be the same after she pulls that trigger—possibly—and does what she must do to protect herself and those whom she loves in Ukraine.
This time round, there is a difference for me. I am no longer a boy with dreams of a glorious war, when I did not really understand what it was. I am a man living with the scars of war, as others do in this Chamber. I am thinking here of the right hon. and gallant Member for Beckenham (Bob Stewart).
Just today, I have been contacted by constituents urging us to do the right thing by the Ukrainian people, as, in doing so, we are doing the right thing by democracy. There is nobody in this House who believes that we should do nothing and allow Putin to carry out his plans for Ukraine. The call of freedom and democracy is far too loud, and the question for this House is how we respond.
It is clear from all the comments we have heard so far that, with respect to the Minister and the Government, the steps that are being taken are understandable but do not go far enough. I welcome the sanctions outlined in the statutory instruments, and I welcome these steps, but it must be made clear that they are initial steps—the first stage in what we do. They must be a precursor to decisive action taken with our allies, because it is clear that Russian aggression will not dissolve in the face of what will equate to a parking fine for a millionaire—irritating, but in no way life-changing. That disappoints me.
While we must not rush to war, we must not rule out the need for our troops, along with our allies, to remind Putin that democracy is something we have laid our lives down to protect before and that, if necessary, we will do so again. I firmly believe that NATO should invite Ukraine to join it, or Ukraine should apply to NATO and be accepted. Upon that acceptance, NATO troops could carry out NATO manoeuvres in Ukraine, support our allies against the aggression of Russia and protect the 44 million Ukrainians.
Bob Stewart
I thank the hon. Gentleman, my good friend. As I know, having spent a lot of time working in NATO, the problem is that NATO requires unanimity for any action. There are 30 members, and one of them is Hungary, which has already said it supports Putin. That will hamstring any action whatsoever.
Jim Shannon
I thank the right hon. Gentleman for that intervention. He always brings his wisdom and his knowledge to these debates. At the same time, I am the eternal optimist in this world; I always believe in better things to come—it is probably my nature—so I believe that NATO can reach out collectively and strongly to support that request from Ukraine, if it comes.
Putin has met with Macron, spoken with the PM and Zoomed with America’s president, yet those discussions have only allowed him more time to plan and co-ordinate, and time to wage his misinformation war online to stir up Russians who believe his lies and will stake their lives for the honour of their nation—honour that has not, in reality, been impinged by any actions of the Ukrainian people. We can debunk their videos by looking at timestamps and comparing sound files, and it is clear that misinformation is the cause of the day.
Putin has lied to us, he has lied to his own and he will continue to lie to fulfil his agenda. We cannot take anything he says at face value. We must make the most of the alliance of NATO, the EU and the USA. I have been heartened to see the American President remember that, rather than mere “Brits”, as he calls us, we are, he states, America’s greatest ally. We must be united in the steps that are taken. We must show Putin that division over our exit from Europe or any other issue will not stop the NATO alliance and our determination to meet these acts of aggression in a responsive and suitable manner, as our shared responsibility.
I am thankful for the Prime Minister’s statement of our defence capacity and state of readiness, and I am proud that our troops are well known to be the best in the world. Putin knows that too; while we consider sending troops, he must know there is a mechanism to make that happen if he does not immediately pull back from his nefarious aims.
I support these sanctions, but only as part of a clear and forceful plan to stand against Putin’s aggression and with those who stand for democracy. If we are silent now, there is no doubt in my mind that the forced reunification of the USSR will be the only end to Putin’s scheme. We have a duty to act. We must act with caution, with wisdom and with a cool head, but President Putin must be under no illusion: the British people will meet our obligations through this country and through NATO, with the co-operation of others and the USA, and take action in defence of the very same principle, so important and so critical, that our grandparents fought for and won the victory for—freedom itself.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I first thank the Minister for his courtesy and that of his officials in discussing the measures before us on a number of occasions over recent weeks, and I pay tribute to the FCDO staff in country, who have been doing so much in difficult circumstances. He can be assured that, as we spoke as one earlier on the overall response to the aggression of Putin’s Russian regime, we speak as one in wanting these measures to succeed, and we in the official Opposition support the principle of them today.
As my right hon. Friend the Member for Tottenham (Mr Lammy) said in opening the debate, we sit in this Chamber with
“dark clouds gathering over Europe”.
We must be in no doubt about the clear and present danger not only to the sovereignty, territorial integrity and people of Ukraine, but to the rest of Europe.
Ukraine is not some far-flung land; the ties between Ukraine and my home of Wales are strong, deep and enduring—not least with the Donbas region, given our shared coalmining heritage. Indeed, Donetsk itself was founded by a Welshman, John Hughes, in 1869, on the site of an older town, and Luhansk was twinned with my own city, Cardiff, for many years. Cardiff residents have helped civilians hit by the impact of war over the past eight years, and Luhansk residents sent aid to help striking miners in south Wales in 1980s. These links run strong and deep.
I think too of young, optimistic and proud Ukrainians whom I taught in Ukraine in the early 2000s—of what horrors may now befall them and their families if Putin carries out further bloody and hostile acts. But I am absolutely sure that Ukrainians are proud, they are motivated, and they will resist; they will not welcome an imperialist invader with open arms. I think of the Russian and Ukrainian mothers who may see sons and daughters return, tragically, in coffins because of the paranoias and obsessions of this one man. Who is next: Moldova, Georgia again, our Baltic NATO allies or Finland? Those who had not already read Putin’s bizarre, dangerous and historically revisionist essay should be left in no doubt by his words yesterday evening or by the finally revealed truth emerging from the façade of lies built by him and his associates over recent weeks while others had entered into good-faith diplomacy and the pursuit of peace, mutual security and respect.
We need to wake up to what we now see unfolding before our own eyes. This is an invasion, not an incursion. These are not peacekeepers. In response, we must be bold, decisive, urgent, and under no illusions about the fact that only the toughest of measures that hit the pockets, property and privileges of those who facilitate and sustain the Putin regime may yet convince them to think again. They cannot and must not be able to use London or the United Kingdom as their bolthole. We must accept that the previous measures did not work and did not go far enough. Indeed, the section 46 report provided with these sanctions makes this clear, stating that the existing measures under the 2019 regulations have not achieved the desired outcomes. The Minister should be in absolutely no doubt—I am sure he is not, as he has heard the unanimous and powerful voices from all parts of the House—that we must go further, deeper and faster if we are to respond to the scale of the threat and have an impact on preventing further bloody escalation. I am afraid that, as we have heard, we have started too low and too slow. We have a chance to turn that around, and we as the Opposition will work with the Government to ensure that tough measures are implemented.
The Minister will have heard time and again questions about objectives and the desire to see the ratchet mechanism explained more clearly, so I hope he can do that in his concluding remarks. He said earlier that the objectives were to prevent further invasion and to seek withdrawal. Will he be absolutely clear about that and what the steps will be if further actions are taken? What will he do to deal with the asset flight by individuals and entities who are not sanctioned today, and banks that may be cashing in that are not included on the list and should have been? We have heard many names mentioned by hon. and right hon. Members. What is the implementation and enforcement mechanism in relation to these sanctions, not only here but in our overseas territories and Crown dependencies where many of these people are stashing their money? He has said much about further lists and further legislation. When are we going to see the legislation that allows us to target the members of the Duma who voted for this illegal recognition?
We need to be moving in lockstep with our allies. According to reports, the EU has today announced 27 individuals and entities that it will be targeting. Why are we not doing all that and more? What discussions have we had with the United States today about new measures that President Biden will be announcing? How are we going to further resource and expand our own sanctions unit to ensure that we can respond as needs be? I have asked questions about this and we have not been able to get clarity on the number of officials and the resources that it is getting.
There have been reasonable questions raised on a number of other technical matters. New legislation is unlikely to affect oligarchs close to Putin who do not hold an official position in a company and who own less than 50% of the shares. Will the Minister clarify that point? I have seen him shake his head a number of times during the debate. I am happy if he wants to correct and clarify anything, as it is really important that we get clarity on these matters. I understand that officers in companies who set policy but are not on the board cannot be sanctioned under the new legislation. Will he clarify that point? What is the situation regarding family members of sanctioned individuals? Will they also face sanctions?
We have heard powerful speeches from across the House. The hon. Member for Tonbridge and Malling (Tom Tugendhat) made a tough and powerful speech saying that we need to put our money where our mouth is. The hon. Member for Stirling (Alyn Smith) joined in the agreement that we need to take tougher measures. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who is no longer in his place, spoke about the oligarchs holding Putin’s money stolen from the Russian state and where we need to be hitting, and again asked questions about the objectives and consequences. My hon. Friend the Member for Rhondda (Chris Bryant) said that we have been recklessly naive for far too long, and also said that he could not understand the ratchet mechanism. The hon. Member for Isle of Wight (Bob Seely) and many others gave powerful and strong messages to the Minister, and I hope those have been heard and that the Minister has heard the will of the House today.
We stand ready to work constructively with the Government to urgently pass tougher and broader measures, whether that is under the regulations today, the Magnitsky sanctions regime or urgently considering further legislation needed to take action. We will work with the Government on those things. We are at a critical juncture. We need to act decisively and robustly. We know the Putin playbook—we have seen it in operation in Georgia, in illegally annexing Crimea and in supporting violence in the Donbas since 2014. Thousands of civilians and soldiers have already lost their lives.
For two months, Putin has menaced Ukraine’s borders, mustering the largest build-up of military forces in Europe since the second world war. Last night—we all saw the footage—he sent his troops to invade a sovereign democratic European state, in flagrant violation of international law and in violation of the diplomatic commitments that he and his own Government have signed up to over decades. The Minister served honourably and gallantly in the Royal Artillery, and I am sure he will agree that peacekeepers do not come into a country alongside artillery and tanks. It is absolute nonsense, and we can all see it for what it is. It is a crime against peace and an assault on international law, and the people of Ukraine have our complete solidarity. We admire their courage, we will champion their democratic rights, and we will support their right to defend themselves and the democracy they have built.
The effects of this moment will depend as much on our response to this aggression as they will on the aggression itself. Autocrats around the world are watching to see whether we meet this test of our strength and resolve. It is not a time for half-measures or naivety as to President Putin’s intentions. We should believe what we see written on the tin and act accordingly. Members on the Opposition Benches and across the House will stand with the people of Ukraine. We will stand unified in this country in the face of this aggression. Of that, Vladimir Putin and those who sustain his kleptocratic, corrupt and authoritarian regime should be in absolutely no doubt.
James Cleverly
With the leave of the House, I will make a few concluding remarks and address some of the issues, queries and concerns that have been brought up by hon. and right hon. Members on both sides of the House. Those in the House who have been in government know that it is never a particularly fun experience at the Dispatch Box being questioned and criticised by both sides of the House.
James Cleverly
No.
The House may be surprised to hear that I have taken a huge amount of positivity from the exchanges today, because this House has once again spoken with such a commanding, concerted and collaborative voice in support of the territorial integrity, sovereignty and independence of Ukraine and in support of the Ukrainian people. More than that, this House has demanded of the Government that we go further with our sanctions—that they are harder and inflict greater economic pain on the individuals and entities in the Russian system who have done so much damage not just to the Russian people, but now also to the Ukrainian people. I am happy that is the tone of the House because I can confidently inform the House that it is demanding something of the Government that the Government are absolutely determined to do. It is pushing at an open door.
A number of questions have come up repeatedly, so I will address them.
James Cleverly
I will rush on, because I was excessively generous earlier. The question was asked: will these sanctions be escalated only in response to further aggression? I can assure the House that these sanctions will be ratcheted up because of what has already happened, and not just in response to what might happen in the future. Our intention is to prevent even further invasion of Ukraine, to have those troops who are in Ukraine removed, and then to have them return to their home barracks once they are back in Russia. That is our ultimate aim, and the ratchet effect will be done to pursue that as a strategic aim.
There have been questions about asset flight. We are very conscious of this, and that is why we are not explicitly naming people or institutions that may be subject to future sanctions. It is also why it is very important that we work hand in hand with our international allies and friends, who are just as determined as we are to address this situation.
The shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), compared what we have announced today unfavourably with what our allies say they are going to announce. If I were to say that this sanctions package is as far as the Government are willing to go, that might be a legitimate criticism, but the point we have made is that, just as our friends and allies intend to go further, we intend to go further. I have given some suggestions about where that additional ratchet effect may be focused, but we reserve the right to explore whatever is necessary to dissuade further aggression and to force Vladimir Putin to withdraw the troops that have entered Ukraine.
Questions were asked about the application of this statutory instrument in the OTs. This SI does cover the OTs. Members asked whether individuals who may not be in direct managerial or ownership roles would be subject to these sanctions. This SI is worded specifically to be broad in scope. I think implicit in the question my hon. Friend the Member for Huntingdon (Mr Djanogly) asked was that it might even be too broad in scope, but I can assure the House that it was written specifically to be broad in scope so that the ownership maze often put in place to hide the beneficiary of ownership can be addressed.
There have been some questions about family members. A family member is caught within scope where they are acting for or deriving benefit from their relationship with the Russian Government. However, just being the relative of someone who may be subject to sanctions is not necessarily enough on its own. There need to be reasonable grounds, and we always act with reasonableness, although we do act with firmness.
In the debate, it has sometimes sounded as if the only Russians subjected to UK sanctions are the ones who were named by my right hon. Friend the Foreign Secretary this morning. It is worth reminding the House that 58 entities and 186 Russian individuals are currently subject to financial sanctions under the Russia regime, including the ones designated today. There are already limitations on the activities in the UK of SberBank, VTB bank, Gazprombank and others, and as I say, we will not speculate on where future sanction designations may land.
Across the House, my right hon. and hon. Friends—including my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friends the Members for Isle of Wight (Bob Seely) and for Tonbridge and Malling (Tom Tugendhat)—have called on us to do more, and their message was absolutely echoed, very effectively and eloquently, by the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), my shadow, the hon. Member for Cardiff South and Penarth (Stephen Doughty), and the hon. Members for Stirling (Alyn Smith) and for Oxford West and Abingdon (Layla Moran). I hear—the Government hear—exactly the points that they are making.
The hon. Member for North Durham (Mr Jones)—
James Cleverly
Right honourable. Exactly. It is appropriate to say that; apologies. The right hon. Member for North Durham made a point about what this framework enables us to do. This is the point we are making: this is legislation that enables us to apply sanctions very widely indeed and we will always do so in the way we believe to be most effective: that is, hand in hand with our friends and allies. We will repeat the message that the people of Ukraine have suffered enough. The aggression and intimidation must end. This will form part of our response to Vladimir Putin’s aggression. We will work towards a time when the people of Ukraine no longer live under the intimidation of Vladimir Putin, and indeed, as has been made clear by a number of Members around the House, the people of Russia can again enjoy a relationship with other countries around the world not tainted by the actions of this individual.
Question put and agreed to.
Resolved,
That the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2022 (SI, 2022, No. 123), dated 10 February 2022, a copy of which was laid before this House on 10 February, be approved.
Business without Debate
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Dame Eleanor Laing)
With the leave of the House, we shall take motions 7 and 8 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Local Government
That the draft North Yorkshire (Structural Changes) Order 2022, which was laid before this House on 24 January, be approved.
Pensions
That the draft Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022, which were laid before this House on 17 January, be approved.—(Gareth Johnson.)
Question agreed to.
Murder of WPC Yvonne Fletcher
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
May I begin by paying tribute to and thanking all the police officers who at this very moment are policing our streets and putting themselves at risk and in danger to protect others and to keep us all safe?
I declare an interest in this matter: in January 1972, I joined the Metropolitan police as a police cadet, on the same day as John Murray, who features prominently in this speech. We trained together for over a year and became friends. Mr Murray is present this evening in the Under Gallery. In addition, I was a serving detective sergeant in the Metropolitan police on duty and nearby on the day Yvonne was murdered.
In 1984 Yvonne Fletcher was a 25-year-old police officer who had served in the Metropolitan police for seven years and had recently become engaged to be married. In the words of her late mother, Queenie,
“Yvonne loved being a policewoman. It was her life.”
On 17 April 1984, Yvonne and her policing partner and friend PC John Murray had paraded for duty at Bow Street police station expecting to undertake their normal duties as community police officers in the Covent Garden area. However, instead, they were requested by the duty inspector to assist in the policing of a political demonstration which was expected to take place outside the Libyan People’s Bureau in St James Square. The bureau, formerly known as the Libyan embassy, had been taken over and was under the control of a new revolutionary committee consisting of four individuals, including a senior official known as Saleh Ibrahim Mabrouk.
Just after 10 am, about 70 anti-Gaddafi demonstrators congregated behind barriers on the pavement directly opposite the bureau. WPC Fletcher and PC Murray were positioned on the road in St James Square with their backs to the bureau and facing the demonstrators. At about 10.20 am, two windows on the first floor of the bureau opened, and Sterling sub-machine-guns were pointed out of those windows and opened fire towards the crowd of demonstrators and the police officers standing between the bureau and the demonstrators. Yvonne, who had her back to the bureau, was struck in the back by a bullet and fell to the ground. PC Murray, who was standing next to her, immediately went to her assistance and with colleagues moved her to the safety of a nearby street. An ambulance attended and PC Murray accompanied Yvonne in the ambulance, where it was clear that she had sustained injuries that were likely to prove fatal. At that time, PC Murray promised Yvonne that he would find whoever was responsible. That promise became the basis for the campaign for justice for Yvonne that Mr Murray has continued tirelessly and relentlessly for 37 years.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I congratulate my hon. Friend on securing this debate, which I know carries great personal meaning for him as a former officer with the Met. PC Fletcher unfortunately paid the ultimate price in the name of public service, and it is shameful that even now, more than three decades on, the onus remains on her former colleagues and not on the Government to continue to fight to hold those responsible to account. I am keen to know whether the Government intend to open an inquiry into the matter, which I am sure my hon. Friend will push for tonight.
Allan Dorans
I totally agree with my hon. Friend.
Yvonne was conveyed to Westminster Hospital, but sadly she succumbed to her injuries on the operating table about an hour after arriving at the hospital.
Bob Stewart (Beckenham) (Con)
I have studied the matter at length and must say that the bravery of that lady after she was wounded was astonishing. I understand that all she was concerned about was the safety of other people. What service. How wonderful for the Metropolitan police.
Allan Dorans
I thank the right hon. Gentleman for his intervention and for holding a previous Adjournment debate on this matter.
The fact that the shots that murdered WPC Fletcher and injured others were fired from the Libyan People’s Bureau is not disputed and is supported by overwhelming eyewitness accounts, videos and forensic evidence. Immediately following the events of 17 April, Saleh Ibrahim Mabrouk, along with other members of the bureau, was deported to Libya. Mr Mabrouk was subsequently allowed to return to this country by the British Government and in 2011 he settled permanently in Reading. As there was evidence that he was involved in a conspiracy, we must ask why he was ever allowed to return.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, we have had more than our full share of murder and heartache. It must be remembered that our officers, past and present, offer to pay the ultimate sacrifice in their service. The fact that WPC Fletcher was willing to sacrifice her life will never make that sacrifice acceptable and negate the need for justice for her family. When the hon. Gentleman asks for a public inquiry, I want him to know that I fully support him.
Allan Dorans
I thank the hon. Gentleman for his intervention. I will address that matter later in my speech.
Sir Mike Penning (Hemel Hempstead) (Con)
As the hon. Member—my friend—knows, I have been involved in this issue for many years; before that, Sir Teddy Taylor was trying to get justice for the murder of Yvonne Fletcher. The question I have to ask—I asked it when I was the police Minister and I have asked it in parliamentary questions—is: why was that man allowed to come in and out of the country? He was not just a suspect in the Yvonne Fletcher murder but accused of other criminal activities, and yet he walked in and out of this country. That is why an inquiry is vital.
Allan Dorans
I thank the right hon. Gentleman for his intervention. I agree. Hopefully we will get answers to those questions.
In 2015, Mr Mabrouk was arrested by the Metropolitan police following an investigation of money laundering and in connection with the murder of Yvonne. Following a two-year investigation, it was announced by the Crown Prosecution Service in 2017 that no prosecution was possible due to evidence withheld by the Government on the grounds of national security not being available to it. Mr Mabrouk was therefore released without charge.
There is no suggestion that Saleh Mabrouk fired the weapons that killed Yvonne. He was in police custody—perhaps intentionally and conveniently—when the shots were fired. However, there is significant evidence that he, as a senior member of the revolutionary committee responsible for the control of the people’s bureau, was involved in the events that led to the shootings taking place. He is a clearly a major suspect in a criminal conspiracy that led to the death of Yvonne.
Following the failure of the Government to support a criminal prosecution, the only avenue available to bring Mr Mabrouk to justice of any kind was for John Murray to initiate a civil court action against him. Accordingly, in November 2018, while Mabrouk was still resident in this country, John Murray lodged a civil court action against him in the High Court for the nominal sum of £1. The civil court action was brought primarily to bring the evidence of Mabrouk’s involvement in the death of Yvonne into the public domain and to prove that he was involved in, and liable for, Yvonne’s death. Very shortly after the case was filed on 9 January 2019, the Home Secretary wrote to Mr Mabrouk at his address in Libya informing him that he was excluded from the UK on the grounds that his presence here would not be conducive to good public order due to his suspected involvement in war crimes against humanity in Libya.
On 1 July 2020, I asked a question at Prime Minister’s questions in relation to reopening the criminal investigation into the murder of Yvonne. The Prime Minister, in response, said:
“The murder of WPC Yvonne Fletcher was sickening and cowardly.”
He agreed to meet me to
“see what we can do to take the matter forward.”—[Official Report, 1 July 2020; Vol. 678, c. 327.]
We met in the Prime Minister’s office on 29 September 2020. My memory of that meeting is very clear. I asked the Prime Minister a series of questions, the most significant of which was: would he carry out a review of whether evidence, which had been withheld by the Government from the Crown Prosecution Service during the criminal investigation into Saleh Mabrouk on the grounds of national security in 2017, could now be released as Saleh Mabrouk had now left the country and had been excluded from returning by the Home Office. He replied that yes, he would do that and would reply to me.
On 10 November 2021, the civil court case brought by Mr Murray against Saleh Mabrouk took place at the Royal Courts of Justice and was presided over by an experienced senior judge, the honourable Justice Martin Spencer. Despite being properly served with notice of the court proceedings, Saleh Mabrouk failed to respond. He was also given the opportunity to appear by video link, but again no response was received. The trial judge’s conclusion was that Mr Mabrouk had chosen to play no part in the trial, and that the trial could fairly proceed in his absence. Mr Justice Spencer delivered his judgment on 16 November 2021, which runs to 25 printed pages.
These are just a few of the highlights from that judgment. Mr Justice Spencer said:
“I am satisfied on the balance of probabilities that there existed a common design to respond to the planned anti-Gaddafi protest by using violence, and specifically by firing shots at or in the direction of the protestors. Witness statements and statements made by Mr Mabrouk demonstrate not only his knowledge of the common design, but also his views of the inevitability of that response.”
He quoted Mr Mabrouk as saying: “We have guns here and there’s going to be fighting,” and said that:
“This is a statement confirming a plan to shoot protestors.”
The judge went on to say:
“Coupled with his position as one of the few leaders of the Revolutionary Committee controlling the People’s Bureau, it amounts to confirmation of the common design to fire upon the demonstrators, in which he was an active participant. On that basis, I am satisfied that on the balance of probabilities the defendant”—
Saleh Mabrouk—
“is jointly liable for the shooting of WPC Yvonne Fletcher on the doctrine of common design.”
That was a hugely significant judgment delivered by a senior High Court judge, having heard evidence from witnesses over three days. It was clear that Saleh Mabrouk was involved in, and jointly responsible, for the death of WPC Yvonne Fletcher. It is without doubt a landmark victory secured as a direct result of John Murray’s determination, courage and commitment to seek justice for his murdered friend and colleague.
I ask the Minister to address the following questions. Given that the evidence presented and accepted at the High Court has been available for over 37 years, how can the Government justify that it was left to John Murray, himself a victim in this case, to bring Saleh Mabrouk to justice in a civil court, rather than see him prosecuted in a criminal court? Will the Government undertake to review whether the evidence withheld from the Crown Prosecution Service in 2017 can now be safely released, as requested by me and agreed by the Prime Minister at our meeting on 29 September 2020? Has Saleh Mabrouk ever been provided with a letter of comfort or letter of assurance by the British Government, which guarantees that he will never be prosecuted in a British criminal court?
Will the Government acknowledge that the judgment delivered by Mr Justice Spencer confirms Mr Mabrouk’s culpability in the murder of Yvonne Fletcher, and in the light of that, what action are the Government and the Metropolitan police now taking to bring Saleh Mabrouk to justice by requesting his extradition from Libya to face a criminal prosecution for the murder of WPC Fletcher? Will the Government now reconsider the need for a public inquiry into the events surrounding the murder of WPC Yvonne Fletcher and subsequently?
Before the Minister responds, I pay tribute to John Murray, who, for the past 37 years, has worked tirelessly and relentlessly to achieve justice for Yvonne and without whose efforts the callous murder of a young policewoman, for which no one has ever been charged, may have faded in people’s memories. I also thank the police officers who have served for their service—some of whom are present in the Public Gallery this evening—and those who have helped and supported John through these incredibly difficult years to keep the memory of Yvonne and the campaign for justice for Yvonne alive.
Finally, in addition to seeking answers to those questions, my hope, in bringing this debate to the Chamber this evening, is that it will send a powerful message to the Government and to Saleh Ibrahim Mabrouk that the murder of Yvonne has not been, and will never be, forgotten. The campaign for justice for Yvonne continues. It will never give up; it is not going away; and it will continue the fight, by any legal means possible, to finally achieve justice for Yvonne.
The Minister for Crime and Policing (Kit Malthouse)
I congratulate the hon. Member for Ayr, Carrick and Cumnock (Allan Dorans) on securing this debate and recognise his indefatigable efforts to secure justice for PC Fletcher and her colleagues, friends and family. I thank him for the advance indication of his questions, which I will come to in a moment, and join him in celebrating the dedication and perseverance of PC Fletcher’s friend and colleague, John Murray—most recently, for bringing the case to the civil court, as well as for his continuous efforts ever since PC Fletcher’s death. They are testament to the high regard in which PC Fletcher continues to be held to this day. I also pay tribute to the hard work and commitment that the Metropolitan police has shown over a prolonged period in its efforts to bring to justice those involved in the murder of PC Fletcher. Her death was an appalling tragedy and my thoughts remain with all who loved her.
The murder of PC Fletcher was one of the most notorious crimes of the past 40 years, representing an act of state-sponsored terrorism that resulted in the fatal wounding of a serving police officer on the streets of London. The hon. Member shared in great detail the findings of the civil case of 16 November 2021, which found that Saleh Ibrahim Mabrouk was jointly liable for the killing of PC Yvonne Fletcher.
Following the conclusion of that case, many, including the hon. Member, have been lobbying for a criminal case to be brought against Mabrouk. In 2017, the Crown Prosecution Service made the decision not to pursue a prosecution in this case, and I understand that that decision was disappointing and frustrating for PC Fletcher’s family, friends and colleagues. It remains, however, an operational matter for the Metropolitan police and the Crown Prosecution Service to consider any criminal prosecution.
It is important to note the differences in making a finding on liability in a civil court as opposed to in a criminal court. A civil court is required to make its findings on the balance of probabilities. That means that a court is satisfied, on the evidence available, that the occurrence of the event was more likely than not. A higher threshold is imposed in criminal cases, which requires an allegation to be proven beyond reasonable doubt. That means that the jury must be sure that the person is guilty. It is therefore not by any means automatic that Mr Murray’s success in the High Court would or could translate into a successful criminal prosecution.
Sir Mike Penning
The Crown Prosecution Service and the Metropolitan police can make such a decision only if they have the evidence that the Government have, which they have not handed over to the CPS. Will the Minister answer the question about whether or not the information that the Government have will be passed over to the CPS so that it can make that decision?
Kit Malthouse
I will come to that point in a moment, if I may.
Following the Prime Minister’s meeting with the hon. Member for Ayr, Carrick and Cumnock in September 2020, the Home Office contacted the CPS in December of that year to ask whether it had received any more information on the case; it had not. The position remains the same as in 2017, which is that the CPS is not currently considering charges in the case. As with any case referred to the CPS by the police, a decision to prosecute is made in accordance with the code for Crown prosecutors, and a case must meet the evidential and public interest stages of the code test. In accordance with the code, the CPS will consider any new information referred to it by the police in relation to the case.
On the hon. Member’s question about evidence being withheld, it has been the long-standing policy of successive Governments not to comment on the existence or otherwise of intelligence material. I am therefore unable to confirm or deny the existence of any material that may or may not relate to the case.
The hon. Member asked for confirmation of whether the Government issued a comfort letter to Saleh Mabrouk. We are not aware of any evidence to suggest that any such letter ever existed or was ever issued.
In response to the hon. Member’s question regarding the extradition of Mr Mabrouk, the House should know that whether an extradition application is sought in any case is an operational decision for law enforcement and prosecution agencies. The UK Government, as a matter of long-standing policy and practice, will neither confirm nor deny that an extradition request has been made or received until such time as an arrest has been made in relation to the request.
On the question of a public inquiry, I am aware of the strong feeling in this case and of the early-day motion that the hon. Member tabled calling for such an inquiry. While of course we recognise the strength of feeling that the case evokes, the Government are not currently considering an inquiry into the death of PC Fletcher.
In closing, I would like to state once more that my thoughts are with PC Fletcher’s family, friends and colleagues. They continue to have my deepest sympathy. I, like many, have often stopped at the memorial stone in St James’s Square to consider a moment in our history that had a huge impact on many of us who were around at the time. I would also like to recognise and pay tribute again to the efforts of John Murray and the courage and resilience that he has shown in seeking justice for PC Fletcher. Finally, I thank the hon. Member for securing this debate. The murder of PC Fletcher was a heinous act that shocked our country to its core, and she will never be forgotten.
Madam Deputy Speaker (Dame Eleanor Laing)
Indeed: she will never be forgotten.
Question put and agreed to.
Draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2022
Draft Tax Credits, Child Benefits and Guardians Allowance Up-rating Regulations 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 10 / Noes: 2 - Question accordingly agreed to.
The Chair
Hon. Members should send their speaking notes by email to hansardnotes@parliament.uk—in the unlikely event of Members wishing to speak. Similarly, officials in the Gallery should communicate with Ministers electronically. We are expecting a Division in the Chamber in about 15 minutes’ time, so if we cannot get our business done within that timescale, we will have to suspend and come back 35 minutes later, because I understand that there might be two or three votes. No pressure, team.
The Financial Secretary to the Treasury (Lucy Frazer)
I beg to move,
That the Committee has considered the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2022.
The Chair
With this it will be convenient to consider the draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2022.
Lucy Frazer
These regulations set the national insurance contribution limits and thresholds as well as the rates of a number of national insurance contributions for the 2022-23 tax year, and make provision for a Treasury grant to be paid into the national insurance fund if required. As Members are aware, national insurance contributions or NICs are a key element of the nation’s welfare safety net, helping to support workers through ill health, unemployment and old age. They allow people to make contributions when they are in work in order to receive contributory benefits when they are not working. NICs receipts go towards funding contributory benefits as well as the NHS.
As announced at the Budget, the Government are using the September consumer prices index figure of 3.1% as the basis for setting all national insurance limits and thresholds and the rates of class 2 and 3 national insurance contributions for 2022-23. September CPI is the standard measure to increase NICs thresholds and class 2 and 3 rates. I will first outline the specific changes to the class 1 primary threshold and class 4 lower profits limit. The primary threshold and lower profits limit indicate the point at which employees and the self-employed start paying class 1 and class 4 NICs respectively. These thresholds will rise from £9,568 to £9,880 per year. The rates of class 1 and 4 NICs are unchanged by these regulations. The rates of class 1 and 4 NICs have already been increased, to 13.25% and 10.25% respectively, through the Health and Social Care Levy Act 2021. Increases to the primary threshold and lower profits limit do not impact on state pension eligibility. This is determined by the lower earnings limit for employees, which will increase, in line with CPI, from £6,240 in 2021-22 to £6,396 in 2022-23. I will come shortly to payment of class 2 NICs for the self-employed.
The upper earnings limit, the point at which the main rate of employee NICs drops to 3.25%, is aligned with the higher rate threshold for income tax. It was announced at spring Budget 2021 that the income tax higher rate threshold and the upper earnings limit would remain frozen at £50,270 until 2025-26. Similarly, the upper profits limit is the point at which the main rate for class 4 NICs drops to 3.25%. This will also remain at £50,270 per year.
As well as class 4 NICs, the self-employed pay class 2 NICs. The rate of class 2 NICs will increase from £3.05 in 2021-22 to £3.15 in 2022-23. The small profits threshold is the point above which the self-employed must pay class 2 NICs. This will increase from £6,515 in 2021-22 to £6,725 in 2022-23.
Class 3 NICs allow people to voluntarily top up their national insurance record. The rate for class 3 will increase, in line with inflation, from £15.40 a week in 2021-22 to £15.85 in 2022-23. The secondary threshold is the point at which employers start paying employer NICs on their employees’ salary. That threshold will increase from £8,840 in 2021-22 to £9,100 in 2022-23. The threshold at which employers of people under 21 and apprentices under 25 start to pay employer NICs on those employee salaries will remain frozen at £50,270 per year, to maintain alignment with the UEL.
The regulations also make provision for a Treasury grant of up to 17% of forecast annual benefit expenditure to be paid into the national insurance fund, if needed, during 2022-23. A similar provision will be made in respect of the Northern Ireland national insurance fund. A Government Actuary’s Department report laid alongside the re-rating regulations forecast that a Treasury grant will not be required in 2022-23, but in view of the economic challenges created by the covid pandemic, the Government consider it prudent to make the maximum provision at this stage. I trust that is a useful overview of the changes we are making to adjust contributions to the Exchequer in line with inflation.
On the second statutory instrument, the Government are committed to delivering a welfare system that is fair for claimants and taxpayers, while providing a strong safety net for those who need it most. The draft regulations will ensure tax credits, child benefit and guardian’s allowance increase in line with the consumer prices index, which measured inflation at 3.1% in the year to September 2021.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Some of us have not seen this statutory instrument. I was only given one when I came in. I did not realise there were two statutory instruments.
The Chair
By all means, help yourself, Barry, but do not interrupt the Minister as she is in full flow.
Mr Sheerman
On a point of order, Sir Gary, I want to put the record straight. I was not here when Lloyd George originally introduced the national insurance legislation.
Lucy Frazer
I am grateful for that helpful intervention. In summary, this proposed legislation makes changes to the rates, limits and thresholds for national insurance contributions, makes provision for a Treasury grant and increases the rates of tax credits, child benefit and guardian’s allowance in line with prices. These are important and necessary steps, and I hope colleagues will support them.
James Murray (Ealing North) (Lab/Co-op)
I am grateful for the opportunity to respond on behalf of the Opposition to the two statutory instruments. The first statutory instrument gives effect to the annual re-rating of various national insurance contribution rates, limits, and thresholds for the purposes of calculating liabilities for the coming tax year. The regulations increase the primary threshold above which people start to pay NICs by the rate of CPI in September 2021, while freezing the upper earnings limit in line with the income tax higher rate threshold also being frozen. We support the increase to the primary threshold, as any help for lower paid workers is particularly needed at the moment, given lower wage growth and the highest inflation in decades.
However, while the primary threshold is being increased by the draft regulations, the explanatory notes remind us that the Government are increasing employees’ national insurance contributions by 1.25% for tax year 2022-23, ahead of an equivalent charge being introduced by way of the health and social care levy. I would be grateful if the Minister could tell me the combined effect on the tax liability of someone on average earnings of both the increase to the primary threshold and the increase in employees’ national insurance contributions in 2022-23.
The second SI before us sets the annual rates of working tax credit and child tax credit and the weekly rates of child benefit and guardian’s allowance for the coming financial year. We support those increases as, again, any help for people who are struggling in the face of soaring energy bills and inflation is particularly needed at this time. Although the explanatory notes do not mention it, we know that the working tax credit basic element was cut last year, along with universal credit, by £20 a week. I would be grateful if the Minister could confirm what the level of the working tax credit basic element will be in April 2022 compared with the same time two years previously.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Sir Gary.
I will not detain the Committee for too long given that we are expecting a vote in the House but I want to put on the record that the proposed uplift, particularly that dealt with the second SI, does not reflect the true cost of living that many of our constituents are experiencing now.
When we debated the matter a couple of weeks ago, it was widely accepted by Members across the House that basing the uplifts on September figures will have to be reconsidered by the Government because the change is not working for our constituents. Far too many households in my constituency of Glasgow East and right across Scotland have been left behind and will not benefit from a paltry 3.1% increase from a Government who know that we are heading for a 7% inflation rate by April.
We have obviously had discussions about national insurance and it would be remiss of me not to put on record that the United Kingdom Government’s decision to go ahead with a regressive hike in national insurance will undoubtedly impact on the youngest and lowest earners in society. The Government often talk about supporting people in society, and the Minister uttered warm words about the social security net, but for far too many people who I represent that security net is getting weaker and there are more holes in it than ever before. The SIs before the Committee will not solve that.
Lucy Frazer
In response to the hon. Member for Ealing North, in my opening speech I set out in some detail how the thresholds will increase for those starting to pay NICs. I am happy to combine information on those thresholds with that on the social care levy in writing to the hon. Gentleman.
James Murray
On a point of clarification, I was asking about the increase in the primary threshold and the increase in NICs for 2022-23. As the Minister will know, the health and social care levy is not due to come in for another year.
Lucy Frazer
In my introductory remarks, I set out how each threshold will be increased, but I am happy to set that out in writing to him. He also spoke about the steps we are taking to protect the most vulnerable. He will know that, last September, we put in place a support package of half a billion pounds to support the most vulnerable. He will have heard the Chancellor’s statement only last month about the steps we are taking in response to the energy price increases. He will also be aware of the £400 billion support provided by the Chancellor in the past two years.
The SIs before us are important to ensure that we continue to uprate the thresholds.
Mr Sheerman
I do not want to extend the debate to excession because I know that we are in a hurry on account of Divisions in the House, but a Government Minister—a colleague of the Minister—has just resigned from the Government because of the amount of fraud that has been allowed to happen in our country under the present Chancellor’s guidance. Indeed, it was his legislation. Will the Minister confirm that £3.4 billion was lost? What could we have done with that £3.4 billion to ameliorate the impact of the NIC increase?
The Chair
That is not really within the scope of the SIs, so the Minister does not need to respond to that, but I think another intervention is coming.
Lucy Frazer
I value the hon. Gentleman’s contribution to the debate. He has obviously followed the issue very closely so he will know of the steps the Chancellor has taken to ensure that we combat fraud not only in relation to the coronavirus schemes but more broadly. The hon. Gentleman will have heard the Chancellor talk about the coronavirus fraud taskforce that has been set up—more than 1,000 people are now engaged to tackle fraud and the taskforce has already recovered half a billion pounds and is set to recover a further billion.
James Murray
May I again ask the Minister to respond to my second point about the second SI before the Committee and confirm what the level of the working tax credit basic element will be in April 2022 compared with the same time two years previously?
Margaret Greenwood (Wirral West) (Lab)
Will the Minister also set out for us what the SIs will mean for levels of child poverty, because I am very concerned that more than 4 million children are already living in poverty, and the rate seems to getting worse?
The Chair
Given the interest in the Committee, it would be helpful if the Minister sent a copy of her response to all members of the Committee.
The Chair
Thank you very much.
Question put and agreed.
DRAFT TAX CREDITS, CHILD BENEFIT AND GUARDIAN’S ALLOWANCE UP-RATING REGULATIONS 2022
Motion made, and Question put,
That the Committee has considered the draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2022.—(Lucy Frazer.)
Westminster Hall
(2 years, 1 month ago)
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India-UK Trade Negotiations
(2 years, 1 month ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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This information is provided by Parallel Parliament and does not comprise part of the offical record
Philip Davies (in the Chair)
Before we begin, I remind Members of the House of Commons Commission’s guidance to observe social distancing and wear masks when not speaking.
Bob Blackman (Harrow East) (Con)
I beg to move,
That this House has considered India and UK trade negotiations.
It is a pleasure to serve under your chairmanship, Mr Davies, I think for the first time. I thank the Backbench Business Committee, on which I sit, and Madam Deputy Speaker for allowing us to have this very important debate. I declare my interest as co-chairman of the Indo-British all-party parliamentary group—the other co-chairman, the hon. Member for Ealing, Southall (Mr Sharma), is also present. This is an important time: trade talks between the UK and India have already begun. There is a tremendous opportunity, which I will go into in some detail.
Of course, we have the opportunity to negotiate a trade deal with India—our friends—because we have left the European Union; we now trade and negotiate as a free trading nation. We must embrace the opportunities that that gives us. Colleagues from across the House will, no doubt, also go into the detail of those opportunities, including in services, particularly for the City of London, legal services—India, after all, has the same basic legal system as we have—manufacturing, and Scotch whiskies and Irish whiskeys, which face huge tariff barriers in India at the moment. Those must form part of our successful negotiations.
We have this opportunity because we have a long-term friendship with India. The European Union has been trying to do a deal with India since 1997, but without success. The United States of America has been trying to do a deal with India, but without success. We should therefore not underestimate the difficulties that we may face. Over the weekend we had the good news that our potential membership of the comprehensive and progressive agreement for trans-Pacific partnership, which is worth trillions of pounds, is moving forward. The trade opportunities with India are enormous, and clearly a free trade agreement will support the Government’s strategy of developing the status of the United Kingdom—global Britain—as an independent trading nation.
We are seeking trade and investment opportunities. We champion free trade—I am sure that my hon. Friend the Minister will allude to that particular issue in his speech. We have already negotiated a long-term arrangement with India—co-operation has been taking place over the last year—but now, free trade is the key to our success.
India is a dynamic, fast-growing economy at the heart of the Indo-Pacific region. Our bilateral trading relationship is already quite significant, and we should not underestimate that—£23.3 billion in 2019. A free trade agreement could strengthen that, and could potentially increase exports by £16.7 billion by 2035. That is a goal that we must secure. We can also enhance the already existing trading relationships, which are considerable, and give the UK access to a market with long and short-term benefits. A free trade agreement has to work not only for the United Kingdom but, obviously, for India.
Theresa Villiers (Chipping Barnet) (Con)
Does my hon. Friend agree that one of the significant benefits of a free trade agreement between India and the United Kingdom is access to a market that is increasingly prosperous? Over recent years, millions of people in India have been lifted out of poverty because of economic growth and prosperity. That is fantastic news for India, and it also creates a great opportunity for businesses based in the UK to increase their trading with India.
Bob Blackman
I thank my right hon. Friend for her intervention. India has a young population, full of entrepreneurs and people who want to succeed, and with a growing and establishing middle class and, indeed, upper class. The potential for a wide range of exports gives us many opportunities to draw on for the overall benefit of this country.
UK consumers, producers and businesses will all gain from a free trade agreement. We must maintain our high environmental standards on labour, food safety and animal welfare in any free trade agreement, not just with India but across all our different agreements. It is also important to protect the NHS when we negotiate, as we do not want it to be compromised in any shape or form. We want to secure the best possible agreement, and the potential interim agreement could deliver early benefits. I look forward to the Minister alluding to that agreement, as well as to the strategic opportunities I have mentioned.
We share a common set of values. India is the world’s largest democracy and has long maintained its support for international co-operation and democratic Government. As my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) said, there have been huge advances over the past few years in the economy of India, the rights of Indians to work, and for villages across India to gain benefits from its trading position.
We work together in various multilateral fora, including the United Nations, the World Trade Organisation and the Commonwealth. In May 2021 we committed to an enhanced trade partnership, which could double trade by 2030, strengthening our relationship and invigorating our respective economies. That is part of a 2030 road map that covers the full spectrum of our relationship with India.
We have strong cultural links. Some 1.5 million British nationals are of Indian origin. I see one or two here in the Chamber, which demonstrates the role that the British Indian population plays. We support over half a million jobs in each other’s economies, so an agreement would further develop that deep-seated relationship. It would also help put global Britain at the heart of the Indo-Pacific region—one of our key strategies—which now represents 40% of global GDP and has most of the world’s fastest growing economies. As they expand, it is key that we have access to their markets.
An agreement with India would complement our other commitments, such as those to Australia and New Zealand, and the ongoing negotiations with the other 11 members of the CPTPP. Tilting towards the Indo-Pacific would diversify UK trade, make our supply chains more resilient and make us less vulnerable—particularly on a day like today—to political and economic shocks around the globe. It would also cement our position as a world leader in free trade and strengthen democracies around the world, which can only be a gain for India and for us.
I will not go through the many benefits of free trade agreements, as I know a number of hon. Members want to contribute to the debate. But let us be clear: reducing barriers will make trade easier and cheaper for UK exporters, as well as improve choice for UK consumers.
In 2019, India imported £5.35 billion-worth of goods from the UK, of which £5.24 billion was in lines subject to tariffs. That gives a feel for how much opportunity exists. Removing those tariffs would enable us to double our exports to India. India’s middle class, which I mentioned earlier, is expected to double from 30 million people in 2019 to 60 million by 2030, reaching nearly 250 million in 2050. If that is not an opportunity, I do not know what is.
We will have huge opportunities to sell high-quality iconic brands and products. Removing tariffs and giving greater clarity on legal certainty would support our UK businesses, such as those in the automotive, agrifood, machinery and pharmaceutical industries, to name but a few. That would also mean our manufacturers saving costs by getting cheaper parts for products, while our consumers in the UK would benefit from the variety and affordability of different products.
The opportunities for UK services and investment are huge. At the moment, they amount to £3.2 billion. The fact that the expanding services sector in India is expected to reach 54% of its economy demonstrates the opportunity for us as a trusted partnership.
Mark Garnier (Wyre Forest) (Con)
My hon. Friend is making a strong point about how reducing barriers to entry will increase trading opportunities with India. Does he agree, however, that it is the job of the Department for International Trade to do not only trade policy but trade promotion? The Tradeshow Access Programme and other good innovations are required to support British businesses that are seeking to take advantage of opportunities. I look forward to the Minister’s explanation of what goes on in his closing speech.
Bob Blackman
My hon. Friend is a former Trade Minister who knows such things all too well. Those go hand in hand—it is no good having a free trade agreement if we do nothing with it. Indeed, before we get to the free trade agreement, we have to use the opportunities we have in the diaspora here and all the other opportunities for trade.
There is also a great opportunity in the digital sector. The Government of India aim to have a $1 trillion online economy by 2025. We expect internet penetration in India to hit 50%—or 622 million users—so the free trade agreement represents a huge opportunity for businesses in the UK, such as those in tech, artificial intelligence and cyber-security.
A trade agreement will not only build on our relationship but give young Indians the opportunity to come to this country to study—to get their degrees, master’s degrees and PhDs—and to return to India to use the knowledge that they have gained in friendship with the UK and to expand India’s economy even more. We already have excellent educational co-operation, in particular with our higher education facilities, but I want to see us do better. I want us to get back to the position where the UK is where India chooses to send its young people to for study. We have slipped behind in recent years, and myths have developed about caps on numbers. Those are problems to resolve—we know that—but nevertheless we want to return to the position whereby we are the place of choice.
Indian-owned businesses in the UK employ more than 95,000 people. Some 29,200 are employed in the west midlands alone—at least one west midlands MP, the right hon. Member for Walsall South (Valerie Vaz), is present—with 20,700 in London and 10,700 in Wales. Indian investment alone created 15,000 new jobs in the past three years. That demonstrates our opportunities to expand. Furthermore, India’s import requirements are set to be worth £1.38 trillion in 2035, which gives us an opportunity—if we can reduce the high tariff barriers—to utilise our capability to provide a high level of services and good-quality goods.
The tariffs paid on exports to India total £49 million a year. The tariffs for automotive manufacturers stand at 125%, so a trade agreement would obviously benefit them. In 2019, 9,900 UK businesses exported goods to India, 98% of which were small or medium-sized enterprises. That demonstrates that it is not only big companies but small companies that could gain.
We are a global leader on climate action, and the Government are obviously maintaining our high standards of environmental protection within trade agreements. An agreement with India could represent a huge opportunity for our world-leading renewable energy industry. The Government of India recognise the need to transition towards renewable gas and plan to install 175 GW of renewable energy capacity by the end of this year. Our expertise can help them to achieve that and to remove their dependence on coal and other fossil fuels. Although we already have a productive trading relationship, it would also help us to bounce back from the pandemic and to invigorate trade and investment services.
The reality is that our negotiation stance needs to be clear and above board, and we need to be clear that India was the UK’s 15th largest trading partner in 2020. As I have said, trade was worth £23.3 billion and our exports worth £8.5 billion in 2019. That makes India the 10th largest export destination for the UK. Outside of the EU, that clearly provides us with a huge opportunity. Imports were worth £14.8 billion in 2019, which was 2.1% of our imports, making India the UK’s fifth single largest import supplier. India is now the fifth largest economy in the world and the third biggest investor in the UK. We have slipped down the list on investment in India, and we need to put that right as we go forward. We were the third biggest investor in India, but I think we are now fifth or perhaps even sixth. India is the second most populous country in the world, with 1.38 billion people back in 2020, which amounts to 18% of the world’s population. I am throwing out a lot of stats, because we need to understand the huge benefit that can result from having a free trade agreement with India.
Obviously, under covid, both our economy and India’s economy contracted, but as they expand we will have an opportunity to get involved in further investment in India. At the moment, India is projected to overtake Germany and become the world’s fourth largest economy by 2030, and it could leapfrog Japan to become the third largest by 2050. The opportunity there is huge, and India has obviously been the engine of global growth over recent years, with its economy growing by 7% a year. If we could grow our economy by 7%,- wouldn’t we bite people’s hands off to achieve it? Clearly, that is going to be the position. I have mentioned India’s middle-class market, which is growing fast and which is a huge opportunity for us overall.
With a free trade agreement with India, we can obviously support jobs across the UK. If our exports to India grow, we can grow our businesses, and SMEs will grow as a direct result. In 2019, something like 1,000 Indian-owned local business units were operating in the UK, so clearly the opportunities are there and the demand for imported goods and services will grow as we use the living bridge between the United Kingdom and India.
Obviously, the success of exports to India will depend on how well the world economy goes and how our relationship grows with it. As I understand it, the second round of negotiations is due to take place between 7 March and 18 March, with a shared ambition to conclude negotiations by the end of this year. I wish those negotiations well, and I hope the Minister will be able to update us on the position when he responds to the debate.
Looking at the various parts of our economy, there are huge benefits right across the UK to having a trade agreement with India. One of our hugest exports is Scotch whisky. That has a huge impact. Those of our Scottish friends who are present—the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes)—know that they will gain as a result of a global Britain free trade agreement. If they were to engage in foolish behaviour and leave the United Kingdom, they would lose that free trade agreement and once again face tariffs of 150%. Indeed, the export of Irish whiskey is a vital part of the Irish economy and will clearly be—
Bob Blackman
I have had the opportunity of sampling Irish whiskey on many occasions.
David Linden
I am grateful to the hon. Gentleman for giving way. I think he has given me this opportunity before gets himself into a bit of a hole. First, he had a pop at independence, only to then turn it into saying how successful Ireland is. I am grateful to him for that, but I thought I would give him the opportunity at least to try a glass of water, if not some whisky.
Valerie Vaz (Walsall South) (Lab)
I take issue with one or two of the points that the hon. Gentleman has made. He spoke cleverly about what the UK can do for India, when the reality is clearly the reverse: we have imported fantastic, highly educated doctors, nurses and IT people.
He talked about whisky; I hope he does not intend for India to become a land of alcoholics. I would like to share an example from my youth of India’s innovation: instead of importing Coca-Cola, it made its own version, Thums Up. It is a very innovative country. I would like to correct the record slightly: our parents and grandparents would not forgive us if we did not say that they were also highly educated and innovative.
Bob Blackman
I thank the right hon. Lady for that intervention. Clearly, the living bridge, as I have described it, of citizens of Indian origin in the UK is not only highly educated, but has the opportunity to build that relationship still further. Equally, there is a potential opportunity for people of UK origin to study at universities and other educational institutions in India. I look forward to those important exchanges taking place.
There is clearly a huge opportunity for us to go forward. The opportunities that arise from a potential free trade agreement are legion. To come back to whisky and the huge 150% tariff, with respect to the right hon. Lady, India manufactures its own whisky, which is a good product but clearly no substitute for that from global Britain. Negotiating that tariff down will be a prize and a huge advantage for our exports to India. It is a premium product that is well respected by the middle classes across the piece, and very welcome.
I will not trouble colleagues further because I know others want to contribute. The opportunities are huge, and it is up to us to grasp that nettle. I look forward to the Minister’s reply to the debate, including the opportunities, our negotiating position, how negotiations are going and how much progress we have made. If we bring off this free trade agreement, it will be a feather in the Government’s cap. More importantly, it will be a huge opportunity for the United Kingdom and India to cement our long-term relationship.
Several hon. Members rose—
Philip Davies (in the Chair)
There are five Members seeking to catch my eye. I do not intend to introduce a formal time limit, but I think everyone can do the maths. I want to get to the Front Benches no later than 10.30 am. If we look at around seven minutes each, everyone will get a fair lick of the sauce bottle.
Mr Virendra Sharma (Ealing, Southall) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies, although not for the first time. Thank you for calling me to speak on this very important matter. I would also like to thank the hon. Member for Harrow East (Bob Blackman) for securing this debate, which I know is of great interest to his constituents as well as my own. I feel a little sorry for myself that I missed the opportunity to lead the debate; however, he made a good opening.
Trade with India has long been a British obsession and I am delighted that now, 421 years on from the founding of the East India Company, it is a little less one-sided. As the chair of the Indo-British all-party parliamentary group, I should declare an interest in this debate. However, my connection is even deeper, as I am not only a British citizen but also a son of India. It is one of my most fervent beliefs that India and the UK are natural friends and allies, with shared values and complementary skills and strengths. A deep and strong alliance is both possible and desirable.
Prime Minister Modi has made it very clear that he views Britain as India’s natural ally. India is bursting with opportunity from which both the UK and India can benefit. There is a massive and growing middle class, a highly educated workforce and demand for services. The future can have so much more to offer than the past. There are nearly twice as many English speakers in India as in Britain, and that number is expected to increase over the coming decade. It could double—triple; numbers are high.
In India there is a connection to Britain that extends beyond the similar legal system, parliamentary democracy and cricket—it is deeper. We may have chosen to stifle trade with Europe and thumb our noses at our nearer neighbours, ending the opportunities that India had to invest in the UK as a jumping-off point into Europe, but that is not all that we have to offer. We must offer something different, but perhaps we should try to avoid further reducing our competitiveness. A free trade agreement may be this Government’s stated aim, but I urge them to seek wins that build into an FTA, not look for a hole-in-one. Education and legal services are ripe for a sector-specific deal. Defence and security would not just be a boost to British design and manufacturing, but have the opportunity to support an Indo-Pacific “tilt” strategy. The Australia submarine deal shows that we have a sector brimming with talent, in demand around the world. Let us compete in space, cyber and aviation. The UK built the first jet airliner. Let us again sell them around the world, and fill Airbus planes with Indian students coming to British universities for a world-class education.
As we heard, in the past we have missed some opportunities. Britain did not stay on top of competing with other countries. Still, British universities and the British education system are popular among Indian students. We should look seriously at how we can further engage that relationship. On that point, I want to commend the excellent work of British universities in attracting Indian students despite the hard work of our Prime Minister’s predecessors to dissuade as many students as possible from coming to the UK. We must accept that it was our failure, not a lack of interest among students back in India. It should not be seen as a criticism, but as a policy matter we must look at how we can improve those relations further to bring those students into the country.
The new post-study visa is a good step, and the numbers from UCAS last week show that it is having the right impact. There is no doubt, then, of the value of an FTA for the UK and India, but experts I have spoken to think it will not be possible to secure one in the next decade or more. Instead, we should seek to nail down the wins that we can now, and work towards an FTA. That should not be for an election stunt but for the long-term success of the British economy.
I also urge the Government to take international promises seriously. This Government have been blamed, time and time again, for interesting interpretations of trade regulations and agreements with the EU. We risk further serious international reputational damage if we are seen to renege on trade deals that we have written and agreed. We can show how serious we are by respecting and taking full advantage of deals already in existence and in the pipeline. I look forward to seeing the sector deal for fruit ripen and the medical technology deal birthed in good health. Two countries, both alike in dignity, can put aside ancient grudge and break new ground with an ambitious deal for civil hands in both nations.
Navendu Mishra (Stockport) (Lab)
It is a pleasure to serve under your chairship, Mr Davies. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate. It is also good to see many members of the Indo-British APPG. I serve as its secretary, so I wish to declare that interest. I am also grateful to both its co-chairs, the hon. Member for Harrow East and my hon. Friend the Member for Ealing, Southall (Mr Sharma), who do a lot of work to keep the APPG going, and also to my right hon. Friend the Member for Walsall South (Valerie Vaz).
I will start by talking about the Manchester India Partnership, which covers the Greater Manchester region, including my constituency of Stockport in south Manchester. It was set up in 2018 and has won several awards. Its main objectives are to link academic institutions, businesses and public sector organisations across Greater Manchester and India. Those are excellent objectives. I am sure that the House will join me in congratulating Shehla Hasan, who has been appointed the new executive director for the Manchester India Partnership.
It is good to see the Mayor, Andy Burnham, and the 10 local authorities in Greater Manchester working with the Manchester India Partnership to attract investment into Greater Manchester, but also to attract investment from British businesses, organisations and academic institutions into organisations across India. It should be highlighted that Greater Manchester is the first UK city region to sign a memorandum of understanding with the regional Government of the Indian state of Maharashtra. That was recently signed between Mayor Andy Burnham and a Minister from Maharashtra, and should be celebrated.
As MP for Stockport, I want to see more investment from Indian businesses in my constituency into Greater Manchester, and vice versa. I also hope that when the Minister speaks, he will support the Manchester India Partnership and outline how the Government will support not only regional partnerships—such as the Manchester India Partnership—and the UK India Business Council, but also the initiative in the west midlands.
I believe that this debate is about trade, but I also want to mention the lack of air connectivity between Manchester and India. Manchester airport is the third-largest airport in the UK and serves people from the north of England, Scotland, and even Wales. Some 537,000 people of Indian ethnicity live within a two-hour drive of it. It is not good—unhelpful, even—that Manchester airport currently has no direct flights to major Indian cities. It used to have links to Mumbai and Delhi, but because of the pandemic those infrequent links, which were weekly, have stopped. I hope that the Government will do something about that. The large, vibrant Indian community in Greater Manchester and the north-west region have been calling for direct air links from Manchester to major Indian cities and, as a bare minimum, direct links to Mumbai—the trading hub of India—and the capital, New Delhi. It is a long time coming, and I hope the Government will do something about that.
Having spoken to them recently, I know that Manchester Airports Group are very keen to start routes to India. I hope there is a commitment today from the Minister that the Government will deliver that. Direct air links will deliver better connectivity for families, businesses and academic institutions. My good friend, my hon. Friend the Member for Ealing, Southall, mentioned the large number of Indian students who study in the UK, as well as businesses and people visiting on vacations. These are people who are choosing to spend their time and money here and we should make it easier for them.
Moving on to the student community, the UK has an excellent educational offer; we attract students from around the world and that is a very good thing. However, I am disappointed that the Government did not do enough at the height of the pandemic to support overseas students. Some struggled badly, and more should have been done. Some students faced extremely serious hardships, struggling to feed themselves and facing issues with rent and landlords. Several organisations, up and down the country, did a lot to support those overseas students and I am very grateful to them. I particularly thank the Indian Association Manchester: Dr Gajanan and Councillor Vimal Choksi went above and beyond to support students, some of whom were in desperate situations, and I am grateful to them for that. I think the Government should have done more, and going forward, if we are going to attract foreign students—which is a good thing—we should make sure that we are able to support them better in the case of a lockdown, in the case of a pandemic.
Over 53,000 students of Indian heritage studied in the UK last year. I believe the figure for the next academic year is close to 84,000—and that is just students from the Republic of India. That shows the growing number of students coming from India to the UK. I hope that part of the free trade agreement provides better support for those students. Over the weekend there have been some media reports about élite Indian universities setting up campuses in the UK; I hope that the Minister will outline how the Government will support that. We want the best and the brightest, and we also want to encourage the exchange of knowledge, ideas and people between those institutions.
I will finish with two points. Climate change is a very serious issue; India and the UK can do so much together to combat climate change and preserve our natural environment. I saw a report recently that India has increased its solar power capacity by more than elevenfold in the last five years; that is just one example of things that are going on in India. The UK and India could lead on green technology and renewable sources, but we need the vision and the investment.
When we talk about trade, we should do so on an equal footing and on collaborative terms. It is all well and good for the Government to say that they want to pursue a free trade agreement with India, but when recently South Africa and India made a joint proposal for a time-limited, temporary waiver of the World Trade Organisation agreement on trade-related aspects of intellectual property rights in order to allow the production of vaccines, medical equipment and medicines to fight the pandemic, the UK Government were part of a small minority that blocked the proposal. Personally, as a British Member of Parliament, I think that is shameful. On the one hand, the Government are saying that they want a free trade agreement on equal terms, while on the other they are blocking a proposal that would enable low and middle-income countries to vaccinate their populations. While we in more advanced economies talk about the second dose, the third dose or the booster dose, around 80% of people on the continent of Africa have not even had their first dose. President Biden’s Administration were with the UK in blocking the TRIPS waiver. However, they reversed their position and said that they were wrong, and that they would support the proposal from India and South Africa. I am sorry to end on a negative note, but the Government have clearly failed on that. They say one thing on the free trade agreement, but do not support a very reasonable proposal for low and middle-income countries.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is good to see you in the Chair, Mr Davies. I thank the hon. Member for Harrow East (Bob Blackman) for securing this debate.
It has been interesting and, in many ways, encouraging to hear the enthusiasm that Members across the House have for increasing links with the Republic of India. While some from my party and my part of the world can only support increasing trade, commerce and understanding between democratic peoples, I am one of the few discordant voices in this debate. I have to ask whether that is truly appropriate at this moment, especially while my constituent, Jagtar Singh Johal, remains arbitrarily detained in a maximum security prison.
Having served as a member of the Defence Committee for five years, I am under no illusions as to the importance of maintaining good relations with India. It remains the largest democracy in a region where it can sometimes seem that anti-democratic voices have the upper hand. However, being a member of the Committee also meant I had more time than most to read last year’s integrated review and that I was fortunate enough to meet many of the people who wrote it.
The fine balance between interests and values is a major theme throughout the review and is something that we should continue to reflect on. On page 17, the review states:
“In the years ahead we will need to manage inevitable tensions and trade-offs: between our openness and the need to safeguard our people, economy and way of life through measures that increase our security and resilience; between competing and cooperating with other states, sometimes at the same time; and between our short-term commercial interests and our values.”
What about our Prime Minister? We know that he is, of course, a man of his word. In his introduction, he says that,
“By 2030, we will be deeply engaged in the Indo-Pacific as the European partner with the broadest, most integrated presence in support of mutually-beneficial trade, shared security and values.”
I would like to linger on the last word: values.
My constituent Jagtar Singh Johal was shopping with his newlywed wife in Jalandhar city on 4 November 2017 when he was suddenly assailed by persons in plain clothes who did not identify themselves. They bundled him into a van before speeding off, leaving his new wife distraught at the side of the road. It was not until he got to Bagha Purana police station that he realised those people were law enforcement. However, if that realisation made him think he would be dealt with humanely, he was wrong.
Jagtar alleges that from 5 to 9 November, the police interrogated and tortured him, including by means of electric shock to his genitalia, forcing his limbs into painful positions and depriving him of sleep. That torture is probably what contributed to Jagtar signing a confession and making a video confession that later appeared on prominent Indian news sites, both of which he subsequently retracted.
I have spoken about Jagtar’s case on many occasions in the House and I will continue to do so until he is released. Due to the time constraints we have today, we will have to gloss over almost five years in captivity, a move to a maximum security prison and the gradual realisation from all working on this case that we were dealing with arbitrary detention.
In my Westminster Hall debate last year on Jagtar’s case, I unfortunately did not hear any justification from the Foreign, Commonwealth and Development Office as to why it did not consider Jagtar’s detention to be arbitrary. However, I fully intend to make the FCDO justify that decision whenever I can. We should ask ourselves if we consider the treatment of Jagtar to be consistent with the pursuance of shared values in the UK’s foreign and trade policy.
My constant refrain during Jagtar’s detention has been for transparency, due process and the rule of law to be what the Republic of India is judged on by both the citizens of that mighty country and the FCDO. The integrated review quite clearly states that,
“we will increase our efforts to protect open societies and democratic values where they are being undermined”.
There is more than enough in this one case for me to ask all Members present, including the Minister, at what price do we pursue this deal? At what point is it incumbent on the UK as a state that seeks to protect open societies and democratic values to act when they are demonstrably not being adhered to? While it is, of course, for the people of the Republic of India to decide how they are governed, it is for us as democratically elected parliamentarians to decide how we sign free trade deals with them.
I hope I have made it clear that, although the benefits of free trade and cultural exchange are undeniable, they should not be pursued at any price. They should certainly not be placed above the wellbeing of individual UK citizens such as Jagtar Singh Johal.
David Linden (Glasgow East) (SNP)
It is a pleasure to follow my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes). I too put on record my support for Jagtar Singh Johal, who is a son of the Rock. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing and opening this important debate.
As chair of the Scotch whisky all-party parliamentary group, I understand the importance of securing a good trade deal with India, especially for the Scotch whisky sector. The industry breathed a huge sigh of relief at the removal of tariffs for Scotch whisky in the United States. However, it only came after significant effort on the part of the APPG, the Scotch Whisky Association and countless industry stakeholders. The industry continues to face yet another barrier at this time in India, where Scotch whisky faces an eye-watering 150% tariff.
India is the world’s largest whisky market, which provides huge potential for the entire Scotch whisky industry. However, the fact that Scotch exported to India is subjected to that 150% tariff is a massive blow to the sector. Because of the steep tariff, Scottish produce makes up only 2% of India’s whisky market. Despite only making up this very small percentage share of the market, the value of Scotch whisky sales continues to rise. Whisky sales rose from less than £60 million in 2011 to more than £150 million in 2019. Just imagine the opportunities for what is, I would argue, our greatest export brand if the 150% tariff were reduced. The Scotch whisky industry could rise to its true potential in India.
A reduction in the tariff on Scotch whisky would grow single malt exports by £1.2 billion over the next five years and create 1,300 jobs. In my Glaswegian constituency, I am privileged to have a bottling hall, a maturation warehouse and a number of cooperages. There is clearly an argument that this investment has an impact on jobs, not just in rural parts of Scotland, but in urban constituencies like my own.
India is already the third largest market by volume. The reduction of tariffs could push it to second place, behind only the United States of America. It would see an increase of £3.4 billion in revenue to the Indian Government. There is a huge potential for the market to grow if tariffs were reduced. In 2019, Scotland only constituted 6.5% of the UK’s overall trade with India, compared to London at 21%, the south-east of England at 14% and the north-west of England at 9%. There is clearly an opportunity for Scotch whisky, if only it were not hindered by these incredibly high tariffs.
The whisky market in India is a wholly untapped, golden opportunity for Scottish distilleries. Scotch whisky plays a crucial role in the success of Scotland’s food and drink sector and our economy, but the industry has been dealt a triple whammy recently, with the economic impact of tariffs—particularly in the USA—as well as Brexit and the pandemic. Going forward, we need to see continued and intensified support for the industry. One step could be to address the extortionate tariffs in India. I hope that my good friend the Minister, and the Government, will address this in conjunction with the APPG, so that together we can support Scotch.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Harrow East (Bob Blackman) for introducing the debate in a consistent, helpful way. I am pleased to follow the contributions of the hon. Members for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes). The hon. Member for West Dunbartonshire knows that I have supported him in the campaign that he has consistently been involved with over the years and in every one of his debates, and I support him here today in urging the Minister to do something. It may not be too late for that plea to the Minister and to the Government to do something to help the hon. Gentleman’s constituent, who has been very wrongly maligned, intimidated, tortured and injured, and his family.
Holding each other accountable to a higher standard is a hallmark of any good relationship. Ours with India should be no different, which is why what the hon. Gentleman said is so important. There has been colonial and historical contact, and that has drawn us together over the years. I see—we all see—India as a friend and the close relationship between the UK and India is well known. A long history of international co-operation and trade has been central to much of that. Our trading relationship is significant and, therefore, I believe we need to have a relationship that draws on our concerns in this country. I will lay out some reasons for that.
The UK is the third biggest investor in India, and in 2020 India became the second largest investor in the UK. Our relationship is growing from both sides and that is important. During the covid-19 pandemic, trade with India secured vital personal protective equipment for our frontline workers, and helped to secure the production and roll-out of the Oxford-AstraZeneca vaccine on such a mammoth scale. The history and our relationship over the last 100 years—especially over the last two—have been significant and important.
It goes without saying that the UK-India relationship is mutually beneficial, and that underscores why a trade deal with India is and should be such a priority. However, in trade negotiations we should not ignore the values central to a good relationship for the sake of a better trade deal. The close relationship between the two countries necessitates that our Government and our Ministers raise the issue of human rights concerns in negotiations with India. Will the Minister confirm that the issues are constantly raised with India? I am quite sure that the answer will be yes, but will the Minister confirm that in Hansard, so that we have it to refer to for the future?
I am sad and sorry to say this, but in recent years India has seen escalating violations of freedom of religion or belief. Churches and Christian schools were targeted during the Christmas season just past. Bibles were set on fire, services were disrupted, a statue of Jesus was torn down and the crowd shouted, “Death to missionaries”. Really? In this modern world? We have this relationship with India, but the Indian Government have not acted on those issues. In 2013, the Open Doors world watch list ranked India as 31st in the global list of the top 50 countries where Christians faced the highest level of persecution worldwide. Last month, in its latest world watch list, Open Doors ranked India in 10th position; it has risen from 31st to 10th. The research sounds the alarm on the escalation of freedom of religion or belief violations in the country—not just against Christians, but against other faiths and beliefs too. I will quickly speak of them.
Lynchings and hate speech targeting Muslims in India have repeatedly made headlines. In December last year, there were open calls for genocide against Muslims at a Hindu Mahasabha party conference. That should never happen at any Government conference or any party conference. The marginalisation of Muslim women was evidenced last month when schools and colleges in the Indian state of Karnataka banned the Muslim headscarf. Indeed, Malala Yousafzai has since responded to colleges forcing Muslim girls
“to choose between studies and the hijab”—
in short, to choose between their right to education and their right to freedom of religion or belief. That must stop. Can the Minister give some indication of how we are encouraging India to do just that?
David Linden
I am glad the hon. Gentleman has touched on that. I discussed the issue in a meeting with the Prime Minister. Thankfully, there was an undertaking that he would raise the issue. Does the hon. Gentleman agree and accept that a lot of the behaviour stems directly from Prime Minister Modi and the various thugs in his party who think that such behaviour and intolerance towards people of a different faith is somehow normal? We need to send a very strong message from London to the Indian Government that we will not accept such behaviour and that we will raise it during the negotiations.
Jim Shannon
I agree that there is an onus on Prime Minister Modi to speak out. Unfortunately, we have not seen much evidence of that. If he speaks out, there should be a reaction, and those who listen to him might respond in a positive fashion, but that has been lacking so far. However, I hope that we can have such a response.
I believe that there is hope and I want to reflect on that as well. Human rights provisions in international trade deals have become the norm since the early 1990s. More than 75% of the world’s Governments now participate in preferential trade agreements with human rights provisions, and we should participate as well. European Union international trade agreements include human rights clauses and a general obligation to uphold human rights as set out in the UN universal declaration of human rights, so what are we doing to make sure that that is upheld?
Leaving the European Union has enabled us—I say this with great respect to colleagues on my left-hand side, the hon. Members for Glasgow East and for West Dunbartonshire—to pursue an independent trade policy. It is vital, however, that we do not drop human rights provisions in that endeavour and that we appropriately use free trade agreements to pursue our broader international objectives.
The UK has a history of defending human rights across the world and is a leader in protecting the fundamental right of freedom of religion or belief. I recognise the good work that our Government have done on these issues, but there are occasions when we have to speak up in a gentle but firm fashion to say that things are not right. The right to freedom of religion or belief is a gateway right and a strong indicator of the future trajectory of the human rights landscape in a country. That is where the focus must be in India, so we seek that change. Religious or belief minorities are often the first groups to be targeted before other rights are eroded, so the right to freedom of religion or belief is well placed to be an indicator of human rights provision in a trade deal with India. I am confident that the Minister’s response will endorse our concerns and deal with how we can make things better.
I am mindful of the time, so I will conclude by urging the Government to ensure that human rights provisions are included in the text of future trade deals with India, that those provisions include robust monitoring and enforcement mechanisms, that the right to freedom of religion or belief is part of that framework, and that the Prime Minister of India takes the lead on this issue. If we hope to nurture a sincere relationship with India—I hope we do; I want us to—Government silence on the matter cannot be tolerated.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate and on his dramatic entrance; it is always good to get off to a start like that.
There has rightly been a lot of talk about the opportunities for friendship, trade and progressive agreements with India. Those matters should be at the forefront of our minds when we talk about engaging with any other country. It is also important, as we have heard from hon. Members around the Chamber, to make sure that when we talk about friendship and being good friends, we are open and honest and call out the things that are not acceptable. I intend to do that in my comments.
The hon. Member for Harrow East talked about the difficulties in gaining a trade agreement with India. The EU has 445 million people, the US has 331 million and the UK 68 million, so there will be difficulties in gaining agreements, and standards must not be sacrificed to get those things across the line. I welcome his comments on protecting the NHS. I hope he will work with me to make sure that the Government pay close attention to not including things such as investor-state dispute mechanisms that could undermine the NHS in future trade deals.
The right hon. Member for Chipping Barnet (Theresa Villiers) is no longer in her seat, but when we talk about being open, we have to be clear about what the situation is in India. Two thirds of Indian people live in poverty. We have to realise that not everybody there is wealthy. Nearly 70% of people live on under $2 a day. That leaves the situation open to worker exploitation. In any trade deal, we must be mindful of that situation.
Hon. Members have talked, quite rightly, about honouring agreements. That is absolutely essential. This Government must reverse some of the precedents that have been set over recent months. They have to show that they are willing to understand and undertake the conditions of international law; if they do that, they will have the moral authority to hold others to those conditions.
It is absolutely right to point out human rights issues in India. I will come on to some of the opportunities in a moment, but I will pause on the point made by my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) about his constituent Jagtar Singh Johal, who has been held for four years without charge. There are many other concerns, including the filing of criminal charges against students, journalists and private citizens in response to speeches seen as critical of the Government. As the hon. Member for Strangford (Jim Shannon) pointed out, in 1995 the EU agreed that every new trade deal would take human rights as an essential criterion. Will the Minister uphold the same principle, or will he let these things slide, as the Foreign Secretary did with the principles in the deals with Turkey, Singapore and Vietnam? The Minister should tell us.
My hon. Friend the Member for Glasgow East (David Linden) highlighted an enormous opportunity to fix a long-held barrier to exports for Scotch whisky. The punishing 150% tariffs applied to this premium Scottish export have been in place for far too long. The UK Government have been tardy, to say the least, in addressing that. We have seen no urgency from the UK Government to rectify the situation until now.
As we have heard, India is the world’s largest whisky market, and yet the quality produce from Scotland makes up only 2% of that market. Despite that, because of the vigorous marketing of high-end product by the Scotch whisky industry, the value of whisky sales has risen from less than £60 million in 2011 to more than £150 million in 2019. There is clearly a demand and an appetite for whisky in India. A reduction in that tariff would grow single malt exports by £1.2 billion in the next five years and could create 1,300 jobs, but that depends on serious action on tariffs. Could the Minister tell us what efforts are being made to remove the 150% tariff, or what reduction to it is being sought? That should not be a secret. It is not a negotiation issue; it should be something that is simply dealt with.
We have heard mentions—too few mentions—from hon. Members of climate change. This is an absolutely pivotal issue that should be at the front of our discussions. There are export opportunities for the Scottish renewable energy manufacturing sector if the conditions are put in place. The Indian Government plan to install 175 GW of renewable energy capacity this year, and they are aiming for further capacity developments over the coming decades. Currently, however, wind turbine components made in the UK are subject to import tariffs of 15% in India. Scotland has the world’s largest research group of renewable energy experts: more than 700 scientists, engineers and more. That is an opportunity.
Navendu Mishra
Part of the “build back better” slogan has to be good, well-paid, unionised jobs in the UK. The UK can be a world leader in green technology and technology transfer, and it can lead from the front on renewable energy. Does the hon. Member agree that as part of the free trade agreements that the UK signs with other nations, we should encourage those nations to sign up to the principles of renewable energy? Does he also agree that we should use those agreements to increase industrial capacity in the UK and produce good, well-paid, unionised jobs that support our constituents up and down the country?
Drew Hendry
Absolutely; I am in complete agreement about those opportunities. It is important to underline that climate change was not solved at COP26; some good agreements were reached there, but it is clear that a lot more needs to be done. All those things need to be taken into account when it comes to a trade deal. India and the UK have considerable and long-standing social, cultural and economic ties. India is a rising world power, and it is impossible and impractical to ignore the south Asian giant. However, as I have said, friendly progress should be made with eyes open to the issues that exist.
None of the proposed trade deals, including this one with India, can make up for the trade disaster that is Brexit. The Office for Budget Responsibility estimates that Brexit will lead to a reduction of 4% in UK GDP. The hon. Member for Harrow East talked about coming back from covid. By comparison, the OBR estimates that covid will only cause a 2% fall, so Brexit is likely to have twice the impact.
According to predictions by the National Audit Office, all the FTAs—those with Australia and the US, and the CPTPP—will increase the UK’s GDP by between 0.33% at best and 0.17% at worst. Brexit has already cost the Scottish economy around £4 billion and could slash Scotland’s GDP by up to £9 billion by 2030.
There are other issues, but lack of time prevents the full exposition of them all. This is a wide-ranging subject and an enormous debate, given the sheer size, scope and industry of India and the opportunities that might be opened up there. However, there are some key points that I want to touch on, so that the Minister can respond to them. These are important things.
In India, produce—rice, in particular—is grown using pesticides that are currently banned from use in the UK. Can the Minister confirm that such produce will never be imported for sale in UK shops? What concerns has he raised with his team and colleagues about microbial resistance, and will he confirm that any FTA will commit to addressing the very real concerns about it? Will he commit to ensuring that there is a robust chapter in any FTA within the legal services text that takes into account the unique nature of Scottish law?
I put those questions to the Minister. I know, and he knows, that he will be asked many more questions about this wide-ranging subject in the coming weeks and months. However, several of the questions I have asked demand an answer—not least those about his ambition for the reduction in tariffs such as 150% on Scotch whisky and 15% on renewable parts, but also those relating to human rights commitments, the protection of UK standards on pesticides and genetic modification, and ensuring that we get an open and honest trade deal that protects the human rights of those involved with it.
Gareth Thomas (Harrow West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Davies. I find myself in the most uncomfortable position of having to praise my neighbour, the hon. Member for Harrow East (Bob Blackman), for his speech; for the first time in a long time, I agreed with more than 50% of what he said.
The hon. Gentleman and the Backbench Business Committee have done the House a service in giving us the opportunity to begin scrutiny of a trade agreement. I hope that the contributions by the hon. Member for Wyre Forest (Mark Garnier), the right hon. Member for Chipping Barnet (Theresa Villiers), my right hon. Friend the Member for Walsall South (Valerie Vaz), my hon. Friends the Members for Ealing, Southall (Mr Sharma) and for Stockport (Navendu Mishra), and the hon. Members for West Dunbartonshire (Martin Docherty-Hughes), for Glasgow East (David Linden) and for Strangford (Jim Shannon) will serve to jog the Minister’s memory about the need to improve scrutiny arrangements for the trade deals that this country begins to enter into. In particular, I welcome the fact that the hon. Member for Harrow East underlined the need to maintain environmental, animal welfare, food and safety standards, and to ensure that there is no retreat on protecting the national health service.
At the outset, let me state clearly that the official Opposition welcome and support the opening of free trade agreement negotiations with India. Given how underwhelming the Government’s record on trade has been of late, the signing of a comprehensive free trade agreement with India that could unlock significant export opportunities for British businesses and help to create significant numbers of new jobs in the UK would be very welcome. However, very few in the business community seem to have much confidence in the Government being able to negotiate any time soon the comprehensive free trade agreement that the Prime Minister has promised us all. There are increasing whispers that Ministers are focusing only on what would be billed as an interim agreement. I hope that turns out not to be true, but that apparent loss of nerve and ambition would be disappointing.
Given that Ministers have negotiated a trade agreement with Japan that, according to the Government’s own figures, is set to benefit their exporters four times more than ours; that provisions on labour and human rights have been dropped from many of the roll-over deals—a point made by the SNP spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—and that a deal with Australia is set to deliver a £100 million hit to British farmers, fishing and food firms, Ministers should not be surprised by the growing scepticism about whether they will be able to put together a genuinely exciting free trade deal with India.
I am afraid that the story of the last 10 years of Britain’s trade with India has been underwhelming. The hon. Member for Wyre Forest, who is no longer in his place, made a pointed intervention on the hon. Member for Harrow East about the Tradeshow Access Programme, no doubt with that in mind. Figures from the House of Commons Library demonstrate that British exports to India dropped by 3% in the years between 2010 and 2019. Canada saw a 62% increase in trade with India over that time, and the French saw a 58% increase over the same period. Every other country in the G7 saw faster growth in their trade with India. There was also an average increase in trade with India across the European Union, without the EU-India free trade agreement having been made. Even Italy performed better than the UK.
After that decade of disappointment, it is high time that Ministers gave Indian markets some serious attention. It is no surprise that as far back as 2018, the Indian Government, through the High Commission here, were asking when Ministers were going to get their act together on trade with India.
Action by the previous Prime Minister on visas, of the sort alluded to by my hon. Friend the Member for Ealing, Southall, or the failure to support India’s call for a temporary trade-related intellectual property rights waiver, as my hon. Friend the Member for Stockport underlined, only add to the concern about whether Ministers are genuinely serious about engaging properly with their counterparts in India. To complement free trade agreement discussions, a strategy to boost exports to India is now needed. That can be built on if and when any agreement with India is achieved.
I hope the Minister will be able to explain, as the hon. Member for Wyre Forest asked, what extra support is being provided to firms that have the potential to export to India but are not yet doing so. If France, Germany, Italy and the EU more generally can all perform better without an FTA in terms of growth in their exports to India, Ministers need to be doing more to help British exporters. How many trade missions are planned to India in the next 12 months? Are extra staff going to be deployed to support export growth in India? How are Ministers going to improve the online help to businesses that want to export to India? I am told that it is weaker than that of our rivals.
India is one of the world’s largest and fastest growing economies, and it is set to become the world’s third biggest economy by 2050. Given that India has a population of almost 1.4 billion people and a growing middle class, a trade deal would increase British business access to a huge consumer base and, according to the CBI, potentially boost wages in the UK by some £3 billion by 2035. Got right, an ambitious free trade agreement could bolster bilateral economic growth and, given India’s regional significance, boost growth and trade with its near neighbours, too.
An agreement that sees the removal of key duties and tariffs is particularly important. As the hon. Member for Glasgow East stressed, exports of Scottish whisky and of cars, which face duties of 150% and 125% respectively, are important.
Navendu Mishra
The Times of London reports today that in 2020, UK companies exported pesticides containing 12,240 tonnes of seven different chemicals that are banned in the UK. Does the shadow Minister agree not only that that is morally wrong, but that it highlights the Government’s double standards on exports?
Gareth Thomas
My hon. Friend makes an important point. That is why we need to ensure that there is no weakening of standards as Ministers, perhaps desperate to make up for the shortfalls in the trade and co-operation agreement with the EU, seek to rush to agree trade deals with other countries.
Ministers ought to be able to make fast progress on Scottish whisky tariffs. The Government of India are keen to tackle smuggling, counterfeiting and the loss of tax revenue, so the UK Government are pushing at an open door regarding Scotch whisky tariffs. The financial sector is emerging as a vibrant and dynamic area of growth in the Indian economy, but India ranks only 30th as an export destination for UK financial services. Figures suggest that Britain exported about £3.8 billion of services to India, with financial services making up less than 10% of that total.
An ambitious agreement on services could support and complement India’s economic development. Indeed, given the UK’s strong comparative advantage in high-value services such as digital finance, a deal that does not support real growth in services exports would be very disappointing. Again, on tech, the UK and India are among the world’s leaders in the development of new technologies. An FTA could help to develop business co-operation in advanced research and manufacturing capacity, in green energy capacity in particular, as well as in artificial intelligence.
For many small businesses, improving customs arrangements to reduce bureaucratic delays and red tape is key. An FTA should include reaffirming commitments to implement the WTO’s trade facilitation agreement, to ensure that there are commitments on the timely release of goods and express shipments, and a mutual recognition of authorised economic operator schemes. On the point of mutual recognition, a comprehensive and ambitious FTA, of the type promised by the Prime Minister, should also include progress on the mutual recognition of professional qualifications and more robust regulatory dialogues.
Trade agreements are not a zero-sum game; there are trade-offs. One reason why better scrutiny of trade deals is needed is to ensure that there is proper debate about those trade-offs and the context of trade deals being done—a point underlined by the hon. Member for Strangford. One obvious issue in that regard concerns visas. The Secretary of State confirmed that nothing is off the table, and a multiplicity of sources confirm India’s continuing interest, and indeed priority, in a substantial easing of visa restrictions into the UK.
Martin Docherty-Hughes
While the UK was a member of the European Union, it was the fly in the ointment of a trade deal with the Republic of India, over two specific issues: whisky tariffs, and the fact that the UK Government did not want a more liberal visa position. Is the reality that now they cannot get cheap labour from Europe, they are looking for even cheaper labour from India?
Gareth Thomas
The hon. Gentleman asks an important question. My hon. Friend the Member for Ealing, Southall underlined the concern we heard from many sources about the more illiberal regime on visas that was introduced by the previous Prime Minister. It is worth asking the Minister if he plans to allow, as under the Australia deal, a significant increase in access to the UK for Indian nationals. What will Britain’s ask be in return, regarding easier movement between the UK and India for UK professionals?
What is the Minister planning for ceramics? That is a key industry, which is hugely important in many specific parts of the UK, such as that of my right hon. Friend the Member for Walsall South, and which is facing ever-growing competition from India. To what extent is the Minister factoring into the negotiations the needs of the ceramics industry?
One of the criteria that the Opposition will use to judge the Secretary of State’s negotiating skills is the extent to which the deal boosts development, improves equality of opportunity, and tackles poverty. Just as we believe that every community in the UK should benefit from the trade deals that Britain signs, every community in India should benefit from a UK-India free trade agreement. That is why we want to see chapters on labour and human rights—important points underlined in interventions from the hon. Members for Strangford and for West Dunbartonshire. We welcome the opening of negotiations, but we will monitor their progress very carefully.
The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena)
It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for raising this important topic and for sharing his passionate belief in the importance of closer ties between Britain and India. I also thank Members from across the House for their broad support for the notion of a trade agreement with India. Although we do not have much time left, I shall do what I can to cover as much as possible.
The Government fundamentally believe in the power of free trade and free markets as unrivalled forces for good in the world, which is why we are pulling out all the stops to champion this great cause globally. We are using free trade around the world to forge new bonds of prosperity with nations worldwide, unlocking fresh growth for businesses of all kinds and sizes based across our United Kingdom. We are positioning Britain at the heart of a rapidly changing global trading system, in which the greatest opportunities lie in emerging markets and the fast-growing economies of the east, and the free trade deals that we are signing with our partners are key to that endeavour.
As has been mentioned, we have already signed deals with 70 countries plus the EU, covering trade worth £772 billion in 2020, and there is more to come. We have already gone above and beyond existing EU agreements with some of the world’s most advanced economies, such as Japan, and we have secured new deals with Australia and New Zealand, but we are just getting started.
To witness the fantastic potential of the global Britain that we are building, we need look no further than the deal that we are discussing today: the free trade agreement that we are negotiating with India. This deal promises to be a game changer for our economic partnership with the world’s largest democracy, opening the door for British businesses to a vast and fast-diversifying market of almost 1.4 billion people—larger than the population of the EU and US combined. The deal is bringing us closer to an economic superpower that, despite covid, was worth more than £2 trillion in 2020 and is on course to become the world’s third largest domestic market by 2050. As the world’s spending power shifts eastward, giving global Britain a greater stake in the Indo-Pacific is crucial, because it is a part of the world that represents over 40% of global GDP and contains the growth of tomorrow.
As has already been said, Britain and India share a trade partnership that was worth almost £24 billion in 2019—energised, as my hon. Friend the Member for Harrow East says, by the living bridge of people and ideas that flow between our nations. We already share close business ties, including nearly half a million jobs across our economies, according to the Confederation of British Industry. Our financial markets are interconnected, with 35 Indian companies listed on the London stock exchange, and our firms partner one another in driving change across a range of fields, from finance to manufacturing, and from tech to transport.
There are innovative businesses such as the Indian firm Intas Pharmaceuticals, which has its headquarters in the constituency of the hon. Member for Harrow West (Gareth Thomas) and near that of my hon. Friend the Member for Harrow East. There are many other such businesses across London, but we know that our nations could and should be doing far more together. That is why we want to strengthen the partnership with India further and faster, building on the bedrock of shared values, common law, institutions and, as the hon. Member for Ealing, Southall (Mr Sharma) said, cricket.
Martin Docherty-Hughes
What do shared values mean, when a UK citizen born in this country—a full UK citizen with a full UK passport—can be arbitrarily detained by an ally?
Mr Jayawardena
I will address the points made by the hon. Gentleman and, indeed, by the hon. Member for Strangford (Jim Shannon) in a moment, but I want to make some progress on trade, which we are also here to discuss.
As part of the road map signed by both Prime Ministers last year, we have set the ambition of doubling our trade with India by 2030, as has been said. That provides a clear framework for our bilateral relationship in future. As part of the road map, we committed to deepening the economic relationship through an enhanced trade partnership, an ETP.
I was delighted to play a role in driving forward that partnership, which is already helping to increase opportunities for British businesses in India by tackling market access barriers, for example, allowing our apples to be imported into India once again—some say, for the first time in 50 years. The partnership has also secured improved access for British medical devices, as noted by Members; committed us to agreeing on mutual recognition of educational qualifications, as requested by the Labour Front Bencher, the hon. Member for Harrow West; and is exploring how we can increase our trade and co-operation in legal services, as raised by the SNP Front Bencher, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).
Major restrictions such as high tariffs, however, still hold us back, so a free trade deal between Britain and India holds the key to unlocking our enormous untapped trading potential. An ambitious deal could bring huge economic benefits, boosting Britain’s GDP by up to £6 billion by 2035 and delivering a triple bonus of higher wages, lower prices and greater choice for British consumers. We could slash taxes on British exports, such as whisky, whether from Scotland, Northern Ireland, Wales or even England—
Mr Jayawardena
I will make some progress. Whisky and cars, from across our nation, face import duties of 150% and 125%, respectively, in the Indian market. A trade deal could give British businesses a first-mover advantage over American and European firms in India, positioning our exporters—as said by my hon. Friend the Member for Wyre Forest (Mark Garnier)—at the front of the queue to meet the expanding demand for world-class goods and services from India’s tens of millions of middle-class consumers.
Increasing trade-led growth could benefit Scotland by up to £220 million, Wales by more than £120 million and Northern Ireland by £70 million, while delivering tens of millions pounds-worth of growth across every English county, including counties in the west midlands, where a deal could bring a boost of up to £300 million, providing fresh opportunities for firms that do business with India, such as Aceleron Energy in Worcestershire and Fortress Security in Wolverhampton. Opening the door to further trade-led growth for firms in the south-east could see a boost to their collective economy of about £430 million in the long run. Such companies include manufacturer He-Man Dual Controls based in Hampshire—not in my constituency—and Larchfield Aerospace in Kent.
The trade deal has the potential to benefit SMEs, which account for 80% of British trade in goods to India in 2020. Smaller firms are disproportionately hindered by costly trade barriers and, as a result, they stand to benefit the most from a deal that cuts red tape and reduces administrative burdens.
Any agreement will be a future-facing deal, expanding the business we do with India in cutting-edge sectors that are shaping the global economy, pushing the boundaries of technological change from fintech to clean tech, automation and AI. As the world’s second-largest services exporter, Britain is perfectly placed to support Indian growth in those fields, taking our partnership in the industries to the next level.
None of that will alter this Government’s commitment to uphold British values. I said that I would address this point: we condemn any instances of discrimination of religion or belief, regardless of the country or faith involved. Where we have concerns, we raise them directly with the Government of a particular country, including the Government of India, at official and ministerial levels. That continues to be so in the case referred to by the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), which the Foreign Office has raised more than 70 times—
Mr Jayawardena
I am afraid I do not have time today, but I am sure we can continue the discussion.
This deal will help to define the future for the global Britain that we are building. It will lay the foundation of our trade relationship with one of our strongest and most important global partners. It will place the world’s oldest democracy and the world’s biggest one side-by-side as we champion a world view that puts people first. It will shape how a modern, ambitious and truly global Britain is using the irresistible power of free trade to tear down barriers to growth.
Motion lapsed (Standing Order No. 10(6)).
Agriculture: Sustainable Intensification and Metrics
(2 years, 1 month ago)
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Philip Davies (in the Chair)
I remind hon. Members that there will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Julian Sturdy (York Outer) (Con)
I beg to move,
That this House has considered sustainable intensification and metrics in agriculture.
It is a pleasure, as always, to serve under your chairmanship, Mr Davies. In bringing forward this debate, I declare my interest as an arable famer and as chair of the all-party parliamentary group on science and technology in agriculture.
The world needs to increase food production and availability by 70% by 2050 to keep pace with the food needs of a rapidly increasing and expanding global population in the face of climate change and the increasing pressures of the world’s finite natural resources. With its good soils, temperate climate, professional farming sector and world-leading research and development, Britain is uniquely placed not only to optimise its capacity for sustainable and efficient food production, but also to become a global hub for agriscience excellence and innovation, exporting technological solutions, attracting inward investment, and fostering international research co-operation. Outside the EU, Britain has a unique opportunity to lead in those fields and to put significant vigour and evidence at the heart of UK policy development.
Jim Shannon (Strangford) (DUP)
I also declare an interest as a landowner and as a member of the Ulster Farmers’ Union. I commend the hon. Gentleman for bringing this debate forward. My constituency of Strangford is able to yield three potato crops a year due to sustainable, innovative farming and premium land. Does the hon. Member not agree that a UK-wide survey of soil quality and climate may enable farmers to slightly change their methods and allow us all to reap the benefits of additional produce with minimal environmental impact?
Julian Sturdy
I completely agree with the hon. Gentleman. Soils play a hugely important part in the wider metrics of agriculture. Knowing the Minister very well, I know that she shares a passion for soils, so she might touch on that in her response.
Early action by the Department for Environment, Food and Rural Affairs to make gene editing regulations more science-based and proportionate, which realigns our approach with that of other countries such as Australia, Japan, Brazil, Argentina and the United States, is a positive and welcome first step. I am pleased to see that coming forward in a statutory instrument at the beginning of March, I believe—perhaps the Minister can clarify that.
Members of the APPG for science and technology in agriculture led calls for the Government to take action on that issue during the passage of the Agriculture Act 2020, and we are grateful to the Minister for listening and responding to those calls. Access to precision breeding tools will bring new opportunities to keep pace with demands for increased agricultural productivity, improved and more efficient resource use, more durable pest and disease resistance, better nutrition, and improved resilience against climate change.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making an excellent speech and I am in complete agreement with his points. I was brought up on a dairy farm, and in those days the Milk Marketing Board secured a price floor for milk. Today, I would suggest to the hon. Member that we have a problem in that the price farmers can secure could undercut everything to which the Member refers. Does he agree that one of the opportunities of Brexit is that it gives Government the power to examine the issue and consider support mechanisms, so that people do not leave farming altogether?
Julian Sturdy
I completely agree with the hon. Member that we have to ensure that we protect our farming communities and that people do not leave farming. It is so important that we have expertise both on the land and within the sector to make sure that opportunities are there for future generations. The Government must make that clear in their future agricultural policy, and I will touch on that shortly, because I have concerns about its direction, which is, I think, what the hon. Member was referring to.
When we talk about gene editing, we must ensure that future farm policies embrace and support the use of all the new, innovative technologies. Like many others in the sector, I am concerned about the direction of travel of the Government’s future vision for agriculture. As I just said, I am concerned about where future policy is going. We cannot afford to be complacent with something as fundamental as food security. The global food supply and demand balance remains as precarious today as 11 years ago, when Sir John Beddington’s Foresight report urged Governments to pursue a policy of sustainable intensification in agriculture to meet future food needs in the context of population growth, climate change and the finite national resources of land, water and fossil fuels.
Last year’s “Agricultural Outlook 2021-2030” report by the OECD and the Food and Agriculture Organisation warned that, with 8.5 billion mouths to feed by 2030, a business-as-usual approach will fall short of achieving sustainable development goal 2 on zero hunger by 2030. The report also highlighted the critical role of public and private sector research and development investment in enhancing productivity on existing farmland to alleviate pressures and bring more land into production. We have a responsibility to optimise our capacity for sustainable, efficient food production and to not offshore our food system’s impacts to regions of the world that are more vulnerable to the production-limiting effects of climate change.
Concerns are mounting that, without clear vision and a definition of what is meant by “sustainable agriculture”, the UK is at risk of sleepwalking into its own food crisis. Writing in Food Policy, Robert Paarlberg of the Harvard Kennedy School recently highlighted the transatlantic policy tensions between the EU’s farm to fork strategy, referring to the plans to expand organic farming, reduce synthetic chemical use and reject modern biotechnology and the United States’ approach, which is to emphasise agricultural innovations based on the latest science, articulated through its global coalition on sustainable productivity growth.
Last September, I wrote to the Prime Minister, urging the UK Government to sign up to that coalition, which was established by US Agriculture Secretary Tom Vilsack, to demonstrate that farmers can adapt to and adopt environmentally friendly and climate-smart farming practices without sacrificing productivity. I did not receive a reply from No. 10, so I ask the Minister: will the UK Government join other countries, such as Australia, Canada and Brazil, in signing up to the global coalition for sustainable productivity growth? Will the Minister explain where the UK sits in terms of the agricultural policy tension described by Robert Paarlberg?
Last year, the all-party parliamentary group on science and technology in agriculture held a meeting on the subject “Whatever happened to sustainable intensification?” It included contributions from leading UK experts in the fields of crop science, agricultural economics, rural policy and conservation science. The meeting highlighted serious concerns that current farm policy development lacks scientific rigour, and that policy focus on sustainable intensification has diminished.
We were reminded that DEFRA responded to Professor Beddington’s foresight report by initiating the sustainable intensification research platform, or SIP. That is a £4.5 million, four-year, multi-partner research programme to investigate the challenges of securing the optimum balance between food production, resource use and environmental protection. However, while the concept of sustainable intensification and the scientific rationale that underpins it remains as relevant and urgent as ever, the outputs, recommendations and advice generated through the DEFRA SIP appear to have been quietly shelved and forgotten.
The weight of scientific evidence points to a need to optimise production on existing farmland. Professor Andrew Balmford, a conservation scientist at Cambridge University, told the all-party group that the most effective way to keep pace with increasing human demands for food while protecting habitats and preventing further biodiversity loss is through high-tech, high-yielding production on land that is already farmed, mirrored by explicit policy investments and regulations to make sure that other land is set aside for nature.
Anthony Mangnall (Totnes) (Con)
I congratulate my hon. Friend on the excellent speech that he is giving; I particularly agree with the point about land sparing and sharing. His vison for the future, and the idea of what we need to do around food security, is incredibly important. Does he agree that if there is one Department that should probably be based outside London, alongside the agricultural colleges and the experts in this country, it is DEFRA? On top of that, does he agree that DEFRA must provide clarity for farmers to be able to look at how they can incorporate productivity with sustainability and environmentalism to ensure that our level of farming and food security can be sustained?
Julian Sturdy
My hon. Friend makes a very good point. I thought he was about to call for DEFRA to come to his constituency; I would argue that York would make a fantastic location too. The principle of DEFRA moving out of London and into the wider farming community, where our food production is based, makes perfect sense. I completely agree with him.
It turns out that sustainable intensification is also the most efficient way to meet climate change objectives, through the increased opportunities for carbon sequestration and storage. The Government must, as a matter of urgency, revisit the policy focus on sustainable intensification as the most effective way—perhaps the only way—to feed an increasingly hungry warming planet. If the term “sustainable intensification” has fallen out of fashion, as DEFRA’s chief scientific adviser, Professor Gideon Henderson, suggested to us recently, then by all means call it something else. However, above all else we must be guided by the science—the science that DEFRA itself has funded.
I am genuinely concerned about a shift away from science and evidence-based policy making in the Department, towards an over-reliance on voluntary and campaigning non-governmental organisations to support the Government’s vision for sustainable agriculture. Nowhere is that more apparent than in DEFRA’s approach to the issue of sustainable metrics in agriculture. While Gideon Henderson suggested to us in January that the Government are a long way from having a mature policy on metrics, correspondence that I have received on this issue from DEFRA Ministers suggests that one particular model, the Sustainable Food Trust global farm metric, is firmly embedded in the Government’s thinking. Not only is the Sustainable Food Trust an activist pro-organic NGO that openly campaigns against technologies that the Government are seeking to enable, such as gene editing, but the model itself is designed to reward less productivity and more extensive farming systems by favouring a whole farm or area-based approach to measuring resource use and the ultimate environmental impact.
Again, Professor Balmford told the all-party group that making meaningful sustainability comparisons between different farming systems would require an assessment of resource use and external impacts per unit of food produced, rather than a per-area-farmed basis. Professor Paul Wilson, an agricultural economist at the University of Nottingham, who leads the Government’s farm business survey programme, agreed that an area-based approach for sustainability indicators such as carbon footprint or greenhouse gas emissions is flawed in principle, and that there needs to be a clear reference point in terms of the amount of food produced to have any relevance.
Professor Wilson also led the metrics component of DEFRA’s SIP, which again does not appear to be feeding into the Government’s thinking. This included a huge amount of work on sustainability metrics and indicators, including the prototype development of a farmer-friendly data and benchmarking dashboard allowing producers to access and compare their performance against those indicators and against a weighted averaging of their peers.
The all-party group has long advocated for the need to embed data science and sustainability metrics at the heart of a policy agenda focused on securing the optimum balance between food production, resource use and environmental impact. We believe that access to metrics capable of objectively and consistently monitoring that balance will be essential to set targets and measure progress for sustainable, efficient production, to develop coherent research and development programmes, to understand and advise on best practice throughout the industry, and to provide meaningful information to consumers about the sustainability impact of each unit of food produced, whether that is a litre of milk or a bag of potatoes.
In addition to my earlier questions about whether the UK will sign up to the global coalition for sustainable productivity growth and where the UK sits in terms of the agricultural policy tension described by Robert Paarlberg, I will conclude with two final questions to the Minister. To be fair to her, this is not quite her brief, but I know that she has great knowledge in this field, so I look forward to her response.
First, in view of the concerns I have raised, will the Minister agree to submit the global farm metric model to a process of independent scientific scrutiny and validation with leading academic experts in the field? Secondly, will she commit to facilitating a joint roundtable with our all-party group to take forward discussions on the development of robust and meaningful metrics for sustainable agriculture?
Jamie Stone
I am aware that the hon. Member is reaching his concluding remarks. I would be less than honest if I did not say that farmers in my constituency have raised an eyebrow at the concept of wilding, which is very fashionable at the moment. I wonder whether he has anything to say about that. Should that perhaps also be included in any roundtable discussion?
Julian Sturdy
I thank the hon. Member for bringing that up. I could say a lot about wilding, if I am brutally honest; that could fill another debate on its own. I return to the point that I made early in the debate: current farmland needs to be used to produce food in the most effective and productive way possible, but also in the most environmentally friendly way, and unfarmed land needs to be used to protect and preserve the environment. I am fundamentally against the principle of wilding productive farmland because I think it would lead to a food security crisis. We have to very aware of that. There has to be a balance struck between producing food in an environmentally friendly way to feed a growing global population and enhancing our environment. We can achieve that, but a balance has to be struck between the two. From what we are hearing from DEFRA, I worry that that balance is out of kilter at the moment.
Anthony Mangnall
My hon. Friend makes the point about his opposition to rewilding and about the need for productivity. Does that mean that he is leaning further towards the idea of regenerative agriculture—producing food in a more sustainable manner?
Julian Sturdy
Absolutely. We have to produce more food, but we have to do so in an environmentally friendly way. We have to protect the environment at the same time—there is a balance to be struck. The way we do that has to be led by technology and science; we must go forwards, not backwards. That is the fundamental point that I am trying to get across today. We have to use and be led by science and technology; Government advice and policy have to be led by the science. I hope that the Minister will take that fundamental point away.
I think that I got my request for a meeting with the Minister in before the intervention on wilding. I am more than happy for wilding to be on the table, and I look forward to the hon. Member for Caithness, Sutherland and Easter Ross, and all the hon. Members involved in this morning’s debate, joining that meeting. I very much look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
It is, as ever, a pleasure to see you in the Chair, Mr Davies. I congratulate my hon. Friend the Member for York Outer (Julian Sturdy) on bringing this subject forward. The Minister for Farming, Fisheries and Food, my hon. Friend the Member for Banbury (Victoria Prentis), would have been responding to the debate, but she is at the National Farmers Union conference, so I am standing in. I am very happy to do so, because the debate touches on so much of what I deal with as the Environment Minister. I will make some points about that as I go along.
We have a great deal of synergy here; I do not really think that we are arguing, as such, about a lot of the points that have been raised. I want to be clear from the outset that everything that I do in DEFRA is science-led—I can absolutely assure hon. Members of that. I sometimes ask officials, “Have we got to do another bit of data gathering and assessment?” The answer is yes, we do, because our work has to be science-focused; we have to have evidence for what we do and how we make policy.
I also want to assure hon. Members that we are not going backwards. Looking after our soil in the way that we hope farmers will in the future is not going backwards; it is going forwards. We will go forwards—yes, with lots of the old ethos and ideas, but also with a great deal of innovation and technology behind us. I want to make that clear at the start.
Food production really matters in this country, and it is at the heart of our levelling-up agenda. The “United Kingdom Food Security Report” set out that we produce 60% of our food supply need, and 74% of foods we can produce for all or part of the year. We are almost 100% self-sufficient in certain things, including poultry, eggs and—weirdly—swedes. We have a very good track record. As we work to deliver our rightly ambitious and world-leading commitments to halt the decline of nature—something to which we are legally committed—and reach net zero, it is critical that we are mindful of food security. However, we need to look at our land and land use strategically; I think that my hon. Friend the Member for York Outer pointed that out himself.
As the Environment Minister, I have a solid background in farming and food production, but also in the environment. For me, the two things have never been separated, and indeed they should never be separated. That means that supporting and enabling sustainable intensification, land sharing and land use change are all in the mix. We have to have sustainable food production, and I think my hon. Friend agrees. Of course, producing sustainable, healthy food is inextricably linked to having a healthy environment.
All of DEFRA’s policy programmes in the agricultural transition plan are informed and supported by evidence generated by and developed in partnership with our world-leading UK research institutes, as I am sure my hon. Friend is aware. Alongside our stakeholders—including, as he said, environmental non-governmental organisations, whose expertise, knowledge and passion we value—we also engage with academia, the science community and industry in developing programmes to ensure that our policies are supported by robust evidence; of course, that includes the chief scientific adviser.
DEFRA works in partnership with research councils, other Departments and agencies via the well-established UK Research and Innovation-led global food security programme, and sets the direction of the £90 million UKRI-led transforming food production challenge fund. More recently, we launched the farming innovation pathways competition under the wider farming innovation programme, through which we are funding projects including a fruit-scouting robot, the use of black fly as a feed alternative, and new approaches to tackling pests and pathogens on vegetables without the use of pesticides. We are, without a shadow of a doubt, moving away from reliance on chemical pesticides. A huge amount of data gathering, research and work is going into that.
Evidence plays a critical role in the development, monitoring and evaluation of our policy programmes. We rely on evaluation and monitoring to work out whether the tests, trials and pilots that we are constantly running are doing the right thing, and whether we should include those things in our policies. Evidence has been vital in underpinning the content of our sustainable farming incentive standards and the development of the net zero strategy in future farming and so forth.
Our thinking has evolved with the evidence, and it is clear that we need to pursue a sensitive approach to this matter. As such, we will invest in new research on land use and agricultural systems as a major strand of the £75 million allocated to research and development in DEFRA sectors announced in the net zero strategy. That investment will build on previous research—including the £4.5 million investment in the sustainable intensification research platform that my hon. Friend the Member for York Outer referred to—and continue to address the pressures identified in Sir John Beddington’s 2011 foresight report. That really important document has informed so much of what we are doing now; people might think it has been forgotten, but it most certainly has not.
DEFRA directly funds innovative research on sustainable intensification and transformational approaches in agrifood protection via our core agrifood research programmes. Of course, intensification may not be appropriate for all settings, particularly in areas that are nature sensitive or of biodiversity value; in such areas, regenerative and agroecological approaches might be more suitable. As recognised by Henry Dimbleby in his independent review, we need to combine sustainable intensification and regenerative approaches to agriculture to meet the objectives of our 25-year environment plan while maintaining the secure and healthy food supplies that we need.
Although we have not touched on it in this debate, we must not forget water. We need a supply of water that is not only resilient and sustainable—agriculture needs that, of course—but clean and of good quality. All of this also impacts on agricultural management practices—what farmers do on the ground to produce the food we need. It is all related. As well as long-term food security, many of our schemes are looking at what I call the vital building blocks: healthy soil, water and a biodiverse ecosystem. If we do not get those right, we cannot produce any food at all. My hon. Friend knows my feelings about soil and the testing that will go with those soil standards.
I am running out of time, so let me mention briefly that we are doing a lot of data gathering. The natural capital and ecosystem assessment will inform an awful lot of what we do. We are also working closely with the UK Centre for Ecology & Hydrology.
My hon. Friend asked about the US global initiative, which we are looking at. We have started a dialogue with Washington to identify the best way the UK can bring knowledge to the roundtable that he mentioned. I am sure that the Farming Minister would be happy to meet him—as would I, if that would be helpful. I think we are singing from the same hymn sheet, but we need to get that clear and we need to go forward working together.
Motion lapsed (Standing Order No. 10(6)).
Legal Aid: North-West
(2 years, 1 month ago)
Westminster HallRead Full debate Read Hansard Text
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Yvonne Fovargue (in the Chair)
Before we begin, I remind Members to observe social distancing and wear masks.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I beg to move,
That this House has considered the provision of legal aid in the north-west.
It is a pleasure to serve under your chairmanship, Ms Fovargue.
“If we are to keep our democracy, there must be one commandment: ‘Thou shalt not ration justice.’”
Those are wise words, I am sure we all agree, from the ancient philosopher Sophocles, but universal access to justice is far from a reality here in the UK. Justice is being rationed. On criminal legal aid, as the Law Society states:
“Cuts and the lack of a significant rise in criminal legal aid rates in 25 years has meant the work is financially unviable and solicitors are being forced from legal aid work. Since April 2012, the number of criminal legal aid firms has dropped by 585 (over a third).”
And in the north-west, it shows. There are over 47,000 cases outstanding in the north-west’s courts. Since 2020, there have been over 5,000 ineffective trials in the north-west, and staggeringly, in some areas of the north-west there are not enough duty solicitors to cover days of the week, let alone the number of people who need representation. The Southport criminal duty solicitor scheme has only two solicitors, and Knowsley has only six.
On civil legal aid, the situation is no less acute. The Law Society has mapped “legal deserts”, areas that show the devastating gaps forming around the country in the provision of housing, community care, education, welfare benefits, and immigration and asylum legal aid. In the north-west, 49% of residents live in local authorities with no housing legal aid providers, compared with just 3% in London, and 61% in local authorities with no community care legal aid providers, compared with 25% in London.
I applaud the work of the Greater Manchester Law Centre, which grew out of protests against cuts to legal aid. I also place on record my huge thanks to the Salford Unemployed and Community Resource Centre, known locally as the fourth emergency service. Both organisations try to fill the gaps in the legal aid advice drought that Salford faces, and their staff and volunteers are a lifeline for so many people. However, the reality is that legal representation based largely on charity and volunteerism should not need to exist. Access to justice, just like access to the NHS, should be a universal service available to all.
So what happened? On criminal legal aid, much of the crisis is the result of cuts to legal aid across a range of serious offences, including murder and rape, and a failure to pay for the extra hours a week undertaken by criminal barristers to meet the demands of trials in courts. Since the Conservatives have been in power, criminal advocates have suffered a 40% real-terms drop in earnings from prosecuting and defending.
On civil legal aid, from 2010 the austerity agenda forced through a wide range of cuts. Legal representation on many issues was deemed a luxury by the Government. Those changes were enshrined in legislation through the Legal Aid, Sentencing and Punishment of Offenders Act 2012. LASPO ended the right to legal representation in huge areas of the law: divorce, child custody, clinical negligence, welfare, employment, immigration, housing, debt, benefits and education. People in desperate need of representation were essentially priced out of the legal system. As a result, many people no longer even try to launch legal challenges. The number of civil legal aid matters initiated reduced by 84% between 2009-10 and 2016-17, and it remained relatively stable at the lower rate from 2017 to 2020. Alongside a fall in the number of cases, there was around a 35% cut in the budget for civil legal aid, from £1.2 billion in 2010-11 to £786 million in 2019-20. Where legal aid remains, it is very tightly means-tested, making it out of reach for many.
There are three major causes of the legal aid crisis that the Government need to address today. The first is the impact of austerity and the resulting cost of providing a legal service. The Legal Aid Practitioners Group shows that in 2010, £1.153 billion was spent on criminal legal aid and £925 million on civil legal aid, with a grand total of £2.156 billion spent on legal aid in England and Wales. If we fast forward 11 years to 2020-21, the most recent figures show £563 million spent on criminal legal aid and £724 million on civil, with a total of £1.319 billion. That is nearly a 40% cut in legal aid funding.
One of the most impactful areas has been funding provided for early legal advice. The Legal Aid Practitioners Group says that this has dramatically changed the case mix that providers can run and the stage in the development of a legal problem at which a client can seek advice and a provider can intervene. This is bad not only because that cut in early advice funding undermines the ability of the legal aid providers to continue to sustain a legal aid business model, but because those people facing housing problems and other early stage assistance are unable to seek help in the early stages, thus worsening their situation to the point of possession proceedings, for example, which could have been avoided.
The Government’s early legal advice pilot scheme is to be welcomed, but honestly, we know that early legal advice works. We do not need a pilot scheme—we need proper funding for early advice right across the UK.
It must also be noted that the current legal aid tendering process locks providers out of the system until a legal aid agency opens a formal tender round. Providers cannot apply for contracts on an ad hoc basis, and with large-scale tender processes four to five years apart, the number of providers is generally always in decline.
Secondly, legal aid rates have suffered decades of cuts and freezes, and, quite simply, legal aid lawyers are voting with their feet. The number of civil legal aid providers has reduced dramatically—from 3,555 in 2012-13 to 2,342 in 2020—while the number of criminal legal aid providers has reduced from 1,733 to 1,174. Those figures are likely to have fallen further following the pandemic.
Locally, the Greater Manchester Law Centre is aware of two large legal aid housing providers in Greater Manchester that are moving out of legal aid work, particularly housing advice, in the next six months. In the north-west, we have been made aware of a large not-for-profit in north Lancashire that has just given notice on its legal aid housing and debt contracts, meaning there will be limited provision in northern Lancashire, including Preston, Morecambe and Lancaster.
In addition, recruitment is a massive issue. Low pay and long hours mean that legal aid lawyers are getting older and are not being replaced. It has taken initiatives such as the Justice First Fellowship programme funded by the Legal Education Foundation—a charity, not the Government—to support the next generation of legal aid lawyers.
Finally, legal aid just does not cover the issues faced by many people. Employment law is no longer covered, except regarding discrimination issues, so unless someone is a member of a trade union, which often offers free legal advice to its members, they are not likely to qualify for legal representation. Indeed, no win, no fee lawyers are not really interested in lower level, low income work, and ACAS, great as it is, does not provide legal advice.
The same is true in many cases for debt, immigration and domestic violence. On welfare rights, only a tiny percentage of cases fulfil the criteria for legal aid, despite clients being on low incomes. The staggering fact, however—as I know from the work of the Salford Unemployed Resource Centre, which provides advocacy support at tribunals—is that the majority of benefit sanctions cases that are brought to a tribunal get overturned. That gives rise to the question: how many people across the UK have suffered through these inhumane sanctions and benefits decisions because they cannot access an advocate? As we know, many have tragically taken their own life.
It is clear that urgent action is required. The Law Society calls on the Government immediately to raise civil legal aid rates in line with inflation since 2020 to secure firms’ financial liability. Will the Minister confirm that today? In addition, the Government should review civil legal aid, carry out a cost benefit analysis of the value of civil aid, and broaden its scope significantly. They must also reform how it is administered in order to make the system more efficient and less burdensome on practitioners. What action will the Minister take on those issues today? Furthermore, to begin to reverse the decline of criminal legal aid, the Government must start by implementing the recommendations of the independent review of criminal legal aid, especially its recommendation to increase by 15% the criminal legal aid rates, as soon as possible. Will the Minister commit to that today? If not, why not?
Ultimately, the Government must accept that the right to legal aid must be enshrined as a fundamental universal right. Following the early legal advice pilot, the Government might offer small exemptions to LASPO, but that will not be good enough. We need to see significant reforms. We need to see the right for individuals to receive reasonable legal assistance on a broad range of issues that affect their liberty and quality of life, without facing costs that they cannot afford. Justice is the cornerstone of democracy, and a society that rations justice in the way that the UK is currently doing is not a democracy but, frankly, on a dangerous path towards barbarism.
Kim Johnson (Liverpool, Riverside) (Lab)
It is a pleasure to serve under your chairship, Ms Fovargue. I thank my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) for securing this important debate.
The pandemic has had a devastating impact on our justice system, which was already on its knees from 12 years of Tory austerity cuts that have seen the Ministry of Justice lose a quarter of its budget over the past 10 years. The cuts have run deep, with the reductions in legal aid and the increase in court and tribunal fees tipping the scales of justice against those who cannot afford to pay and who are invariably the most in need of such services.
I thank the law centres in my Liverpool, Riverside constituency—the fantastic Merseyside Law Centre and Vauxhall Community Law and Information Centre—which have raised concerns about the desperate situation that they face as a result of the drastic impact of the LASPO cuts on legal aid, waiting times and availability of advice, which have left our legal system barely functioning.
On top of the pressures caused by the pandemic, the cost of living crisis caused by the Government will increase the number of constituents facing problems with rent arrears, welfare benefits, employment disputes, crime and domestic violence. We are standing on a cliff edge, and the poorest and most vulnerable are being left without legal protections and support.
In Liverpool, we are acutely aware of how stacked the scales of justice are against ordinary people. Faced with the unimaginable devastation of losing their loved ones in traumatic circumstances, the Hillsborough families were forced to face the full might of the state as the establishment closed ranks to save its own neck. The families and survivors were given no legal aid funding. In their darkest hours, when they should have been free to grieve for their loved ones, they were instead forced to fundraise to fight for justice. Against the odds, they uncovered the truth. Sadly, however, justice has still not been served.
Thanks to the fantastic work of the families and survivors, supported by my hon. Friend the Member for Garston and Halewood (Maria Eagle), the Hillsborough law is being brought forward. It will provide properly funded legal support for bereaved families at inquest and ensure parity of legal funding for families and public bodies at inquest. It will also introduce a charter for families and a duty of candour on public servants during inquiries, and it will provide a public advocate to act for families during inquests.
Although we urgently need funding to tackle the courts backlog and ensure that justice is a right available to all, not just the privileged few, we also need laws that force public officials and private companies to come clean about wrongdoings and failures. Time and again we have raised the need for these changes, but despite sympathetic platitudes from the Government, we have yet to see action. How much longer can we wait? Will the Minister take the opportunity—here and now—to commit this Government to bring forward these changes in legislation at the very next possible opportunity?
Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) on securing this important and timely debate.
Access to justice is a fundamental and basic right. Justice cannot be said to be just if it is afforded only to those who can afford it. Therefore, without legal aid, there is no access to justice, and the rule of law breaks down for millions of people.
That is what we have seen over the past decade because, alongside the Government’s harsh and sustained attack on the welfare system, deep cuts to legal aid have denied people with little in the way of financial means their legal rights. Across Merseyside, there has been a 41% reduction in solicitors firms providing legal aid since 2012-13, and a 20% fall in solicitors providing criminal legal aid within the same period. Yet these figures only paint part of the picture. Every missed opportunity for proper legal advice may be the difference between someone with a disability receiving or being refused the support they are actually legally entitled to; it may be the difference between someone subject to domestic abuse, domestic violence, being able to take action to stop their physical or financial abuse.
In my Liverpool, Walton constituency, I am proud to host regular surgeries at my office in Anfield, in partnership with the University of Liverpool Law Clinic, which provides free legal advice to members of the public on special educational needs cases. The sessions allow parents to obtain a proper education, health and care needs assessment for their child, or receive assistance to appeal to tribunal on matters including the choice of school.
I want to share with the Chamber an email I recently received from a constituent who attended one of the clinics. She said:
“When we received the ‘no decision’ letter last year, it was unbelievable how stressful and emotional the situation made us feel for our child and her future secondary school journey. But on attending the advice session you provided, it gave us the hope and positivity we needed to go ahead with the appeal. All we want is for our child to attend school, be happy and thrive, without worry, and for her to now receive an assessment. We hope this will be the case.”
I want to put on record my thanks to Deborah Tyfield and the wider team at the University of Liverpool Law Clinic, as well as the nearby law centres in Vauxhall and Merseyside that my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) mentioned. Those organisations provide vital advice to my constituents and people across Liverpool, and yet they tell me how difficult it is to survive in the current legal aid environment.
The absence of adequate legal aid funding has driven out many providers, leaving remaining services overwhelmed. Therefore, the Government must act on the independent review of criminal legal aid. They must act on its recommendation to increase criminal aid rates by 15% to ensure that advice providers can continue to serve local communities. Civil legal aid rates, which have not risen for over 20 years and have faced real-terms cuts, must also rise. A Government who were serious about upholding justice and the rule of law would act to ensure that communities such as mine get the access to justice that they deserve.
I want to finish on the Hillsborough law. My city of Liverpool knows all about injustice. More than three decades since the Hillsborough disaster, no one has been held to account for the unlawful killing of 97 people. The long fight of the bereaved families and survivors is all the evidence we need to know that the legal system is broken. It is weighted in favour of the powerful and against working people and communities. That is why I support the campaign for a Hillsborough law, which would include a series of measures to rebalance the scales of justice: first, a statutory duty on public officials, including police officers; secondly, publicly funded legal representation for bereaved families at inquests and an end to limitless legal spending by public bodies, to put those affected by public disaster on a level playing field; thirdly, a public advocate to act for families of the deceased after major incidents, a proposal that my hon. Friend the Member for Garston and Halewood (Maria Eagle) has brought before this House but that has shamefully been repeatedly blocked by this Government; and fourthly, a charter for families bereaved through public disaster that is legally binding on all public bodies. Those are the changes we need if we are to build a justice system worthy of the name.
Mick Whitley (Birkenhead) (Lab)
It is a pleasure to serve under your chairship, Ms Fovargue, and I congratulate my good and hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) on having secured this important debate. My learned friends will know better than anyone that there is no greater honour for a practitioner of law than to stand up for the rights of the poor and innocent, but today, there is simply no incentive for lawyers or their firms to engage in legal aid work. Over the past 30 years, fees for civil legal aid work have more than halved in real terms, while fees for criminal aid have similarly fallen far behind inflation.
The consequences have been devastating. Countless firms providing legal aid have folded, while the number of criminal aid providers has fallen by a fifth in Merseyside in just the past 10 years. Fewer and fewer trained solicitors are deciding to enter this important field, meaning that the average age of a criminal duty solicitor working in the north-west today is now 51. Based on current trends, in just a few years’ time there will be no legal aid provision whatsoever in some parts of our region. No corner of the UK has been worse affected by the plummeting numbers of legal aid practitioners than the north-west, and it sounds like my constituency of Birkenhead is being hit hardest of all.
In our region alone there are 46,000 cases waiting to be heard by the courts, leaving thousands of victims, witnesses and perpetrators of crime still waiting for justice to be done. It is the poorest who are bearing the brunt: as a representative of some of the most deprived communities in the UK, I am inundated every single day by people seeking support on complex housing, debt and welfare cases. My constituents have the right to expect quality legal advice, but the sad reality is that providers of such advice have become few and far between. Indeed, the legal aid directory now lists just seven organisations with contracts to offer welfare benefit services in the north-west—one for every million people. In the midst of the spiralling cost of living crisis, with so many millions of people dependent on a cruel and often opaque benefits system just to get by, that is an astonishing failure on the part of this Government.
What are the Government doing to address this unfolding catastrophe? Ministers talk about the need to be tough on crime, but that means nothing to the countless victims in my constituency who are still waiting for their day in court. Instead of taking the action that is so badly needed to tackle the historic backlog in our courts, Ministers are spending their time attempting to erect even more barriers to justice with the Judicial Review and Courts Bill, while their colleagues push ahead with the undemocratic attempt to criminalise peaceful protest; and all the while, more cases pile up on the docket.
The scale of the crisis facing our legal system is unprecedented, but it is not too late for the Government to start putting things right. After 12 long years of allowing the pleas of the legal profession to fall on deaf ears, Ministers must now urgently implement the 15% increase in criminal legal aid fees recommended by the Bellamy review and outline a long-term plan to create a more sustainable sector.
Afzal Khan (Manchester, Gorton) (Lab)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I am also grateful to everybody who has spoken today, especially my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) who secured this important debate. There is much consensus in the room on the importance of legal aid, as well as an appreciation of how it should work and why it is not working now.
It is fair to say that the legal aid system is broken. As Members of Parliament, we all meet constituents who are in desperate need of both civil and criminal legal aid. From housing, welfare and immigration issues to more serious criminal cases, access to legal aid is essential to protect people’s rights and livelihood. We are suffering from the serial underfunding of the entire legal aid sector, paired with a strict means test and a huge backlog in the criminal courts. We know that justice delayed is justice denied.
Thousands across the north-west are impacted by this. We have already heard a number of examples of how it impacts ordinary people’s lives in the north-west. I recently learned about a couple who were referred to the Vauxhall law centre in Liverpool. Self-employed and unable to work during the pandemic, the couple depleted their savings and eventually fell into rent arrears. When the eviction ban was lifted, their landlord issued them with an eviction notice but, by the time the claim was issued at court, the couple had returned to work, and therefore failed the means test for legal aid. Their savings had gone; their earnings barely covered their bills. Thankfully, the law centre was able to provide support and ensure that the possession order was set aside.
Law centres such as that one are providing an emergency service up and down the country, preventing people from facing destitution, homelessness and even deportation. I want to put on record my thanks to Greater Manchester Law Centre and others for that vital work. It is not right for the third sector to pick up the pieces of the Government’s mess. These issues are not new and have been festering for a decade of Tory austerity. Since 1986, there have been progressive reductions in the scope of civil and criminal legal aid, along with strict financial requirements for eligibility, culminating in LASPO in 2012.
As a result, legal aid is now accessible only to less than a quarter of the population, and only for criminal defence and some very limited areas of civil law. Civil legal aid is usually available only in the direst circumstances where specific criteria are met, such as domestic violence, discrimination or risk of homelessness. Even when those conditions are met, there is no guarantee that a person will be granted legal aid. More than a third of women who have experienced domestic violence are unable to satisfy the Government’s strict requirements for providing proof, and are therefore denied access to legal aid. That is worsened by the fact that there is no remuneration to firms for assisting clients in gathering necessary evidence. As a result, victims must face their abusers in the family court without legal advice or representation.
Legal aid providers have also suffered considerably. Legal aid fees have not increased in more than 20 years, making it unsustainable for many firms to take on legal aid work, creating a shortage of legal aid lawyers, whose capacity to take on these cases is severely limited. The number of criminal legal aid litigators has fallen by almost 30% since 2012-13 in the north-west. The case for civil legal aid provision is even more dire, with what the Law Society describes as “advice deserts” appearing throughout the country. That means that even those who are eligible for legal aid face regional barriers to accessing it. The impacts of that can be felt across the justice system.
To put that in perspective, there are more than 47,000 outstanding criminal cases in the north-west courts. Furthermore, since 2020 there have been more than 5,000 ineffective trials in our region. Those are trials that do not go ahead as planned because of the action or inaction of the defence, the prosecution or the court, including unavailable counsel. That means that there are thousands of victims, witnesses and defendants in the north-west left without justice.
In December 2021, Sir Christopher Bellamy QC, chair of the independent review of criminal legal aid, published his report and recommendations on criminal legal aid in England and Wales. The Law Society has called on the Government to act on the review’s recommendations as quickly as possible, but they have so far failed to do so. The recent decision by the Criminal Bar Association to ballot in direct response to the Government’s failure to respond to the Bellamy review should be a cause for great concern. By the end of March, the Government will have had the Bellamy review in their lap for some four months. Victims, defendants, witnesses and criminal lawyers cannot wait any longer, because the backlog will remain stubbornly high the longer the Government take to act and risk the complete collapse of the criminal justice system.
Criminal advocates have suffered a drop of 40% in real-terms earnings for prosecuting and defending criminal cases over the past decade. That has been a result of cuts to legal aid rates across a range of offences, including murder and rape. There has also been a failure to pay anything for the dozens of extra hours a week undertaken by criminal barristers to meet the demands of the massive backlog of trials that the courts themselves are buckling under. The Government’s repeated stubbornness on fees has caused publicly minded criminal barristers and solicitors to walk from their chosen careers, meaning that their victims are being denied justice. We cannot reduce a record backlog of nearly 50,000 criminal trials if there are not enough lawyers to prosecute and defend.
Ultimately, cuts to criminal and civil legal aid while the Tories have been in power have contributed to a crisis in our criminal justice system and risk creating a two-tier legal system. Under those circumstances, people in the north-west are at a substantial disadvantage against the parties with access to legal advice and representation, undermining the core principle of equality before the law. Without adequate legal aid, victims are denied justice and criminals left to walk our streets.
The erosion of access to legal aid represents a threat to the rule of law. It does not matter what legal rights an individual has on paper if they do not have the means to vindicate them. The Government pay lip service to levelling up the country. When will they level up access to justice?
The Parliamentary Under-Secretary of State for Justice (James Cartlidge)
It is a pleasure to serve under your chairmanship for the first time, Ms Fovargue. I pay tribute to the hon. Member for Salford and Eccles (Rebecca Long Bailey) for calling this very important debate. I think we all agree on the importance of this subject. I pay tribute to colleagues for their words and to the hon. Member for Manchester, Gorton (Afzal Khan), who I enjoyed meeting as part of the engagement on the criminal legal aid review. In particular, I also wish to put on record my thanks to all the practitioners and everyone working in the courts in the north-west throughout the criminal justice system who helped us keep justice going during the pandemic. They were very challenging circumstances for all of them and particularly in the early months for those who were there face to face and in person, at a time when there was a great fear about the consequences of doing so.
To be clear, I believe that legal aid and legal advice play an incredibly important role in upholding justice and the rule of law, which are both vital tenets of our constitution. The hon. Member for Salford and Eccles spoke about the importance of legal aid in the context of democracy. Access to justice is a fundamental right, and the Government are committed to ensuring that everyone can get the timely support they need to access the justice system.
We usually spend around £1.7 billion annually on legal aid, which provides crucial support for the most vulnerable in society, ensuring that they can effectively access justice when they need to. While that amount was lower in 2020-21 due to the impact of the pandemic—after all, the number of cases being heard collapsed for several months—we put in place measures to support practitioners and are working to reduce the court backlog. We expect to have returned to an annual spend of more than £1.7 billion on legal aid by the end of the current financial year.
Legal aid services are delivered in England and Wales through solicitor firms; not-for-profit organisations, some of which we have heard about today, operating in Liverpool in particular; telephone operators; and barristers, most of whom are contracted by the Legal Aid Agency to do legal work. The LAA makes provision for legal aid services throughout England and Wales to ensure that individuals can access advice where they need it. It regularly monitors the provision of legal aid services in England and Wales. Where issues arise, it takes the necessary action to ensure that service provision reflects local need—for example, by merging duty schemes or conducting localised supplementary tender activity to ensure that appropriate provision is in place.
Before I turn to the wider actions we are taking on civil and criminal legal aid, I want to answer specific points raised in the debate. The hon. Members for Liverpool, Riverside (Kim Johnson), for Manchester, Gorton, for Birkenhead (Mick Whitley), and for Liverpool, Walton (Dan Carden) all referred to the courts’ backlog. Of course, that is incredibly important. I am the Minister responsible for court recovery. I understand the great anxiety out there. Cases have been taking a long time. We faced an extraordinary impact on the ability of courts to hear cases, particularly where there are juries in the criminal courts because of social distancing, but we are now recovering and are seeing a reduction in the backlog.
The hon. Member for Liverpool, Riverside spoke about funding for the backlog. We announced £477 million of additional funding in the spending review settlement primarily for Crown court recovery, which I think shows our commitment to addressing the backlog.
Afzal Khan
In light of the extra funding, what support is the Minister giving to make sure that throughout the system police officers, who prepare some of the files, are also recruited?
James Cartlidge
I am grateful to the hon. Gentleman for asking that. It gives me a chance to express how pleased I am with the recruitment of police officers. We are on target to achieve 20,000 extra police officers. In my county of Suffolk, we are going beyond the numbers that we expected, so it is very positive in terms of police recruitment.
The hon. Member for Birkenhead mentioned the Judicial Review and Courts Bill. I appreciate that there are aspects of that Bill to do with judicial review and so on that are not directly backlog issues—they are more principles of law, particularly public law—but there are important measures in the Bill that will help us to deal with the backlog, not least the measures that will see more cases moving from the Crown court to the magistrates court. That will have a significant impact, freeing up potentially 2,000 days in the Crown court where we can hear cases—those serious indictable offences of murder and rape that we have heard about—so it is a very important measure included in that Bill.
I have the greatest respect for colleagues, particularly in Merseyside, on the issue of Hillsborough. I understand: this was a trauma for the city. The hon. Members for Birkenhead and for Liverpool, Riverside and others have consistently argued for more action on that, and I understand where they are coming from. They speak with great passion; this was a terrible event. The IPA was mentioned, which is a very good point. We recognise the fundamental importance of placing the bereaved at the heart of any investigation that follows a large-scale disaster and ensuring that bereaved people are supported and given a voice throughout the processes that follow.
Following a 2018 consultation on the establishment of an independent public advocate function, we are carefully considering a way forward. We note the Public Advocate Bill promoted by the hon. Member for Garston and Halewood (Maria Eagle), which is an important contribution to the debate, along with Bishop James Jones’s report on the Hillsborough families’ experiences, to which we will respond soon. In terms of timing—the hon. Member for Birkenhead knows this is primarily a Home Office responsibility—the Government remain committed to responding to Bishop Jones’s report. We have worked closely across Government and with key stakeholders to carefully consider Bishop Jones’s points of learning, and we will publish a response in due course. I am sorry that I cannot say more than that at this moment.
The hon. Member for Liverpool, Walton spoke about a moving constituency case. He hit the nail on the head—this is about our constituents, their experience of the legal system and their access to it. To turn specifically to civil legal aid sustainability and the steps we are taking, I emphasise that we are in the middle of lots of engagement on criminal legal aid, as the hon. Gentleman knows. He has been a part of that. We are also continuing to engage with representative bodies and providers of civil legal aid to increase our understanding of the system. We are considering civil legal aid broadly, looking at a range of factors, from the current remuneration rates to the pipeline into a career in legal aid, as well as the ability of providers to offer legal aid services into the future.
I want to mention some specific points on housing, because I recognise that is a particularly important point in the constituencies represented in this afternoon’s debate. As part of our work considering civil legal aid sustainability, we have recently consulted on proposed changes to the housing possession court duty scheme—the HPCDS—to ensure the sustainability of the service and ensure that it meets the needs of the people using it. The HPCDS offers vital emergency, face-to-face advice and advocacy to anyone who is at risk of losing their home. The consultation proposals would amount to a more than £7 million investment in this vital service.
The key changes would remodel the delivery of the HPCDS to become a new housing loss prevention service, incorporating both the existing service of advice and representation at court and the early legal advice before court; expand the scope of legal aid so that providers of the scheme can offer early legal advice on social law matters to individuals facing possession proceedings; contract for individual courts rather than larger geographical areas; and allow providers to claim for the court duty fee in addition to a legal help fee for follow-on work, which is important for remuneration. Finally, the changes would introduce a set attendance fee for all schemes that is double the existing nil session payment. That is also important for renumeration. Officials at the Ministry of Justice are currently reviewing the responses to the HPCDS consultation and the Government intend to publish their response shortly.
The hon. Member for Salford and Eccles made a point about our early legal advice pilot. I am glad that she welcomed it, although with some caveats, it is fair to say. We are due to commence such a pilot later this year and I am bringing forward the statutory instrument on Thursday. The pilot is being funded with £5 million from Her Majesty’s Treasury’s shared outcomes fund. One of the areas selected for the pilot is Manchester, I am pleased to say. Participants will receive comprehensive legally aided advice covering housing, debt, and welfare benefits.
The early legal advice pilot signifies an important step in delivering a key commitment made in the Ministry of Justice’s legal support action plan, which was published in 2019. The pilot is intended to test whether early legal advice leads to early problem resolution and saves money in the long run. I appreciate that the hon. Member for Salford and Eccles said, “We all know that already”, but, unfortunately, when we go to the Treasury, we need definitive evidence. The pilot will hopefully help in that regard. We intend to use the findings of the pilot to inform future policies relating to legal aid services for social welfare law matters.
To be eligible for the pilot scheme, individuals will live, or be habitually resident, in the areas of Manchester City Council or Middlesbrough Council. Manchester and Middlesbrough were identified as areas with potentially high levels of legal need, and it was felt that the people living within these areas would be most likely to benefit from early legal advice. Our decision was further supported by the Government’s levelling-up agenda, which informed our preference for the pilot to take place in the north-west and north-east. The early legal advice pilot scheme is part of our wider ambition to test what works and for whom, so we can ensure that legal aid is available for those who genuinely need it.
We are reaching the end of a review of the legal aid means test and will publish a consultation shortly. The review has been assessing the effectiveness with which the means test protects access to justice. This includes reviewing the income and capital thresholds, the passporting provisions for people receiving certain benefits, and the level of contributions applicants are required to pay towards their legal costs. We have already made changes ahead of publication of the review. In December 2020, we removed the £100,000 cap on the amount of any secured debt that may be disregarded when assessing the value of an interest in a property.
The rule change will benefit a significant number of applicants for civil legal aid, including survivors of domestic abuse, with many more eligible for legal representation in family proceedings. Last month we removed the means test for legal representation at inquests, available through the exceptional case funding scheme, and for legal help at an inquest for which representation is granted in order to ease the burden on bereaved families at such a difficult time.
As hon. Members know, we have just completed a wide-ranging review of the long-term sustainability of the criminal legal aid market. In light of early findings, in September 2020 we injected up to £51 million per annum into the criminal legal aid system through payments for reviewing unused material, sending cases to the Crown Court and increasing funding for cracked trials and paper-heavy cases.
In December 2020 we launched the second phase, an independent review led by Sir Christopher Bellamy QC, to consider the sustainability of the criminal legal aid system in its entirety. The criminal legal aid independent review—CLAIR—was published on 15 December 2021. Sir Christopher has undertaken a whole-system review of criminal legal aid provision in England and Wales and has considered a vast amount of evidence from a wide range of sources. We recognise the importance of remuneration in delivering the long-term sustainability of the market and are considering Sir Christopher’s recommendations very carefully. Given the detail covered by Sir Christopher, it is right that it receives full and thorough consideration. We aim to publish the Government’s response no later than the end of March 2022, alongside a consultation on our related policy proposals.
The hon. Member for Manchester, Gorton made the point that many people want that timescale to be accelerated. I understand that. In all the engagement I have held with the Bar Council, the Law Society, the Criminal Bar Association, individual practitioners and other groups that represent practitioners, I have expressed my understanding about where they are coming from in wanting urgent action. We all see that. However, I do not think anyone disputes it is a wide-ranging review covering the criminal justice system in the round, and we cannot rush that. More importantly, we, as a Government, have to abide by public law principles and to be careful that any consultation does not risk being unlawful by not giving everyone adequate time to contribute. I would stress that point particularly.
On the specifics of legal aid provision in the north-west, let me give some numbers. In the north-west, including Merseyside, there are 231 criminal legal aid provider offices, with 166 provider firms, and 337 civil legal aid provider offices, with 213 provider firms. The LLA remains confident there is enough provision of services in the north-west for criminal justice, but, as I said earlier, where issues arise the LLA takes the necessary action to ensure appropriate legal aid provision is in place. For example, the LLA launched a tender in December 2021 in 10 areas, three of which are in the north-west—Cheshire, Trafford and Wigan—for new housing possession court duty contract holders. The outcome of the tender is yet to be finalised and the results will be published in due course.
While legal aid is central to access to justice, it is part of a much broader picture. Since launching our legal support action plan in 2019, we have been exploring several changes across the full breadth of legal support, focusing on what works for the people who need it. The Government are passionate about the importance of giving people access to the right support to enable them to resolve legal problems earlier.
One such example is the £3.1 million litigants in person grant, which was launched in April 2020. The grant is funding 11 projects across England and Wales that deliver advice on a national, regional and local scale to litigants in person at different stages of their problem, within several areas of civil and family law. Through the legal support for litigants in person grant, local services in Greater Manchester and north Lancashire are delivering an integrated regional advice and information network that services the needs of litigants in person from two community hubs, one in each county. These hubs support people across a broad range of areas including employment, family, immigration, housing, debt and welfare benefits. Linked to that is the importance of law centres, which were mentioned by several hon. Members. They will know that during the pandemic we made available £140,000 for the Greater Manchester Law Centre and £120,000 for the Merseyside Law Centre, as well as £60,000 in 2020 and £36,000 in 2021 for the Vauxhall Community Law and Information Centre, and £80,000 for the Equality and Employment Law Centre in Liverpool
Additionally, we are working to improve signposting services to enable early access to legal support. Last year, in collaboration with the Department for Levelling Up, Housing and Communities, we launched an online guided pathway pilot to help people living in rented accommodation.
Dan Carden
The Minister has put a lot of information on the record. I know that the law centres will be following the debate closely. Will he go back to the civil legal aid fees that are paid? They have been frozen for 20 years and eroded by inflation. When do the Government intend to take a decision on them? Will there be a full review of the civil legal aid market and its future financial sustainability?
James Cartlidge
The hon. Gentleman makes a good point. As I said earlier—it is important to stress—we are conducting a means test review. That is key to civil legal aid. We will announce our response soon. I cannot say more than that, but it underlines that this in an important moment for legal aid. We are committed to ensuring that everyone can get the timely support they need to access the justice system, whether civil or criminal.
Looking ahead to the future, 2022 will be a big year for legal aid, with the Government publishing our response to the criminal legal aid independent review and bringing forward new proposals on the means test review, as I mentioned in response to the hon. Member for Liverpool, Walton. Alongside this, we will continue to focus on the sustainability of the civil legal aid system in all parts of the country, including the north-west.
Rebecca Long Bailey
I thank everyone for taking part in today’s debate. My hon. Friend the Member for Liverpool, Riverside (Kim Johnson) outlined the terrible situation that the Hillsborough families found themselves in. She said they should have been free to grieve, but instead they were forced to fundraise for justice. That about sums up the sentiment of today’s debate.
My hon. Friend the Member for Liverpool, Walton (Dan Carden) agreed that access to justice is a fundamental and basic right. My hon. Friend the Member for Birkenhead (Mick Whitley) said the scale of the crisis is unprecedented. Indeed, that was a point that my hon. Friend the Member for Manchester, Gorton (Afzal Khan) illustrated; he stated very clearly to the Minister that failure to act now risks collapse of the criminal justice system.
I welcome the comments made by the Minister, who genuinely sounds supportive of the legal aid system. He said he was committed to ensuring that people can get access to justice in a timely manner. However, that just is not happening—and it will only get significantly worse. The Minister mentioned the increase in annual spend and the spending review amount. I would say, in response to that, the amounts that were referred to in the spending review will not be sufficient to stem the crisis in civil and criminal legal aid. He mentioned the review of civil legal aid; that is welcome and I would like to see the details of it, and whether his Department is looking at the broad areas that legal aid should cover. That is certainly a huge issue in my constituency.
When the Minister was asked by my hon. Friend the Member for Liverpool, Walton about increasing the rate of legal aid for the civil legal aid sector, he did not respond, and referred simply to the means test, which is a completely separate issue. That is not the rate of civil legal aid; that is what needs to be addressed as quickly as possible so that legal aid providers can exist, function and continue to provide legal aid to their communities. The Minister also mentioned the early legal advice pilot scheme. As I said earlier, I welcome it but it will not benefit my constituents in Salford—we are not covered by Manchester City Council. Perhaps he will clarify to me separately whether people in Salford, if they go to Greater Manchester Law Centre, for example, would be able to qualify for that scheme.
We know that early legal advice leads to early resolution. I understand that the Minister’s hands are tied by the Treasury and he is under pressure to create business cases to justify polices that his Department want to put forward, but, frankly, if we are in a situation where we have to make a business case for access to justice then we are on very shaky ground as a democracy. That is a point that the Minister made right at the start; he said that legal aid was a cornerstone of democracy. He agrees with me on that, and I welcome his comments. If he does believe that, he has to understand that no access to justice means no justice at all.
The Minister needs to address the points that I set out about increasing the amounts that are provided for criminal legal aid—the uplift to 15% as a minimum would be transformative. He needs significantly to increase the funding for civil legal aid and a wider review of civil legal aid is long overdue.
Question put and agreed to.
Resolved,
That this House has considered the provision of legal aid in the north-west.
Cost of Living in Wales
(2 years, 1 month ago)
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Yvonne Fovargue (in the Chair)
Before we begin, I remind Members of the House of Commons Commission’s guidance to observe social distancing and wear masks. I will call Jessica Morden to move the motion and then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up because that is the convention in 30-minute debates.
Jessica Morden (Newport East) (Lab)
I beg to move,
That this House has considered the cost of living in Wales.
I am most grateful to be granted a debate on this most pressing issue for constituents in Newport East and across Wales, who face an unprecedented cost of living crisis, which has perhaps more accurately been described as a “can’t pay the bills crisis”. Across Wales, our constituents face galloping prices fuelled by soaring energy bills, which affect the cost of everything. This is leading to deepening inequality, as price rises hit the poorest households hardest—inequality already entrenched by years of Government austerity. With things only set to get worse in April as constituents feel the impact of the energy price cap rise, the Government’s manifesto-busting national insurance hike and a forecast rise in inflation, the Government’s lack of understanding and empathy about the stark choice households are having to make, and the absence of any meaningful response to address it, is unacceptable. This is a serious situation that demands a serious response.
I am calling the debate today to give voice to the real stories that constituents have shared with me about their day-to-day existence and how their income is not enough to cover rising bills. The following are quotes that constituents have shared with me, because the cost of living crisis is real:
“I reduce the amount of meals I have a week so the food is spread further for my children, I do not use the heating if I am home alone as I cannot afford it and we cannot use it at night as it is just too expensive.”
“I’ve found that buying cheaper, less nutritional food is the only way I can make food last longer for my children. The cost of gas and electric means I struggle to wash and dry their clothes.”
“Almost all of my tax credits, if not more, a week go on my gas and electric. Very often I have to go without food to be able to have the heating on.”
“The cost of food is jumping quite dramatically, my weekly shop was about £40 a week now it’s more like £60 to £80, unfortunately, my wages and benefits haven’t gone up to compensate. … I’m also disabled—I cannot get cold and I use hot water to manage pain!”
“I struggle to feed my children and to keep the house warm, I’m too embarrassed to use a food bank, especially as I work within the community. I have even gone without food so my daughters could eat.”
“I’ve had to cut down to one ‘meal’ a day to be able to heat our home at night. It’s so cold, too cold for my baby in his thickest sleeping bag, so I have no choice.”
“I am a community nurse and my pay rise is totally negligible. I am paying a lot of money for petrol and the increase in this is not reflected in the expenses I receive ... Food is costing me a lot more and my heating oil has gone up ... I try not to use the heating as much. I am a middle income family and I am not entitled to any financial support.”
“We’ve had to cut everything back to just the basics of daily living. We are a family of three. We have five jobs between us. We have no social life or time for relaxing … having to work to make ends meet. It’s not living, it’s surviving.”
These are just a small selection of the responses I received after asking constituents to tell me how life is for them. The overall results of the survey we carried out in Newport East was stark: 95% of those who responded said that they had seen an increase in the cost of living; 76% had cut back or made difficult choices to try and save money; and more than 15% offered that they had used food banks. This feedback chimes with the view of the Bevan Foundation, one of Wales’s leading think tanks, which called the current cost of living crisis the most challenging in living memory. Its most recent research paper describes how more than a third of Welsh households have had to cut back on heating, electricity or water, and more than a quarter have had to cut back on food.
We are seeing a perfect storm, with many factors coming together and hitting people at the same time. Since December, the UK’s rate of inflation has soared to its highest level for nearly 30 years, and it is expected to peak at 7.25% in April, higher than the growth in wages. A British Chamber of Commerce survey found that 58% of businesses are now planning to raise prices. As the prices we all pay at the till go up, household budgets will be further squeezed.
Food prices are already up. The most recent BBC food price index showed that the cost of some individual food items had skyrocketed by nearly 50% during the last year. Earlier this month, the chairman of Tesco warned that the
“worst is still to come,”
with a potential 5% increase in food prices over the coming months.
The cost of many food items has already shot up faster than the rate of inflation. According to research by Jack Monroe, the price of the cheapest loaf of bread is up by 92%, a can of baked beans by 45% and the cheapest bag of pasta by 141%. All this will be felt most keenly by those on the lowest incomes.
The Child Poverty Action Group suggests that the cost of a food shop will soon rise by £26 each month, with a disproportionate impact on families with children in poverty. The Government’s own food security report found that the poorest 20% of households spent a higher proportion of their income on food, and are therefore more impacted by the changes in food prices. These households have already seen their incomes drop since 2017.
Private rents are now £62 per month higher on average than in March 2020, with Wales experiencing some of the highest rent rises after London and Northern Ireland. The costs of mortgage repayments are also up. UK Finance estimates this will add around £26 a month on to a typical tracker customer mortgage repayment.
Rail fares will rise by 3.8% in March, the biggest increase in nine years. For the two thirds of commuters who drive to work, petrol prices have risen to an all-time high this year, with the cost of filling a tank up by an estimated £10. With oil prices likely to rise further, prices at the forecourts will only be ramped up more.
Then there are the soaring household gas and energy prices. Households in Wales and across the UK will see their energy bills rise by nearly £2,000 a year from April, when the energy price cap lifts, an increase of 54%, or an average of £693.
Christina Rees (Neath) (Lab/Co-op)
Does my hon. Friend agree that things would be a lot worse in Wales if it were not for the Welsh Labour Government’s £330 million package to tackle the cost of living crisis, targeted at helping the most vulnerable through the winter support scheme and the discretionary assistance fund?
Jessica Morden
I thank my hon. Friend for her excellent intervention. In fact, we saw a further announcement and more detail last week.
Jessica Morden
Before the vote, I was talking about the soaring household gas and electricity prices and about how households in Wales and the UK would see their energy bills rise to nearly £2,000 a year from April, when the energy price cap lifts. I agree with the excellent intervention by my hon. Friend the Member for Neath (Christina Rees) about the interventions of the Welsh Labour Government in Cardiff and how they have used the levers at their disposal to do all they can to ease the cost of living crisis for Welsh people. I will talk more about that later.
The proportion of households spending at least 10% of their budget on fuel bills will be trebling from 9% to 27% and, on top of that, taxpayers will be asked to foot an estimated £120 a household to shoulder the extra costs of the energy companies that have gone under in the last year. Based on that increase alone, National Energy Action Cymru estimates that 280,000 households in Wales could be in fuel poverty come April. That is a further 100,000 households since October 2021, and all that at a time when pay is not keeping pace with rising prices. When we factor in inflation, average weekly pay packets across Britain fell in December by 1.2% and TUC research suggests that real wages are set to fall by £50 a month this year, after taking into account the cost of living, with incomes after tax forecast to drop by 2%. That represents the biggest fall since records began in the 1990s. Although the national living wage may be going up, the proliferation of insecure, casual jobs and cuts to in-work benefits mean that a higher minimum wage does not mean higher living standards.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that, although many people think of benefits as going to people who are not in work, there are in fact a lot of benefits that go to people who are in work? The fact is that there have been swingeing cuts to tax credits since 2010, and even though there was some adjustment to the taper last year, that alone is not enough. With rampant inflation, there now needs to be a real effort to make sure that those tax credits are actually worth something, to make it worthwhile to be in work. At the moment, people face horrendous poverty because of that accumulation of 12 years of cuts.
Jessica Morden
I thank my hon. Friend for that intervention. She is absolutely right: the levels of in-work poverty are really terrifying, and it is those on the lowest incomes who are feeling the squeeze most acutely. As she said, that is made worse by the Government’s £20 cut to universal credit in the autumn, which impacted 8,630 households in my constituency. Research from Wales TUC and the Bevan Foundation suggests that Wales was particularly hard hit by the cuts to universal credit and working tax credit, especially when it comes to the in-work poverty that she mentions.
Of the 280,000 individuals in receipt of universal credit in Wales, around 104,000, or 37%, are in work—the highest proportion of any nation or region in the UK. In April, universal credit will increase by 3.1%, just as inflation is predicted to peak at 7.25%. As the Child Poverty Action Group has highlighted, that means that the real value of universal credit for families with children will fall by around £570 a year on average.
Carolyn Harris (Swansea East) (Lab)
Citizens Advice tells us that, heading into the winter, one in 10 families were already facing financial crisis. With food prices going up, utility bills going up and the extra burden of the national insurance payments, families are having to decide between heating and eating.
Jessica Morden
I thank my hon. Friend for that intervention. She is absolutely right. The experiences of her constituents that she relays were borne out in the comments from my constituents that I read earlier on. The average fall of £570 will affect 3,355 families and 6,272 children in Newport East alone. Meanwhile, families across the UK hit by the benefit cap will experience an even greater fall.
Increases in other benefits are totally insufficient in the face of the inflation juggernaut. Carers allowance has increased by only £2 a week, statutory sick pay by £3 a week and the severe disability premium by £2.10 a month. Local housing allowance rates were also frozen again until 2023, meaning that help for housing costs through universal credit and housing benefit have not kept pace with inflation.
Pensioners are also hit hard. Comparing state pension increases to inflation projections, there is a real-terms cut of £355 for a couple on the basic state pension and £222 for an individual. That is not to mention the hundreds of thousands whose pensions have been underpaid because of admin errors and the 1 million pensioner households still missing out on pension credit.
Hywel Williams (Arfon) (PC)
I apologise for missing the first part of the hon. Lady’s speech—I was keen to vote. Does she agree that we need a measure of inflation that reflects the costs that people—including pensioners and families with children—actually face? In fact, 3,153 children in my constituency will be hit by the change to universal credit.
Jessica Morden
I very much understand the point that the hon. Member makes about inflation, which runs through this whole debate.
On top of all that, the Government have decided to go ahead with the national insurance rise in April, with the average worker’s contribution set to be hiked from £274 to £500 a year. National insurance contributions will be charged at 13.25% on earnings up to £50,000, but just 3.25% on income above that threshold. Low and middle-income earners will be affected yet again—a tax on ordinary working people and on jobs. The Government have had an opportunity to do something about the cost of living crisis, but the Prime Minister and the Chancellor have been distracted and slow to act. What have we had so far from the Chancellor?
Dr Jamie Wallis (Bridgend) (Con)
The accounts from her constituents that the hon. Lady read out earlier were very moving, and I take that to heart. Does she not think it is time, with the cost of living crisis, that the Welsh Labour Government did more to tackle the huge council tax bills in Wales? Welsh councils are consistently and disproportionately some of the most expensive in the UK. That comes up time and again with my residents. Should she not be putting pressure on her colleagues in the Senedd?
Jessica Morden
We have some of the lower council tax rates, compared with the UK as a whole. The support packages from the Welsh Labour Government are more generous than those of the UK Government. The hon. Gentleman’s intervention was timely, because I had just asked what we have had so far from the Chancellor. The answer is a £150 council tax rebate for a limited number of households, which is already less generous than the council tax reduction scheme in Wales, where on average people will pay £17 less on their council tax bill. An average band D council tax bill in England is £167 more than in Wales.
The second measure the Government have come up with is the buy now, pay later scheme of a £200 loan to help with bills, which the public are expected to pay back in full over five years, even if their wages fall in the meantime or energy bills rise further still, or even if they become a bill payer later and do not receive the initial £200 loan. The TUC General Secretary, Frances O’Grady, has highlighted that, for most families, the Chancellor’s support package equates to just £7 a week, with more than half of that having to be paid back. As she said,
“It’s too little, it’s poorly targeted, and it’s a stop-gap measure instead of fixing the big problems.”
Conservative MPs voted down Labour’s proposal to cap VAT on energy bills, after suggesting that we could do that once we left the EU. The Government, let us not forget, have casually written off £4.3 billion lost to fraudsters, but refuse to tax properly North sea oil and gas profits, despite the fact that leading energy companies such as BP are boasting about being cash machines, as gas prices across global markets reach record highs.
In contrast to the Tory Government, in Wales we have a Labour Government who are prepared to step in and help by using the levers that they have. Last week, the Welsh Labour Government set out a £330 million package of extra help. That is a funded package that is significantly larger than equivalent support provided by the UK Government. It includes matching the UK Government’s £150 council tax rebate and extending the eligibility criteria, so that many more households will benefit. That is funded by the Welsh Government, as the UK Government made no extra money available, even though they said they would.
The Welsh Government have also announced an extra £200 for low-income households, by extending the winter fuel payment this year and next winter, £25 million for local authorities to help struggling households, and an extension of the Wales national discretionary assistance fund. They have also invested in crucial advice services, food banks and community hubs.
Christina Rees
My hon. Friend might have been about to come on to this point. Will she also congratulate the Welsh Labour Government on their basic income pilot scheme for care leavers in Wales? That will give care leavers the support they deserve to develop and become independent young adults.
Jessica Morden
I thank my hon. Friend for that intervention. I am glad she mentioned that scheme because I am running out of time, and it is another thing we are able to highlight. All those steps are in addition to Wales’s more generous council tax reduction scheme, the warm homes programme, free prescriptions, a free school meals programme and more. Their actions ensure that people who need support get support, but many of the solutions fall in non-devolved areas, which is why it is the responsibility of the UK Government to step up.
The Government should look again at the practical solutions Labour is putting forward. A one-off windfall tax on North sea oil and gas profits could pay for the removal of VAT on energy bills for a year, and an increase and expansion of the warm homes discount. That is a support package that could mean up to £600 for those who need it most. The UK Government should also reconsider their increase to NI and cuts to support.
The Minister should look at the sensible five asks on the cost of living that the Welsh Government put forward last month, none of which has been responded to. They include the social energy tariff to support lower-income families, increasing local housing allowance, increasing the support available through the warm home discount and other winter fuel payment schemes, expanding suppliers’ ability to write off household energy debt and removing the regressive social policy costs imposed on household energy bills by moving those costs to general taxation.
In the longer term, we need a fundamental reform of our energy system. We also need the Government to set out a national strategy for food, including how they intend to ensure access to high quality, sustainable, affordable food for all and meet the United Nations goal to end hunger by 2030. The national Food and Drink Federation has been clear that it wants greater collaboration between the industry and Government on finding a solution. The next Labour Government would support business to bolster the sustainability and affordability of good quality food.
As the Welsh Government said last week:
“Paying bills, heating homes and putting food on the table shouldn’t be so hard.”
They have taken the action they can with the levers they have available to them. If the Conservative party will not take action, the Opposition stand ready to.
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I apologise for the fact that I was at the vote for a few minutes, as one or two others were. I congratulate the hon. Member for Newport East (Jessica Morden) on securing this debate, and I thank those who have contributed. I am pleased that we are having this debate on a subject that is of great importance to colleagues. I want to make it absolutely clear that I fully accept that there is a cost of living crisis. It is a global crisis with many causes, one of which is the quadrupling of gas prices as a result of factors such as the sudden increase in demand for goods and energy as we come out of the covid crisis, and the inability of some suppliers to match that need. It is a global crisis, and I do not deny for one minute that people are suffering.
It is worth reflecting on the unprecedented support provided to businesses and individuals by the UK Government in Wales during the pandemic: 475,000 Welsh jobs have been protected through the furlough scheme, billions have been provided in Government loans to Welsh firms and an extra £3.8 billion of Barnett-based funding has been provided to the Welsh Government. The hon. Lady suggested that the extra money for the council tax rebate had not been supplied yet. That might be the case, but it will be supplied because it was a Barnettised sum, so I am certain that that money will arrive. That is why the Welsh Government were right to pass that reduction on.
The pandemic has had a significant effect on the global economy, and the Government have intervened to ensure that the UK persists and is strengthened throughout the economic challenges. As a result of actions taken by the Government, more people are on a payroll than before the pandemic began. The UK economy is the fastest growing among the G7 nations, so I hope we can agree that the best way to support people’s living standards is not through handouts but by offering access to good quality jobs, better skills and higher wages.
We are helping people across the UK, including in Wales, to find work and to boost wages and prospects through our plan for jobs. That includes the kickstart scheme, which has seen 122,000 young people begin work across the UK, including 6,000 in Wales. I am pleased to say that the Wales Office has a kickstart worker from Merthyr Tydfil working in our Cardiff office, and I was absolutely delighted to meet her today.
We are increasing the national living wage by 6.6% to £9.50 an hour, which will benefit more than 2 million workers. We want to ensure that people in Wales keep more of what they earn, so we are raising income tax personal allowances and freezing alcohol and fuel duties. Although the price of filling up a tank has gone up, it is still £15 cheaper than it would have been if we had kept the original fuel duty escalator.
We have also, as the hon. Lady knows, reduced the universal credit taper rate from 63% to 55%, and we are increasing universal credit work allowances by £500 a year. Together, that should mean more than a million households—I do not have the exact figure, but it is certainly a significant number of households—keeping an extra £1,000 a year, on average.
We absolutely recognise that this is a worrying time because of significant increases in global energy prices. We understand that people such as the hon. Lady’s constituents are concerned, and we have done what we can to help. We have provided £12 billion of support over this financial year and next to ease the cost of living pressures across the UK. We have targeted help for working families, low income households and the most vulnerable in society, in addition to providing a £9.1 billion package of support to help households with rising energy bills during 2022 and 2023.
The hon. Lady is right about the impact that these prices will have, but we cannot do very much about the fact that global gas prices have quadrupled in the last year alone. This will be an issue for every country across the world. The more dependent a nation is on gas, the more of an impact that will have.
Jessica Morden
The Minister is quite right, but he missed the comments that I read out from constituents about how hard life will be. He is also quite right that there is a global gas crisis, but we are more exposed to it because of a decade of Tory mismanagement. Gas storage has been cut, so we are reliant on Russia and other countries. We have been slow on insulating homes and we have not been investing in renewables. Does he not accept that?
David T. C. Davies
Funnily enough, I do not accept that. First, gas storage will make no difference whatsoever to the price. It does not matter if we are storing two, 20 or 200 days’ worth of gas, because if the unit price of gas has gone up at some point, we will have to pay that higher price.
David T. C. Davies
I will in a moment. Let me finish my speech—as Opposition Members know, I like to take interventions and then I completely lose my place.
I do not accept that storage was an issue. We made a decision, as a nation, that we were not going to frack for cheap gas, but we are not dependent on Russian gas. Only about 2% of the gas we use comes from Russia, and we could easily do without it. We import mainly from Norway and take liquefied natural gas, as well as using our own. We are not dependent on Russian gas, but other countries in the EU are, and that will have an impact on supplies overall.
As far as renewables are concerned, we have an amazing story to tell. We have vastly increased the amount of renewables we use, mainly from wind. We are now developing offshore wind power, and even looking at floating offshore wind. The hon. Member for Newport East will realise that the transition towards carbon neutrality comes at a cost. We should not hide the fact that low-carbon energy sources, such as wind and solar, generally cost more than carbon-based energy sources, such as gas and coal. I wonder how many minutes I have left.
David T. C. Davies
I will take a quick intervention from the hon. Member for Swansea East (Carolyn Harris).
Carolyn Harris
In France, where the industry around energy is nationalised, there have been nowhere near the price hikes that there have in this country, where we have allowed the Government to allow the companies to get away with blue murder.
David T. C. Davies
I fear the hon. Lady may not be right about that. About 70% of the electricity in France comes from nuclear power plants, which are already built. That is one reason why they have managed to control their costs. I hope we will be building nuclear power stations across the UK, and I would very much like to see one built at Wylfa in Wales; there is pretty much cross-party support for that.
I welcome the fact that we are going further and looking into developing modular reactors. I know the hon. Member for Newport East is chair of the all-party parliamentary group for the western gateway, and I may see her later on when I talk to that group about the spherical tokamak for energy production, which could lead to nuclear fusion by 2040.
David T. C. Davies
I have only 30 seconds left and I have a conclusion here as well, but I give way to the hon. Lady.
Jessica Morden
Does the Minister accept that a failure to regulate our energy market has led to dozens of energy companies going bust and consumers footing the bill for that? Consumers have had to move their bills to new energy companies, and they do not know what those will be like in the future.
David T. C. Davies
A fairer analysis would be that a lot of energy companies had not expected prices to quadruple and had given people fixed prices. In conclusion, this has been an excellent debate and I wish we had more time for it.
Motion lapsed (Standing Order No.10(6)).
Kinship Care for Babies
(2 years, 1 month ago)
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Yvonne Fovargue (in the Chair)
Before we begin, I remind hon. Members to observe social distancing and wear masks.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I beg to move,
That this House has considered kinship care for babies.
It is a pleasure to speak under your chairmanship today, Ms Fovargue. Parents come in all shapes and sizes, and today I want to touch on the role of kinship care, particularly for babies. Recently, a constituent came to my surgery to talk to me about his then eight-month-old niece. For a couple of months, she had been under the care of her grandmother, who was understandably struggling to cope with the needs of a baby, so my constituent and his wife agreed to become kinship carers.
It was clear to me that my constituents were both fully committed to raising their niece as their own daughter, but it was also apparent that the level of support they received was almost zero. In order to formalise the kinship care arrangement, they each had to take a week of paid holiday to undergo compulsory training and complete all the administrative arrangements with the local authority. Then, to enable them spend vital time with their now almost one-year-old niece to build the secure bond that is so essential to the happy upbringing of any child, my constituent and his wife were only eligible for unpaid leave from their respective businesses, both of which are significant employers in the UK.
My constituent pointed out to me that if they had been formally adopting this gorgeous baby, they would have received similar pay and leave rights to birth parents—as it happens, both their employers would have offered up to 39 weeks of parental leave at close to full pay. My constituent, who also has older children of his own to support, had to choose between earning and parenting. Even if they had been fostering this baby, they would have received an income from the local authority, as well as ongoing support. This situation seems to me to be completely unfair.
It is estimated that 200,000 children in the United Kingdom who cannot live with their birth parents are being brought up by kinship carers—grandparents, older siblings or other wider family members. In England, surveys suggest that 51% of kinship carers are grandparents. Over 40,000 children in kinship care in the UK are aged nought to four. In my work on the Government’s early years healthy development review, we demonstrated the vital importance of the earliest years of a baby’s life. It is in the period from conception to the age of two—known as the 1,001 critical days—that the building blocks for good lifelong physical and emotional health are laid down. The quality of a baby’s attachment to their principal caregivers will literally determine their lifelong potential.
In its 2021 state of the nation survey, the charity Kinship reported that 96% of kinship carers expect their children to live with them permanently. It is clear that the kinship route has a low rate of disruption, offering much greater levels of stability for children than non-kinship foster care. Additionally, there is less risk of placement instability, and the likelihood of emotional and behavioural difficulties is lower, when children are in kinship care than when they are in non-kinship foster care. Where a baby is unable to stay with his or her birth parents—perhaps for reasons of death, mental health issues, incarceration, addictions or other problems—the younger the placement into kinship care, the greater the chance of a secure future for that baby or child.
One of the key concerns raised by every parent and carer, including kinship carers, during the research phase of the early years healthy development review was that parents and carers simply do not know what kind of support they might need. Even if they do know, they struggle to get access to the help that they are looking for. The Government’s vision for the best start for life seeks to address that fundamental challenge by requiring every local authority to publish a Start for Life offer for every new family in England and to provide universal support for every new family through the family hub model.
I was delighted that the Government announced in the spending review a £500 million investment package to help every family across 75 upper tier local authority areas over the next three years. The Start for Life unit is currently looking at how those 75 local authority areas will be selected. The spending review commitment includes £82 million for transformation of existing children’s services into family hubs. It also includes £100 million for infant and perinatal mental health services, £50 million for parenting programmes and another £50 million to develop breastfeeding support services, as well as a £200 million uplift for the supporting families programme. The commitment in the spending review also includes funding for early years workforce pilots to improve the capacity and skills mix of the early years workforce, as well as funding to enable every local authority to publish their Start for Life offer.
During the research phase of the early years healthy development review, we spoke to a number of kinship carers and heard directly from them about the extent of the additional practical and emotional support that they so often require when a baby or child who is going into kinship care has experienced significant trauma and neglect before arriving in their new family. The review also heard that kinship carers, particularly grandparents, often face financial problems as a result of caring for a young baby or a child. Kinship carers often step in to help just because it is the right thing to do for their broader family, but the personal sacrifice for them can mean having to give up work and make considerable changes to how they live. Clearly, for kinship care of babies to be a success, it is critical that there are good quality joined-up services to support the parent and infant relationship, but it is also vital that employers step up to the mark and treat kinship care of babies in the same way as they would childbirth, fostering or even adopting a baby.
Before covid, when I worked on the employment rights Bill as Secretary of State for Business, Energy and Industrial Strategy, I pushed the idea of flexible work as standard for every employer. Flexible working can include part time, flexitime, compressed hours, staggered hours and job sharing. Since 2014, all employees have had the legal right to request flexible working, but it is still up to the employer whether to grant the request. Unfortunately, in too many cases we find that employees are afraid to request flexible work because they fear they will be seen as not committed. There is evidence that this can increase job insecurity—another reason why employees will be reluctant to request flexible working.
Flexible work as standard would involve jobs being advertised without a specific proposal for the number of hours or the days of the week to be worked. The employee would apply for the role and offer the working arrangements that suited them, and it would be for the employer to agree, to negotiate or to refuse. As we look to recover post pandemic, this policy can reflect the reality of post-covid preferences and support the needs of families, but it can also support the needs of employers. There is plenty of evidence to suggest that allowing and even encouraging people to work flexibly can boost productivity, increase diversity in the workforce and help general wellbeing. That would be a win for employers and a win for the quality of life of employees. I hope the Government will consider the role that that can play in our recovery.
Not only can more flexible work help our nation’s fiscal position and mental health, but it could encourage more families to consider kinship care or fostering. With so many families struggling and so many thousands of children already in care, a more flexible approach to work could enable many more children to benefit from the security and love of a family environment. I am aware that my hon. Friend the Member for South Ribble (Katherine Fletcher) is working on a private Member’s Bill, the Kinship Care (Parental Leave) Bill. I pay tribute to her for her work in the area, and I pay tribute to all across the House who recognise what unsung heroes kinship carers really are.
I will end my remarks with good news. My constituent has recently been back in touch and has told me that, following his story, his employer is considering reviewing its employment practices and will be setting up a working group to look at better supporting kinship care. That is great news, and I hope other employers will listen to his story and be inspired to see how they can better support families and kinship carers right across the UK.
Yvonne Fovargue (in the Chair)
If people keep to around seven minutes, I think everyone should get in. I call Andrew Gwynne.
Andrew Gwynne (Denton and Reddish) (Lab)
Thank you, Ms Fovargue. It is a pleasure to serve under your chairmanship. I thank the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) for having secured such an important debate and for the work she has done in this important area.
I start by declaring an interest, because I and my wife Allison are kinship carers to our beautiful grandson Lyle. I also sit as the co-chair of the all-party parliamentary group on kinship care. This is not an easy debate for me to take part in. I understand the issues with kinship care in this country all too well. Allison and I have lived the uncertainty, the heartache and the sleepless nights. We have spent countless hours trying to navigate an incredibly complicated system, one that is in dire need of reform and that all too often feels devoid of compassion.
Soon after Lyle was born, it became clear that his parents would be unable to care for him. Allison and I went through the family court and eventually managed to secure a special guardianship order. An SGO gives us parental responsibilities and enables us to make important decisions about Lyle’s upbringing. However, a lack of legal aid often means that kinship carers rack up extraordinary costs during the legal process. I have heard stories, both personally and in my capacity as chair of the APPG, of families being dragged into substantial debt, all for trying to do the right thing and be there for a child in need of their support. It is not right. We are leaving families in a legal labyrinth, with precious little in the way of financial or emotional support. As the right hon. Member for South Northamptonshire set out so eloquently, living with a family member is often the best course of action for a child, yet the system does not feel optimised to facilitate kinship care. People are often left at sea, scrambling to meet mounting legal costs, all while trying to hold their family together in extremely difficult circumstances.
At the centre of all this is a child. In my case, it was baby Lyle—he is now three, so he is not so much of a baby. Allison and I are often praised for choosing to look after Lyle, and while those comments are obviously well intentioned, they somewhat miss the reality of the situation many kinship carers find themselves in, because kinship care is not really a choice: it is ultimately about love. When Allison and I looked at Lyle, our baby grandson, we did not have an option. We would be there for him no matter what. When it became clear that we would need to look after Lyle, we did not think twice, and I believe that very few people would.
The fact is, though, that we are fortunate enough to be in a position to meet the legal and financial demands of kinship care, but what about the other 180,000 children in kinship care? What about the kinship carers who are not Members of Parliament? What do they do? There is massive variation in how local authorities address, assess and support potential kinship carers. Such a massive decision, which ultimately boils down to the welfare of a child, should not amount to a postcode lottery.
In my capacity as co-chair of the APPG, I work closely with the charity Family Rights Group and the Kinship Care Alliance. Their agenda for action makes a number of policy recommendations that would instigate transformational change for kinship carers across the country. That includes calling for more to be done to ensure that local authorities explore the option and suitability of kinship care in the event that a child needs to be looked after. That means working with families in a proactive way and letting the wider family take the lead in making a safe plan for the child in question. It also includes recognising the practical and financial consequences of kinship care. That means giving kinship carers the right to a period of paid employment leave as well as ensuring that there is suitable specialist advice available, irrespective of the local authority or postcode. I hope that the Minister, in his response, will recognise these calls and outline what steps the Government will take to work with kinship care and sector leaders to recognise and reform a system that has been neglected for far too long.
I would like to conclude by sharing something that defines the start of my working week. Every Monday morning, I am waved away from Stockport railway station by both Allison and Lyle as I set off for another week in Westminster. Leaving Lyle does not so much tug on my heartstrings as heave on them. However, as the train pulls away, I am always filled with an enormous sense of gratitude and love. I am very lucky to be Lyle’s grandad and kinship carer.
I started my contribution by stating that this is not an easy debate to take part in, and it is not. However, I believe that it is my responsibility as an elected representative and Lyle’s grandad to speak up for kinship carers and to use my own experience to try to effect positive change. Ultimately, that is what politics is about, and I hope that, sooner rather than later, the Government recognise that change is needed and, more importantly, proactively do something about it.
Ben Bradley (Mansfield) (Con)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) on securing the debate and on her incredible campaign and passion for this subject, particularly around the first 1,001 days. Her knowledge of this subject is second to none in this place, so it is a privilege to speak in her debate today.
I will touch on the care market in general and then on kinship care and perhaps babies, as per the title of the debate. Children’s services around the country are under massive pressure and are our biggest budget pressure from a local authority perspective. People talk about social care, and I wish I could spend the money in social care, but the staff do not exist, so the biggest budget pressure is in children’s services. Every year we battle with the overspends.
At the same time, we are also tackling what are very often poor outcomes for children in the care system. Mostly, it is best for children to be with families. There were 57,000 children in the fostering system this time last year, but fostering is also a challenge in the current climate. Covid isolation—not being able to have people come and go from one’s house—has had a huge impact on fostering and the ability to recruit and retain people in the sector. The Competition and Markets Authority’s report on the children’s care sector has said that the market is broken and in need of significant work, which further highlights just how important kinship care is and will increasingly be in the future in what is otherwise a volatile market.
Living with family or friends is often the best outcome for a child. It is also cheaper from a local authority perspective, and it is outside the market pressures that mean that fostering and adoption are so difficult. It is something we could manage much more easily if we wanted to do so, but as my right hon. Friend the Member for South Northamptonshire touched on, there is inconsistent support, and much less support than for fostering or adoption, even though there are additional challenges that do not exist in those areas, such as the relationship with birth parents. More often than not, we would hope, there is a reason why families cannot look after their child, which can lead to incredibly strained relationships with whoever looks after the child. I do not want to stereotype, but my right hon. Friend touched on some reasons why that might be the case, including imprisonment and substance abuse. Clearly, if granny or grandad takes on a child in such circumstances, with perhaps a mum or dad who is on drugs or an alcoholic, it can be an incredibly difficult relationship for them to manage alongside the work pressures, financial pressures and everything else that comes along with kinship care. Sometimes it just has to go in the “too difficult” box without the support that exists.
Kinship carers also get less access to free childcare, which does not happen in other parts of the care system. Almost uniquely, kinship carers do not access the 15 or 30 hours’ support in the same way as parents who adopt, which is something very simple that we could do. In Nottinghamshire, we are investing in that in our budget this year; we are putting £400,000 into a specific kinship support scheme. When we look at how we are going to balance our budget in children’s services over the coming years, it clearly has to be by having more of that kind of support—keeping kids in their own homes or in the home of a family member or friend through kinship care—and having less expensive residential care, which we know costs a fortune and where the outcomes are typically not good.
The more that we can invest up front in those proactive services to help kinship carers to cope and look after relatives, and to mitigate those financial challenges, the better off we will be in the long term, both financially and in terms of outcomes. We want to look at how we incentivise granny and grandad, or aunt and uncle, to take on that challenge and keep their family member in a loving home environment. We will invest in that in our budget this year, and I am very proud that we are doing that for the first time.
The national review of children’s care services needs to highlight the importance of kinship care and increase the simplicity of, and access to, that support. That should be tackled alongside the well-understood and discussed challenges around fostering and the wider care market, which are really challenging. From a purely financial perspective in local government, early support and intervention to help people access kinship care are much simpler and cheaper than the challenge of providing long-term residential care and, ultimately, of having to look after people throughout most of their adult lives because outcomes are often very poor.
In her example, my right hon. Friend the Member for South Northamptonshire highlighted cost and the lack of comparative rights, when compared to adoption and fostering. I have touched on some of those, and there has to be more that we can do to rebalance things. The private Member’s Bill of my hon. Friend the Member for South Ribble (Katherine Fletcher) sounds like a fantastic start to being able to do that, and I look forward to supporting it in the House.
My right hon. Friend also focused on babies. We know that the earliest years are absolutely vital in terms of emotional connections with family, communication and language, and social skills and the ability to meet and engage with other children. Security is very important when it comes to things like that. Going in and out of different foster homes with different people, or going in and out of the care system in different ways, cannot be a good environment, particularly for babies. All the way through the system, kinship care tends to be a much more secure and long-term placement.
My right hon. Friend is right to highlight all the good work that has happened around the early years workforce and the investment in family hubs that was in the Budget last year—again, in Nottinghamshire we are very much promoting and supporting that model. All these things will boost the life chances of young people. There are many positives, but it is also clear that more could be done on kinship care, the care market and fostering.
I urge the Minister in his closing remarks, and over the coming months and years—particularly through the children’s care review—to help us support services such as the one that we are rolling out in Notts. I think that will be a fantastic start but there is much more that we could do, and I would welcome his thoughts and advice in the future about how we can boost and promote that. We should look at that support and the incentives that exist for kinship carers, to ensure that kindship care is at least comparable with fostering and adoption. It is a better outcome; it is arguably the best outcome for most children to stay with somebody whom they know, who loves them and who wants to look after them. We should support and promote that, because it is better for children, better for families and better for the taxpayer as well. It should be at the top of our list, and I am sure it is at the top of the Minister’s list.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) on securing this debate.
It is very striking, when we look at the care system in England, that the earlier a child goes into care and the longer they stay, the better their outcomes are. We also know that the cost of failure is enormously high. On average, a local authority spends in excess of £55,000 per year to support a looked-after child; for a child with a significant level of care needs, it is on average over £130,000 per year. When the local authority takes that very difficult decision to go to court to safeguard a child’s interests, it seems absolutely critical that planning and seeking the best available option for that child are an early part of the work that is done.
As my hon. Friend the Member for Mansfield (Ben Bradley) described, a kinship care placement can be the very best option for any child, for a whole host of reasons. My ask of the Minister is to look at how local authorities can, in that initial decision-making process, when a child first comes into the care system very early in life, think about how to plan effectively. They need to be able to explore kinship care options alongside other things that may need to be considered as part of safeguarding, so that we can ensure children are placed in a safe and familial environment.
The concept of kinship care seems to have grown very much in the last two decades. That has arisen partly from a recognition that box-ticking does not ensure a quality experience for a child. We have seen Governments of all stripes seeking to improve the quality of children’s experience in care. The key thing that emerges from the feedback of children who have been through that system—as well as from relatives, social workers and professionals—is that always having a stable, enduring and loving relationship is the most important thing if a child is to thrive. We can have foster carers who are incredibly well trained and social workers who are immensely highly qualified, but if each of those is dipping in and out of a child’s life, that simply is not going to bring about the quality of outcome that a loving grandparent, aunt, uncle or other family member could provide.
Katherine Fletcher (South Ribble) (Con)
I want to develop that point slightly. There are long-term, systemic issues that might arise for any new kinship carer, although there may just be a nasty shock. Does my hon. Friend agree that my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom)—whom I commend for securing this debate—is right to highlight the role that employers can play, in advance of legislation or local authority care, to support family members coping with that shock event, as well as with some of the long-term structural needs that Members have spoken about?
David Simmonds
My hon. Friend makes an important point, which I was going to develop next. We need to look at the practicalities and logistics of making kinship care a much more effective system and to address some of the challenges described by the hon. Member for Denton and Reddish (Andrew Gwynne).
The support of employers is clearly vital for family members to be able to take on that caring responsibility. Entitlements that exist in law for adoption and parenting are often very difficult to access for a whole host of reasons, which is something that needs to be explored. We need to consider the issue of finance and what it means to a family taking on a child with potentially very expensive needs that have to be met, when they themselves might not be in a position financially to do that directly. We need to recognise that this process saves the local authority potentially significant costs that would be incurred through a foster or residential placement, which is also an incentive to look at the way we provide support. The manifest benefits of kinship care placements, such as the sense of stability a child experiences being with a family member instead of with strangers at that stage in their life, are critical.
Yesterday, I went to the Hillingdon Hospitals NHS Foundation Trust to visit an acquaintance of mine, Dr Jideofor Menakaya, who is a leading national expert on care of neonatal children. It was an opportunity to see how Hillingdon Hospital is working with a local authority, through a family hub model, to develop a package of different kinds of support to address the care needs of children with significant medical challenges. Some children going through the care system have suffered disruption and may have health problems arising from what happened to them before birth. It is striking that when children are in an environment with supportive and loving family members around them, it is much more straightforward to address those medical and health challenges. I know that Members present have often spoken about that, and seeing it in action is fantastic. Recognising how the placement of a child with a kinship carer can make a real difference to addressing significant medical needs right at the start of life is a good example of why this care is so important.
To conclude, it is important to recognise that a degree of moral hazard is perceived in the wider public debate. Having been in local authorities and seen kinship care developing as an option that is often explored, I am certainly aware that people ask why we would pay family members to care for a child who is a member of their own family, especially when, historically, many people would do that voluntarily. We need to recognise that, as a country, we have high expectations of the experience that children will have. In order to make sure that the outcomes we want are achieved, we need to make sure we have system that supports children. Alongside adoption, fostering and special guardianship orders, the kinship care model is an excellent way of managing the risks to a child, ensuring a nurturing environment and doing so in a way that is good value and efficient for taxpayers.
Lee Anderson (Ashfield) (Con)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for securing this debate; I am extremely happy that she has because the subject needs debating.
Ashfield, which I represent, has the most looked-after children in Nottinghamshire. That is not a statistic I am proud of, and it is going to get worse. I work with my hon. Friend the Member for Mansfield (Ben Bradley) to make sure that we give our young people the very best chances in life.
I have some experience of working with young people who have been through the care system. Before I came to this place, I worked for several homelessness charities in Nottinghamshire. The children who came to us at 16 had been in the care system since they were babies—they had been pushed from pillar to post through it. I saw them first-hand; they would come in at 16 years old and we would try to get them on the right path.
For two years, we would spend tens of thousands of pounds on these young people who, as I say, had been pushed from pillar to post and had a very poor start in life. They had not had that loving relationship. To be honest, the girls who left at 18 or whatever age were pregnant, to get accommodation and to be able to sustain not a reasonable standard of living, but a standard of living. If they had a child, they would be bumped to the top of the housing list and get accommodation and all the benefits. What a waste of a young person’s life that is! They had all their life chances taken away because they had been through the care system without the support and love of their family.
The young men I used to work with in the hostels would leave, and within months a lot of them were in prison because they had not knuckled down and had not been in those stable, loving relationships. They had been through the care system since they were babies and that was all they knew. At 16, they were selling 10-bags on the corner of the street just to make a few quid. They had no idea how to look forward to a career. They had no real role models in their life; they had just been in and out of care.
Given the money spent on the care system, benefits and whatever else in later life, I have always said that it would be cheaper to put some of those children—I know this sounds a bit bonkers—into private education and give them the very best, so they could get the very best outcomes in life. That has to be much better, and it would break the poverty cycle. The young children I worked with were stuck in a poverty cycle; their parents were, and probably their grandparents before them. Hey presto—20-odd years and three generations later, the same young people are going to live the same sort of life as their parents. Unfortunately, I have seen first-hand that they have children, and a few months later those children are in care.
We are really missing a trick in this country. Our best asset is young people. We have a massive pool of young people, and we have let them down over decades. I speak from experience. I want to speak about a lady called Maxine in my constituency. Maxine is a little bit older than me—58, I think. I went to school with Maxine in Ashfield, back in the day. She is approaching 60 and looking forward to retirement but, unfortunately, her daughter is a heroin addict with all sorts of mental health problems.
Her daughter has three children, the youngest being six months old. Maxine had her daughter committed to an institution and took the children in, but the hoops she had to jump through to get the children into her house were incredible. Social services raked her out and poked into her private life from 35 years ago. Yes, she had made some mistakes in her past, but she was nothing more than a loving grandparent who did not want to see her grandchildren go into care. She wanted to provide a loving home.
Eventually, she came to me as an old friend and her Member of Parliament. I rattled a few cages and we got social services involved properly; we got some legal help for her, and I am glad to say she now has her grandchildren. I spoke to her on the phone today about this debate, she said she was very proud because the middle grandson can now read and write. He is seven. That brought a lump to my throat; I could write when I was five. She has taken it upon herself to give that young man a real start in life.
The biggest problem she had, once she got the children, was money. She said to me, “I could not cope with bringing my three grandchildren up properly without proper money.” Again, I had to get involved with the benefits system and sort her child benefit, child tax credit and everything out with the local authorities, who are under a lot of strain. I know they are because, as I said, Ashfield has the most looked-after children in the county.
Maxine is very happy now, but she is a woman, at nearly 60, who has given up her retirement after working all her life, done the decent thing and given up those final years to bring up her grandchildren. I think that is an incredible thing—and the hon. Member for Denton and Reddish (Andrew Gwynne) should be incredibly proud of what he did, because it is amazing.
Children need a loving home; they need to be with their parents or their family. We must remove some of the barriers to that, and the biggest barrier is financial. I hope that the Minister will look at this and see how we can move forward on it, because there are thousands of Maxines around the country who want to help their grandchildren but simply cannot afford to, so those children end up with a life in care instead.
The last time I saw Maxine was late last year; she was taking her grandchildren to Skegness. I think it was probably the first time they had been on a holiday. I went around to give them some ice cream money, because I thought that would be a nice treat for them. They were so happy and excited that they were going to Skegness for a week in a caravan. They would not have got that before, with their mother, because obviously she had her health problems. I thought, “You know what? She’s done really well, Maxine has.”
As politicians, if we cannot make it easier for people like Maxine, up and down the country, to look after those children, then we are failing society. I hope the Minister and the Government will look at this issue very seriously, and realise that young people are our best asset, and that it is actually cheaper, in the long run, to pay family members, such as grandparents, to give those children a loving home.
Kirsty Blackman (Aberdeen North) (SNP)
Thank you very much for chairing this debate, Ms Fovargue. I give massive thanks to the right hon. Member for South Northamptonshire (Dame Andrea Leadsom), who I know has worked in this area, particularly on improving the life chances for babies, for a significant time, and has done a massive power of work on it. I am glad that she has brought this debate today and given us the opportunity to speak about it.
I particularly recognise the speech given by the hon. Member for Denton and Reddish (Andrew Gwynne). It was a brave speech to give, but not an easy one. Nothing compares to lived experience in these debates. We are so often talking about things that an awful lot of us do not know enough about, so it is hugely important to have that experience. I thank him very much for bringing that to us.
I wanted to make a few comments, particularly from the Scottish point of view. I do not know very much about how the care system works in England, and may use terms that are Scottish-specific, and are not as relevant in England. I begin by apologising for that.
First, kinship care is absolutely not just about grandparents. It is important to recognise that. As the right hon. Member for South Northamptonshire said about the family that she talked about, it was not the grandparents who were caring for the baby. Some of the people who have come to me in my constituency, who have been involved in kinship care, are concerned that everything that relates to it is set up expecting the kinship carers to be grandparents.
Sometimes it is some of those younger kinship carers, who are in work, who are struggling to get the understanding, rather than the people on pensions, for whom there are more systems in place. In one of the families that I spoke to, the adults looking after the children went along to a meeting and everybody was 30 years older than them. They felt, “Well, we’re not going to get very good help, assistance and support from our peers here, because these people don’t seem to be our peers.” There was a gap there; they felt that something was missing.
Throughout Scotland, kinship carers get the same allowance as foster carers. That is important, because we are recognising the importance of kinship care. Unfortunately, my understanding is that kinship carers are not entitled to the child element of universal credit if the child is a looked-after child. Clearly, that needs to change.
There needs to be a recognition that although the children—babies, in the case we are talking about—are looked-after children, in a lot of cases the kinship carers are going through a significant number of difficult legal processes, as well as financial expense. Those carers probably did not plan or arrange their lives for this to happen. I do not see why the child element of universal credit should be excluded just because the children have the title “looked-after children”. We have to remember that for some people involved in kinship care, the children are not classed as looked-after children, so they are in a different category.
In Scotland, people who are kinship carers of babies can get the baby box. Provided that the baby is under six months old, a family involved in a kinship-care relationship can ask their social worker to ensure that the baby box is delivered. They can get that box if the child is under six months old. That is important in levelling the playing field and ensuring that everyone gets the universal entitlement that there is in Scotland, whether or not the baby is with the birth parents or in a kinship-care arrangement.
In Scotland, children are also eligible for the best start grants, for the Scottish child payment and for the twos provision—the provision in nurseries for children under three years old. They are eligible if the young person is a looked-after child, subject to a kinship care order or something related to that.
In Scotland, we have given huge attention to ensuring that looked-after children get the best possible outcomes. The situation brought up by the hon. Member for Ashfield (Lee Anderson) is an illustration of how much the system has absolutely failed if that is the outcome he has seen for the young people he worked with. In Scotland, we have made a promise to young people that we plan to keep: by 2030, all those young people involved in the care system will not be faced with a care system, but will be raised with love and compassion, which is what every young person should be raised with.
Whether children are raised with either or both of their birth parents, in foster care, in placements or in kinship care, or if they have a looked-after order in place, surely what we should want for all of them is that they should be raised with love and compassion. It is incredibly important to ensure that that is front and centre.
Previously, I was the looked-after children’s champion in my local authority, when I was a councillor. The issue is therefore pretty close to my heart. We need to do a significant amount more. In talking about the benefits of kinship care, there is the comparison with the other elements of the care system. It is important to have those other elements, but it is clear that some of them have comparatively very poor outcomes for children. For example, young people in out-of-authority placements have significant problems, which make it much more difficult for them to achieve their potential in life. Kinship care is one of the elements that results in the best outcomes for young people.
Why should kinship carers get paid? That was mentioned earlier. They should get paid because what has happened is not what they planned for. The system is difficult, which is necessary—I understand why: some sort of legal system needs to be in place around how kinship care works. But navigating that system, when people did not expect to have to navigate it, is expensive and difficult. We owe the people who choose to be kinship carers or foster carers looking after young people who are in corporate care. We owe them, and therefore we need to do better than we are currently doing.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a pleasure to serve under your chairmanship, Mr Mundell. I congratulate the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) on securing this important debate.
I put on the record that, until recently, I was an officer of the all-party parliamentary group on kinship care, chaired by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). In the work of that group, I met kinship carers regularly, and I was involved in the parliamentary taskforce on kinship care, which made recommendations on the additional support that should be provided to kinship carers.
I am really grateful to all right hon. and hon. Members who have contributed to today’s debate, but I pay particular tribute to my hon. Friend the Member for Denton and Reddish, who spoke so powerfully about his experience of caring for his grandson Lyle. He discussed the legal labyrinth that kinship carers face and the postcode lottery of support that applies across the country, but he also spoke movingly about the unconditional nature of love that characterises kinship care, and how lucky he is to be able to look after Lyle. I think we would all agree that Lyle is also very lucky to have such a lovely granddad.
Other right hon. and hon. Members have highlighted the time commitments entailed in kinship care; the disparity in entitlement to paid leave between new parents, whether by birth or adoption, and kinship carers; the disparity of access to free childcare affecting kinship carers; the importance of consistency in care and attachment for children in the care system, and how successions of people dropping in and out of a child’s life can compound the original trauma that led to them being in the care system in the first place; and about the negative consequences and costs to individuals and to society of failing to look after children in the care system properly.
I pay tribute to kinship carers across the country who care for babies and children when relatives or close friends are unable to do so. I think every one of us would find the idea of a cherished niece, nephew, grandchild or close friend being taken into care and looked after by strangers, however loving and capable, almost unbearable, particularly since such circumstances almost always result from a tragedy; addiction, domestic abuse or serious mental or physical ill health may have befallen the child’s birth parents. The 180,000 families across the country who have stepped in to care for the children of a family member or close friend know of the enormous personal sacrifice and considerable extra cost involved.
I also pay tribute to the Family Rights Group, Kinship and the Kinship Care Alliance for the work they do to support kinship carers, and also St Michael’s Fellowship, a very special organisation based in my constituency that provides support to very young parents specifically with the aim of reducing the risk of the need for care proceedings.
We know that the number of babies subject to care proceedings is increasing rapidly, from more than 2,400 in 2012-13 to more than 2,900 in 2019-20. Before we look at the support that is needed for kinship carers, it is important to ask why this increase is happening. The Family Rights Group has highlighted the erosion in early help and support for vulnerable women during pregnancy and immediately after childbirth. More than 1,000 Sure Start centres have closed since 2010, and the Government have so far committed to open family hubs in just 75 locations across the country. The National Children’s Bureau estimates that Government funding available to councils for children’s services fell by 24% between 2010-11 and 2019-20, from £9.9 billion to £7.5 billion in real terms, and the impact of the pandemic is likely to have made it even harder for councils to offer early intervention for families. There is a direct link: if support that could be given to vulnerable women who are pregnant is not being provided, the risk that their babies end up being subject to care proceedings will increase.
We know that domestic abuse is a common reason for the removal of children from their parents, yet too often mothers who have experienced domestic abuse feel that they are punished further by a child welfare system that blames them for failing to protect their child while not holding the perpetrator of their abuse to account. The failures of the Government to ensure that early help is always available to the most vulnerable families, wherever they live in the country, has a direct bearing on the increase in the number of babies who are subject to care proceedings.
It is also very concerning that when babies are subject to care proceedings, short-notice hearings are now the norm, with 86.3% of cases involving babies in 2019-20 being heard at short notice, and one in every six cases involving a newborn baby heard on the very same day. Clearly, there are emergencies in which the safety of the baby demands that immediate action is taken, but we must discuss why emergency hearings are becoming the norm rather than the exception, and understand in how many cases involving short-notice hearings there were missed opportunities to identify risks, offer support to parents, or explore kinship care options earlier. Short-notice hearings allow no time for families to prepare, to decide whether and how they can take on the care of a baby, or to ensure they are properly represented and that there are good channels of communication with children’s social services.
Since we know that kinship care delivers better outcomes for children than many other forms of non-parental care, a system that routinely fails to ensure that kinship options for care of a baby are properly explored surely lets down babies and their families. Kinship estimates that for every 1,000 children who are removed from local authorities and put into kinship care, £40 million is saved in placement costs.
The Family Rights Group introduced family group conferences to the UK from Australia in the 1990s. They bring together a child’s family and other adults who are important to the child, to create a plan for the child that addresses concerns. They can result in support being provided to parents, which removes the need for care proceedings, or they can explore care options within the wider family.
Kinship care delivers better outcomes for children and their families and saves the Government millions of pounds each year, but many studies have acknowledged that kinship carers are not well supported. That creates perverse incentives and often unbearable hardships and strain for families who want to do the right thing for the children they love.
David Mundell (in the Chair)
Order. Ms Hayes, can you bring your remarks to a close? I am keen to ensure that the Minister has enough time to respond.
Helen Hayes
I will finish by saying that there is an urgent need for the Government to look comprehensively at the framework of support that is offered to kinship carers in order to enable more families to take on the care and support of a child whom they love.
David Mundell (in the Chair)
I call the Minister, but I want to ensure that Dame Andrea has the opportunity to respond.
The Parliamentary Under-Secretary of State for Education (Will Quince)
I will be as brief as I can, Mr Mundell. Time is short, and there are so many comments to respond to. Let me first thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for securing this important debate and for all of her work on “The Best Start for Life” and her commitment to families, babies and children.
My right hon. Friend rightly said that parents and families come in all shapes and sizes. She is absolutely right, and we should celebrate every single one. She is right to raise the important role of kinship care, particularly in the context of babies. She raised her constituent’s case, and I would like to apologise for the experience that her constituent had. I assure her that I am very much alive to the experiences her constituent had. The Government are committed to ensuring that kinship carers receive the necessary support to give their children the support they need.
My right hon. Friend rightly mentions that there are many reasons why babies and older children can no longer live with their birth parents. In many cases, the reasons are sad or tragic. In others, it is for their own protection. I am full of admiration for kinship carers. The hon. Member for Denton and Reddish (Andrew Gwynne) eloquently and articulately set out the role of kinship carers and the love and affection that he has for baby Lyle—though he is not so much a baby now.
It is not just grandparents who step up to offer loving homes; it is aunts, uncles and siblings. They often make considerable sacrifices, as was set out by my hon. Friend the Member for Ashfield (Lee Anderson), who mentioned his friend and constituent Maxine. Last year I met a support group for kinship carers, and they set out some of the challenges they experienced as kinship carers. They are all heroes and we must do more as a Government to support them. I will come on to what I want to do in this area and how I believe we can better support kinship carers and special guardians. I will not talk in very much detail, as I do not have much time, but I am happy to do so at a later date.
It is clear that there are benefits to children remaining with the wider family wherever it is possible and safe to do so and when it is with someone they know and trust. It is about a sense of belonging and maintaining family links. It is about the people and places they know. It is about permanence and the potential for future reunification. As the hon. Member for Denton and Reddish rightly pointed out, fundamentally it is about love.
I was fast scribbling down points raised during the debate. My right hon. Friend rightly raised—I was fast scribbling these down while she did so—access to support, access to financial support, carers leave, parental leave, employment rights, support groups and advocacy. I would love to touch on every single one of those issues, but I fear I am not going to be able to do so in the time left available to me.
Access to support, both financial and otherwise, is critical. We rightly give a lot of autonomy to local authorities, but is always about striking a balance. Yes, there is a bit of a postcode lottery, but at the same time it is about balancing local discretion and the autonomy of local authorities to make the right decision, because they are the ones that best know their residents. It is about addressing the inconsistency and patchy provision of support at a local level while at the same time making sure that the support that is available is tailored to the individual needs of the kinship carers. The support that Maxine may have needed could have been very different from the support that the hon. Member for Denton and Reddish and Allison need, so having local discretion is also very important.
We know that the financial impact of kinship care can be considerable, especially if it is unplanned. There is statutory guidance, and it is clear that local authorities should consider financial help for kinship carers, but as my hon. Friends the Members for Mansfield (Ben Bradley) and for Ruislip, Northwood and Pinner (David Simmonds) set out, it is patchy and the cost of failure in children’s social care is high in terms of both the outcomes for children and the financial cost to the local authority.
There is so much that I would love to say, but I am very much alive to some of the other pressures that kinship carers can face—whether it is employment rights, housing, benefits, HMRC, universal credit or child benefit. I see my role as a cross-Government one, and although I do not have all the levers to pull, it is part of my role to ensure that other Government Departments are playing their part and ensuring better support for kinship carers.
In the minute or so I have left, I want to say how sympathetic I am to the points made by my right hon. Friend the Member for South Northamptonshire on the apparent disparity between the support offered to foster parents and adopters versus kinship careers. It is complex and there are considerable challenges—not least because most kinship care arrangements are informal and familial, which makes it challenging—but I want to explore what more we can do. I look forward to working with my right hon. Friend and others from across the House to improve the service and support that we are able to offer.
I would like to put on the record my sincere thanks to my right hon. Friend for securing this important debate, and I want to reiterate my commitment, and that of the Department, to champion across Government the needs of kinship carers. I assure my right hon. Friend, and indeed the House, that I am committed to ensuring that those who step up to take a baby or child into their care receive the support that they need to give that baby or child the best possible start in life. As I say, if I had more time, I would love to answer every single point in detail, but I look forward to working with my right hon. Friend and others from across the House, as well as with charities in this sphere, to improve the support and provision for families.
David Mundell (in the Chair)
I call Dame Andrea Leadsom to wind up the debate by 17.49.
Dame Andrea Leadsom
Thank you, Mr Mundell. I pay tribute to my hon. Friend the Minister, who is incredibly supportive of the work on early years and who has done so much to support improving services for babies. It has been such a fantastic debate, and we have heard two fabulous stories. We heard about the hon. Member for Denton and Reddish (Andrew Gwynne), his partner Allison and baby Lyle. They do fantastic work, and I pay tribute to the hon. Member—it is all about love. We also heard about Maxine and the incredible sacrifice that she made to raise three of her grandchildren.
Those are the things that people do, and it is about love. It is about trying to make sure that, in raising the next generation, we give them the capacity to have fulfilled and happy lives. We absolutely know that the best way to do that is in the bosom of the family, so we need to support the family network. I would like to leave this debate with the thought that the best place to do that is in the perinatal period. That is when the building blocks for emotional good health are laid down, so the earlier we do that, the better. It is vital to give kinship carers and other carers maternity and paternity rights in that early period. If we can get employers to recognise that kinship care is the best solution and much better than any other looked-after or adopted solution outside the bosom of the family, we should always start with that. We should always put the baby and child at the centre of everything we do, look at it through their eyes, and give the best solution for them.
David Mundell (in the Chair)
I congratulate the right hon. Lady on her immaculate timing.
Question put and agreed to.
Resolved,
That this House has considered kinship care for babies.
Written Statements
(2 years, 1 month ago)
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International Development Association: 20th Replenishment
(2 years, 1 month ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Elizabeth Truss)
The UK will shortly publish its international development strategy and the FCDO will publish its overseas development assistance (ODA) allocations, which will promote British expertise and bring more countries into the orbit of free, democratic nations and ultimately benefit the British people.
As part of this, we are rebalancing the aid budget towards bilateral programmes to give the UK greater control and flexibility over how taxpayers’ money is spent.
In December 2021, the UK pledged £1,414 million to the 20th replenishment of the World Bank’s International Development Association (IDA20). This funding will support covid-19 vaccines, tackle climate change, get girls back into school and promote women’s economic empowerment.
The UK will be the third largest donor to IDA20, after the US and Japan, and our pledge will bring us more in line with our share of our global ODA.
Our IDA20 pledge is a reduction of 54% compared to our previous pledge to the 19th replenishment. This will allow us to focus funding on UK bilateral programmes and control how exactly taxpayers’ money is used to support our priorities, including clean infrastructure investment, promoting British expertise, supporting women and girls, and delivering humanitarian aid.
Thanks to the UK’s engagement in the IDA20 negotiations, the World Bank has committed to:
provide health services to over 285 million people;
lose learning gaps and improve learning outcomes for girls in 20 IDA countries;
support IDA countries to contain the covid-19 pandemic through vaccine roll-out, preventive measures, testing, treatment and care;
ensure that at least 35% of IDA financing tackles climate change;
fully align World Bank IDA operations with the Paris agreement by 2023;
support women’s empowerment by expanding access to affordable sexual and reproductive, adolescent and maternal health services in at least 30 IDA countries;
support all IDA countries to strengthen preparedness for future crises; and
mobilise private sector investment to create jobs in IDA countries.
We will continue to push for multilateral reform, building alliances with like-minded partners and improving value for money.
Consistent with the International Development Act 2002, and before any financial contributions are made, the Government will lay statutory orders relating to the IDA20 replenishment for the consent of the House of Commons.
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EU-UK Withdrawal Agreement Joint Committee
(2 years, 1 month ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Elizabeth Truss)
The Withdrawal Agreement Joint Committee met yesterday in Brussels. I co-chaired the meeting alongside European Commission Vice-President, Maroš Šefčovič. A joint statement was agreed and published on gov.uk.
The Committee received an update on the work of the Withdrawal Agreement Specialised Committees since the last meeting on 9 June. They also discussed citizens’ rights and progress on negotiations to find practical solutions to the problems with the Northern Ireland protocol.
On citizens’ rights, both parties noted the continued constructive collaboration to ensure that the rights of our respective nationals are protected. The UK urged the EU to ensure consistent support for all UK nationals living in the EU, with a focus on three areas of concern: first, UK nationals in member states having difficulties accessing their rights because of requests for permits which are not required; secondly, member states requesting information of UK nationals which is not required under the withdrawal agreement in order to secure their status; and thirdly, a lack of safeguards and clarity on appeals where residence is not granted. The EU raised its concerns with aspects of the UK’s EU settlement scheme, focused on the legal base for guarantee of rights and the need for those with pre-settled status to apply for settled status at the point of qualification. The UK made clear there is no legal uncertainty for EU citizens in the UK.
In relation to the Northern Ireland protocol, both parties emphasised that they shared an overriding commitment to protect the Belfast/Good Friday agreement in all its dimensions. The UK outlined the problems the protocol posed for trade within the UK internal market and Northern Ireland’s integral place in the United Kingdom, which was putting at risk the delicate balance essential to that agreement and political stability in Northern Ireland. This underlined the increased urgency of finding solutions. Both sides reiterated the importance of further engagement, including with the Northern Ireland Assembly and Executive, and wider Northern Ireland civic society and business.
The UK and EU also discussed activity in the Withdrawal Agreement Specialised Committees since the previous Withdrawal Agreement Joint Committee on 9 June 2021, and agreed to adopt two technical decisions:
Decision No. [1]/2022 amending the agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community—principally covering data sharing linked to social security co-ordination.
Decision No. [2]/2022 amending decision No. 7/2020 establishing a list of 25 persons who are willing and able to serve as members of an arbitration panel under the agreement—to reflect a change on the EU side.
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Healthcare Payments to the EEA and Switzerland
(2 years, 1 month ago)
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The Minister for Health (Edward Argar)
First Annual Report on International Healthcare Payments under the Healthcare (European Economic Area and Switzerland Arrangements) Act 2019
I have today laid before Parliament the first annual report on international healthcare payments pursuant to section 6 of the Healthcare (European Economic Area and Switzerland Arrangements) Act 2019.
The 2019 Act was enacted as a result of the UK’s decision to leave the EU. It provided the legislative means to respond to a wide range of possible outcomes of the UK’s exit from the EU in relation to reciprocal healthcare, including the implementation of new reciprocal healthcare agreements with a European economic area (EEA) state, Switzerland or an international organisation.
The 2019 Act implements the social security co-ordination protocol to the UK-EU trade and co-operation agreement. That agreement ensures UK residents continue to benefit from reciprocal healthcare arrangements, including covering necessary healthcare when travelling to Europe (previously known as the EHIC scheme, now the GHIC scheme). Planned healthcare arrangements have also continued after EU exit (known as the S2 scheme); and eligible pensioners, frontier workers and certain other groups can have their healthcare costs covered when they move to the EU (known as S1 scheme). Under the 2019 Act, the UK has also implemented the various separation agreements with the European economic area and Switzerland.
Building on the successful continuation of EU reciprocal healthcare agreements, the Government now wish to negotiate further agreements with other states to bring greater benefits for UK nationals. The Health and Care Bill includes amendments to the 2019 Act which will enable us to implement comprehensive healthcare agreements with countries outside the EEA and Switzerland.
This report covers payments made under the powers conferred by the 2019 Act between the end of the transition period on 31 December 2020 and 31 March 2021. During this period only one payment was made under the 2019 Act payment powers for discretionary planned treatment. Other payments made to the EEA and Switzerland during this period were for healthcare incurred prior to the end of the transition period. These payments are reimbursable as a matter of EU law and not therefore paid pursuant to the 2019 Act. Member states are now in the process of submitting claims which have been paid under the 2019 Act, details of which will be provided in the second report which will be published after the end of March 2022.
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UK National Preventive Mechanism: Annual Report
(2 years, 1 month ago)
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The Minister of State, Ministry of Justice (Victoria Atkins)
The United Nations optional protocol to the convention against torture and other cruel, inhuman or degrading treatment or punishment, which the UK ratified in December 2003, requires states parties to establish a national preventive mechanism (NPM) to carry out visits to places of detention to prevent torture and other cruel, inhuman or degrading treatment or punishment.
The Government established the UK NPM in March 2009 (Official Report, 31 March 2009; Vol. 490, c. 56WS). The UK NPM is currently composed of 21 scrutiny bodies covering the whole of the UK.
Following previous practice, I present to Parliament the 12th NPM’s annual report (Command Paper 607). This report covers the period from 23 March 2020 to 1 April 2021.
I commend the important work that the NPM has carried out over the year and the NPM’s independent role in safeguarding the human rights of detainees across the UK and its role in preventing torture and inhuman and degrading treatment. The Government take allegations of torture and cruel, inhuman or degrading treatment very seriously and any allegations are investigated fully. The Government do not participate in, solicit, encourage or condone the use of torture for any purpose.
The NPM’s report focuses on the ongoing impact of the covid-19 pandemic for those in detention settings. The report notes the actions taken by detention authorities in response to the pandemic which averted the serious risk of large numbers of infections among people in detention, but that these had impacts on key issues such as the time out of cell, education provision and visits.
I am grateful for the work the NPM and its members have continued to undertake during the pandemic and the findings set out in its report. The Government are committed to ensuring that those in detention in the UK are treated with respect and care.
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Grand Committee
(2 years, 1 month ago)
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Arrangement of Business
(2 years, 1 month ago)
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The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, Members are encouraged to leave some distance between themselves and others and to wear a face covering when not speaking. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Revised Energy National Policy Statements
(2 years, 1 month ago)
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Lord Callanan
That the Grand Committee takes note of the draft Revised Energy National Policy Statements laid before the House on 11 October 2021.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, our purpose here today is to consider updated energy national policy statements, which we propose to designate later this year, subject of course to the outcome of a public consultation and parliamentary scrutiny.
NPSs for all types of nationally significant infra- structure should comprise clear guidance on the legal, policy and technical issues that project sponsors need to consider as part of their applications for planning consent under the Planning Act 2008. They enable the Planning Inspectorate to examine the application before any recommendations are sent to the Secretary of State for determination, and underpin the delivery of legally robust and timely planning decisions by the Secretary of State. Importantly, where the need for a type of nationally significant infrastructure is established in an NPS, that need cannot then be questioned on an individual application for development consent.
The NPS framework is complemented by two supporting assessments: the appraisal of sustainability and the habitats regulations assessment. The appraisal of sustainability ensures that the likely national environmental and socioeconomic effects of the national policy statement are identified and evaluated. The habitats regulations assessment identifies and assesses the likely effects of the national policy statement on nature conservation and specially protected sites.
The suite of energy NPSs was first designated in 2011. They set out national energy policy and form the framework for decision-making on applications for development consent for nationally significant energy infrastructure projects. The overarching strategic national policy statement, EN-1, sets out the need case for certain energy infrastructure and general assessment principles. The other five NPSs set out technology-specific assessment principles. The Government published their energy White Paper, Powering Our Net Zero Future, in December 2020. The White Paper presents our vision of how we make the transition to clean energy by 2050, building on the Prime Minister’s 10-point plan.
Of course, since the energy White Paper, the Government have published the Net Zero Strategy. This sets out clear policies and proposals for keeping us on track for our coming carbon budgets and for our vision for a decarbonised economy in 2050. The strategy raises our ambitions to hit our climate targets, as well as delivering our goals to create new jobs and industries as we capitalise on green economic opportunities. The energy NPSs need to reflect this scale of ambition.
The agenda established through the energy White Paper and net-zero strategy mark the start of a decisive shift away from unabated fossil fuels to clean energy technologies. This means renewables, nuclear, CCUS and new technology options such as low-carbon hydrogen. Deploying a range of low-carbon technology options keeps us in line with our objective to ensure that our supply of energy always remains secure, reliable, affordable and consistent with our net-zero target.
The Government decided that it was appropriate to review the existing energy national policy statements to ensure that they reflect the policies set out in the energy White Paper. The review would ensure that we continue to have a planning policy framework which can deliver the investment required to build the infra- structure needed for the transition to a clean energy system.
I should be clear that updating the NPSs is not the only way that we will satisfy our infrastructure needs. Through the national infrastructure strategy, the Government have committed to a major reform programme to refresh how the nationally significant infrastructure project regime operates. This reform programme will make the planning regime more effective and bring government departments together to deliver more certainty in the process and faster outcomes. The Department for Levelling Up, Housing and Communities will be providing further information on how it is taking the NSIP reform programme forward later this year.
The draft revised energy NPSs, which we have consulted on, reflect our policy that a diverse mix of technologies will be required to deliver on our energy objectives. However, where a technology no longer meets our objectives, it is right that this is removed from the mix, and the NPSs are clear that there is no longer any role for new nationally significant coal or oil-fired electricity generation. We believe that the market is best placed to determine the best solutions for very low emissions and reliable supply, at a low cost to consumers. This means that we should use the NPSs not to deliver specific amounts or limit any form of electricity infrastructure, but rather to set out the framework under which they can be consented. This approach facilitates competition and spurs both investment and innovation in technologies which are cheaper and more efficient.
We will need a significant amount of new energy infrastructure. Electricity demand is set to double as we electrify heating and transport. Networks need to adapt for the future electricity system. We will also need oil and gas to support a smooth and orderly transition to a clean energy future and to ensure security of supply. Natural gas will still be needed for heating homes and workplaces, until we are able to deploy low-carbon alternatives, so we need infrastructure to support the importation, storage and transmission of oil and gas. Natural gas infrastructure might also be repurposed in the future for use by other gases required to deliver a net-zero economy, such as low-carbon hydrogen or for transportation of carbon dioxide to storage.
The nuclear power generation NPS, EN-6, was reviewed but not amended as there are no changes material to the limited circumstances in which it will have effect. However, it would not be appropriate to withdraw the NPS at this time given that the information that it contains may be relevant to development consent order applications under examination and the need to maintain a stable nuclear planning and consent regime. The Government went out to consultation with an updated energy NPS last September. The consultation closed in November. The draft energy NPS has been scrutinised by the BEIS Select Committee in another place; its report and recommendations are due to be published shortly, I am told. We will consider the recommendations and responses to the consultation, and publish our response in due course.
National policy statements for energy must be clear about the urgent need for new energy infrastructure, to meet our climate change commitments and continue to ensure a secure and affordable supply of energy. They must also identify the potentially negative impacts of such infrastructure at a local level to enable planning decisions to be taken which weigh up this national need against potential impacts, based on expert evidence and with full stakeholder involvement. The documents that we have consulted on strike the right balance between these factors. I appreciate that there are many views on this, and I look forward to hearing all the contributions to today’s debate. I beg to move.
Lord Whitty (Lab)
My Lords, I thank the Minister, particularly for explaining the relationship of these documents to planning decisions at both national and local level. Last night, I took home all the documents that are piled up over there, together with the energy policy White Paper and hydrogen White Paper, and tried to make sense of them. I failed utterly, although the Minister’s explanation has made it slightly clearer. Nevertheless, I shall bore the Committee with my reflections, looking at the totality of the papers before us.
I note in the present draft that the Government frequently use nuanced forms of modal verbs—namely, could or can rather than should or will. That is perhaps too loose a form of words for the immense task that we have before us in meeting our net-zero targets in particular. As the Minister said, those net-zero targets have a direct impact on not only what are traditionally regarded as nationally significant developments but the local effects that those developments will have on their areas and populations.
Therefore, the final version needs to be a little more definitive than the one before us. The key target here is clearly that for 2035. Decisions taken in planning now will not see fruition for at least three or four years and, in many cases, much longer. The 10-year run-up to 2035—meeting the 78% reduction, I think in emissions by that date— therefore depends on crucial decisions to be made in the next two or three years. That requires clearer guidance in the overriding policy statement, less freedom of manoeuvre and less nuance in the guidance given, otherwise we will have inconsistent decisions.
I take just four examples of where we need a clearer decision on the basis for any national or local decisions before they can be taken. The Minister will be familiar with the arguments in many areas—we debated nuclear yesterday and have debated other aspects—but I shall go through them quickly.
The first is obviously the replacement of natural gas heating for homes and buildings. On that, we need clear decisions on whether a hydrogen-based system can meet most of our gas needs, whether we will have enough hydrogen and how it will be produced—presumably, it will be green hydrogen. The hydrogen strategy itself, although very useful, leaves a lot of questions unanswered. We need to know whether there will be differential impacts in different parts of the country. If we are to have large-scale hydrogen for industrial and domestic purposes, heating may well extend only to the area within a few miles and everybody else will have to rely on transferring on to the national grid for direct electrification of their heating or, in the more rural and suburban areas, probably heat pumps. So there will be different impacts of that decision but if what is currently natural gas heating, which heats 80% of our homes and buildings, is to be replaced, we must be clear how it will be, and in what parts of the country it may be replaced by different forms of lower-carbon heating.
My second example is related, because one of the replacements for our gas grid proposed for our domestic heating has been district heating—effectively, local networks. If we are to have local networks on a major scale, we cannot rely on a planning process which takes propositions for development, retrofitting or individual buildings on a one-by-one basis. You have to designate substantial domestic or industrial building areas to be obliged to take the form of district heating that is given planning permission on the grounds that it is nationally significant. If we are to see district heating—I am in principle in favour of it, as long as its consumers are protected, because clearly there is no competition in those circumstances—we need to ensure that we have powers to designate the whole area, otherwise, by and large, it will not work. That includes not only new developments but the retrofitting of existing buildings and factories.
Thirdly, there is the issue of offshore wind. It has been a huge success and, in the period between now and 2035, will continue to be one of the major contributors to reducing our total carbon emissions. However, the development of offshore wind has been somewhat haphazard. By and large, a single array has a single landing point onshore and each is owned by different companies or consortia. There are planning considerations, usually addressed locally to start with, of how you bring offshore wind onshore and what the connections look like, because they will also be mostly in areas of natural beauty or other rural areas which do not like the disturbance. If every array has an individual landing point, that is a huge number of planning decisions if we are to meet the objectives in the energy White Paper.
If, however, there were to be an offshore network so that several arrays could be connected, some engineers argue that we could reduce the number of landing points by something above two-thirds. That requires a government intervention to ensure that we have an onshore and offshore network that limits the number of onshore connection points. That is a key strategic decision and, if decisions on new or enhanced offshore arrays are taken on a one-off basis, we will never reach the decision to amalgamate them into an offshore grid.
My second-to-last point relates to nuclear, which we discussed at some length yesterday. It is also important that we have early government decisions on a number of nuclear aspects, particularly the designation of nuclear reactor sites—a project that successive Governments have utterly failed at over the past 20 or 30 years. Any sizeable nuclear reactor will create significant planning effects on the surrounding area and there will be strong political pressures as well. That means that, if we are to go for a new generation of nuclear power—by and large, I am in favour of that, whether on the size of Sizewell or on a smaller size facilitated by the Rolls-Royce developments on small modular reactors, et cetera—we need to know where it will go and all the planning hurdles have to be overcome. That will again require a much clearer government decision on where those sites will be.
Of course, the most acute and difficult decision for the Government, and for all of us, is the issue of the storage of waste and waste disposal. We already have a historic legacy of waste from now-closed reactor. If we are to have a new generation of nuclear, while it will be much more efficient, there will be high-radioactivity waste to be disposed of. We need a decision on that urgently.
I hope that the final version of the statement indicates that there are key decisions that the Government have already taken, or are about to take, which will define the parameters of any subsequent decisions, even on relatively large-scale projects. I hope that those will be addressed.
My final point is that as far as I could see, certainly in the overriding document, there is a major omission on carbon reduction. As I understood it, the National Infrastructure Commission indicated that the energy efficiency project, to insulate and otherwise improve the energy efficiency of our homes, should be regarded as a nationally significant project. That is operated street by street, at best, but it is still in totality a major contribution towards meeting our net-zero targets. It should really be dealt with in the same way as these other single-site projects. I hope that the Minister, and the final version, will take that into account and that it will be somewhat shorter and more to the point than the present document, so that all protagonists can understand where we stand on that and where their own projects stand.
Baroness Neville-Rolfe (Con)
My Lords, energy is a serious topic, as we have been forcefully reminded very recently. Indeed, my own house in Wiltshire was cut off from the electricity grid as a result of recent storms for two days. Since our village has no gas supply, that brought real discomfort to all, but especially of course to the very old and infirm. Luckily, the village has an emergency generator, started up by supportive volunteers who learnt who and how to help across our community during Covid.
My first point is a simple one. It is the responsibility of any Government to ensure that energy is supplied as required both to domestic customers and to enterprises of all kinds. Any Government who fail in that task will be judged harshly and might well not be a Government for very long. No amount of enthusiastic rhetoric on sustainability, climate change or habitat enrichment will serve as an effective excuse. I am not sure that the document before us is as unequivocal in recognising this reality as it could, and ought, to be. Keeping the lights on, literally and metaphorically, is the number one priority in energy policy. All other aspects are secondary to that.
Having said that, it is sensible to have documents of the kind before us today to help with planning and other decisions. Naturally, there will be a need for constant revision, since the world changes more quickly than we sometimes recognise. Twenty-five years ago—less than a third of the average lifetime—most countries, including this one, relied heavily on coal. Indeed, a recent UK Prime Minister was heavily criticised by some politicians for allegedly devastating the UK coalmining industry. Now the same people are critical of any attempt to retain any coal mining at all in the UK, even if the objective is to retain one or two heritage railway lines, as some may recall from our debates on the Environment Bill and my vain efforts to save the Thomas the Tank Engines. How the world changes! Coal was once the epitome of virtue to some; now it represents the devil to the same people.
Personally, I favour a more nuanced and balanced approach to energy policy. I would add that gas is a very important part of any transition to net zero, and that shale has played a major part in the transition in the US, and indeed in its growth. So we need to see regular textual revisions to these documents every few years, as policies change and innovations come through. The noble Lord, Lord Whitty, has rightly just talked about the potential role of hydrogen and town heating systems, as well as of nuclear, where I think we are on more common ground. On this question of revisions, I very much hope my noble friend the Minister can indicate how often he envisages that changes might be made.
My other main point is to emphasise how much investment there will need to be in infrastructure if the presently expected move towards electrification, including electric vehicles, comes to pass. That has two major implications. First, we need to be clear how and where the investment will be made. We need to be assured that those concerned with the grid and other electrical infrastructure have a viable plan to achieve this investment. I am not clear that we can yet feel confident on that point. Secondly, we need to know from whence the very large sums needed are to come. I note that a main method of financing green investments so far has been to impose green levies on consumers. That is one approach, but I note that it has quickly come into question now that electricity prices have risen steeply and inflation has taken off sharply. Some argue, rightly I think, for moderation, but all this certainly needs more thought.
Finally, I return to the storms and what they have taught me. Despite the advent of the 105 number, which I remember launching a few years ago when I was fortunate enough to be in the Minister’s position, consumers are in serious trouble when their power lines go down. We also need more thought about how people might prepare. Perhaps retailers could start selling first-aid style kits, with candles, matches, gloves, woolly hats, primus stoves and an old-fashioned phone that plugs in when the wi-fi and cordless phones do not work. This of course is not an issue for the statements before us, but we always need to think about how to make life easier and bearable for the consumer. Throughout history, too much of the energy debate has been provider and government-led, and that concerns me. I was therefore glad to hear that our Economic Affairs Committee will be looking at some of these knotty issues. I hope it will be able to help tackle the problems, including those that hit the poorest in the country, old and young.
Lord Teverson (LD)
My Lords, I welcome this document. I remember some 10 years ago sitting here and going through all six of the previous documents. It does not seem so long ago, which is a sad fact, but there we are. It is right that a lot has changed since the statements first came out during the coalition Government.
I do not want to talk particularly about net zero; I want to talk about the other emergency that we have and ask a number of questions on it: the biodiversity emergency, and how that relates to the national policy statement. There are some specific questions that I want to ask at the end. I welcome the fact that biodiversity is mentioned quite a bit—I have mainly gone through the overarching document—but I do not understand how the Environment Act that we passed at the end of last year relates to biodiversity net gain in terms of nationally significant infrastructure projects. Paragraph 4.5.2 of the overarching document states:
“Although achieving biodiversity net gain is not an obligation for projects under the Planning Act 2008, energy NSIP proposals should seek opportunities to contribute to and enhance the natural environment by providing net gains for biodiversity.”
Yet Schedule 14 to the Environment Bill, which is about biodiversity net gain, states:
“The biodiversity gain objective is met in relation to development for which planning permission is granted if the biodiversity value”
is attributable to the percentage, which, as we know, in the Environment Act is 10%. Given that the Environment Act, primary legislation passed only at the end of last year, relates biodiversity net gain to a planning permission —and I understand that NSIP is a planning permission— does the 10% net gain apply to such projects? Is that true also of marine projects? In any case, even if the Environment Act does not apply to them, does the Secretary of State expect that marine projects will also create biodiversity net gain?
It is great to go on about biodiversity net gain, but, as we know, there is a requirement in the Environment Act that such net gain be protected for at least 30 years. That has to be done by local authorities, as I understand it from the Environment Act, but when it comes to NSIPs, who is going to make sure that net gain that is promised as part of NSIPs’ planning permissions is actually delivered through that period of at least 30 years? If that policing and enforcement do not take place, we know that it will not happen or will disappear along with everybody’s corporate memory of the original agreement. I would be very interested to understand the Minister’s idea of that. I am sure that both he and I have exactly the same objectives in that area.
On a similar environmental theme, I could find no mention within the documents of the circular economy. This is one of the other areas that government is starting to get involved in and where it is starting to see that, rather than a linear economy, we should move to a circular economy in terms of global resources. How will the Government start to look at that in terms particularly of renewable energy as well as all the other areas that there are? On renewable energy, we have got as far as looking at wind turbine blades, but that is about as far as it goes, and I do not think that the industry has been fully responsible yet in that area.
On waste disposal, the noble Lord, Lord Whitty, was absolutely right. I know that the Government are doing a study on networks of offshore wind pipelines and energy cables; it is particularly important, as development starts in the west, in the Celtic Sea, to understand what is going to happen, so that we do not have the sort of spaghetti junction that we have in the North Sea.
I also want to comment briefly on nuclear waste. I was disappointed that EN-6 was not actually updated. I think that the Minister may reply by saying that it is in process, which, if so, is fair enough. But on page 16 of the original EN-6, the footnote, which I thought was a typing error when I first read it, says:
“Geological disposal of higher activity waste from new nuclear power stations is currently programmed to be available from around”—
wait for it—“2130”. That is still 120 years away, and I wonder whether the Government would like to reconsider that and maybe bring it a little forward. The document does say at the end, to give it its due, that they—this is the coalition Government—might see
“potential to bring forward this date”.
I shall put it in my diary to check if it happens by then, but it would be great if we could bring it forward.
Lastly, I again checked “energy security” on a phrase checker, and it came up with “text not found”. The document does mention energy security, but only in relation to two things. One is the capacity market, all around the area that the noble Baroness, Lady Neville-Rolfe, mentioned—keeping the lights on—which the capacity market is very much about. The other area is cyberattacks, which as we know are very topical and important. But there is nothing on what we would understand more broadly as energy security in this overall document, and I find that quite an interesting omission.
I look forward to the Minister’s reply, particularly in the area of who is responsible for making sure that biological and biodiversity net gain actually happens over the next 30 years for this level of project.
Lord Moynihan (Con)
My Lords, I declare my interests. My commitment to the environment came with me into my first ministerial job in the 1980s, and the energy world provided me with a second opportunity of ministerial office. Since then, I have regularly worked in both sectors. I was privileged to be elected the first president of the British Wind Energy Association, and I introduced the first competitive market framework for renewables in the UK, the non-fossil fuel obligation in 1990. Since then, as set out in the register, I have continued to work in the energy sector, culminating in my current chairmanship of Buckthorn Partners, which works in energy transition.
This short debate, particularly well set out in EN-4 before the Committee, and the wider strategy referred to by my noble friend the Minister, provides us with the opportunity to discuss the issues set out admirably by the noble Lord, Lord Whitty. Looked at rhetorically, the current high watermark of the relentless destructive attack on the oil and gas industry, with John Kerry citing the May 2021 International Energy Agency report as evidence that there should be no more new oil and gas investment anywhere in the world, is foolish and ultimately destructive. That is so in political terms, as it ignores the transitional pain inflicted on families and industries around the world, and it is counterintuitive, as it encourages highly polluting coal to be used in electricity generation, thus causing yet further pollution to our planet.
However, today, at least in this Committee, we have a more moderate, sensible and civilised energy debate, as the documents before us highlight. We vitally need to produce gas within a regime of strict environmental standards against the chorus of politicians clamouring to inflict windfall taxes on North Sea producers to help struggling families, who are struggling primarily because of eye-wateringly expensive energy policies. This came as we brought to a close a record year of low investment on the UK continental shelf. This has to change.
We all watch European customers, both residential and industrial, facing the extreme post-Covid pain of record power prices and gas prices, at some $200 per barrel of oil equivalent, which means that a European fertiliser producer, or any European industrialist using natural gas as a feedstock, is now paying eight to 10 times more for energy than a US or Middle Eastern competitor, and nearly 15 times more than a Russian competitor, due to the unprecedented differential between global spot prices, at some $200 per barrel of oil equivalent and much lower market gas prices in self-sufficient countries such as the US, Russia, et cetera. Europe, including the UK, could now lose a significant proportion of its industrial base to “home fire” very quickly indeed if this energy crisis continues.
We also anguished in 2021 at the all-benevolent coal-to-gas switch, the most effective atmospheric cleansing policy yet devised, being reversed in China and other parts of Asia as they burned more coal again due to gas prices reaching levels exceeding $300 per barrel of oil equivalent. Now we all sit on the precipice watching if the stability-threatening energy price tsunami will sweep away many industries before it, or whether the tide will turn the turn as the political elite of the West confronts its poorest citizens being crippled by the energy crisis imposed on them. Are the hopeful recent reports that—long overdue—the EU will include gas in its taxonomy of green energy a sign of energy sanity returning, or is this a false dawn, with Germany’s new Government showing ever more radical eco-credentials?
A wise voice in this debate to whom every Government should turn for advice is Philip Lambert, who, leading Lambert Energy Advisory, has continued to highlight the critical role of gas, as mentioned by my noble friends Lady Neville-Rolfe and the Minister, if the world is to pursue accelerated decarbonisation and create a responsible energy mix that balances affordability, reliability, energy security and environmental needs. With consistency in his approach to energy policy in recent debates, Lambert continues to emphasise that gas plus renewables, as so obviously on offer in the UK with its strong offshore gas plus offshore wind resource blend, are complementary partners and able to lead the phase-out of coal, as well as supporting blue/green hydrogen buildout efforts.
Recently, Lambert set out the problem in a rather innovative way, saying that it is very simple to understand if one uses a stark medical analogy. The climate doctors of the western world, who gathered at Glasgow for COP 26 in November, have decided, with very little real democratic debate or scrutiny that the global patient, threatened by the “certainty” of extreme and catastrophic climate change, now needs an accelerated transfusion of the “fossil fuel” portion of the global energy lifeblood which courses through the global economic body every day, underpinning the heartbeat of our modern life of mobility, health, domestic living, food production and industrial process. The climate doctors’ prognosis, as underpinned in the IEA paper of May 2021, is a “net zero world” by 2050, the ongoing “capital starvation” and progressive transfusion of 80% of the current energy lifeblood of the world—the 101 million barrels of oil equivalent per day of oil, 66 million barrels of oil equivalent per day of gas and 70 million barrels of oil equivalent per day of coal.
In this incredible medical transfusion experiment, we need to dispense as quickly as possible with 80% of the world’s energy lifeblood. But as any responsible medical doctor will testify, no transfusion process should happen unless the patient can receive with complete certainty instant similar amounts of “clean bloodstream” —ie, new clean energy blood of 237 million barrels of oil equivalent per day—otherwise, the patient will literally die. Yet breathtakingly, the climate doctors currently have only developed small, highly uncertain and intermittent—albeit very welcome—“new blood sources” to transfuse back into the body. After 20 years and nearly $5 trillion of investment into “new energy blood”, the world has only 15 million barrels of oil equivalent per day of wind and solar, against the 237 million barrels of oil equivalent per day required—and this bloodstream flows, as 2021 has demonstrated, only sporadically to the heart when the wind blows or the sun shines. Moreover, the all-in cost of intermittent renewables into power systems is rising not falling, due to the high cost of system balancing and legacy subsidy and government guarantee costs.
Our journey to this began 40 years ago exactly, and we have reached a global position of 15 million barrels of oil a day equivalent of renewables against the necessary 237 million, but instead of recognising that we are entering a vital stage of transition, many demonise gas—which, if revoked from the energy equation, as so many campaigners would have us do immediately, will unquestionably damage the world economy. Of course it is right to invest heavily in solutions to take us to net zero, but this should be done alongside acceptance of gas as a critical component of the energy mix in the UK as we move towards net zero and welcome ESG approaches. Setting an arbitrary date of 2050 is little wiser today than forecasting the date of storms in the UK next winter.
I should add that most of the rest of the energy lifeblood is made up of biomass, which entails burning primarily wood at higher carbon intensity than coal at a time when the world should be protecting all existing forests and planting billions of new trees, not cutting them down, especially as the tree is still the most effective carbon capture and storage process in today’s world, with the carbon abatement costs still 10 times cheaper than a human-manufactured CCS plant. So the climate leaders have been ironically highly successful at starving the global gas machine of essential investment needed to overcome natural global gas production declines of 3% per annum, let alone allow gas productive capacity to increase to beyond its current level of 66 million barrels of oil equivalent per day to facilitate the all-important environmental initiative: the global coal-to-gas switch.
We are therefore waking up to the nightmare that high gas prices may in 2022 imperil the very viability of mass renewable rollout, because the back-up needed to create a firm power product out of intermittent renewable production relies basically on gas—or coal if gas is too expensive. The real nightmare for renewables producers is new obligations on them—rather than energy customers or taxpayers—to pay the full costs of back-up supplies. This, plus a rise in interest rates to challenge their leveraged model, could push some renewable energy players in 2022 into the same difficulties as faced recently by the mass bankrupted energy suppliers in the UK, who promised “100% renewable electricity” and other seemingly attractive product brands but then faced the full storm of reality when wholesale gas/power prices soared and the questionable irresponsibility of the UK Government’s populist “price cap” policy was fully revealed, and they may well end up in the same place. I foresee many of the current wind operators facing financial difficulty. Certainly, a new generation of companies will take over but the next five years are going to produce harrowing headlines around the world along with calls for significant nationalisation.
Policymakers must cease their rhetorical attack on natural gas, realising that for a responsible energy transition to occur, a solid partnership between best-in-class renewables such as offshore wind in the UK or solar in India and best-in-class gas—zero methane leakage, environmentally responsible and cheap—is required. That means tax-effective measures to extend the life of fields in the North Sea, postpone decommissioning, bring onstream new gas fields and maximise recovery rates within a clear and certain framework of strong, environmentally responsible policies. This surely is the great window of opportunity for the UK so we can produce a clean, firm power product via our integrated and environmentally responsible gas/renewables/trading model into the market, which will begin to wake up to the fact that firm power is a premium product, not a cheap, guaranteed given.
Maybe the last word should be left to our Chancellor, Rishi Sunak, who recently commented that North Sea gas
“plays an important part of our transition to net zero.”
He added:
“I want to make sure that people acknowledge that we should also exploit our domestic resources. We have resources in the North Sea, and we want to encourage investment in that because we’re going to need natural gas as part of our transition to getting to net zero. And in the process of getting from here to there, if we can get investment in the North Sea that supports British jobs, that’s a good thing. So that has to be part of the mix as well.”
Baroness Sheehan (LD)
My Lords, it was good last September to finally have sight of the draft updates for the range of energy-related national policy statements, first introduced a decade ago in 2011. I will restrict my remarks today to the infrastructure that we need to deliver net zero with regard to our shorter-term horizons —for example, the rollout of electric vehicles—and will not be tempted to talk about gas and its phase-out.
These updates, according to the Government, focus on regulatory, policy and technology changes to guide those involved in determining development applications for major infrastructure projects in England and Wales. As the noble Baroness, Lady Neville-Rolfe, pointed out, National Grid is going to be crucial in delivering this. It sits at the heart of Britain’s energy system. It is fully behind the net-zero ambitions and is committed to playing a leading role in enabling the transition, as indeed it must, because without its wholehearted commitment the transition would not be realisable. In its briefing, however, it states that while it was looking forward to the reviewed national policy statements, it has been left rather disappointed. In its view—I would say a rather well-informed one—current drafting does not provide the step change needed to deliver the scale and pace of nationally significant infrastructure development that will be needed to meet the Government’s own net-zero ambition.
That should really give the Government cause for concern. There is no sense of urgency or appreciation of the scale or pace of change needed to deliver nationally significant infrastructure development, which lies at the core of what we are trying to achieve here. I wonder whether BEIS is aware of its concerns and is taking them seriously. We are otherwise in real danger of falling short of meeting the challenging targets that the Government have set on electric vehicle ownership, as an example. These cars will need electricity—a lot of it, as the Minister himself said. The current grid, however, cannot supply what we will need. As an aside, and as the noble Lord, Lord Whitty, mentioned, the Government have to take on board the imperative of reducing demand. One quite effective way of doing that, and one that there is growing public concern about, is to make homes more energy efficient. That would take a lot of demand off the national grid, so I feel that is a real missed opportunity here.
There is also concern about what we are hearing from industry leaders about the importance of BEIS’s offshore transmission network review, which is producing a blueprint known as an holistic network design for the onshore and offshore infrastructure required to connect the Government’s target of 40 gigawatts of offshore wind by 2030. Why is the crucial work of the OTNR and the HND not explicitly referenced in the draft NPSs?
Another point of concern is that delivering the scale of nationally significant infrastructure needed will inevitably impact on the local communities and environments that host this infrastructure. Industry must have clear guidance from government on the levels of mitigation and compensation that developers are expected to deliver locally. On the flip side, the communities affected must also have some idea of what they will be up against. Communication with industry and local communities is going to be key. I wonder whether BEIS has taken that on board. Unfortunately, the draft NPSs are silent on these points. Again, can the Minister address that, as it will be really important if the infrastructure behind these policy statements is to be successful?
I add that Energy UK, the trade association for the energy industry, also has real concerns about the lack of a strong focus on net zero. In particular, there is real concern about the fast pace, flexibility and adaptability that will be needed to realise net-zero ambitions. The energy NPSs will therefore need to be revised and updated regularly, certainly more frequently than once a decade, so I ask the Minister: how often will the Government review these NPSs?
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Baroness. I refer to my interests as declared in the register: I am the honorary president of the advisory board of National Energy Action and, perhaps of more relevance, I was delighted to undertake a placement with BP as part of the Industry and Parliament Trust and had the privilege of visiting a North Sea oilfield.
I welcome today’s debate on the documents and thank my noble friend the Minister for bringing them to us. I want to ask a series of questions. As there are a number of them, I will quite understand if my noble friend might find it easier to respond in writing.
Following the critical floods of 2007, the Pitt review concluded that there should be an audit of critical infrastructure, most of which seemed to be energy substations that were at serious risk of flooding. How regularly does such an audit take place and when was the last one performed?
In the principal policy statement before us today, EN-1, there is welcome reference to climate change adaptation. Is there any reason—perhaps I have missed it—why mitigation has been left out? Many of the references that are made would cover mitigation as well as adaptation. I welcome in particular paragraph 4.9.11, which states:
“If any adaptation measures give rise to consequential impacts (for example on flooding, water resources or coastal change) the Secretary of State should consider the impact of the latter in relation to the application as a whole and the impacts guidance set out in Part 5 of this NPS.”
I think that, somehow, the Minister is secretly aware of my fixation and passion for SUDS, or sustainable urban drainage; I am also an honorary vice-president of the Association of Drainage Authorities, which apply to the lower drainage areas, of which we have plenty in North Yorkshire. I am therefore delighted that, on pages 93 and 95, there is reference to the reduction of flood risk and, in particular, the “hierarchy of drainage options” in relation to sustainable drainage systems and other green infrastructure. That is very welcome, and I hope that my noble friend will be able to expand on those points.
My background gives me a real concern about how energy is generated, transmitted and distributed in rural areas. My noble friend Lady Neville-Rolfe had a similar experience to my own, where a family home was without electricity for six days and included a particularly elderly population who had no such luck as to have a generator. That was during Storm Arwen, and we have seen many others since then. Rural areas are often off grid and face particular challenges in receiving fuel. They tend to be dependent on LPG, solid fuel and oil to heat homes. As my noble friend the Minister will be aware, these are not covered by the price cap and those areas face an even higher increase in costs, particularly because of activities this week in Ukraine—today there has been an additional spike. To what extent will the NPS reflect this and look to rural-proof any nationally significant infrastructure that is envisaged under the proposals before us today?
I for one particularly accept and welcome the nuclear energy mix. My noble friend said yesterday in the debate on the Bill that 85% of our UK nuclear capacity is to go out of commission by 2028. If, as I understand it, the national policy statement for nuclear power generation, EN-6, is not part of the package before us today, what would be the timetable for its review, and would it be subject to a further debate here and looked at separately by the BEIS Select Committee in the other place? I think that we are going to be increasingly dependent on nuclear and, obviously, 15% is not going to hack it after 2028.
The noble Lord, Lord Whitty, in his remarks, made reference to hydrogen and heat pumps as two separate issues. I, for one, do not understand how hydrogen will work and what the use of hydrogen will be, but I was particularly relieved that fracking did not happen in north Yorkshire, for the very simple reason that it would not only be difficult to fund but there was no way that the wastewater could be safely taken away and disposed of. Fracking and hydrogen, as I understand it, will have remarkably large uses of water. I certainly welcome a greater understanding of how we would deal with that.
I leave the Minister with the thought that we need a coherent, well-thought-out and consistent policy, and I for one would argue that we should not penalise those who live in rural areas. I would be interested to learn how we are going to rural-proof any energy policy, particularly regarding significant national infrastructure as it comes out.
The noble Lord, Lord Whitty, also referred to district heating, which is closely linked to energy from waste. I do not understand why we are not using more energy from waste or, indeed, combined heat and power. I remember going to visit SELCHP, the south-east London combined heat and power scheme, before it actually became the combined heat and power scheme. It seems that we solve two problems in one go, if we go down the path of energy from waste and combined heat and power. We are disposing of hard to get rid of rubbish; we want to incinerate it, because we cannot get rid of it in landfill—it is very hard to get rid of. North Yorkshire and I think probably most local authorities are exporting this rubbish to countries such as Holland, where it is burned and goes into the local network. I hope that my noble friend and the department will learn from the Danes and other Scandinavians, as well as the Austrians and Germans, who use this, as my aunt and uncle in Denmark have enjoyed over a period of time, to reduce their heating and hot water costs by feeding the energy from waste into the local grid, so the local community benefits.
I shall say a word on renewables. Under the excellent and skilful chairmanship of the noble Lord, Lord Teverson, we looked at offshore wind farms and received very powerful evidence to show that there are significant threats to sea mammals and sea wildlife through the use of offshore wind, which should be explored before there is a further rollout of offshore wind and arrays, to which the noble Lord, Lord Whitty referred. The most significant thing for rural areas that causes me alarm is that, once the energy generated reaches shore from an offshore wind farm, it has to be transmitted almost entirely by overhead powerlines and pylons. My noble friend and I suffered a loss of electricity, as did thousands more in the two recent storms—and any reduction of transmitting power by overhead powerlines and pylons would be welcome. It is not generally understood that we lose 30% of our electricity through transmitting energy in this way, so it is wasteful, not sustainable, and that must be addressed. I welcome my noble friend’s response as to how we can better transport the energy from offshore wind farms when it reaches shore. I support the call of the noble Lord, Lord Whitty, for limiting the number of onshore connections in that regard.
Like my noble friend Lady Neville-Rolfe, I am a keen supporter of heritage railways, and that is something that my noble friend might like to address in his remarks —whether they will be able to source their coal. I speak as the honorary president of the most-visited tourist venue in north Yorkshire, the North Yorkshire Moors Railway. I hope that my noble friend will ensure that we can continue to enjoy heritage railways sourced by locally produced coal.
In conclusion, I ask my noble friend how he intends to address energy efficiency to stop wasteful transmission, as I described; how to make electricity more sustainable and resilient; how to future-proof the increasing demands and how the Government will meet the additional electricity required to power electric vehicles. In particular, I ask, as have others, how often the Government will review the national energy policy statements and, finally, what plans he has to rural-proof the national policy statements and how we expect the department to do that.
Baroness Jones of Moulsecoomb (GP)
I wish the Minister had shown me his speech before he gave it today, because I could have gone through it with a red pen. Repeating wishful thinking does not make it happen. “May” and “might” is not a policy, and I shall now describe what the Government’s energy policy should be. I am really happy to send it directly to the Minister, in case he is in any doubt about what I am saying.
If we had insulated Britain, people would not be choosing between heating and eating. If we had not “cut the green crap”, as Cameron said, over the past decade, we would be saving £2.5 billion off energy bills. If we had not had a Tory Government for the past 12 years, we would be doing a lot better than we are now.
Renewable energy was cheaper to produce than gas even before the big explosion of oil and gas prices in recent months. There is now a huge gap between what it costs to produce renewable energy and what it is sold for as part of the national grid. If renewables now dominated the energy sector in the UK, everyone would be buying electric hobs and ovens as gas prices soared and electricity prices continued to go down. Rich and poor would all be better off, and the planet would be better off; the only people not better off would be the fossil fuel companies such as Shell—but I think we can manage without their doing particularly well, personally.
We have the perverse situation where green consumers who want green energy are paying extra because we have an energy system dominated by fossil fuels. For example, if someone is selling electricity to the national grid, why are they getting only 5½p per kilowatt hour, when it is being sold back to them for 21p per kilowatt hour? I understand that operators have costs to pay, but those small-scale producers, those homeowners, ought to be getting at least twice what they are now. I have a lot of questions; that is the first.
If gas producers are pushing up the price of electricity, why are households with renewables not getting more for their investment? Why are the fossil fuel giants the ones being rewarded for destroying the planet and ripping off consumers? That is another question.
I know that the Conservative Party receives millions of pounds in donations from the oil and gas industry; we have discussed that in this Chamber before. For example, the Prime Minister got something like £2 million in donations from Russians, possibly oil and gas producers, since he became Prime Minister. The case for a dirty fuel tax is overwhelming, and I wish everyone in this House and this debate would support a move that benefits this planet and consumers. Perhaps that is another question: why not have a dirty fuel tax?
Unfortunately, we have a Government in the pay of the oil and gas industry who have agreed the price cap for consumers going up by 50% in April. By contrast, households in the feed-in tariff scheme selling electricity to the national grid are tied to the retail price index, which will go up by 7.5%. That is a decision by the Government; why is that?
The potential for solar on the rooves of houses, warehouses and shops is absolutely massive, and this is the year when the Government should be giving it the biggest push by upping the amount that people are paid. Getting solar panels on more rooftops could make us far less reliant on gas in future years. Removing the planning block on wind farms supported by their local community would stop reliance on foreign gas. In fact, bringing back all the “green crap” would make us more independent and energy secure.
It is progress—I will give the Government this credit—that the Government have removed the arbitrary cap on how large solar farms can be, but why are we still building new houses and warehouses without basics such as solar panels? Why are there any new houses being built that are not net producers of energy? That is another question. We know how to do it. We know that new houses in the decades to come will have to be built that way or retrofitted, so why do we not do it now? The clever engineers at the national grid say that they can be ready for net zero by 2025, so why cannot we make this happen sooner rather than later? That is another question.
Why can we not use the technology that we have to make renewables the dominant source of our electricity within the next three years? That is another question. Why can we not scale up the use of emerging technologies of battery storage and hydrogen production to capture all that renewable energy in a form we can use to power vehicles, houses and factories when we need it? If we show that solar panels are an investment that really pays off, then more people will see the logic of heat pumps earning them money back. Making Britain independent of foreign gas supplies is a side-benefit of going renewable, the main reason obviously being the climate crisis.
Greens are often accused of wishful thinking, but in my view, and in that of an increasing number of people, we are the realists. The reality is that we have the technology to reach net-zero carbon emissions in the next few years; what we do not have is the political will. The Government’s wishful thinking is that they can keep using oil and gas, even beyond 2050. Instead of using all the potential sources of renewables, they rely on non-existent “greenhouse gas removal technologies” —more wishful thinking—to square this circle in reaching net zero. This is the wishful thinking of politicians who have taken dirty money from the dirty-fuel industries. I am sure the Minister knows that Germany has just cancelled the Nord Stream 2 undersea natural gas pipeline and is saying that it will overhaul its energy supply strategy. I would so love the Government to do this, and I would give them full credit for it.
Another bit of wishful thinking is the Government’s approach to waste incineration, which has driven me mad since I was a councillor. It is good that the Government state:
“The amount of electricity that can be generated from EfW”—
or energy from waste—
“is constrained by the availability of its feedstock, which is set to reduce further by 2035 as a result of government policy.”
However, unless they stop local authorities building an excess of new incinerators across the country and signing up to legally binding contracts for the next 25 or even 35 years, the words have no meaning. Money talks, and the contracts require councils to burn and not recycle. In some areas, the amount of recycling is going down because of the incinerator contracts that councils have signed. Burning waste instead of recycling is bad for air pollution and, obviously, bad for the climate. Can the Government commit that they will not allow the import of waste from abroad for burning in UK incinerators?
I know that we had the debate on nuclear yesterday, where my noble friend Lady Bennett of Manor Castle demolished the Government’s arguments for it, but I will say now that nuclear is not needed. We are developing tidal and wave power. Houses leak less heat when they are insulated. We have more efficient batteries as well as the conversion to hydrogen gas. The storage of energy is becoming an everyday thing, whether that is in a car or a battery on the side of the house. In the coming decades, more and more houses and communities will become net producers of energy. Are we seriously expecting them to buy nuclear energy from Hinkley at three or four times the price they are producing it for themselves?
Nuclear is dangerous. It leaks; it produces waste that we do not know how to dispose of; and, above all, we have to build new plants on the coast in an age of rising tides. Every single IPCC report since 2007 has increased the worst-case scenario for sea levels. Sizewell C has a massive sea defence system at the height of 18 metres based on the 2018 IPCC analysis, but that worst-case scenario is already out of date this year. If we build nuclear stations, they will become islands awash with sea water.
The Government’s energy strategy needs to abandon the idea of balance based on dirty fuels, whether fossil or nuclear. It needs to do its bit to mitigate the climate emergency by fast-tracking the cheaper solutions of renewables and insulation. It needs to show some bravery and create a dirty-profits tax that will encourage clean energy. In short, the Green national policy on energy would be good for the planet, good for consumers and independent of Russian gas and the flux of world prices.
Baroness Foster of Oxton (Con)
My Lords, black gold powered the industrial revolution. Where would we be today without it? Thank goodness the noble Baroness opposite, the noble Baroness, Lady Jones, was not around at the time. To produce enough firewood in the 1860s equivalent in energy terms for domestic consumption would have needed 25 million acres of land a year—nearly the entire farmland of England.
Mining was dirty and dangerous, but it became acceptable because we needed the energy. In fact, my late grandfather was a coal miner in the Cronton colliery, which had its share of disasters. A hundred and sixty years on, we are in a very different place, because geopolitics is determining what we should do next; the debate has been taking place today in the other place. This is about not just energy supply but energy security. Successive Governments did not really see this coming. In fact, you could say that they did not see the wood for the trees. North Sea oil and gas lulled us into a false sense of security, and we should never have allowed our nuclear programme to practically wither and die. In 1997, the Blair Government failed to carry out their plans to renew four nuclear generators that we needed. A few years later, Gordon Brown sold off our new nuclear capability to Japan.
It was an interesting debate yesterday, and I welcomed the information from my noble friend the Minister on our plans to push ahead with Hinkley Point and our nuclear programme in general. I also believe that the contribution by Rolls-Royce for the mini nuclear pods is a fantastic step forward, but we need to go further. However, there is an elephant in the room that needs to be discussed. A few years ago, we thought it worth while to drill for shale gas in Lancashire—just one area out of many across the UK. It was estimated that there were 37 trillion cubic metres of gas in the Bowland fields, and extracting just 10% would have been enough for us to be self-sufficient for the next 50 years. The programme would have regenerated a number of areas and could have created 75,000 pretty skilled jobs. That is what you call a real step in levelling up, and it is only the tip of the iceberg. But it does not suit the agenda of many of the more extreme activists of the green lobby. Misinformation on safety and relentless lobbying—mostly by those who did not even live in the surrounding area—stopped the programme.
It is astonishing that our energy policy can be determined by Extinction Rebellion, Insulate Britain and others who would like to take us back centuries. The irony is that those same people expect a roof over their head, central heating, hot water, mobile phones, iPads, washing machines, a dishwasher, a car and everything else that we all expect these days, as well as clean water and food on their plate. All that requires energy, which renewables alone will never be able to provide. As we know, we import 50% of our gas from abroad, mainly from Qatar and Norway, with some from Russia. If we continue along that road, by the end of the decade that will have risen to 70%. This winter, we imported shale gas from the USA, which this year will sink 19,000 wells—up from 16,000 only two years ago. The hypocrisy is nauseating, when you come to think of it.
Is fracking dangerous? No more than other extraction processes. Will there be the odd tremor? Well, probably, but technology has moved on in leaps and bounds, and there were many more tremors and much worse happened from deep coal mining, as I highlighted. To fill in those wells is positively absurd, and to carry on increasing our reliance on energy from abroad is equally absurd when it is beneath our feet.
I have welcomed the great strides that we have made for clean and green energy provision, and I echo and welcome the detailed analysis of the situation by my noble friends Lady Neville-Rolfe and Lord Moynihan, but we need to look outside the box and keep an open mind on how we move forward. I therefore I ask my noble friend the Minister to take back these comments and to let us have a debate on the specific issue sooner rather than later.
Lord Naseby (Con)
My Lords, I apologise for speaking in the gap, but I had not realised that we had to have a list in the Moses Room. I shall be brief. I spent a number of years on the Select Committee on Energy in the other place. I very much welcome this framework, this document and the associated ones. As my noble friend just said, since Brexit we are on our own and therefore security of supply is vital.
I will make four key points. I was pleased by yesterday’s debate in our own House on nuclear. That is part of the way forward, and the very exciting bit is the development by Rolls-Royce of the mini-plant concept.
Unfortunately, solar is becoming a little controversial in rural England. The estimate given is that 150,000 acres of good farming land is being taken up every year. On top of the fact that nearly 100,000 acres are already going for other uses, industrial and so on, one has to ask, with regard to the planning decisions that are being made, whether there should be a clause or a requirement for the protection of the national interest. My noble friend may or may not know, but there is certainly considerable concern over the Mallard Pass and Cottam solar farms, and the Sunnica solar farm near Newmarket.
I have one suggestion to make, which was prompted by driving down from Northampton earlier today. There are now hundreds of warehouses across the nation and they all have flat roofs. Every one of those warehouses is an opportunity for solar. We should look at that urgently, put it into the planning requirement for any new ones and put some persuasive methodology ahead for those which have already been built.
On offshore, my noble friend Lord Moynihan covered most of that. However, I went out to offshore when I was in the Commons, and we have to make sure that we continue to explore and use those resources properly.
Finally, on the domestic front, heat pumps are not the perfect answer. They are extremely expensive. Quite frankly, I have talked to some people who have heat pumps and they are not exactly a source of warmth that most people would expect. The answer must lie in low-carbon hydrogen. I know that it is at its very early stages, but we need to move forward with research on that area, both in universities and in other research institutes. We need to give some major incentives to take it forward so that we can neutralise the gas emissions from the 70%-plus of homes that have gas-fired heating.
Lord Oates (LD)
My Lords, the Liberal Democrats welcome the fact that the Government have set an ambitious net-zero target for 2050 and have recognised that that requires a 2035 decarbonisation target for the climate sector. We also welcome the target of 40 gigawatts of offshore wind for 2030. All this ambition is welcome, and we welcome the recognition in the Overarching National Policy Statement that wholesale transformation is required in our energy system. However, we remain unconvinced that the Government recognise what they have to do to achieve those targets. These national policy statements underline the gap between rhetoric and the detailed application and clarity that are required.
The net-zero target must be the overwhelming priority and challenge for the energy sector and for government as a whole. However, these documents simply do not supply the clarity and detail that the energy industry, the planners and other decision-takers will need. To have any chance of meeting the 2030, 2035 or 2050 targets, we need a much more joined-up approach across government and industry.
The national policy statements seem to be, at best, nodding acquaintances of the Energy White Paper, the 10-point plan, the offshore transmission review and the holistic network design policy—and, at times, almost complete strangers to them. The NPSs need to be clear about how the various policy documents should be taken into account by promoters and decision-takers, because the lack of integration threatens to fatally undermine the Government’s ambitions. If we are to deliver 40 gigawatts of offshore wind by 2030, we need the transmission infrastructure to deliver it to where it is needed. As the noble Lord, Lord Whitty, said, we must address the issue of an offshore grid and how we bring it onshore. The noble Baroness, Lady McIntosh, made the startling point that we lose 30% of power in transmission, so we must think about a much smarter and more locally distributed grid.
We must think much differenter—if that is a word—about the whole way we deal with the energy system. It is not a word, by the way. As a result of all this new infrastructure, there will have to be new substations, cables and so on. It is important that we think about how the impact on communities is mitigated. What is the Government’s approach to undergrounding cables, particularly in some rural areas? What is their approach to the mitigations that communities need? Industry needs clarity on this, because it has to plan, but it does not get that from these documents.
Energy storage and release will also be critical in the new energy system that we will need. The NPS needs to be much clearer about the scale of what is required. EN2 talks about pumped hydro storage and it is welcome that it does, although it gives little detail, but there is nothing about using green hydrogen as a storage vector. The Minister will correct me but I think that, in the past year, about £1 billion was paid to abate wind. This is crazy: that wind power could be creating green hydrogen, which could then be used where we need it in the energy system. We need much more about that. That is one of the points we were discussing in the debate yesterday on the Nuclear Energy (Financing) Bill. The Government must think much more creatively about how we deliver power.
The noble Lord, Lord Whitty, and a number of others stressed the importance of energy efficiency—the noble Baroness, Lady Jones, in particular. That is critical. It is crazy that so much of the energy we consume at the moment is going not to heat us, but straight out of the roof or the windows. We need a national plan for energy efficiency. Again, we discussed this yesterday. The Minister protested that much was being done and agreed with the noble Lord, Lord West, that it was also all terribly difficult. Some of it certainly is difficult, but a lot actually is not.
What makes even the relatively easy quite hard, however, is that there is a real lack of skills. For instance, if you want exterior wall insulation on your house and are in London or the south-east, good luck with that, because the few people who can deliver it are up to their eyeballs in work—and loads of them have just given up. There have been various government projects, such as the green homes grant scheme, and previously, under the coalition, the Green Deal scheme. But the industry invests, the schemes are then scrapped and now those people are fed up.
We have a massive skills shortage and there must be a plan to deal with it. If the Government care about levelling up, one of the best ways they could deliver jobs all around this country would be to reduce the energy we consume and how much we pollute our planet. We know that the Treasury is always behind these schemes going wrong, so I have a lot of sympathy with the Minister because it always thinks in the short term and these schemes can be delivered only in the long term.
Some noble Lords who spoke in this debate did so as if the climate emergency was a concept that we could choose either to believe in or not. I can only assume that the noble Baroness, Lady Foster, has not read the IPCC report on the impacts that are coming from climate change because there was certainly no mention of them whatever in her speech or, I think, of climate change at all. We heard a lot about what she regarded as absurd, but what is really absurd is that we are still building houses that leak energy. We should have had a standard in place from 2016; one was put in place by the coalition Government but scrapped by the Government who came after them. We should not be building homes that leak energy or have no national plan for the energy efficiency of our building stock. We should never have done what the Government who came in after the coalition did, which was effectively to ban onshore wind.
The noble Baroness, Lady Neville-Rolfe, raised the issue of green levies—the noble Lord, Lord Forsyth, raised it in the Chamber earlier. We really need to be clear that it is not green levies that are pushing up energy bills at the moment but the staggering cost of fossil fuels. The sooner we move off them, the better. That is what we need to be doing. In fact, total household expenditure on energy bills fell between 2010 and 2020. It did so in large part because of the energy efficiency measures that were funded through the green levies, so we should not allow this misnomer to take hold.
My noble friend Lady Sheehan raised the concerns of the energy industry about the policy statements. I hope the Minister will answer some of the very legitimate questions that the industry posed, particularly on how the various government policy documents should be taken into account by decision-takers. Also, what is expected from industry on community mitigation and why is the work of the offshore transmission review and holistic network design not properly addressed in the NPSs? How will those statements be expanded to include hydrogen and CCS, in line with government policy?
I was struck by my noble friend Lord Teverson’s question about when the geological disposal facility will come online, and whether the date in the original nuclear planning statement for operation of the GDF from 2130 was correct. I must say that it seemed like the first realistic statement I have heard about that geological disposal facility, because we have been told decade after decade that it is just around the corner. I hope the Minister can clarify that.
As I said at the outset, we welcome the Government’s ambitious targets but we need the detail about how they will be met. These national policy statements fall short in doing that.
Lord Lennie (Lab)
My Lords, I thank the Minister for his comprehensive introductory statement and all other noble Lords for their contributions to this debate. My noble friend Lord Whitty made it plain that there is not enough imperative in these statements. They need, I guess, to be more inclined towards planning consents rather than against, or a balanced view. The noble Baroness, Lady Neville-Rolfe, reminded us that it is about keeping the lights on at the right price. The noble Lord, Lord Teverson, reminded us about avoiding silo thinking. The noble Lord, Lord Moynihan, was on about prices and costs, as a gas advocate.
The noble Baroness, Lady Sheehan, asked how often this policy and these NPSs would be reviewed. The noble Baroness, Lady McIntosh, talked about the rural effect and rural-proofing future policy, while the noble Baroness, Lady Jones, talked about replacing the whole policy, in her usual fashion. The noble Baroness, Lady Foster, advocated fracking, rather than importing fracking from the United States. The noble Lord, Lord Naseby, supported nuclear fuel, as we do as well, and advocated solar as a future-proofing of warehouses. Then we came to the noble Lord, Lord Oates, who introduced the whole concept of “differenter” to all of us, a new language for us all to grasp.
This national policy statement updates the Liberal Democrat Minister’s statement in 2011 in the coalition Government. I may be wrong, but I think that it was a Liberal Democrat Minister at the time. It will form the framework within which the Secretary of State will take decisions on the nationally significant energy infrastructure developments under the Planning Act. As we have heard, it is accompanied by a series of specific statements which in combination establish the criteria that will be taken into account when considering energy planning applications. The need for the update, as we have heard, is explained by the Government announcing the move to net zero, to be brought forward and achieved by 2050, and the marker, that we will have moved three-quarters of the way towards this by 2035. They are both confirmed in the NPS.
The dash for gas has screeched to a halt and is replaced by a reaching out for renewables. What we have is the establishing of a prime market in energy of wind, solar and nuclear fuels, with only a back-up residual use of carbon fuels as a supplement. This policy shift is welcome—but is it entirely believable? Currently, almost 80% of UK energy is fossil-fuel generated, and there are reports that the Government are about to announce, or have already announced, the licensing of six new oil and gas fields in the North Sea. The Times on Monday carried an interview with Greg Hands in which he confirmed, or appeared to confirm, that the North Sea fields would be developed as a new prime market develops. Is that true and, if so, do the Government believe that it is consistent with the prioritising of renewables in the NPS? What message do they think that it would send out to the energy market and the energy sector overall?
On timing, the need to speed up the planning process and decision making is essential, given the rightful hastening of the net-zero target. Evidence given to the BEIS Select Committee reveals that, while it takes only a year to build an offshore wind farm, it takes about eight years to get planning consents through the process. The NPS establishes a new legal framework for planning decisions, balancing the need for infrastructure against its impact on communities. If it takes eight years to gain approval for new infrastructure to support renewable energy production, it is unlikely that any approvals will be achieved before the next likely review of this NPS. Is the Minister concerned about the timescale, can it be shortened—and, if so, what evidence can the Government point to in support of that? The energy sector needs answers to these questions before risking capital on major infrastructure projects.
That leads to the whole question of costs and prices of energy. The NPS makes passing reference to the costs of energy, but does not focus on it, despite the fact that it is clearly the number one issue facing household budgets. The Chancellor has announced that households will be forced to take a loan from the energy companies in the short term, to be to be paid back in the medium term, but has not offered any longer-term solution to the problem of these high energy costs, other than the prospect of repeated compulsory loans across the board. The NPS skirts around this. It talks about energy at affordable cost, but does not put forward any proposals about how that will be achieved. Does the Minister see the issue of costs as a short-term one or as a strategic problem and, if the latter, how does he feel it should be addressed, and does he think it should be addressed in this NPS?
A decarbonised future should make the UK less reliant on the importing of energy; 79% of energy is currently fossil-fuel generated. Currently, the UK imports about half of its gas-fired energy; it is therefore significantly subject to world price movements, over which the Government remind us they have little influence or control. But the Government of the nearest neighbour, France, have announced a 5% increase, while here in the UK we face a 50% price hike in the Ofgem price cap review.
The Labour Party has no doubt that nuclear energy should play an increasingly significant part in the energy mix of the UK’s decarbonised future. Parliament debated yesterday the financing of nuclear energy, and strategically the two are interconnected—so the absence of any strategic proposal in the NPS is all the more surprising. About half of UK gas is imported, and about one-third of UK energy is gas-fired, so it is a big number when considering the fuel costs that the industry has little control over. Does the Minister see a future when UK energy cost and prices are in the main controlled by decarbonised UK energy markets? If so, when is that likely to happen, and by when will the UK no longer be reliant on importing a significant proportion of its energy?
Onshore wind development has been removed from the NPS—maybe it was in 2016, I am not sure. That appears to show a lack of confidence in that form of energy. I do not know whether it does not meet the de minimis level for inclusion in the NPS, but why was that decision taken and what impact has it had on onshore wind development? Is it because of its not meeting the de minimis levels, or other factors?
The NPS sets out a series of factors that will be taken into account by the Secretary of State in reaching his decisions about approvals of infrastructure projects. How many consents have been made since the last NPS was published? Does the Minister believe that it will increase significantly in the period before the next review? While we are on that subject, when does the Minister feel that the next review should be? Should it be in five years, as discussed in the evidence sessions before the statement was released, or in 10 years, as is the case with this NPS update from the last one? The pace of change and development in energy supply and infrastructure will be exponential in the next period, if we are to meet net zero, and the NPS needs to future-proof to reflect this. Government policy appears to be “wait and see” before judging planning applications, which will almost certainly mean that we do not meet our net-zero ambitions.
Lord Lennie (Lab)
The planning process for renewables and low-carbon development such as hydrogen and CCS should ensure support for infrastructure projects such as aviation over and above competing interests. The inclusion of emerging technologies alongside renewables that will contribute to net zero—hydrogen, CCS, biomass—as well as the infrastructure and storage necessary, should be advanced and advocated by the NPS. A presumption in favour of them in the planning process should be the watchword of the NPS, not neutrality as it currently appears; I think the noble Lord, Lord Whitty, made that point.
The long timescale between this and previous NPSs has resulted in policy falling significantly behind current thinking and technological advance. Keeping NPSs under ongoing review and updating them as required would be more likely to reflect advances in technological development and would therefore more likely play an important part in our move to net zero.
Lord Callanan (Con)
My Lords, I thank everyone who contributed to this debate. As always, it has been interesting and informative, if not all directly related to the subject under discussion—I am looking at the noble Baroness, Lady Jones; I will come on to that in a minute. I will address many of the points made in turn, but first I will bring the Committee back to the subject under discussion and will talk about the energy national policy statements.
Our world-leading agenda to transform the energy system requires a planning framework for nationally significant infrastructure which can process the pace and scale of planning decisions in line with this transformation. Updated energy NPSs are critical to achieving this. The review will make the policy framework for the provision of energy infrastructure clearer and more up to date.
In the context of the wider reform programme for nationally significant infrastructure, up-to-date energy NPSs will support project sponsors, the Planning Inspectorate and ultimately the Secretary of State in timely consideration and decisions over when and how to provide significant to critical infrastructure.
We believe that the documents we have consulted on and which are being examined by the committee of the other House at the moment strike the right balance between the need for new energy infrastructure and the impact that such infrastructure will have, and they will enable planning decisions to be taken at the required pace.
I thank the noble Lord, Lord Whitty, and many other noble Lords who have used this debate to make some interesting and wide-ranging comments on energy policy. However, I repeat that our purpose today is to consider whether the NPSs are fit for purpose in performing their critical purpose, which is to provide a legal framework for planning decisions on nationally significant energy infrastructure.
I thank my noble friend Lady Neville-Rolfe for her comments on timing and security of supply. Within that, the NPS establishes the need for the infrastructure required to deliver the energy objectives. This includes ensuring that we have a supply that is secure and reliable as well as consistent with our net-zero ambitions.
A number of noble Lords, including my noble friends Lady Neville-Rolfe and Lady McIntosh, the noble Baroness, Lady Sheehan, and the noble Lord, Lord Lennie, asked me about the timetable for future reviews. Of course, there will be change over time, and we will review the documents when appropriate—so I do not want to give an absolute commitment to a specific time; we will do it as required. The exact timing of a review will depend on the specific circumstances that apply in the case of each national policy statement, but it is expected that a public announcement on whether a review is required should be made at least every five years. This reflects the position that was set out in the Government’s published guidance.
I thank the noble Lord, Lord Teverson, for his comments on biodiversity. He will be aware that Schedule 15 to the Environment Act 2021 introduced specific requirements for biodiversity net gain in relation to NSIP development. This schedule is not yet in force, and Defra is currently consulting on exactly how it will be implemented. Of course, the NPS will be amended to bring it in line with the Environment Act before it is designated.
I welcome the comments from my noble friend Lord Moynihan and my noble friend Lady Foster’s support for the energy NPS. I can assure both of them that the NPS recognises the need for continued investment in oil and gas infrastructure during the transition to clean energy. It was recognised also by the climate change committee that we will continue to need oil and gas infrastructure during the transition. I think some of the simplistic exponents sometimes miss the point that this is a long-term transition. Unless we want to unplug people’s boilers or stop them putting petrol in their car tomorrow, there is an ongoing requirement for investment, and it makes more sense to obtain oil and gas from our own reserves than to import it from Russia, Qatar, Saudi Arabia or American shale gas reserves through the medium of LPG.
I say in response to the noble Baroness, Lady Sheehan, that we believe that the draft NPS strikes the right balance between clarity on the need for the types of infrastructure required to deliver on our climate commitments and retaining security of supply and identifying the potentially negative impacts of such infrastructure at local level. This enables planning decisions to be taken which weigh this national need against these potential impacts, based on expert evidence and, of course, on full stakeholder involvement. Of course, there will always be different views on whether we have got this balance right, and we are currently analysing the responses to the public consultation. We will take account of these and any resolutions or recommendations from the parliamentary scrutiny process before issuing our final response.
The draft NPS reflects the work of the offshore transmission network review and the policy is written to support that work. Future changes will depend on the outcome of the OTNR. The urgency and scale of offshore wind farm development—I remind the Committee that there is to be a fourfold increase by 2030—mean that radial routes to shore are in many cases not viable given the environmental and community impacts.
I say to my noble friend Lady McIntosh that we recognise the desire for a settled siting policy for new nuclear and we are seeking to deliver a robust and comprehensive framework. Three years is the rough working estimate to develop, consult and deliver on an NPS. I can assure my noble friend that a new nuclear NPS will be subject to the same requirements of public consultation and parliamentary scrutiny as these energy NPSs. I can also assure her that the NPSs cover climate change adaptation and mitigation—mitigation is covered by part 2 and new section 5.2 of EN-1.
The noble Baroness, Lady Jones—where to start? In her wide-ranging contribution, I lost count of the number of questions that she asked me. I think I got up to about 25 before I lost count. The noble Baroness will, of course, appreciate that in the context of this short debate it is not possible to answer all her points. I am sure that we will have lots of debates and questions on these subjects in future. Of course, I do not think that any of her questions had anything to do with the subject of this debate, which is on the NPS. I am afraid that the noble Baroness knows that we disagree over this. A lot of her solutions sound great, but they are overly simplistic nonsense in most cases.
In many respects, I agree with the noble Baroness. Of course, we want to see more renewables. We have the largest offshore renewable capacity in the world—and we going to increase it fourfold. It has been a British success story; the price of new offshore wind is now at record low levels. It is a good thing, but it is inherently intermittent. During the recent stormy weather, we saw that wind generation for the UK was up to almost 50% of our capacity, which is great, but a few months ago, when we had a weather depression, we saw wind capacity at about 2% to 3% of our national energy needs. We need a diverse mix of supply—so we need nuclear and existing oil and gas infrastructure and supply and, yes, we need renewables as well.
I do not disagree with the noble Baroness. Of course, we want to see energy efficiency schemes, as energy efficiency is by far the best form of generation; the energy that you do not use is required. We are spending £9.2 billion over this Parliament on energy efficiency and insulation schemes. I am proud of our record. Of course, we can have an argument over whether we should be spending even more, but as regards our levels of investment compared to any previous Government, we are spending record sums on environmental schemes. On ECO alone, the contribution that we are making to that is going up to £1 billion a year, starting in March this year, in addition to the £9.2 billion that we are investing through direct government support. The vast majority of that is going to help fuel-poor households and those on lower incomes to benefit from increased investment and increased energy efficiency in their homes, to make their bills smaller and their homes warmer. That is a key point.
I assure the noble Baroness that we will have time to debate all her many questions and points in future, but I hope that she will forgive me if I do not address all those issues now, because it is not a matter for today’s debate.
In response to my noble friend Lord Naseby, of course we need to preserve our most productive farmland as best we can, which is why the draft NPS continues to advise that the effective use of land is prioritised by focusing large-scale solar farms on previously developed and non-agricultural land, provided that it is not of high environmental value. It also suggests that, when a proposal involves greenfield land, poorer-quality land should be used in preference to higher-quality land.
In response to the noble Lord, Lord Oates, the draft energy NPS set out the Government’s policy for delivering nationally significant energy infrastructure and providing a legal framework for planning decisions at the national level. This includes balancing the need for new infrastructure against the impacts of such infrastructure. It will provide guidance on some of the issues that the noble Lord raised, such as the presumption in favour of underground cables in areas of natural beauty, but many of the important issues raised by the noble Lord, such as energy efficiency and housing, are outside the scope of these documents.
Lord Oates (LD)
I am grateful for the Minister’s response, but could he address one specific question that I asked about guidance on community mitigation? This is something that the industry is really clear on—that it needs to have guidance, because it is going to have to bring onshore lots of cable and lots of new energy infrastructure. It really needs clarity from government about what it should be doing there. I would be grateful if the Minister could address that point.
Lord Callanan (Con)
During the planning process itself, community mitigations will be taken into account, providing the national framework to enable local planning decisions to be taken. Community mitigations of course play an important part in the planning process.
As I said earlier in response to the noble Baroness, Lady Jones, improving the energy efficiency of homes is the most effective way to permanently reduce energy bills by reducing the amount of energy required to heat the home, and it can tackle fuel poverty in the long term. I covered all the schemes that we have, including ECO, home upgrade grants, the local authority delivery scheme, the public sector decarbonisation scheme and the social housing decarbonisation scheme—myriad different schemes, all contributing quietly and in the background to upping the energy performance of the homes that we all live in.
The noble Lord also mentioned the need for clarity in the approach to CCUS and hydrogen. The NPS establishes the need for CCUS and hydrogen infrastructure, but we do not want prematurely to introduce detailed guidance before we know more about the impact of such projects. We will consider whether to develop a technology-specific NPS for CCUS and hydrogen infrastructure as the technology and the project landscape evolves.
The noble Lord, Lord Lennie, asked how many consent decisions have been made under the current regime. The answer is that 65 decisions on energy projects have been made under the existing suite of energy NPSs. We are, of course, expecting a significant increase in the number of applications as the transition to net zero continues. He also asked about onshore wind. It was removed from the NSIP regime in 2016 through amendments to the Planning Act 2008. This means that all planning applications for onshore wind turbines in England are made to the local planning authority, or to the Welsh Government in Wales. As national policy statements are statutory guidance, and as onshore wind is now not included in the 2008 Act, it was no longer appropriate for the national policy statements to provide specific policies in relation to onshore wind.
Finally, to reply to my noble friend Lady Foster’s point about fracking, it is important to realise that Lancashire is not Texas. The UK is a relatively densely populated island compared to most parts of the US. Although we are not in principle against the idea of fracking, it must be done with the consent of local communities and we need to be aware of its environmental impact. Also, as we discussed during Questions in the House a few weeks ago, it is not the short-term answer that many people think it is. Even if we managed to overcome all the environmental objections, and even if we managed to progress the scheme, it would be many years, if not a decade, before we got meaningful quantities of shale gas out of the ground. Even then, the quantities that we would be able to produce in this country would have no meaningful impact on the overall gas price level. We continue to keep these matters under review, but it does not represent the easy solution that we might like to think it would in this circumstance.
Baroness Neville-Rolfe (Con)
I am grateful to my noble friend for answering all our points so clearly and fully. I asked a question about coal for heritage railways. He may not be aware of it, but in the debates on the Environment Act we were told that it would be fine because we could get coal from Russia. He may want to take the point away. Perhaps he could update us, because I assume that we will not now be getting coal from Russia. Also, I wanted clarification on an issue to do with planning. I think he said that some kind of planning for renewable infrastructure would take three years, but somebody—maybe it was the noble Lord, Lord Teverson, or the noble Lord, Lord Oates—said that it took one year to build an offshore wind turbine and eight years to get planning. Clearly, we have to speed planning up for necessary infrastructure; that has come through very strongly in the work that I have been doing in the Built Environment Committee. To have an answer on what we can now expect—how long planning applications of different types will take—either today or on another occasion would be very helpful.
Lord Callanan (Con)
The whole purpose of these national policy statements is to try to speed up the planning process in the first place by setting a national framework within which the local decisions can be taken. As with all these things, it is a question of getting the balance right. Of course we want to try to speed up the process, but the problem with energy policy is that it takes many years, if not decades, to put the infrastructure in place.
We are announcing, we hope, some progress on new nuclear and passing new legislation in the next few months to enable it but we will not see the fruits of that until the early 2030s. The process for the infrastructure which we see in place now was put in place 10 or 12 years ago. The reason that we have a problem with nuclear now—I am sorry to bring it back to party politics—was because when Labour came into office in 1997, that Government ruled out new nuclear. Tony Blair said in the manifesto “We see no case for new nuclear”. Now, that is a party-political point and I think many Labour Members now think that was a mistake—maybe it was right in the context of the time but it was probably a mistake. Correcting these mistakes takes many decades in order to get the infrastructure in place.
Lord Lennie (Lab)
If I may reinforce the point I made, if it takes eight years to get consent for something, that is eight years before the first brick is laid, as it were. If that period can be foreshortened, the fruits of the labour can be brought forward accordingly.
Lord Callanan (Con)
We are always open to finding new ways of speeding these things up, but you also have to take into account the concerns of local communities which have to put up with this infrastructure and try to mitigate the effects on them.
I return to the point that my noble friend Lady Neville-Rolfe asked me about heritage coal. I am very well aware of this issue; I am told that my noble friend Lady Bloomfield is a hero in the heritage railway community because she was able to write to them to say that heritage coal would still be available to them to operate their railways. There are many sources of coal apart from Russia. Significant quantities of coal are still produced in Germany and Poland, so I am confident that they will still be able to get the coal to power their excellent machines. I do not think anybody, even the most committed climate zealot, would object to the relatively small quantities that they would use for their heritage equipment.
Baroness Foster of Oxton (Con)
I did not raise the issue of fracking necessarily as a short-term measure. With any energy, we know that it takes a long lead-in time to come to some sort of results. One of my key points was the fact that we are already importing 50%; by the end of the decade, that will rise to 70%. Neither am I talking about doing things without the consent of people who live locally. Of course, you must have the appropriate places to do these things. I have raised this issue so that we can start looking at it. It may be feasible in the not-too-distant future. because we just do not know at the moment what is going to happen.
Lord Callanan (Con)
My noble friend makes a good point. Supplies of gas from the North Sea are slowly declining. We will still have a need for fossil fuels, gas in particular, but of course the long-term trajectory of gas use will fall as we decarbonise the power supply and heating in homes. We might well not be importing larger quantities; so it would be a larger proportion of the smaller amount that we will require in future. However, we keep all these things under review and if all the environmental objections can be overcome and the difficult engineering processes solved, we are of course open to considering that. I just caution my noble friend that the difficulties are considerable and there are no easy solutions in this.
With that, I think I have dealt with most of the points that were on the subject of the national policy statements. I thank all noble Lords for their contributions.
House of Lords
Hong Kong: Political Prisoners
The Lord Bishop of St Albans
To ask Her Majesty’s Government what representations they have made to the Government of Hong Kong about the (1) human rights, and (2) release, of pro- democracy political prisoners remanded in custody under that Government’s national security law.
Lord Alton of Liverpool (CB)
My Lords, on behalf of the right reverend Prelate the Bishop of St Albans, and with his permission, I beg leave to ask the Question standing in his name on the Order Paper. In so doing, I declare my interests both as a patron of Hong Kong Watch and as vice-chairman of the All-Party Parliamentary Group on Hong Kong.
The Earl of Courtown (Con)
My Lords, the mainland Chinese and Hong Kong authorities have used the national security law to target pro-democracy figures, curtail freedoms and shrink the space for opposition, a free press and civil society. The UK continues to raise its concerns directly with Hong Kong and Chinese authorities. We continue to urge Beijing to uphold its international obligations, including the rights and freedoms protected in the joint declaration.
Lord Alton of Liverpool (CB)
In thanking the noble Lord, I will put to him a question put to me by a courageous Hong Kong activist, Chung Ching Kwong, about young pro-democracy activists most at risk of arrest. Can we be told, she asked, when the Home Office will introduce the promised and welcome new regulations to include within the BNO scheme young people with a parent who is a BNO passport holder and born after 1997? What are we doing to work with other Commonwealth countries to provide an international lifeboat for young Hong Kongers who do not qualify for the BNO, and what estimate have the Government made of their number?
The Earl of Courtown (Con)
I thank the noble Lord, Lord Alton of Liverpool, for his question. We are sympathetic to the circumstances of children of BNO parents born on or after 1 July 1997 and are considering what more can be done to support this cohort where they wish to build a permanent life in the United Kingdom. We will continue to bring together our international partners to stand up for the people of Hong Kong, to call out the violation of their freedoms and to hold China to its international obligations.
Lord Cormack (Con)
My Lords, is it not time for us to reconsider British judges giving a veneer of respectability to an appallingly repressive regime?
The Earl of Courtown (Con)
The national security law poses real questions for the rule of law in Hong Kong and the protection of fundamental rights and freedoms promised by China in the joint declaration. Our assessment of Hong Kong’s judicial independence is increasingly finely balanced. It is, therefore, right that it is kept under review.
Lord Thomas of Gresford (LD)
My Lords, I know that there have been recent discussions between the Lord Chancellor, the Foreign Secretary and British judges who continue to serve on the Court of Final Appeal. That fine court declared recently that these new laws under the national security law trump rights guaranteed by the Basic Law. What were those talks about and what was their result?
The Earl of Courtown (Con)
My Lords, I was not privy to those conversations, but the noble Lord is quite right about the situation in Hong Kong relating to breaches of the joint declaration that have continued over time.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, I recall that, before the transfer of sovereignty in 1997, judges and anti-corruption police officers were routinely seconded to Hong Kong to assist with the administration of justice under the then colonial constitution. Can the noble Earl say how many of the individuals concerned remained in post at the changeover, whether British judges still served the new Hong Kong Administration after the transfer of sovereignty and what the position is now?
The Earl of Courtown (Con)
My Lords, in relation to judges in Hong Kong, I answered the question on the first supplementary, but we are aware that a number of UK nationals are members of the Hong Kong police, having joined prior to the handover of Hong Kong to China in 1997. The Government have no jurisdiction over this matter; the national security law poses real questions for the rule of law and the protection of fundamental rights and freedoms promised by China in the joint declaration.
Lord Flight (Con)
My Lords, while Hong Kong has been an open and free economy, it has brought great help to China. Are we making sure to point out to the Chinese Government that, if they turn it into a quasi-police state, they will lose the huge economic advantages of its success?
The Earl of Courtown (Con)
My Lords, the consequences of Beijing’s actions in relation to Hong Kong have been made very clear on many occasions. As the noble Lord will be aware, since 2021 we have launched a bespoke immigration route for BNOs, suspended the Hong Kong-UK extradition agreement and extended the arms embargo to cover Hong Kong.
Baroness O’Loan (CB)
My Lords, can the Minister tell us whether any representation has been made by Her Majesty’s Government on care for the families of those pro-democracy activists imprisoned under the national security law, particularly in the light of the withdrawal of so many human rights organisations from Hong Kong, leaving them with no recourse?
The Earl of Courtown (Con)
My Lords, the noble Baroness makes a very good point about those who have been arrested under the NSL. There are difficulties here, as she will be aware, around consular assistance for BNOs and dual nationals; it is available only in third countries, but not in China, Macau and Hong Kong. However, where we have legitimate humanitarian or human rights concerns, we can and will lobby the relevant authorities and demonstrate our political support.
Baroness Merron (Lab)
My Lords, following up on previous answers from the Minister, given the level of interference in the Hong Kong judicial system, does he agree that the context in which there was thought to be a continuing role for British and Commonwealth judges has fundamentally shifted? Is it not now time for those judges to be withdrawn from the judicial system? Will the Minister work with Commonwealth partners to get this done?
The Earl of Courtown (Con)
My Lords, I thank the noble Baroness for that question. As I said, our assessment of Hong Kong’s judicial independence is increasingly finely balanced. It is therefore right that it is being kept under review. It is essential that both the Hong Kong judiciary and Hong Kong’s legal institutions can operate independently and free from political interference. Whether to withdraw judges from Hong Kong is decided by the Supreme Court, in conjunction and consultation with Her Majesty’s Government.
Viscount Waverley (CB)
My Lords, when leaving Hong Kong and entering the UK, what passport do our friends actually travel on? China does not recognise dual citizenship, so which takes precedence in this instance? When will the amendment of the noble Lords, Lord Alton and Lord Patten, to the Nationality and Borders Bill come before us? Will it come back on Report and be properly addressed?
The Earl of Courtown (Con)
My Lords, I cannot predict what will happen in legislation in the future, but I am sure the noble Lord will be made aware in due course. The noble Lord also asked about people travelling from Hong Kong. They are able to travel under the Hong Kong SAR passport.
Lord Carlile of Berriew (CB)
My Lords, given that it is now palpably clear that human rights are under severe attack in Hong Kong, how much longer does the review of UK judges’ position have to take before they are firmly advised to play no further part in the Hong Kong judicial system?
The Earl of Courtown (Con)
My Lords, the noble Lord makes a fair point, but these are issues relating to whether there are judges from the United Kingdom serving in Hong Kong. This is under review continually. I do not have any more information on that, but if there is any more, I will write to the noble Lord.
Baroness Bennett of Manor Castle (GP)
My Lords, I declare my position on the All-Party Parliamentary Group on Hong Kong. I will understand if the Minister does not know that the Hong Kong Baptist University student newspaper was suppressed in January, but its staff and students suffered. The HKBU said that it could not promise to guarantee student safety if they chose to attribute their resignation to the way they had been treated. In answering the noble Lord, Lord Alton, the Minister said that he sympathised with the situation of young Hong Kongers. Is sympathy really enough for people such as those brave students, who are taking action to try to defend human rights?
The Earl of Courtown (Con)
I could not agree more with what the noble Baroness said on the importance of those who have been protesting. It is very clear to all who watch the newsfeed. The Government hope to be in a position to say more this issue in the forth- coming days on, ahead of Report on the Nationality and Borders Bill.
Hunting Trophies
(2 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Selkirk of Douglas
To ask Her Majesty’s Government when they plan to introduce legislation to ban the import of hunting trophies; and what is the proposed timetable for that legislation.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, it is a manifesto commitment to ban the import of hunting trophies from endangered animals. We will be bringing forward legislation to deliver this measure as soon as parliamentary time allows.
Lord Selkirk of Douglas (Con)
My Lords, I thank the Minister for what he has just said. Will he acknowledge that the Government have the opportunity, by getting this Bill on the statute book as soon as possible, to play a significant part in saving many rare animals from a horrible and unnecessary death? Therefore, can he confirm that the Bill will go further than the manifesto commitment and cover more than 1,000 additional near-threatened species, as stated in the government press release of 10 December? Is he aware that, at the end of last year, more than 300 carcasses of endangered species had been shipped to this country since 2019? Is it not the case that any delay in enacting the legislation would result in many more large animals being killed?
Lord Benyon (Con)
My Lords, there were about 20 licensed imports of trophies in the year 2020 and I suspect that many others may have been illegally transported around the world. My noble friend is right to say that the scope of what we are proposing is all species listed in Annexes A and B of UK wildlife trade regulations, which are broadly equivalent to Appendix 1 and 2 of CITES. That is about 6,000 species. Over 1,000 further species are not listed in the WTR annexes but are assessed on the IUCN red list as near threatened, vulnerable, endangered, critically endangered and extinct in the wild. Only a very few of those are actually hunted for trophies.
Viscount Hanworth (Lab)
Can the Minister explain why the MoD continues to sanction the slaughter of Canadian brown bears to produce ceremonial headgear for our soldiers when there are perfectly viable alternatives?
Lord Benyon (Con)
My Lords, I am not an expert on this, but I understand that the bearskin is a product of a heritage cull which has to take place in certain parts of the world and is not an endangered species import.
Baroness Jones of Moulsecoomb (GP)
My Lords, the Prime Minister is infamous for breaking his promises. He has promised this ban, but will it be another broken promise?
Lord Benyon (Con)
My Lords, there is a Bill coming forward relating to issues of animals abroad. That will be published in the near future. The noble Baroness would not expect me to second-guess parliamentary procedures, but it will be introduced soon.
Baroness Fookes (Con)
My Lords, given that there are suspicions arising that certain other animal welfare aspects are to be dropped from the Bill to which my noble friend refers, will he forgive me if I say that I entertain considerable suspicions as to whether the Government are back-tracking?
Lord Benyon (Con)
My noble friend’s question suggests that she has the advantage on me and a greater understanding of the pre-legislative discussions that are going ahead. As far as I am concerned, what was in the manifesto will be brought forward in a Bill in the near future.
Baroness Pinnock (LD)
My Lords, it was reported in the media over the weekend—I think this is what the noble Baroness was referring to—that the Government are doing an about-turn on imports of fur and foie gras, both of which are abominable for those of us who have animal rights at the forefront of how we treat the natural world. Would the Minister care to comment on why there has been this about-turn?
Lord Benyon (Con)
I have read some of the speculation in the press, but this is not something that has come to me in my department as part of these discussions. We will see in the near future whether the noble Baroness is right or wrong when this legislation is published and pre-legislative discussions have taken place.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend agree that, if people do not like the process by which foie gras is made, the option is not to buy and not to eat it and we do not need the Government to ban it?
Lord Benyon (Con)
The Government are bringing in a range of animal welfare measures. We have a proud tradition in this country across parties of having concern for animal welfare. There is a long list of measures that the Government can take, have taken and will take. When the animals abroad Bill is published, everything in it has to be seen in relation to a much wider determination to protect animal welfare.
Baroness Hayman of Ullock (Lab)
My Lords, further to the questions from noble Lords around what has been in the press, if bans on foie gras and fur imports are to be dropped from the animals abroad Bill, can the Minister confirm whether the noble Lord, Lord Goldsmith, is being sidelined by the Government and his department? He has previously stated that the Government would legislate to ban fur imports at the earliest available slot. There seems to be general back-tracking on animal welfare promises from this Government, so can the Minister assure us that the noble Lord, Lord Goldsmith, has the full support of the Prime Minister and the Treasury on these matters?
Lord Benyon (Con)
I can assure the noble Baroness that my colleague and noble friend Lord Goldsmith has the full confidence of the Prime Minister and is very active on these issues. He would be answering this Question if he was available.
Lord Rogan (UUP)
My Lords, I note that the Defra consultation on this matter received over 44,000 responses, with 86% of respondents supporting the proposed ban. As the noble Lord, Lord Selkirk, said, 300 trophies have since been bought into the United Kingdom. Can the Minister tell the House how many more trophies are likely to be imported into this country before the long-awaited ban is implemented?
Lord Benyon (Con)
The noble Lord knows the length of time it takes for legislation to get on to the statute book, but once it is there, imported trophies will be banned. I would expect that, if the Bill comes in in the relatively near future, by this time next year the noble Lord’s ambitions will be realised.
Lord Hannan of Kingsclere (Con)
My Lords, has my noble friend the Minister made any assessment of the possible unintended consequences of this legislation? In the late 1970s, Kenya banned trophy hunting and saw the number of its elephants plummet. South Africa and Rhodesia, as it then was, went the other way and said that, if you owned land, livestock on that land was your property. As a result, local people treated large animals as a renewable resource rather than a pest. Can my noble friend confirm whether the Government have assessed whether there might be increased pressure on the habitats of rare species as a result of this legislation?
Lord Benyon (Con)
As part of the consultation, we heard from a number of different organisations and Governments, including those of South Africa, Mozambique, Namibia, Canada, Zambia and Botswana, all of which support trophy hunting as a conservation tool. There is a wide-ranging debate about the value of well-managed conservation hunting and the impact it can have on increasing the number of rare and endangered species as against badly managed hunting, which sees large amounts of rare and endangered species killed and has no value to conservation.
Covid-19: Vaccination Programme
Lord Londesborough
To ask Her Majesty’s Government what financial support they will provide to the global Covid-19 vaccination programme in 2022; and how many vaccine doses the United Kingdom has donated to date.
Lord Sharpe of Epsom (Con)
My Lords, the UK has committed up to £1.4 billion to help end the Covid-19 pandemic and address its impacts. This includes funding for COVAX, which has now delivered more than 1 billion vaccines worldwide. We are working with partners on how to finance Covid-19 vaccines more sustainably for 2022 and beyond. To date, the UK has donated 32.2 million doses; 29.5 million have been delivered to recipient countries. COVAX is in the process of allocating and delivering the remaining 2.6 million doses.
Lord Londesborough (CB)
I thank the Minister for his detailed response, but we are way behind the WHO’s target of vaccinating 70% of the world by September. Just 6% of people across low-income countries are fully vaccinated, while 3 billion people have not received a single dose. Last month, the Prime Minister was warned by 300 leading scientists that wealthy countries were pursuing
“a reckless approach to public health”.
Will the Government step up and further commit to the UK’s £1 billion fair-share contribution towards the urgent $23 billion funding needs of the Access to COVID-19 Tools Accelerator, and help to address this moral and economic dereliction of duty?
Lord Sharpe of Epsom (Con)
My Lords, the UK is in total agreement with the noble Lord that vaccine inequity is shocking. We are committed to supporting global vaccination and equitable access in the poorest countries. That is why we used our G7 presidency in 2021 to push for more commitments and continue to play a leading role with COVAX and other partners in strengthening procurement and delivery efforts with partner Governments. We have delivered £548 million to COVAX’s advance market commitment, which will help to deliver up to 1.8 billion doses for developing countries in 2022. To date, more than 1.19 billion vaccines have been delivered globally through COVAX to 144 participants, including 1 billion doses to almost all of the AMC-eligible countries. Some 86 of those countries are eligible, and 44 of them are in Africa.
Baroness Thornton (Lab)
My Lords, does the Minister agree that it is unacceptable that, through mismanagement, this Government allowed more than 500,000 vaccines that could have gone to developing countries to be destroyed? Given that the UK has the expertise, technology, resources and production capacity to vaccinate the whole world, why is the vaccination gulf between us and the global south so great?
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Baroness for her question, which relates to shelf life. Decisions on donation are driven by the availability of vaccines from domestic supply. Once the Health Secretary is confident that vaccines are available to donate, the Foreign Secretary prioritises how they are shared. Avoiding vaccine expiry and the wastage of vaccines is a UK core objective, determining when and where we share and deploy our doses. For all bilateral donations, we have sought assurances that recipients have the capacity to roll out the quantity of doses in line with the national vaccination programmes ahead of their expiry date. Vaccines delivered by COVAX are delivered in consultation with countries and distributed in line with the WHO’s equitable allocation framework.
Baroness Sugg (Con)
My Lords, the price point of how we declare our donated vaccines as overseas development assistance matters here, and the Centre for Global Development has a robust calculation showing that the average price the UK has paid is $4.40. This is less than the OECD’s DAC ODA amount of $6.72, but we can indeed charge what we pay for them. Can my noble friend the Minister reassure me that the Government will not make any profit from the vaccines that we donate, which were, of course, originally bought for the UK? Charging poorer countries more than we paid for these vaccines not only is morally wrong but will reduce our international development spending further.
Lord Sharpe of Epsom (Con)
I thank my noble friend for her question. She is right: the OECD’s Development Assistance Committee secretariat has now provided guidance for reporting donations of excess Covid-19 vaccine doses in 2021 in ODA. The UK is considering this guidance together with our other commitments and obligations and is actively engaging with the Development Assistance Committee secretariat on valuing Covid-19 vaccines in ODA assistance in 2021. The DAC secretariat will review its methodology for donations in 2022, and all donations to date have been to ODA-eligible countries.
Lord Wigley (PC)
My Lords, what consideration have the Government given to the possibility of offering tax incentives or financial aid for companies from the United Kingdom which might set up manufacturing plants in overseas countries so that they can help directly in those areas?
Lord Sharpe of Epsom (Con)
My Lords, I am not familiar with the tax incentives that may have been offered, but we have provided technical support to develop business cases for, for example, Biovac to manufacture vaccines in South Africa, the Institut Pasteur in Dakar, Senegal, and to the Moroccan Government. The technical support helped to catalyse investment that will see Covid-19 vaccines produced on the African continent in 2022. We also welcome the work of the COVAX supply chain and manufacturing task force, which brings together partners to identify immediate and longer-term actions to increase the volume and security of global vaccine supply.
Baroness Sheehan (LD)
My Lords, this March the UK is hosting the pandemic preparedness summit, at which CEPI, the Coalition for Epidemic Preparedness Innovations, is aiming to raise $3.5 billion for its 2022-26 strategic period. Will the UK Government take this opportunity to commit £300 million and act as a diplomatic leader to ensure that CEPI has the resources it needs to continue its crucial work?
Lord Sharpe of Epsom (Con)
The noble Baroness is quite right: the UK is hosting the global pandemic preparedness summit on 8 March this year, and that will raise funds to achieve CEPI’s goal to develop vaccines against new threats in 100 days and rapidly scale up regional manufacturing for affordable global supply. CEPI’s new five-year strategy aims to develop vaccines to prevent future pandemics, cutting the time it takes to develop new vaccines from 300 to 100 days. The UK is a long-term partner of CEPI and one of its biggest supporters, giving £276 million in funding since 2018. There will be a pledge of more money towards CEPI at the replenishment summit next month, but I am afraid that I do not know the number. I could go on about CEPI, but I think that is enough.
Baroness Deech (CB)
My Lords, it is reported that Nigeria will give away hundreds of thousands of doses because it is unable to deliver them, and that Iran likewise has wasted nearly a million doses because they were made in America. What steps can the Government take to make sure that the infrastructure is available and that doses will not be wasted for political reasons?
Lord Sharpe of Epsom (Con)
I think I have already answered the question on shelf life. I obviously cannot comment on the Iranian Government. In terms of what more the Government can do, I have already outlined a number of measures we are trying to take with regards to shelf life in particular. As I say, these decisions are taken very carefully by the Foreign Office and the health department.
Lord Udny-Lister (Con)
My Lords, will the Minister tell us what is happening for those countries which have difficulty in getting supplies in because of conflict or non-recognition? I use the example of Somaliland, where all the supplies go through Somalia and then arrive in Somaliland only when they are out of date. There are a number of countries like this, so what action is being taken to deal with these problem areas?
Lord Sharpe of Epsom (Con)
My Lords, the UK is supporting the humanitarian buffer of last resort to support populations displaced by conflict in various parts of the world, including Afghanistan. Obviously, we welcome continued application of this instrument to support vulnerable populations where needed.
Baroness Ritchie of Downpatrick (Lab)
My Lords, yesterday the Prime Minister said in the other place:
“We will continue to support other countries in developing their own surveillance capabilities, because a new variant can emerge anywhere.”—[Official Report, Commons, 21/2/22; col. 44.]
Can the Minister detail when the Government will reinstate the overseas aid budget to 0.7% of GNI to provide that necessary capability and funding capacity to help countries in the developing world deal with new variants?
Lord Sharpe of Epsom (Con)
The noble Baroness is aware that I cannot say that—it is a matter for the Chancellor. But I can say this: on 30 December, the Foreign Secretary announced a £105 million emergency package to support low-income countries, particularly in Africa, to prepare for and respond to omicron. That includes scaling up testing, especially in parts of Africa where testing rates remain lowest, and it will enable health systems to track and respond more effectively to Covid-19, improving access to medical oxygen supplies, and so on.
Baroness Blower (Lab)
My Lords, I am sure the Minister agrees that Her Majesty’s Government should redouble their efforts to ensure that vaccines are shared in a safe, timely and effective manner, but can he also say whether only vaccine doses that are actually used should be accounted against the ODA budget?
Lord Sharpe of Epsom (Con)
I am afraid I cannot say that, but the ODA budget and how we account for these things are currently being considered by the department. I am sure more information will be forth- coming very soon.
Windfall Tax: Oil, Gas and Energy Companies
Lord Sikka
To ask Her Majesty’s Government what consideration they have given to levying a windfall tax on the profits of oil, gas and energy companies.
Baroness Penn (Con)
The Government place additional taxes on the extraction of oil and gas, with companies engaged in the production of oil and gas on the UK continental shelf subject to headline tax rates on their profits that are currently more than double those paid by other businesses. To date, the sector has paid more than £375 billion in production taxes. All taxes are kept under review and any changes are considered and announced by the Chancellor.
Lord Sikka (Lab)
My Lords, the primary cost of producing oil, gas and green energy has hardly changed. Only the selling price has, resulting in excessive profits without any additional effort for the companies. A windfall tax is needed to help hard-pressed households. Why are the Government so wedded to their ideology rather than helping the people?
Baroness Penn (Con)
My Lords, the noble Lord is correct to talk about price fluctuations in the sector, of course. In spring 2020, the price of oil crashed to below $20 a barrel. That year saw investment in the sector at an all-time low, so an abrupt tax change would create further uncertainty and potentially undermine significant investment in that sector. However, the Government remain committed to supporting households with the cost of energy and have set out plans to do so.
Lord Naseby (Con)
My Lords, instead of threatening major companies such as Shell and BP, would it not be more sensible and in the interests of UK Ltd to recognise that we need those companies to pioneer work in new areas of supply for fuel and power, particularly hydrogen and areas like it?
Baroness Penn (Con)
My noble friend is right. The North Sea transition deal is a global exemplar of how the Government can work in partnership with the offshore oil and gas industry to achieve a managed energy transition.
Lord Bilimoria (CB)
My Lords, like the noble Lord, Lord Naseby, and as president of the CBI, we feel that a windfall tax is not efficient, as it puts investments at risk for companies that are key to our transition to net zero. Does the Government agree? Secondly, do they agree that this is absolutely the wrong time for our tax burden to be at its highest level for 70 years? Businesses have suffered so much through the pandemic; will this not stifle what is already a fragile recovery?
Baroness Penn (Con)
My Lords, the Government agree that an abrupt tax change could put investment in this sector at risk. While the overall tax burden is high, we have had to take certain decisions to aid our recovery from the pandemic. We saw the Government put in place so much support during the pandemic, but we need to recover, for example by getting on top of NHS waiting lists.
Lord Browne of Ladyton (Lab)
My Lords, the Minister tells us that the Government are concerned that a windfall tax would deter companies from investment, so let us look at that. The Norwegian Government tax companies at 22% and add 53% for those that operate in the North Sea. We apply 40% tax to profits, but we have massive rebates for investment and for decommissioning, with the result that, over five years, 19 companies that operate in the North Sea have paid no tax at all. The Norwegians have no problem getting corporate investment in the North Sea; why would we have any problem getting corporate investment in the North Sea, if we took some of these unearned profits this year to help poor people with difficulties paying their own energy bills?
Baroness Penn (Con)
My Lords, I want to be absolutely clear that the Government have put in support to help people pay their energy bills—we are spending around £9 billion on that. The noble Lord is right that the UK provides tax relief for decommissioning costs, which is something that we have in common with Norway. Of course, different oil and gas fields are at different levels of maturity and have different costs relating to further extraction, and that is reflected in our approach to the North Sea oil and gas fields that we have in the UK.
Baroness Sheehan (LD)
My Lords, despite fine words on net zero, it is nigh on impossible to get an accurate picture of the amount of money that oil majors spent on renewables. The little we do know shows that their words pay lip service only. Eni spent less than 2% on investment in renewables, and Shell and BP spent similarly derisory amounts. It really is time to stand up to them: tax their extreme profits and use the money to help people who are having to make desperate choices between heating and eating.
Baroness Penn (Con)
My Lords, I am afraid that the Government do not agree with the approach of the noble Baroness. However, where we do agree is on the essential nature of providing further support to households that are struggling with their fuel bills. That is why we are providing a £150 cash rebate for homes in council tax bands A to D, which is about 80% of all households, and a further £144 million of discretionary funding to councils for those households that would not otherwise qualify for that rebate.
Lord Forsyth of Drumlean (Con)
My Lords, if we were really concerned about the cost of energy to poor people in our country, would it not be a good idea to remove the green levies that are adding to their bills? Surely it is naive beyond belief to imagine that we can do without gas and oil in the immediate future. The reason that prices are so high is that we are not able to produce enough of our own gas supplies. That requires investment and surely means not taxing the people who are capable of providing it.
Baroness Penn (Con)
My Lords, my noble friend is right that in the short to medium term we will continue to need oil and gas supplies, and that is why the Government think that it is important that investment continues to be made in our oil fields. But we also need to fund the transition to a net-zero economy, where we move more towards clean and renewable energy in the longer term. That is why we have programmes such as the North Sea transition deal, to do that in a managed and orderly way.
Lord Tunnicliffe (Lab)
My Lords, let me be absolutely clear: the Labour Party would immediately implement a windfall tax on oil and gas profits. Unlike the Government’s buy now, pay later scheme, our plan would provide a genuine £200 off most household bills, with targeted support of £600 for those who need it. The Chancellor will make his Spring Statement a month from tomorrow, just weeks before the energy price cap is hiked. Will the Government use that occasion to do the right thing and adopt Labour’s proposals?
Baroness Penn (Con)
My Lords, Labour may say that it would impose a windfall tax immediately but under its proposals the support would not then be passed on to consumers immediately; it would take far longer under its plans to get money into people’s pockets. Furthermore, Labour’s plans for a VAT cut would not target support at those who most need it, with some of the wealthiest households saving the most money under the proposals.
Baroness Boycott (CB)
My Lords, surely the Government agree that the long-term future has to be renewable energy, yet at the moment the oil companies are putting out that 20% to 25% of our energy bills is coming from green levies, when in fact the figure is 8%. This cannot be the moment that we take our foot off the gas, so to speak. Will the Government give the House a guarantee that they will not reduce the green levy but look to increase it, so that we do not end up with these problems again and again?
Baroness Penn (Con)
My Lords, I would not speculate on the green levy or any other tax or levies outside of the Budget process. What I would say to the noble Baroness is that we remain committed to our transition to net zero. While we recognise that in the short term we need to continue our oil and gas supplies, in the longer term we need to move to greener forms of energy.
Lord Oates (LD)
My Lords, does the Minister recognise that between 2010 and 2020 real energy bills for consumers fell? That was in significant part because of the green levies which helped to reduce energy consumption, quite contrary to what the noble Lord on the Government Privy Bench has just said. Will she ensure that we do not cut these energy-saving levies, and will she make absolutely clear that what is driving up prices is the cost of fossil fuels, not of renewables and green levies?
Baroness Penn (Con)
My Lords, I believe I have already answered a question about the level of the green levy on bills. However, I have also given the reassurance that the Government are committed to their net-zero targets. That involves a transition from fossil fuels to greener forms of energy, which is why we have a plan in place to do so.
Baroness McIntosh of Pickering (Con)
My Lords, does my noble friend agree that it is only in this sector that the industry is not paying for future infrastructure? Will she ensure that, rather than funding renewable energy through green levies, companies will be able to go to the market and fund them in the usual way?
Baroness Penn (Con)
My Lords, the green levy on bills is in place to help move the transition towards more renewable energy sources. It has been successful in doing that so far. The Government remain committed to that transition.
Living with Covid-19
(2 years, 1 month ago)
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Baroness Smith of Basildon (Lab)
My Lords, the Prime Minister was clearly very upbeat throughout his Statement yesterday, announcing an end to all legal Covid restrictions in England and setting out part of the Government’s living with Covid plan. The pace and the efficiency of the vaccine programme, the justification for the changes, has been extraordinary. I again commend and thank the scientists, staff and volunteers of the National Health Service, and indeed some Ministers, for their collective efforts.
As many in your Lordships’ House have said before, Covid and our necessary response to it has taken an enormous toll on the nation’s physical and mental health, on society as a whole and on every aspect of our economy—we are all desperately keen to get back to how things were. Yet even the Prime Minister admits that Covid is not going to suddenly disappear, which means that this next stage—with a now hopefully much reduced virus—has to be well thought out, manageable and resilient over time.
I would like to probe the background to the decision with the noble Baroness and clarify some of the points about how we move forward. First, as the noble Baroness is aware, the BMA and other bodies do not believe that the decision is evidence led. Can she offer any reassurance to your Lordships’ House and state whether the decision is in line with the recommendations of SAGE, as well as those of the Chief Medical Officer and Chief Scientific Adviser?
On these Benches, we are optimistic that we could well be moving on from the very worst of this pandemic. Vaccinations, testing and self-isolation have been highly effective in reducing infections and transmission and thereby reducing the likelihood of new variants. But the SAGE advice is that something worse than omicron will be an ever-present threat. So, with all the restrictions being removed, there is real concern that ending the legal requirements to isolate and stopping free tests on 1 April feel quite arbitrary. So, can the noble Baroness say anything further about the evidence base for the timing of those two points following restrictions being removed, and commit to placing supporting information in the Library? Also, will there be an impact assessment on the consequences of lifting restrictions all at once, alongside the testing and self-isolation, and what mitigations are being considered?
On self-isolation, the Prime Minister draws a comparison with flu in terms of staying at home. Yet we know Covid is much more highly transmissible. If I have understood this correctly, the advice is to make a personal decision on whether or not to self-isolate. But without a legal requirement, what assessment has been made of high-risk workplaces such as care homes and the National Health Service? The noble Baroness will understand that most people want to do the right thing. But some are going to struggle with, on the one hand, guidance telling them to self-isolate if positive, and, on the other hand, pressures—either financial or from an employer—forcing them to work.
Can the noble Baroness also provide further details on the cost of purchasing tests? With rapidly increasing household bills, paying for testing, particularly where an employer might require it, will be an additional pressure for many. The Prime Minister has said that free tests will be available to the oldest age groups and the most vulnerable. What about those working with them? In the Statement, Mr Johnson merely offered that the Government were working with retailers to supply tests, so can the noble Baroness shed any further light on this, including on whether the reports of £3 for each individual test are accurate and whether the price will be fixed?
Also, will there be a greater effort to support UK manufacturers rather than relying on imports? Most of the tests I have had have come from China. Also, what is the Government’s response to concerns about the sale of the UK’s flagship Vaccine Manufacturing and Innovation Centre in Oxford, at a time when vaccines are so important?
The Prime Minister reflected on the eye-watering amount of money spent on test and trace. He said it was more than the entire budget of the Home Office. Given the criticisms of that service, is the noble Baroness satisfied that the budget was well managed and value for money, or will an independent assessment be made of this?
In terms of going forward, despite the success to date of vaccines, only two-thirds of those eligible for a third jab have had one. The advice is that two jabs are not enough to provide maximum protection. With all the regulations being scrapped, how will the Government ensure that everyone eligible for a booster actually gets one? With the evidence that immunity and protection are reduced quite significantly over time, we welcome the rollout of a further booster for those who are over 75. Can the noble Baroness say how long this will be for? Will it be ongoing at least for the foreseeable future, perhaps as people reach their 75th birthday?
In the Statement, the Prime Minister committed to monitoring future outbreaks. That seems sensible. But what was missing from the Statement was what the Government would do if they identified such an outbreak—or even if the emergence of a new variant was identified. Without testing and self-isolation for those infected, I am not clear what the Government’s plan is. So, can she provide any further information on that and the purpose of the monitoring, or write to me if it is not yet available?
It is absolutely critical that the right measures are in place to support people to make the right, proportionate choices going forward. We know now that, moving forward, we have to live with the virus. But that is not the same as ignoring it, and I am really not sure that the Government have the sequencing of events or the messaging right. Following this announcement, it seems that the message that the Covid-weary public can take away is that Covid is no longer a threat, because it is not essential to know whether you have it or not, as there is no testing, and it is not essential to self-isolate if you have. That is going to lead many to conclude—wrongly, as even the Prime Minister has admitted—that the pandemic is now over. So, can the noble Baroness today give us some reassurance of what the Government’s plans are in the face of any further outbreaks or new variants and what the Government are going to do to encourage the public and signal the importance of everyone getting their booster? Also, reassurance on the issue of government monitoring of any new variants or outbreaks would be really helpful, because we need to understand why the Government are doing that and what the plan is if they identify any.
Lord Newby (LD)
My Lords, I begin where the Prime Minister concludes his Statement:
“We do not need laws”,
he says,
“to compel people to be considerate of others. We can rely on that sense of responsibility towards one another”.—[Official Report, Commons, 21/2/22; col. 45.]
If this were the case, many laws would not be on the statute book and, indeed, many aspects of the regulations that we have had in place over the last two years would not have been necessary. For this Prime Minister to claim that we can rely on the sense of responsibility towards one another shows a remarkable lack of self-awareness. He did not behave responsibly even when there were laws in place, so to remove all legal restraints at one fell swoop seems to me, at best, an extremely risky option. Doing so makes sense only if we are confident that the costs involved are manageable.
It is obviously a great relief that numbers are falling and that serious illness is on the wane, but the death only last week of one of my colleagues, having been in ICU with Covid, is a timely warning to us all that this disease is far from done. While everybody agrees that we have to learn to live with Covid, that is not the same as getting rid of every precautionary measure. We need to ensure that cases continue to diminish, the vulnerable are protected and pressure on the NHS is bearable.
The Prime Minister repeatedly said yesterday that taking personal responsibility requires people to test themselves and to self-isolate if they think they have the disease, but, for those on limited income, including the millions who are not eligible for sick pay, the cancellation of self-isolation support payments will make that an impossible choice. If faced with heating or eating, or paying for a coronavirus test, it is pretty obvious which will be the lowest priority. So, we have real concerns about getting rid of free testing, especially for those who are either vulnerable or have family members who are vulnerable.
The latest testing figures show that, every week, nearly 4 million people are taking regular Covid tests—on average, two a week. This includes people who take tests to protect their elderly relatives and friends, as well as vulnerable workers in people-facing industries such as hospitality who are concerned about their health. If people have to pay for this, we estimate that it could amount to an annual testing cost to an individual of up to £500. Does the Minister agree that this is simply unfeasible for many people and is also, in effect, a tax on caring? While the Prime Minister said that half a million people who are the most severely immunocompromised will get free tests, their carers and families will not.
There is also a more important principle at stake here. The Government have consistently said that the NHS is safe in our hands because it is free at the point of need. However, Covid-19 is a notifiable, highly infectious disease under the Public Health (Control of Disease) Act 1984 and the Health Protection (Notification) Regulations 2010, which say that medical practitioners must test potential cases under the NHS so that infections can be managed and monitored. Currently, all notifiable disease tests are free of charge but, from 1 April, that will no longer be the case. So, how can the Government claim that the NHS will continue to be free at the point of need? In this case, it clearly will not.
The Statement refers to SAGE’s concern about the future path of the pandemic, which underlines the importance of the survey work carried out by the ONS and Imperial College. Can the Leader confirm that these surveillance operations at ONS and Imperial will continue on a substantial scale, and can she say how quickly full, free testing and tracing can be restarted in the not unlikely event of another variant emerging?
While vaccination remains a vital tool in learning to live with Covid, some people’s immune systems wane quickly after their booster jabs. The Statement says that these people will have access to antivirals and other treatments, but the antivirals must be administered within 48 hours of symptoms starting. Can the Government confirm that such people will get access to rapid testing, to be able to start these vital treatments within the first 48 hours?
Finally, the Statement mentions the UK’s G7 plan for future pandemics. How do the Government respond to comments from the WHO that countries such as the UK are dismantling the precautions needed to ensure a safe reduction in Covid? We will learn to live with Covid, but the Government have a lot more work to do to ensure that we do it with minimal risk.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, I thank the noble Baroness and the noble Lord for their comments. On behalf of the whole House, I send condolences to colleagues on the Liberal Democrat Benches on the loss of one of their dear colleagues, and to Lord Chidgey’s family. He is in our thoughts.
The noble Baroness and the noble Lord asked about SAGE advice. We have continued to take and publish the best advice and analysis from scientific groups such as SAGE and its subgroups, which has been used in decisions taken by Ministers, alongside economic and social considerations. The latest SAGE advice was referenced within the strategy that was published on 10 February. We will continue to publish SAGE advice as and when we have it.
The noble Lord rightly pointed out that the proportion of infections from the current omicron variant resulting in hospitalisations is significantly lower than in previous waves, with less than one per 100 infections, compared with over four per 100 infections during the alpha peak. Although there is a delay, we are also seeing a welcome fall in deaths, which we expect to continue.
The noble Lord and the noble Baroness both referred to the changes in the self-isolation regime and the legal requirement finishing on 24 February. We will be replacing that with guidance in the short term, still advising people with Covid to stay at home and avoid contact with others. From 1 April, we will be issuing new guidance setting out the ongoing steps that people with Covid should take to minimise contact with other people. There will be specific guidance for staff in particularly vulnerable services, such as adult social care, healthcare, and prisons and places of detention. Health and social care workers will continue to be asked to stay at home following the lifting of the legal requirements to self-isolate. We will review over the coming weeks the long-term approach to managing Covid in health and social care settings and will publish adult social care guidance, again by 1 April.
The noble Lord and the noble Baroness asked about testing. Free symptomatic testing will remain available to those at highest risk of Covid and to social care staff. Again, details will follow ahead of 31 March. We will also set out in due course further details on which high-risk groups and settings will be eligible for continued free testing. The noble Lord and the noble Baroness also asked about the costs of tests. We will be working with retailers to establish and develop a private market for lateral flow tests. There have been private markets operating in the US and many European countries for some time now. Retailers will be setting the price, but we will be ensuring that the private testing market is properly regulated, including monitoring prices charged, and we will continue to work with UK companies in developing lateral flow tests, which the noble Baroness referred to.
The noble Baroness asked about the value of test and trace and its cost. Of course, we are all aware that we began the pandemic with no diagnostics industry and yet have conducted the most tests in Europe. We have conducted more than 460 million tests, and over 36.3 million positive cases and their contacts have been reached who could have spread the virus. We have built a testing network from scratch that can process millions of tests per day—more than any other European country—and over two billion lateral flow tests have been distributed across the UK since the start of the pandemic. That is a pretty impressive record.
The noble Baroness mentioned, rightly, that we have accepted JCVI advice for a new spring booster, to be offered to those over 75, older care home residents and those over 12 who are immunosuppressed. Those doses will be given six months after their most recent booster dose. We have also procured five million patient courses of antivirals, more than anywhere else in Europe, which is a significant supply and will provide a crucial layer of protection going forward. We are rolling out neutralising monoclonal antibodies and antiviral treatments for patients at highest risk. Up to 1.3 million patients could benefit if they are clinically eligible, and we have a plan to personally communicate with these relevant patients so that they can take advantage of the treatments that we have invested in.
Both the noble Lord and the noble Baroness talked, quite rightly, about future surveillance and what we would be doing about it. UKHSA will continue to sequence infections and monitor a range of data, including infections, hospital admissions, patients in hospital and deaths with Covid. It will maintain critical surveillance capacity, including the Covid infection survey, genomic sequencing and additional data, and this will be augmented by continuing the SIREN and Vivaldi studies.
As the noble Lord and noble Baroness pointed out, we will have to keep a very close eye on the emergence of new variants, so we will retain the core capabilities and infrastructure required to scale up a proportionate response in the event of a resurgence or a new variant. Obviously, this will involve the continued use of pharmaceuticals as the first line of defence, along with continuing to develop capacity to respond in the health system. We will retain laboratory networks and diagnostic capabilities so that PCR testing can be stood back up in the event of a resurgence, and we will retain the ability to stand up the national trace response if it is needed. Local health teams will continue to use contact tracing and provide context-specific advice, where they assess that to be necessary, as part of their role in managing local outbreaks, as they do with other infectious diseases. We will also maintain the ability to increase asymptomatic testing in the NHS and care homes.
UKHSA continues to have good stocks of lateral flow tests and will manage them to enable the Government to establish an adequate stockpile that could be rapidly deployed in future outbreaks. We will also continue to run public health campaigns such as we have seen in the past to encourage people to think about their behaviour and to ensure the continuation of the good work that we have done to understand how to deal with Covid.
Finally, the noble Lord asked about the global scene. He is probably aware that in March we are hosting the Global Pandemic Preparedness Summit for the Coalition for Epidemic Preparedness Innovations, and we are working with international partners on future pandemic preparedness, including through a new pandemic treaty, an effective early warning system—or global pandemic radar—and a mission to make safe and effective diagnostics, therapeutics and vaccines available within the first 100 days of a future pandemic threat being identified; this is, of course, a global problem.
Baroness Brinton (LD) [V]
My Lords, the 3.7 million clinically extremely vulnerable people already follow government advice for them, regularly checking the daily Covid dashboard to see how many cases there are in their area. This will be even more important when others no longer have to self-isolate when they get Covid. They cannot do this when widespread testing and the daily dashboard stop. What advice would the Leader give these people on how to assess their own risk after 1 April?
Baroness Evans of Bowes Park (Con)
The noble Baroness is absolutely right that throughout the crisis we have led the way on data reporting, and have ensured that data is always available to the public. UKHSA will keep the content and frequency of reporting on Covid—including the GOV.UK dashboard—under close review, to ensure that statistics are being produced of the appropriate quality and transparency, and that they remain useful and relevant in accordance with the code of practice for statistics. So we will continue to publish information.
Lord Hunt of Kings Heath (Lab)
My Lords, I refer to the SAGE advice, from the last meeting, that the Leader mentioned. It was said that some people may take the removal of free and accessible testing as a signal that they should continue to attend workplace social gatherings while showing Covid symptoms. What is the Government’s response to that? Why are they getting rid of free testing?
Baroness Evans of Bowes Park (Con)
We have always made it clear that as we move through Covid we would move away from free testing, and that is what we intend to do. As there are now high levels of immunity across the population as a result of vaccination and natural infection, future testing and isolation will play a less important role in preventing serious illness, and, as I have said in response to the noble Baroness and the noble Lord, we will be working with retailers to establish and develop a private market for lateral flow tests.
Lord Bilimoria (CB)
My Lords, last summer and winter the CBI, of which I am president, said that there must be a three-pronged attack. The first prong was vaccines, and hats off to the Government for an excellent vaccine programme. The second was providing free lateral flow devices to businesses and citizens, and the Government have been the best in the world at doing this so far; no other country has done it like we have. The third was antiviral treatments, and the Government have almost 3 million. Why are the Government withdrawing the free lateral flow tests so early, when it has taken one year for people to get used to using them regularly? We ran out of them in December and January. They are very effective. Why are the Government doing this? Surely they are being penny-wise and pound-foolish. Businesses and citizens should be using them. We need them for a while longer.
Baroness Evans of Bowes Park (Con)
The noble Lord will be aware that we have announced that we will end free testing, but it will not finish until the end of March; we are not stopping free testing immediately. There will obviously be the opportunity for people to get tests during that time. As the noble Baroness said, the test, trace and isolation budget in 2020-21 exceeded the entire budget of the Home Office. It cost a further £15.7 billion this financial year and £2 billion in January alone, at the height of the omicron wave. We want to move to the next phase as we begin to live with Covid, and ending free testing is one aspect of that approach.
Lord Robathan (Con)
Unusually, I congratulate the Government—first on the outstanding success of the vaccine programme, which really has been world leading, and secondly on this policy of living with Covid. It is extremely important that we rely on personal responsibility and common sense, and do not listen to the siren voices from SAGE and others who say that we must stay locked down for ever. Can my noble friend please tell me what the death rate has been in the last month, compared with the death rate in 2018-19?
Baroness Evans of Bowes Park (Con)
I thank my noble friend. I do not have the exact figures to hand but, as I said, the reporting of deaths is always slightly delayed. It has started to decline now and we expect this to continue. The latest evidence suggests that the risk of presentation to emergency care or hospital admission with omicron is approximately half that for delta.
Baroness Ritchie of Downpatrick (Lab)
My Lords, access to free testing with lateral flow tests ensured that many of those who cannot afford to pay for tests were able to take them and to help prevent the transmission of highly transmissible variants. Will the Leader therefore tell the Prime Minister from your Lordships’ House today that we want the free lateral flow tests to remain for a considerable time longer to ensure that the Government have the necessary contingency capabilities to respond rapidly to any new variant, as outlined in the Government’s Statement in the other place yesterday? We know that unless other countries have the capacity to deal with variants, we are all in a state of danger.
Baroness Evans of Bowes Park (Con)
As I mentioned in response to a previous question, we are giving notice that free lateral flow tests will come to an end at the end of March. But, as I also said in an earlier answer, we will retain laboratory networks and diagnostic capabilities to ensure that PCR testing can be stood up in the event of a resurgence or a dangerous new variant.
Baroness Browning (Con)
With these changes in various settings, can my noble friend update the House on what the guidance is now for in-patients in hospitals? Exactly what level of barrier nursing will there be to make sure that Covid patients—like those with any other contagious disease—are protected, in their own interests and those of other vulnerable in-patients?
Baroness Evans of Bowes Park (Con)
As I said, in due course we will set out further details on which high-risk groups and settings will be eligible for continued free testing. As I also said, we will publish guidance specifically in relation to adult social care and other high-risk settings well in advance of when we move towards the end of free testing.
Baroness Meacher (CB)
My Lords, I want to raise a very particular issue raised initially by the noble Lord, Lord Newby, and the noble Baroness, Lady Brinton. The Government are rightly retaining free tests for exceptionally vulnerable people but by the time an exceptionally vulnerable person is found positive, it is too late; he or she may die. Will the Government consider tweaking the rules to enable the children— and maybe the husband and other members of the household—of exceptionally vulnerable people to have free lateral flow tests so that the exceptionally vulnerable person can then take exceptional measures to protect themselves if one of their household is found to have Covid?
Baroness Evans of Bowes Park (Con)
As I say, we are not ending free testing immediately. There is some time and obviously, as I said, there will be further guidance and information on a whole range of issues including, I am sure, the situation the noble Baroness mentions. We have announced that the end of free testing is coming but we have also made it very clear that for vulnerable groups there will be further guidance and information about where testing will continue to be available.
Lord Alton of Liverpool (CB)
My Lords, will the noble Baroness return to a question put to her by the noble Baroness, Lady Smith of Basildon, about the number of lateral flow tests that have come from the People’s Republic of China? Is she aware that by the summer of last year over a billion such tests had been bought by the United Kingdom? This week in another place, it was confirmed that we have bought 24.1 billion PPE items with China registered as their country of origin, including 10.7 billion gloves. Before we consider this further during the course of the Health and Care Bill, on an amendment from her noble friend Lord Blencathra, will the noble Baroness undertake to tell us how much has been spent on these items and what we are doing to build up our own resilience and reduce dependency?
Baroness Evans of Bowes Park (Con)
As I said in response to the noble Baroness, we are working with manufacturers in the UK to encourage the build-up of supply and capability in this country and we will continue to do so because we want resilience in this area.
Lord Roberts of Llandudno (LD)
My Lords, may I remind the House that we are not dealing with one nation but with four nations? The devolved Administrations —Northern Ireland, Scotland and Wales—all take their own decisions and rightly so because they held referendums and so on to give that authority to the particular nations. What discussions have taken place to try to get some resolution? For instance, yesterday I was on the train from Llandudno Junction—a wonderful area for a holiday—and I had to wear my mask until I got to Shotton; at Shotton we were entering England so I could discard my mask. Have we learned any lessons at all about international UK relations following this pandemic?
Baroness Evans of Bowes Park (Con)
We have worked very closely with devolved Administrations throughout the pandemic to effectively support citizens but, of course, health is a devolved issue so the Administrations have made their own decisions. We have also provided £860 million to the devolved Administrations so they can take the precautions they consider necessary on top of the combined £77.6 billion confirmed in the autumn Budget, so we have worked well together. As I say, however, devolution means that it is for the Administrations to decide their way forward. I believe the First Minister of Scotland, for instance, made an announcement today about changes to the rules in Scotland so I think we are moving forwards together, albeit perhaps at a slightly different pace.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend agree that St Augustine is alive and well on the Opposition Benches? We should remember that these measures were brought in to stop the NHS being overwhelmed. There is no sense whatever that that is happening. If we cannot remove these measures now, at a time when we have done so brilliantly in getting the population vaccinated, we never will and the cost to the economy will be enormous. To hear the president of the CBI, no less, describe £2 billion a month as penny-pinching makes me wince.
Baroness Evans of Bowes Park (Con)
I thank my noble friend. He is right that our plan for living with Covid prioritises moving to a world where the country manages Covid like other respiratory diseases. Our response is underpinned by four principles: living with Covid by removing restrictions while encouraging safer behaviours; protecting those most vulnerable to Covid; maintaining resilience to be able to spot and respond to new variants; and securing innovations and opportunities from our Covid response, including investment in life sciences.
The Lord Bishop of Coventry
My Lords, thanks to the noble Lord, Lord Londesborough, earlier this afternoon your Lordships’ House considered the matter of global vaccine equity, and my sense was that, in many among the House, there was a feeling that more could be done on that front. Would the Leader say whether the Government also feel that more might be done to ensure vaccine equity in the UK itself, as an expression of the noble and laudable commitment to levelling up?
Baroness Evans of Bowes Park (Con)
Certainly, we have been very focused on targeting those communities which have not taken up the vaccine as much as we would like—for a whole array of reasons. For instance, we have invested a further £22.5 million in a community vaccine champion scheme to support 60 local authorities with the lowest take-up, following a £23 million investment in the initial scheme. We have vaccine ambassadors speaking 33 languages between them who are promoting uptake across the country. The recently launched Office for Health Improvement and Disparities will systematically tackle the top preventable risk factors associated with ill health and improve the public’s health and health disparities.
Baroness Chisholm of Owlpen (Con)
My Lords, I am pleased to hear my noble friend say that the Government are still thinking about free testing for social care areas. Would it be possible for her to take back to her colleagues that, if we are not going to have free testing anymore, it would be good to ensure that there are public announcements to tell the public how they should self-isolate if they think they have any Covid symptoms—in the same way as they would with the flu, cold or other illnesses?
Baroness Evans of Bowes Park (Con)
I entirely agree with my noble friend and, as I said, we will be producing further guidance in advance of the end of March, when free testing, for the vast majority of the general public, comes to an end. We will also be publishing further details about the high-risk settings and groups who will be eligible for continued free testing.
Baroness Fox of Buckley (Non-Afl)
My Lords, good riddance to the draconian Coronavirus Act, but could the Government commit to reviewing public health laws which have been used so damagingly to attack civil liberties? Secondly, beyond rolling back laws, how are the Government planning to counter disproportionate fears and risk aversion? The nudging seems to have been rather too successful in frightening people. For example, so many in care homes are still not allowing family members to see relatives and there are miserable rules in place which are the opposite of homely and welcoming. This matter is beyond laws—there is a lot of encouraging to do.
Baroness Evans of Bowes Park (Con)
I agree with the noble Baroness, and that is why we will continue with public health campaigns, as we have seen in the past. We will also be reiterating to the public the safe behaviours we have learnt: the washing of hands; improved hygiene; ventilation; and all those other measures that we can take which do not involve restrictions on people’s lives but which can help ensure we keep Covid at bay—which is what we all want.
Baroness Finlay of Llandaff (CB)
My Lords, when people are in hospital and seriously ill, they are often desperate to see their own family and their family are desperate to visit them. However, at the moment, there are very severe restrictions in place. Will free testing be provided to families to facilitate them visiting and to help take a more compassionate view towards those who are often disorientated, frightened and find that they cannot even telephone their own family because they are in a hospital unit where the phone does not work?
Baroness Evans of Bowes Park (Con)
As I have said, we will be publishing further guidance and information on the high-risk groups and settings where free testing may be available. However, I cannot make that commitment to the noble Baroness.
Lord Dubs (Lab)
My Lords, of course the vaccine programme has been a success, and I concede that. However, almost all of us here know people who have died of Covid. We have had the highest death rate in western Europe, and that sits badly with the tone of self-congratulation which characterised the Statement. Is it not time that the Government showed some humility as well?
Baroness Evans of Bowes Park (Con)
I am sorry the noble Lord felt that way; I do not think that was the tone at all. However, this Statement gives people hope that we are beginning to move out of a very difficult period for citizens across the country. We are all trying to move together to a world where we can manage Covid like other respiratory diseases, because the emotional, social and economic cost of what we have all been through in the last two years has been devastating. I think the public as a whole, and all of us here, I am sure, want to try to move on while understanding the risks ahead, making sure we have surveillance and the ability to ramp things up if we need to—let us hope we do not—to make sure we can keep everybody safe.
Baroness Altmann (Con)
My Lords, I understand the sensitivities and nervousness being expressed around the House about this move, but there is no right time to do this. We must move on from this virus; it is two years on. To restore confidence to the public in living with this virus, I think the Government’s decision is commendable, just as the decision not to impose isolation before Christmas turned out to be correct. On the £2 billion cost of free testing, the national insurance increase that we are about to impose—although I hope the Government may reconsider it—is planned to raise £12 billion. That is just six months’ worth of free testing.
Baroness Evans of Bowes Park (Con)
I thank my noble friend and am grateful for her support for the approach we are taking. As she rightly says, we need to move on and learn to live with Covid. This is another step in that direction.
Lord Brooke of Alverthorpe (Lab)
My Lords, I regret that the noble Baroness dismissed the noble Lord, Lord Dubs, so peremptorily. We have one of the worst records on deaths from Covid in Europe. We have seen that we have one of the unhealthiest countries in Europe. We now have the freedom with Brexit to make many changes which people previously said we were unable to make. When will a programme be set out to make this country the healthiest in Europe?
Baroness Evans of Bowes Park (Con)
As I have said, we have launched the Office for Health Improvement and Disparities, which will systematically tackle the top preventable risk factors and associated ill health, such as smoking and obesity, to improve the public’s health. We will also set out a strategy to tackle the core drivers of inequality in health outcomes in a new White Paper on health disparities this year.
Viscount Thurso (LD)
My Lords, what advice will the Government give to employers? Will responsible employers be expected to provide testing for their employees?
Baroness Evans of Bowes Park (Con)
We will revise the workplace guidance for employers and work with them; again, it will be published shortly, before the full measures we announced yesterday come into effect.
Lord Hannan of Kingsclere (Con)
My Lords, at the weekend Her Majesty the Queen was reported to have tested positive. I am sure noble Lords on all sides will join me in wishing her every success, but I was struck that, immediately, some commentators and politicians jumped on the announcement, saying that therefore we must not go ahead with the unlocking. Surely the two most salient facts are that omicron will reach even the most protected person in the country and that, if a 95 year-old woman can carry on working with her typical devotion to duty, we have reached the point where these non-clinical, non-pharmaceutical interventions are, if not wholly purposeless, certainly disproportionate?
Baroness Evans of Bowes Park (Con)
On behalf of the whole House, I am sure, I wish Her Majesty the Queen all the best and a quick recovery from her current illness.
Procedure and Privileges Committee
17:22 - Division on Lord Foulkes of Cumnock’s amendment - Ayes: 144 / Noes: 133 - Lord Foulkes of Cumnock’s amendment agreed.
The Senior Deputy Speaker
That the Report from the Select Committee Divisions: pass-readers; Sessional select committees; Participation of eligible members in oral statements and repeated urgent questions (6th Report, HL Paper 152) be agreed to.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, the report before your Lordships covers three distinct issues. Before I move to the recommendations on the conduct of Divisions, I will cover the committee’s other recommendations.
The Standing Order on sessional committees is straightforward and the report sets out the committee’s position.
On our recommendation for Oral Statements and the amendment in the name of the noble Lord, Lord Foulkes of Cumnock, on 1 December, we debated the committee’s fourth report. This report recommended that the practice of speakers’ list for Oral Questions, which was adopted as part of our hybrid House procedures and retained after we returned largely to business as usual in September, be discontinued. Since that time, the House has been essentially self-regulating during Question Time and the Leader has brought in eligible Members who wish to participate remotely, following consultation with the usual channels. The committee’s sense is that this change has worked well and, for that reason, we now recommend it be extended to Oral Statements and repeated Urgent Questions.
I am well aware that some noble Lords believe the Lord Speaker, not the Leader, should undertake this role. Indeed, the noble Baroness, Lady Quin, tabled an amendment to this effect last December, which she ultimately withdrew. The amendment from the noble Lord, Lord Foulkes, is in a similar vein, seeking to provide for the Lord Speaker to call on virtual participants during Questions, Oral Statements and repeated Urgent Questions, rather than the Leader of the House. While the noble Lord’s proposal would represent a change to the procedures of the House, it also raises practical considerations, such as the configuration of the House, which would need further consideration by the Procedure and Privileges Committee before any change could be implemented. With all due deference, this is the third time this Session that we have had a debate on this issue, but I am, as always, in the hands of the House.
I now turn to the recommendations relating to the conduct of Divisions, which we debated at some length on 25 October. As noble Lords are aware, last summer, the two Houses jointly launched a project to introduce pass readers in their respective Division Lobbies to replace the clerks who, before the pandemic, would take down the names of those voting in Divisions. The pass readers were installed last October, but it was clear from our debate on 25 October that our original proposal for how to use them, which would have involved the provision of two pass readers in Prince’s Chamber and the abolition of Tellers, did not find favour.
I said to your Lordships then that the Procedure and Privileges Committee would reflect further, and we have now done so. I believe that our revised proposal meets many of the concerns expressed last October while securing the key benefits of pass readers. Under the procedure we have proposed, which is reflected in the proposed amendment to Standing Orders 52, 53 and 54, Tellers will be appointed and, if they are not appointed within three minutes, the Division will be cancelled. Noble Lords will vote in the Lobbies but will do so by presenting their security pass to one of the pass readers. They will then leave the Lobbies, as before the pandemic, by passing the Tellers.
I will not detain the House by explaining the process in more detail, as there is a very clear summary in the report, but I should comment briefly on the amendment from the noble Lord, Lord Cormack, which would require the House to return to the system of conducting Divisions that operated before the pandemic, without the use of pass readers, except with regard to disabled Members who have been deemed eligible to vote remotely under Standing Order 24A. Again, this is of course a matter for the House, but I underline that your Lordships’ committee was unanimous in its support for pass reader voting and for the procedure described in the report before the House today.
We have already modelled that procedure as far as possible on that which operated before the pandemic. Our proposals retain Tellers and would see voting taking place in the Division Lobbies. However, the committee has also sought to embrace innovation through the deployment of pass readers, rather than requiring clerks to record names manually, as was the case before the pandemic. I can assure your Lordships that the system will be tested fully and staff will provide whatever support is needed to noble Lords as we introduce the new system, if that is the House’s wish. I should emphasise that the Procedure and Privileges Committee will keep the new system under review, but I am confident that the introduction of pass readers will deliver significant benefits. The recording of the names of noble Lords will be faster, more reliable and more accurate, and the results will be delivered more quickly.
The experience in the other place gives me confidence in offering these assurances. Since pass readers were introduced, there have been 73 Divisions in the other place with, on average, around 450 MPs voting per Division—a total of more than 33,000 votes cast. On no occasion has the pass reader failed to record Members’ names correctly. Moreover, the system has allowed voting lists to be published online with unprecedented speed, within two to five minutes of Divisions ending.
I believe that these benefits are worth securing. As a committee, we have thought carefully about the issues raised by noble Lords last October. Our view, as reflected in our recommendations, is clear. I hope that the noble Lord will feel able not to press his amendment, particularly with the assurance I have given that we will keep the operation of the new system under review. I believe that the committee’s report—it is your committee, my Lords—deserves your Lordships’ endorsement and support. I beg to move.
Amendment to the Motion
Lord Foulkes of Cumnock
As an amendment to the first Motion in the name of the Senior Deputy Speaker, at the end insert “but that this House believes that the Lord Speaker should call remote participants during questions, oral statements, and repeated urgent questions, rather than the Leader of the House”.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I thank the Senior Deputy Speaker for the courteous way in which he has dealt with these issues, both formally and informally. I am most grateful to him for discussing them with me.
First, I emphasise that I think it is crucial that we have an efficient and fair system to allow our remote disabled colleagues to participate as much as possible. Secondly, I approve the extension of their ability to participate. The only issue before us is who calls them to speak, and that brings me to my amendment.
Let me say what my amendment is not. It is not a party-political issue in any way whatever. It does not in any way compare us with the other place because the other place does not have an arrangement to allow disabled people to participate remotely; in fact, yet again the other place is not as enlightened as we are in this House, just as we were first with televising the House and on many other innovations. And it is not a beauty contest; I think we would lose right away if it were.
So why am I proposing this amendment? First, the chair of all the meetings I have ever been to has been the moderator of the debate. That applies to committees of this House, where the chair calls people to speak. Secondly, the Leader of the House has many other responsibilities. Even today, just before this debate, she dealt with an important Covid Statement, and later today, she will give a Statement on the crucial issue of Ukraine. She is a member of the Cabinet, and has many other responsibilities. Why should we require her to do this, when we have a perfectly competent Lord Speaker and, if I may say so, an equally competent Senior Deputy Speaker, as well as many other Deputy Speakers who stand in and carry out that responsibility very well? In fact, we saw a perfect example of this earlier today, when my noble friend Lady McIntosh of Hudnall called the noble Baroness, Lady Brinton, to speak remotely on the previous Statement. She did it with skill and effectiveness. Among everything else, with due respect to the Senior Deputy Speaker, she proved that the configuration of the House, which was his main argument, is not a problem. She was able to deal with it perfectly.
I would be interested to hear colleagues’ views before I decide whether or not to press this amendment, but I now have the pleasure of moving what I think is just a simple but very important amendment.
Lord Grocott (Lab)
My Lords, I do not know whether the noble Lord, Lord Cormack, is going to speak at this point. If he is not, I am always happy to say a few words.
Lord Cormack (Con)
I am grateful to my friend, the noble Lord, Lord Grocott. I was expecting my amendment to be called from the Woolsack, but I am glad to speak now. I begin in a similar vein to my friend, the noble Lord, Lord Foulkes, because another friend—although he is no longer technically my noble friend—the noble Lord, Lord Gardiner, the Senior Deputy Speaker, is the very embodiment of courtesy. None of us could ever criticise him for not listening carefully and seeking to understand what we are saying.
There is a danger that we will make a permanent change to our procedures this afternoon. When electronic voting and pass reading were first talked of, it was the height of the Covid crisis and this was another way of helping. The original proposal was that, at a suitable moment, we would all vote within the Parliamentary Estate and pass readers would be installed, both in the Lobbies and the Prince’s Chamber. There was even talk of having readers in the Royal Gallery. One understands why: it would have enabled people to keep socially distancing and still discharge their duties where they should be discharged—on the premises.
There have been a few changes since then, not the least of which was announced this afternoon. When we had that debate on 25 October, my noble friend Lord Taylor of Holbeach, who sits in front of me now and I hope will contribute to this debate, made one of the most perceptive interventions when he talked about the crucial role of the teller. That, for some reason, had been ignored by the committee. The noble Lord, Lord Gardiner of Kimble, kindly did not press the Motion that afternoon. He withdrew it and said he would take it back to the committee, and he acknowledged the force of the argument on tellers. Now he comes back with a revised version.
First, this is not something to deal with Covid anymore. It is a permanent change to our voting arrangements. He says it will be reviewed, and I hope it will, carefully and thoroughly, taking account of the views of Members in all parts. I believe we owe that to those who have joined your Lordships’ House in the last two years who, until September last year, had no idea what a proper Question Time is like. Many of them, for entirely understandable reasons, liked the idea of the printed Question list, which we had. I was always against it, as were many noble Lords who have been here for a long time, but I have lost count of the number of newer colleagues who have come to me, since we reverted to spontaneity, and said, “You and your friends were right—it is better this way”. I would like those newer Members, who have no experience of the old system of voting, to experience it, because then they will have something to measure against. That would be entirely fair and reasonable.
I would like us to go back to voting as it was at the beginning of March, two years ago. Noble Lords who were there then know the system. There is a certain conviviality in the Division Lobbies, which can be positively helpful. Of course, we are talking of voting in the Division Lobbies; this is no longer a Covid-related change.
Lord Grocott (Lab)
My Lords, this is not the first time we have had this debate and it will not surprise many people that I agree wholeheartedly with the amendment in the name of my noble friend Lord Foulkes. I think it is time, maybe at the conclusion of this debate, to test the opinion of the House.
I want to put this in some kind of context. It has been 17 years since we established the position of Lord Speaker. It was highly controversial. The main concern expressed by those opposed to the inauguration of a Lord Speaker was that they feared we would end up with a Speaker like in the House of Commons. I had a great deal of sympathy for that view, but surely we can reach the conclusion now, after 17 years, that there has been at no stage the slightest evidence of the Lord Speaker here becoming like a Speaker in the House of Commons—adjudicating on points of order and the rest. We can say categorically that the Lord Speaker’s position in this House is not like the Speaker in the House of Commons and there is no remote possibility of that happening. I hope we can put that particular scare story to bed.
I also point out that, slowly over these 17 years—things do not happen quickly in this place—there has been a movement of responsibilities towards the Lord Speaker. Every one of those movements, small and slight at each stage, has seemed to be absolute common sense as soon as they have been introduced. The most recent, of course, is that the Lord Speaker now introduces the business, as opposed to the clerk sitting at the Table—for example, announcing when a Statement is to be made and what it is about. They were all common-sense proposals that the person in the chair does those things.
Does anyone listening to this short debate think that the sensible thing now would be to move the clock backwards and reinstate those responsibilities wherever they existed before—in part with the Clerk at the Table and, more significantly, with the Leader of the House? I do not think anyone does, and I am certain that, if we made the very small change that my noble friend is proposing, we would think it was common sense to go back to it after an experimental period of six months. So I hope the House will make a decision on this. I always try to understand opposing views, but I really cannot see a case for it remaining with the Leader of the House—not least, of course, because the Lord Speaker is the same person there every day. There is continuity, predictability and common sense.
I will speak briefly on the amendment from the noble Lord, Lord Cormack. Again, I am very inclined to support the case he makes, for this reason: I think these pass readers are, in a sense, a solution to a problem that does not exist. I was a Teller on numerous votes over a long period when there were several ties—we had lots of excitement in those days; the tension built up and all the rest of it—and there were lots of Divisions won or lost by two, three or four votes. I cannot remember a single instance when there was a problem with the telling system that existed and we needed a recount. It worked perfectly well. The Senior Deputy Speaker said that we must move with the times—well, by all means, although we tend not to do that with any great haste normally in this Chamber. The truth is, there is no problem to be resolved—unless he can demonstrate it to me. If people can do it well enough, do we really need a machine to do the job? I am not convinced, and I await the rest of the debate to see whether I can be.
I will make one final brief plea to the Senior Deputy Speaker. He said on 13 July that the question of the sitting hours of this House would be reviewed by his committee. I would like an update, please, on how that review is going and when he expects to bring a suggestion to the House.
Lord Forsyth of Drumlean (Con)
My Lords, I have a great deal of sympathy with my noble friend Lord Gardiner. He listened to the debate, and he and his committee have come back with a perfectly reasonable solution. The issue that concerned us most was the role of the Tellers, and that has been sorted.
Having said that, I am concerned about the constitutional position. We get a Writ of Summons which entitles us to come here and vote. During the period of the previous Clerk of the Parliaments, when we could not get in here because of people gluing themselves to the pavement, blocking the road and everything else, I went to see him and said, “What has happened to the Sessional Orders that we pass every year?” He said, “They’re really decorative. They don’t really matter”. They matter immensely, because it means that a mob could actually prevent us voting and, more importantly, people in the other place voting—
Lord Forsyth of Drumlean (Con)
Indeed, as my noble friend says, as in the Capitol.
So, I am just a bit concerned that, in order to cast my vote, I need a document issued by the House bureaucracy. Noble Lords may say that the House bureaucracy will never take their vote away—but I noted what happened to the previous Lord Speaker, who had her right to come and have a drink or cup of tea here taken away because she had not done the Valuing Everyone training as she had been ill. I noted also that, just before Christmas, on our very last day, those of us who use the House of Commons underground car park—I have used it twice in 22 years—were sent an email telling us that our pass would no longer work to give us access to the underground car park; this was without any consultation whatever.
So I would say to my noble friend that, if he wants to have a gadget and an electronic voting system because he thinks somehow that Tellers cannot count and clerks cannot tick off people’s names on a computer, fine, but I do worry that, in order to vote, I have to have this document. I change my suit when I come down from Scotland, noble Lords will be pleased to hear, and, sometimes, I leave my pass in my pocket and discover that I do not have it. Okay, I can get past the policeman by showing him my driving licence or something of that kind, and I am told that I can go downstairs and get another pass—but why should we have to get another pass in order to vote? If people have forgotten their pass, surely the Tellers can—
Lord Forsyth of Drumlean (Con)
Of course you can get in without a pass; surely the noble Lord knows that perfectly well. You say to the policeman, “I am a Member of the House”, and you show him your driving licence or some other form of identification. If this is where we are moving—to a situation where our ability to come here and vote is decided by the rules of the Administration—that is an undesirable development. The way around this is simply to say that, if you do not have your pass, you can still vote by going to see the Teller. My noble friend here tells me that he has not registered for PeerHub, but he can go to the Table Office and he will be able to vote if there is a Division this afternoon. So I just think that it should not be conditional.
The other thing that I will say will probably make me very unpopular indeed. I do understand why we want to allow remote voting for those people who are not able to come to this House; I get that. I think that the numbers need to be limited and the reasons need to be genuine for that to work effectively. But I do not understand how it is possible for people to be eligible to vote remotely while also appearing in this House from time to time; I find that a bit confusing.
More importantly, one thing that really irritates me about the coverage of this House is that I read regularly how we get paid more than £300 a day. We get £300 a day to cover our expenses, overnight accommodation and whatever else is required to be able to attend this place. When we were not able to attend because of Covid, we were given half a day’s allowance if we operated remotely—but those people who appear remotely at the present time get a full day’s allowance. I believe that undermines the ability to defend the system, which is about paying that £300 or whatever it is per day to cover the expenses of attending here, and I think that should be looked at. I am sorry if I sound like Gradgrind, but we are talking here about spending public money and we need to be able to justify why it is being done.
So I say to my noble friend that I will support him but that he should think about the point made so eloquently by my noble friend Lord Cormack. There should not be an absolute requirement to have a pass in order to vote in the Division Lobbies of this House.
Baroness Hayman (CB)
My Lords, I will not follow the noble Lord, Lord Forsyth, in everything that he said, but I would like to register my absolute support for the point he made about the Sessional Order and the importance of gaining access to this House, particularly when there are difficulties outside. On other issues, I am extremely diffident about commenting on the powers of the Lord Speakership, for reasons that the House will understand, but, having had more than a decade since I left office, I feel that I might be allowed a little leeway on the subject.
Lord Hunt of Kings Heath (Lab)
My Lords, I sympathise with the noble Lord, Lord Forsyth, on the issue he raised about the pass reader. It seems to me that the reason that we are continuing with it is for the convenience of the administration and not for any other reason. I say to the Senior Deputy Speaker that there is a sense in which a more proactive administration is seeking to manage Members of this House in a number of ways. I caution him and the commission that we may reach a point where Members say that this is unacceptable. I think we are getting close to that point. At the end of the day, it is for Members of this House to make these decisions and not the professional administration, much as I admire the work that it does.
In relation to the Speakership, my noble friend’s amendment is so miniscule that surely the Senior Deputy Speaker will agree to it. He mentioned technical issues. I do not know whether it is that the Lord Speaker cannot see a screen from the Woolsack, but it is perfectly possible to put a screen where the book rest is—in fact, there is a screen there. Secondly, he said in the introduction that this was the third time this Session that issues have been raised about the Speakership. I put this point to him: surely it would be possible for us to have a more general review of the role of the Speaker, and then to allow us to have a proper debate.
Clearly, this has been a controversial area for many years. The House has always been keen to champion self-regulation, and page 47 of the Companion, on the conduct of the House, makes it clear that it is for Members of the House themselves to ensure the preservation of order but that it is also the role of the Leader and other Members on the Government Front Bench to advise the House.
All I would say is that while I welcome, like the noble Lord, Lord Cormack, the return to Question Time as we now do it rather than having a speakers’ list—because that was clearly killing the thing off—nonetheless, self-regulation is not working. Essentially, it worked when Members were prepared to give way gracefully—I am afraid that that is not happening and I sense a reluctance of the Front Bench to intervene. I simply do not believe it is working. Surely it is time for a more fundamental review, alongside, I would certainly hope, acceptance—and I hope that my noble friend Lord Foulkes will put it to the vote—of my noble friend’s amendment today.
Lord Hamilton of Epsom (Con)
My Lords, I very much support the noble Lord, Lord Hunt, because I do not really buy in to this idea of the noble Lord, Lord Grocott, that we are all agreed that we do not want to have a Commons-type Speaker. There are many on his side of the House who precisely want a Commons-type Speaker. Let us face it: any extra powers that we give to the Lord Speaker merely move us closer to that. We have to be a little bit wary, and it is absolutely right, as the noble Lord, Lord Hunt, said, that we should have a serious debate about what sort of Lord Speaker we actually want, and try to establish how many powers he should have and how many he should not.
I did not really understand the argument of the noble Lord, Lord Foulkes, that the Leader of the House is constantly leaping to her feet to call people to contribute remotely. As far as I can see, it is the Chief Whip who is doing that a lot of the time, and I do not think that the onerous duties on the Leader of the House are that great when the Chief Whip can deputise for her.
Baroness Hayman (CB)
I am extremely grateful to the noble Lord for giving way. He talked about not giving any extension to the power of the Lord Speaker. The point I was trying to make was that this would not be giving any power to the Lord Speaker. There would be no element of choice about who was speaking; it would be giving a miniscule duty to the Lord Speaker. I do not think we should see it as part of a slippery slope towards a Commons-type Speaker at all. We should see it as a simple improvement in process in the House.
Lord Hamilton of Epsom (Con)
I stand corrected by the noble Baroness, Lady Hayman. Clearly, we are not talking about powers being given to the Lord Speaker but, as she says, about duties. As you impose more duties on the Lord Speaker, obviously the role that he or she plays in the House gets greater than it was before.
I turn now to my noble friend Lord Cormack’s amendment, which basically wants us to go back to the status quo. Here, I totally agree with the noble Lord, Lord Grocott. We have to ask ourselves: in having these pass readers, what are we actually achieving? I will try to help my noble friend the Senior Deputy Speaker by suggesting that perhaps this is to save money. If it is, perhaps he can tell us how much money he thinks he is going to save by doing this, because then we could get the whole thing into perspective. Otherwise, there does not seem to me to be any seriously pressing argument as to why we should change rather than go back to the original system that we had before this pandemic started, which seemed to have worked extremely efficiently. I agree with the noble Lord, Lord Grocott, that the onus is on the Senior Deputy Speaker to say why we should change, when it seemed to work so very efficiently before we ever started all this.
Baroness Butler-Sloss (CB)
My Lords, I would just like to say that my noble friend Lady Hayman is speaking such excellent sense that the House should uniformly agree with her.
Lord Brooke of Alverthorpe (Lab)
My noble friend Lord Foulkes asked us to give our views, particularly on the role of the Speaker. I take a different view from what has been expressed by my colleagues. It is interesting to note that only two contributors to this debate have not been ex-MPs. I have been in the House for 25 years this year, and I have seen the House change from when Labour came in in 1997 and we had hundreds and hundreds of hereditaries; it was a different Chamber entirely. I then saw the change after they had left. I sense the House was probably at its best between 2000 and 2010.
Lord Brooke of Alverthorpe (Lab)
We had a very good Government then, but it was nothing to do with the Government. From 2010 onwards, we had a big influx of new Peers coming in, and we have this odd situation in which we have so many on the Lib Dem Benches compared with their weight in the country—but this is the House; we are different from the Commons. I have sensed that as more and more MPs have come into this Chamber, they have exercised more and more influence and played a bigger part. I am in love with them all, so there is nothing wrong with that.
The conduct of the House has changed. My noble friend Lord Hunt put his finger on it about self-regulation. I am a radical. If we have a debate on anything, I would say we should have a debate on the composition of the House. That is what the country will require us to engage in at some stage, but we are not there. So what are we now? We are a House whose Members have respected each other, regardless of party, to a very fair degree; where the Whips have played a lesser role in the past than you find down at the other end; and where, particularly in our committees, we have worked so well. We come together and try to produce something for the common good.
When I came in here, this Chamber was about the common good and was not as political. In a sense it was, because the Tories had all the seats, but the hereditaries tempered it to a degree in that they looked for the good right across the board. I believe in self-regulation while the House continues to function and to have representatives put in it as at the moment. If we go to a different scene entirely, I think we have to look for a different type of Speaker.
With respect to my good friend, the noble Baroness, Lady Hayman, I think she is perfectly right but I do not believe it would rest there. There is a push and a change taking place that would require the Lord Speaker to take on more and more responsibilities in different ways to that which we are currently talking about. I am reluctant to embrace a change that puts power with the Speaker, in a Chamber that needs fundamental change. My noble friends are normally in favour of fundamental change to the way the House is composed.
I hope we will support the report before us and not embark on what I believe is a change—a foot in the door—that would lead to even bigger changes, without a fuller debate on it than we have had to date. I hope we will back the recommendations from the committee.
Viscount Stansgate (Lab)
My Lords, I am not sure it is to my advantage to follow my noble friend’s speech, in view of some of the matters he raised. I accept the invitation of the noble Lord, Lord Cormack, who said he hoped to hear some of the voices of people who are new. When we debated the matter in October, I was very new; now I am just a little less new. When I appeared on my first day, of course, I did not have PeerHub. I voted by going to the Table and asking for my name to be written on a scrap of paper; I took it that that would be sufficient to have my vote recorded.
Pass readers are clearly a matter of great convenience, as my noble friend Lord Hunt said. I was never one of those who welcomed the speakers’ list, even when I arrived and was new, but the noble Lord, Lord Cormack, is quite right to say that we are talking about something that will change for ever, so it is an important point to discuss.
On my noble friend’s amendment, I take the view that change in your Lordships’ House is very small and incremental. This is one of the smallest and most incremental that I have come across but, if it is pushed to a vote, my small and incremental vote will be in favour of it.
I want to raise one question with the noble Lord, the Senior Deputy Speaker. Paragraph 5 of the report says that pass readers will be the authoritative figure for a vote. Although we will restore the role of Tellers, I must gently ask: what would happen if there was a discrepancy between the two? I hope that is not a frivolous question. With the “Hear, hears” ringing in my ears, I will sit down. I will be grateful for an answer.
Viscount Hailsham (Con)
My Lords, I have nothing against pass readers. There is a great deal to be said for them. However, my noble friend Lord Forsyth is utterly right. What happens if people do not have a pass or have forgotten it? In those circumstances, it would be extremely helpful if there could be a default position by which noble Lords could vote in the Table Office to meet that circumstance.
Baroness Fox of Buckley (Non-Afl)
My Lords, I speak tentatively, as a new Member, particularly in relation to the amendment tabled by the noble Lord, Lord Cormack.
I shivered when I heard the justification for the changes to voting, and that “It was time to move with the times.” As a relatively new Member, I think that there is quite a lot that could change if that was the guiding principle of this House. One of the things that I have struggled with is learning the variety of rules and traditions. I am not criticising or complaining, but simply asking whether “move with the times” is a new slogan. If so, the pass readers are the least of the problems that this House is likely to encounter.
Also, I do not like, inside or outside this House, the way that technology can be used to suggest more profound changes as though they were a fait accompli. The way it runs is, “It’s just technology: there’s nothing to see here; don’t worry about it; we’re just collecting your data; show your papers or your pass”, wherever it may be, including outside of here, but it is often presented as though anyone who objects is a bit of a Luddite who does not get modern times. There is a point about this change that is political, and not simply one of technology, of which I am sure that we are all supportive. I need clarification on whether it would become permanent. Trials are one thing, but there is a broader point that the Covid period has led to us having to accept the new normal because we are not going back to the status quo. My view on this, and regarding the rest of society as well, is that we go back to the old normal, and if we want to change to the new normal, we have a democratic vote, either in here or outside of here, to decide whether that is what we want, rather than being told, “It is all too late for that: we’ve lived through Covid; put up with it—this is the new normal.” I do not like that.
Also, in relation to the pass readers in particular, the justification that it is convenient does not seem justifiable. I do not understand why noble Lords want to change it anyway, to be frank, but it surely should not be changed for convenience. There are lots of things in this House which are inconvenient to me all the time, as I am sure that there are to other people, but that is because it is a different place. That is the point, is it not? It has different rules and conventions. I am concerned that we are being bumped into it— steamrollered into it. If there is to be a change, I would not mind it being trialled, piloted or whatever it is, but the idea that something becomes permanent as a fait accompli I find disconcerting. Even in an undemocratic House, there must be some democratic spirit remaining, surely.
Lord Taylor of Holbeach (Con)
My Lords, I am pleased to speak in this debate. It arises, really, from a debate on 25 October in which I played a part. I understand a lot of what is being said. I am a traditionalist by instinct. I thank my noble friend, and I hope I can be forgiven the solecism of calling the Senior Deputy Speaker my noble friend, because I think he is a friend of the House in the way he is trying to get some viable arrangement for us to conduct our affairs. I thank him very much.
There was a ridiculously short time between the publication of proposals and our first debate on 25 October, and my noble friend immediately listened to what we were saying and withdrew the report. Within a matter of days, the pass readers had disappeared out of the Prince’s Chamber, the Pugin tables were back and we felt we had been listened to. Sometimes, I feel the concern of Members of this House is that they are not being listened to and decisions are being made without the consultation they would like to be a part of.
We have had some good speeches today. We have had quite good points made. I, personally, am of the view that we ought to give the proposals now before us in this report a try. But I am concerned that it may work out more difficult in practice than we suppose. The technology is fine, but we do not want to be hamstrung by a decision we make to approve this report and find ourselves going through the Lobbies with pass readers. I think we are unanimously agreed on Tellers within the House, but we are not quite sure how they are going to coexist with pass readers.
I suggest to my noble friend that he acknowledges that there is some concern about the way we will be proceeding in practice and perhaps agree that, if we accept the report before us today, we should have an opportunity, and he himself would be prepared, to initiate procedural change to match the terms of the report he has presented to us.
Lord Berkeley (Lab)
My Lords, I rise very briefly to support the amendment of my noble friend Lord Foulkes and also to speak about what I see as a creeping managerial control that the authorities sometimes seem to put on us when we come here. The noble Lord, Lord Forsyth, said that we have a Writ of Summons and we come here with our security passes, but Peers’ Entrance is the only way you can get in without showing one. Everywhere else, you have to have one. If you have not got yours, you can show your driving licence or something and you can get in. I saw about a year ago that we were encouraged to put our pass on the reader just inside the Peers’ Entrance. I thought that was the creeping control that was going to stop us coming in completely if we did not have our pass.
I had another example two weeks ago—I am very grateful to the Senior Deputy Speaker for the help he has given me on this—to do with electric bikes, of which I have one. One Sunday, I and maybe other colleagues got an email from the fire and safety people here saying I could not bring lithium-ion batteries into the building on my bike—maybe on wheelchairs or scooters—because they might set the building on fire. I am sure they had some good advice, because they took the advice from London Underground—and misinterpreted it, I think, but that is beside the point.
There were a couple of policemen outside who told me that they commute here by electric bike. They come on the train, cycle across London and park their bikes here. I got given a grant to buy one of these expensive bikes, and I cannot use it any more, because I cannot bring it here. I thought, “Who has made the decision that we are not allowed to bring the bikes here?” The Senior Deputy Speaker is going to arrange a meeting for me to talk about this later in the week, but it is just another example. My question is: who is in charge? Anything like that, I would have suggested, should have come before the relevant committee and then, if necessary, been discussed in the House.
Lord Stoneham of Droxford (LD)
My Lords, I apologise for detaining the House. I will not apologise to the noble Lord, Lord Forsyth, for intervening while I was seated; I know that he does it himself. The point I was trying to make is that Peers should not come into this House without a security pass and they should wear their security pass whenever they are here, for security reasons. This proposal assumes that, whenever we are in the House, there will be a facility to get another pass if we lose ours; that is important. In fact, if noble Lords go and look at the exhibition in the Royal Gallery, they will find a proposal that they will not be able to get in through Peers’ Entrance without a pass—quite right too, in my view, but that is another argument for another day.
Viscount Hailsham (Con)
Is the noble Lord aware that the Pass Office has limited hours? It opens early but also closes early. If he wants to get a pass after 4 pm, he may not be able to.
Lord Stoneham of Droxford (LD)
If the noble Lord feels that way, we control this House so we should get it changed. It is as simple as that. Of course, if we are to have this procedure, we will have to change it.
Lord Forsyth of Drumlean (Con)
Does the noble Lord not realise, in saying, “You can’t come into this House unless you have a security pass”, that that is the very reason why some of us are concerned about this issue? This is a House of Parliament. It is not an office building.
Lord Stoneham of Droxford (LD)
I thought we had this argument some time ago. You can go to Black Rod’s Garden Entrance and get a temporary pass if you need it. There should be a rule for everybody that you cannot get into this building without a pass, but that is an argument for another day; I thought that we had this argument some time ago and won it, but let us move on to the debate now.
I am a member of the Procedure Committee. I support the committee’s proposals in the report, as far as they go, but I have a point of dissent because the commission made the original decision to have pass readers. I have never agreed with that as such but, if we are to have pass readers, I agree with the rules and procedures that have been agreed. In my view, the reason for having pass readers is that it will speed up the process of voting. I cannot tell noble Lords how many times, with my name—Lord Stoneham—I have been confused with the noble Lord, Lord Stone, in the Lobby when I give my name to the clerk. We have had similar problems when the name of the noble Baroness, Lady Bakewell, is given to the clerk because there are two Lady Bakewells. It happens; we get mistakes. I have no doubt that the process will be quicker. I am happy that, if we have pass readers instead of Tellers, as we agreed in the procedures, it will be fine. It will increase the speed of voting in time, I am sure, once everybody gets used to it.
However, I want to make another point. At every meeting of the usual channels that I go to, what is normally being discussed is a complaint that the Government do not have enough time to get their legislation through this House and we are having far too many late nights. I just want to make the argument—the last stand, if you like—for virtual voting because it has worked amazingly well. We are talking about problems with pass readers but look what we have been through over the past two years with virtual voting. It has worked incredibly well. A minority are still having difficulties with phones, but I am sure that this could be dealt with if we put our minds to it.
I hope that we will look at the possibility of virtual voting because, if we did, it would enable us to go back to shorter times for votes. We could do them in seven or eight minutes, whereas when we go through the Lobbies, the long votes take 20 to 25 minutes. There should be a real drive to get everybody involved in the virtual voting system through their mobile phones. It is incredibly convenient. Noble Lords can vote anywhere they like in this building: in the Chamber, even in the Lobbies if they want to, but anywhere in the parliamentary building. It means that noble Lords can vote in Millbank House as well, so it overcomes the argument that we should have a post there. It also involves minimal interruption to Select Committees; indeed, it is convenient for attendance at all the other meetings we have to have in Parliament.
I therefore think that, if we put our minds to it, we would find that it is a much quicker and more convenient way of voting, and one that we have already proved can work. It will involve the actual votes being much quicker. If we are not going to have a vote before we make the final decision on the posts, I hope that in time we will at least look at this for the future, because we already have two years of experience when it has, I think, worked remarkably well and improved the convenience of the House.
I obviously do not support the amendment from the noble Lord, Lord Cormack, but I would like to say a little about the amendment from the noble Lord, Lord Foulkes. I have tremendous admiration for the noble Lord and am normally on his side on every single argument; I am certainly on his side in terms of giving the Lord Speaker greater powers for calling Members at Questions. But there is a practical difficulty. If you allow the Government Front Bench, either the Leader or the Chief Whip, to decide and adjudicate when there is a dispute as to whose turn it is to ask a question, you cannot then leave to the Lord Speaker the decision on calling somebody virtually. It would add tremendous confusion, I am afraid.
Lord Foulkes of Cumnock (Lab Co-op)
I may be misled, but my understanding is that this would not be making a decision; it would be carrying out a decision that has already been made, and that is better done by the Speaker than by someone on the Front Bench.
Lord Stoneham of Droxford (LD)
Well, I accept that there is an argument there, because introducing the virtual speaker is done by the Lord Speaker in other proceedings. But this is a particular difficulty in Questions, with the pace of Question Time. You have a decision being made on the Front Bench—I do not agree with that; I think it should be made by the Lord Speaker—and then another decision being made by the Lord Speaker on the Woolsack. There is a distance between them, so there is a practical problem.
I think we should look at it and I certainly support the view expressed by the noble Lord, Lord Hunt, that we should look at this in the round and look at the powers of the Lord Speaker. We actually had a vote on it; that is the only difficulty we have had. Maybe we should look at it again and have another vote—but I think there are difficulties with this particular proposal. Apart from that, having made my point in favour of the virtual voting system, I am supportive of the report as to where we are.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, this has certainly been an intriguing debate, and I am not surprised. One of the things that I consider is that it is impossible to satisfy all your Lordships. I could go from A to Z with the perfectly respectable arguments that have been deployed, but I think the best I can seek to do is try to answer some of the conundrums raised, as I am indeed in the House’s hands.
First, I want to be very clear that I stand here on behalf of your Lordships. There was a question about the administration. The undoubtedly important and essential work it does on our behalf is absolutely clear to me, but it is this House, this Chamber and the work of your Lordships that is the raison d’être for us all. I am very clear that these proposals are all designed to help your Lordships flourish; that is their purpose.
I also agree with the noble Lord, Lord Foulkes, that we want a fair system. One of the points raised relates to the intricacies of this. The noble Baroness, Lady McIntosh, can of course—as do all exemplary Deputy Speakers—get up when the virtual eligible speaker is the very first Member to contribute and always the very first; it is a very easy option to get up at the very beginning and call whoever it may be. What this part of the report before your Lordships seeks to do is precisely to bring Statements and Urgent Questions in line with other aspects where the eligible Member is not automatically the first Peer to have the opportunity to contribute. I have to say that some eligible Peers have expressed to me that they feel uncomfortable being asked to be the first noble Lord to speak. In the intricacy of the proposal before your Lordships, that is precisely the point.
I want also to say something about permanent change. I understand there has been a good knockabout in terms of the speed with which your Lordships and this House propose change. I do not see that what is proposed here is always about permanent change. I said in my opening remarks, particularly in the case of the pass readers, that the committee has a responsibility, as with everything, to keep these matters under review. If this does not work and if there are problems, I will be the very first to want to come back to your Lordships and say, with the deepest of regret, that I do not think this is working for the House. I put that on record, as I did at the beginning, and say it now. I can give the absolute assurance that the committee will be looking to see how this prospers if your Lordships wish it to proceed. I should also say, just to correct the record, that proxy voting in the other place has not operated since pass readers were introduced there.
I very much hope that noble Lords who have arrived here will see the House pre pandemic in so many respects in terms of that dynamic and that discourse. We are proposing changing an iPad to a pass reader. We were giving our names to a clerk with an iPad, but one of the problems that the clerks have all mentioned to me privately is that, in their experience, there has been what I would call “rider error” with the iPads. Indeed, when I was a Whip I could not work out how one of my flock who I knew simply never came to the House suddenly appeared. It was because there had been rider error in terms of the Division. Lord Hayhoe and Baroness Heyhoe Flint both had a hey-ho about them, but they did not have anything else in common. All of these things relate to the accuracy and the speed that the noble Lord referred to.
I think we have all done remarkably in terms of using PeerHub and all of those matters. I am not a great machine man myself, but nearly 30 Peers will often appear in the Table Office having difficulty in using PeerHub. That is one of the reasons why many Divisions actually take longer and why the result does take and has taken longer. So all our proposals have been designed to create accuracy and speed; it has not been about cost. It has been about seeing whether there are ways in which we can assist the House. That is the background to it.
On the issue that the noble Lord, Lord Foulkes, and other noble Lords spoke about—indeed, the noble Lord, Lord Grocott, raised this—my recall is that on 13 July last year the House divided on the matter of the regulation by the Woolsack. The House voted 376 to 112. That is not 17 years. As I say, we have had this discourse on three occasions in this Session. I do not think that that suggests that these matters have not been aired and put to your Lordships.
The other point raised by the noble Lord, Lord Grocott, was that the same person would be on the Woolsack. Well, we all know that we have a roster. The Lord Speaker will not be on the Woolsack for all Statements—quite rightly when one has exemplary Deputy Speakers. There was a slight suggestion that I used a strange word in mentioning the “configuration” of the usual channels. However, compared with the other place we have a very isolated person on the Woolsack and part of the dynamic is ensuring going round the House in this self-regulation. It is the dynamic of, as we have all noticed, noble Lords and Baronesses in this part of the House. So when I use the word “configuration” I mean that none of these things are impossible, but they are some of the practical issues that I raised in my opening remarks but perhaps did not explain so carefully or fully.
Lord Grocott (Lab)
As a matter of fact, the amendment my noble friend Lord Foulkes put forward relates to the circumstances during Oral Questions, in that the job can be done from the Woolsack and not the Front Bench. I think I was right, rather than the noble Lord, in referring to the fact that the Lord Speaker is there during that period, with very rare exceptions, and not a Deputy Speaker.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
My Lords, we have before us the consideration of Statements. Yes, the noble Lord refers in his amendment to Questions as well, but the change in the report relates to Statements. That is included in the amendment. My point is that, although the noble Lord, Lord Grocott, said that it is the same person, that is not strictly the case—whoever is on the Woolsack will have the task of deciding when to call the eligible Member and from which part of the House in the rotation of taking turns. That is why, although I am in the hands of the House, I think it is more intricate than saying that the Lord Speaker or whoever is on the Woolsack could easily do this. I do not think it is quite as straightforward as that.
The noble Lord, Lord Grocott, asked me about sitting times. I assure him that I have just seen the paper that will come before the Procedure Committee at its next meeting. We will give it very thorough consideration, because it is a very important point which has been made to me by noble Lords.
On the point made by the noble Lord, Lord Hunt of Kings Heath, and others about administration members, I reaffirm what I said at the beginning. I genuinely think we have responsibilities here; it is really important. I emphasise that my task is to support your Lordships, working with the administration, for the best interests of the House.
On the importance of having Tellers and recording the numbers passing, I say to the noble Viscount, Lord Stansgate, that that is part of the essential proposal that came forward following the 25 October debate, when so many of your Lordships, on all sides of the House, said that, to have the probity of Divisions that many wanted, we must have Tellers. The committee took that fully on board. I know that some hold the view that Tellers are unnecessary, but it was understood from that debate, looking as I did across the House, that this belief was strongly held because Divisions are a key part of making the laws of the land and we need, in my view and that of the House, the rigour of coming together in passing those laws.
The point about the pass reader and its authority is that it will clearly identify every single Member who has voted, by name; as is important, we will know with speed how noble Lords have voted, but also the Teller will come back with the number and it will be presented at the Table alongside what is on the readers. It will be for the Teller to go up to whichever noble Lord is on the Woolsack to present the result. The whole essence of the pass reader is to ensure that we get it absolutely correct for all noble Lords, which I think everyone would want, for the reasons I have described. Occasionally we have had a problem, with the wrong names being ascribed to varying noble Lords.
On the very important issue of forgetting the pass or the changing of a suit, which the noble Viscount, Lord Hailsham, raised, a key feature was added precisely so that, if and when the Pass Office is closed, at Peers’ Entrance there will be passes available which will immediately be activated to enable a noble Lord to vote if they have come in without one.
Lord Forsyth of Drumlean (Con)
I apologise to my noble friend, but I think he is rather trivialising this issue. It is not about whether we wear a pass or not but whether having a pass enables us to vote or not.
I will give an example: it is perfectly possible, if you keep your mobile phone and credit cards together, for you to find that your credit card has been wiped out. You could be in the Lobby and find that your pass was not actually activating the reader. I have had this experience at the pass reader as you come in from the Underground. What would we do in those circumstances? I asked my noble friend specifically. I said I would support him and his recommendations, provided there was an opportunity for someone who had a problem to be able to go to the Tellers and say, “Look, my pass didn’t work and I tried to get a pass downstairs; there is a fault”. You would not get 30 people in that situation, as in the Table Office. So could he give an undertaking that there will be a failsafe arrangement in those exceptional circumstances?
The Senior Deputy Speaker (Lord Gardiner of Kimble)
That is a very reasonable point. If, for any reason, any noble Lord’s pass did not work, I can put the assurance that clearly that would need to be addressed by going to the Teller and saying, “I can’t work this”. We would need to look into it, but the Peer would be recorded by the Teller if that was the case. It is perfectly possible that there may be a problem with the system. As I say, there has not been a problem in the other place, but if there were, we would have to undertake a manuscript arrangement, as it were. We would need to do that if the system failed. So far as the practicalities of it, I think it is reasonable to ask noble Lords to use the pass which can be obtained at the Pass Office or at Peers’ Entrance. This is not in any way offensive to the importance of either the Writ of Summons or access to the Palace.
Obviously, I am in the hands of noble Lords. I hope that, following 25 October, I have taken back the points raised and the suggestion that Statements should be under the same arrangement that we have. In my view, everything should be kept under review. We should see how these matters go and flourish. Interestingly, I have been told that Question Time has flowed much better. In point of fact, quite a lot more noble Lords—I do not have the statistics in front of me—have been able to pose questions because of the dynamic of this flow. Those are the sorts of things that I am tuned into to see how it is going.
I ask noble Lords is to support the report, mindful that the committee and I will always want to keep anything under review. If noble Lords are unhappy about something, then we will need to look at it and come back to your Lordships. With all those remarks, I am in the hands of the House.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, we have had a very good debate on both topics. I am grateful again to the Senior Deputy Speaker. However, I do not think we are dealing with whether the person coming in remotely is first. As I understand it, there is usually an understanding within the usual channels about which of the relatively small number of seriously disabled people should be allowed in remotely. Who should come in and when is usually accepted; all I am talking about is who should call them. I think implementing the decision to call them is better coming from the Chair.
As a number of noble Lords will confirm, I have been asked, again and again, whether I will press this to a vote. I said, “I have not made up my mind; I am going to consult with as many people as possible”. I have discussed it. My noble friend the shadow Chief Whip has been very helpful, I had a chat with the noble Lord, Lord Fowler, the former Lord Speaker, and I have taken advice about it from others. The general advice was to listen to the debate and then decide. I have very much listened to the debate and what was said by the noble Lords, Lord Berkeley, Lord Hunt and Lord Grocott, the noble Viscount, Lord Stansgate, and particularly—I hope this does not sound patronising, in any way—the noble Baroness, Lady Hayman, with her extensive experience as Lord Speaker. She said it has been quite a while since she did it, so she is impartial as a result. On the basis of what they said, I would like to test the House in relation to what I was going to describe as a modest amendment, but others have described as minuscule.
Lord Mackay of Clashfern (Con)
Before the noble Lord sits down, can I ask him if he has ascertained whether the Lord Speaker is willing to take on the responsibility of receiving these communications from eligible Members.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I assure my noble and learned friend—I think I can call him that, as we have known each other for many decades—that I would not have moved it if the Lord Speaker had not been willing.
Lord Cormack (Con)
My Lords, what an exciting note on which to get up, and how tempting it is. I thank all of those who spoke favourably to my amendment. I also thank those colleagues—a dozen or so—who sent me notes or texts to say that if I put this to a Division they would be voting for it. But I listened extremely carefully to what my noble friend Lord Gardiner said, and I would like to ask him for clarification: would he consider that a reasonable time would be six months before reviewing this? Could he give me some idea of when he expects the experiment to start, and what measures he is putting in place to make it as carefully monitored as possible?
The Senior Deputy Speaker (Lord Gardiner of Kimble)
I am most grateful to the noble Lord for giving me this opportunity because, as stated in the report, the recommendation is:
“To mandate the House of Lords Commission, once the pass-reader system is ready”.
We need to get the passes system up and running and, as I said, be absolutely clear with a number of trials, not only for your Lordships, but for the doorkeepers and the Administration, so that all will flow well. I cannot give a precise date because we obviously also need to take into account any prevailing public health situation issues. What I can say is that six months from the time of operation of a voting system beginning is a very reasonable time, during which we would consider as a committee how it is working. I hope that is helpful to the noble Lord and your Lordships.
Lord Cormack (Con)
I am most grateful to my noble friend because that is helpful. There is an air of suspicion in the House at the moment; one has only to look at the exhibition of what is proposed of our entrance. I urge all colleagues to do that—it is an architectural abomination. Everything that my noble friend is doing to win and reinforce the trust of the House can only be to the benefit of us all. On the basis of what he has just said, I intend not to move my amendment.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
I beg to move the Motion, as amended, standing in my name on the Order Paper.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
The Question is that this Motion be agreed to—however, I am slightly concerned about the effect of the last vote on this Motion.
The Senior Deputy Speaker (Lord Gardiner of Kimble)
That is why I specifically said “as amended”.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
In which case, I will read out the wording I have: “The Question is that this Motion be agreed to, only insofar as it relates to Standing Order 63, and excluding the reference to Standing Orders 52 to 54”—no?
The Senior Deputy Speaker (Lord Gardiner of Kimble)
I think the Standing Order issues would relate to the situation if the noble Lord, Lord Cormack, had moved his amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I am very grateful to the Chief Whip for making to help me, but I realise that I have failed to notice that it was only in respect of the amendment in the name of the noble Lord, Lord Cormack. That is entirely my mistake, and I apologise. Therefore, the Question is that this Motion, as amended, be agreed to.
Standing Orders (Public Business)
The Senior Deputy Speaker
That the standing orders relating to public business be amended as follows:
Standing Order 52 (Divisions)
Leave out Standing Order 52 and insert:
“52 (1) When, on the Question being put, a division is called for, the member on the Woolsack or in the Chair shall order the Bar to be cleared, and the Clerk will start the division by activating the pass-readers in the division lobbies and the electronic voting system.
(2) Two Tellers shall be appointed by the Contents and two by the Not-contents. Of these, one Teller for the Contents and one for the Not-contents shall be appointed for each division lobby.
(3) After the lapse of three minutes from the time when the Bar is ordered to be cleared, the member on the Woolsack or in the Chair shall again put the Question. If, at this point, Tellers have not been appointed either for the Contents or for the Not-contents, a division cannot take place. The member on the Woolsack or in the Chair shall declare the Question decided in favour of the side which has appointed Tellers.
(4) To cast a vote, a member must present a valid security pass to one of the pass-readers located in the division lobbies, except as otherwise provided for in Standing Orders 24A and 53. Having voted, a member should pass the Tellers as they leave the lobby.
(5) After the lapse of eight minutes from the time when the Bar is ordered to be cleared, or longer at the discretion of the member on the Woolsack or in the Chair, the doors of the Chamber shall be locked, and the member on the Woolsack or in the Chair shall inform the House or the committee of the Question which is the subject of the division.
(6) A member may vote in a division although they did not hear the Question put.”
Standing Order 53 (Votes counted in the House)
Leave out Standing Order 53 and insert:
“53 Any member may, on the ground of infirmity, have the privilege of voting in their place; and the votes of such members and of the member on the Woolsack or in the Chair shall be taken first by the Clerk.”
Standing Order 54 (Voting in wrong lobby)
Leave out Standing Order 54 and insert:
“54 If any member has by mistake voted either Content or Not-content, having intended to vote on the other side, they may go to the Clerk at the Table before the end of the division and request to change their vote. The Clerk will inform the Tellers of the change before the result of the division is announced. Members may not vote in both lobbies.”
Standing Order 63 (Sessional Committees)
Leave out “European Union Committee” and insert the following at the appropriate points in the alphabetical list of sessional committees:
“Built Environment Committee
Environment and Climate Change Committee
European Affairs Committee
Industry and Regulators Committee
Justice and Home Affairs Committee”
Standing Orders (Private Bills) Committee
The Senior Deputy Speaker
That Baroness Finlay of Llandaff, Lord Jones and Baroness Thomas of Winchester be appointed members of the Select Committee, in place of Lord Rodgers of Quarry Bank.
National Insurance Contributions Bill
Viscount Younger of Leckie (Con)
My Lords, in moving the Motion that this Bill do now pass, I take the opportunity to thank noble Lords from all sides of the House for their interest and contributions to the progress of the Bill. In particular, my thanks go to the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Kramer, for their constructive engagement, thoughtful contributions and thorough consideration of this piece of legislation.
As ever, I am grateful to the House authorities and parliamentary staff for their hard work behind the scenes. I acknowledge the work of the officials who have worked so hard on the Bill for many months: the Bill team; the policy teams at HMRC and Her Majesty’s Treasury; the lawyers in both departments; the Office of the Parliamentary Counsel; the clerks in this place; and, finally, my noble friend Lady Scott.
I take this opportunity very briefly to recap the importance of this Bill. It introduces new measures to unleash the potential of our ports and regenerate left-behind communities by encouraging businesses from around the world to invest in our regions, spreading jobs and investment opportunities across the country. Specifically, it introduces two employer national insurance reliefs for workers in free ports and organisations that recruit Armed Forces veterans. In doing so, it supports the delivery of the Government’s free ports programme and boosts regional growth and the employment prospects of our extraordinary veterans. The Bill also provides an exemption from self-employed NICs for test and trace support payments, which will apply retrospectively from the 2020-21 tax year. Finally, the Bill introduces changes to the disclosure of tax avoidance schemes regime. I beg to move.
Lord Tunnicliffe (Lab)
My Lords, I join the Minister in his thanks, particularly to the Minister himself and his team. I commend their availability to interested parties and the many interesting Zoom meetings we have had. I also thank all Members who were involved in this Bill, particularly the noble Baroness, Lady Kramer. Between us, I think we produced an excellent speed-through and we have done the Bill a total service. Finally on the thanks side, I thank my team, which is one half of Dan Stevens, without whom I could not have carried this burden.
On the substance of the Bill, I note what the Minister has said. I hope that he shows equal enthusiasm for the two rather gentler amendments that we are sending to the Commons, and I hope that we see this Bill no more.
Lord Davies of Brixton (Lab)
My Lords, I have participated in the progress of this Bill and I have always appreciated the stated objectives. I know that I have disappointed the Minister with my pessimism about its likely effects, but I thank him for his unfailing courtesy during the Bill’s progress.
Baroness Kramer (LD)
My Lords, it is very nice to have an opportunity to say thank you, and I really want to say thank you to the Minister and his office. Not only were his staff always courteous, but their willingness to meet us, to answer questions and provide a great deal of detail, was very helpful—certainly for me, but also for anyone not sitting on the Government Benches. We really appreciated that flow of information.
For my part I thank Sarah Pughe and Katherine Ginty, who gave me a great deal of support—and were sitting alone on my Benches for most of this Bill. It is always excellent, too, to work with the noble Lord, Lord Tunnicliffe. We found a good way, I think, to pursue the primary interest of the Official Opposition while also giving space to the views coming from these Benches, and often to find common ground.
I particularly appreciated the amendments that the Minister brought forward which reflected the concerns of the Delegated Powers Committee. From a constitutional perspective, it is important that he took those on board and made change that is exceedingly sensible and constructive. I thank him very much for that.
The two gentle amendments—as the noble Lord, Lord Tunnicliffe, described them—are actually rather important. One was on veterans. I hope that it will be well received when it heads back to the Commons. Our amendment, on a public—rather than non-public—register of beneficial ownership of businesses in the free ports, could hardly be more pertinent today, as we look to bring in economic sanctions against henchmen of Putin. Once again, the Prime Minister has talked very publicly about the importance of the public nature of registers, so it would have been sad not to ensure that this register started life in that way. So I hope that that amendment, too, will be very warmly received by the Commons.
It often feels as if there is an inner circle of three from across our three Benches on some of the less dramatic finance and economy-related Bills, and it has been very good to work with everyone again. I thank also the staff of the House, who are always so supportive.
Viscount Younger of Leckie (Con)
I just want to thank the three noble Lords for their comments. With that, I shall go quickly to moving this Motion.
Finance (No. 2) Bill
Tuesday 22nd February 2022
(2 years, 1 month ago)
Lords ChamberRead Full debate Finance Act 2022 View all Finance Act 2022 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 2 February 2022 - large print - (2 Feb 2022)
Baroness Penn (Con)
My Lords, we are here to debate the annual Finance Bill, introduced in the House of Commons following the Budget on 27 October last year. My right honourable friend the Chancellor of the Exchequer outlined then a Budget to build a stronger economy: an economy of higher wages, higher skills and rising productivity, with more investment in infrastructure, innovation and skills; stronger growth, with the UK recovering faster than our major counter- parts; a stronger labour market, with falling unemployment and record numbers of payrolled employees; and stronger public finances, with a simpler, fairer and more sustainable tax system to support businesses and consumers. That is the Government’s vision for the future of this country, and this Finance Bill will help to deliver that vision for the tax system.
It may be helpful to noble Lords to start with a little of the context behind the Bill. Our country’s economic situation has significantly improved in the past year. The UK’s real GDP growth was the highest in the G7 in 2021, at 7.5%, and the IMF is now forecasting that we will have the highest growth in the G7 again in 2022, at 4.7%. GDP remained at pre-pandemic levels in December, despite the impact of the omicron variant and plan B measures. The labour market is also performing extremely well, with the total number of employees on payrolls above pre-pandemic levels, redundancies at an all-time low and record numbers of vacancies. However, there are challenges ahead, with global supply chain disruption and high energy prices adding to inflation around the world and helping to explain the rise in inflation above the 2% target in the UK in recent months.
These are global problems, neither unique to the UK nor possible for us to fully address on our own, but the Government are committed to working with international partners to monitor global supply chain pressures and strengthen the resilience of our critical global supply chains. We are also providing support worth over £20 billion this financial year and next to help families with the cost of living. In 2021, we moved away from providing emergency economic support to focusing on our economic recovery. This is a transition from a period where the Government rightly provided unprecedented support, to a promising future.
Credit for this recovery must, of course, go to our vaccination programme, including the outstanding booster programme, but equally we must not overlook the steps that this Government have recently taken to support families and businesses, including through measures contained in the last Finance Bill. This action has boosted public finances, allowing the Government to invest at scale through the Budget and the spending review, with significant increases for government departments in overall spending.
But debt is still at a historically high level. It is set to pass £2.3 trillion and is currently at its highest level as a percentage of GDP since the early 1960s. While the level of debt is currently affordable, there are significant risks associated with elevated levels of debt. Although the fiscal outlook has been improving, new fiscal rules will help to ensure that public finances remain on a sustainable path. This approach will ensure that the Government can continue to invest in first-class public services, support people and businesses through the next stage of our economic recovery and lay the foundations for future economic growth. This is also a responsible approach to our public finances that allows the Government to respond to global challenges where needed, including the recent package of support to help households with rising energy bills, worth £9.1 billion this year.
I now turn to the content of the Finance Bill itself. The Bill contains several measures that will help build a stronger economy and help businesses to invest in the UK’s future growth and prosperity. Noble Lords will be aware that productivity in this country has long lagged behind that of our international counterparts. The Government are determined to rectify this and to help businesses to reach their full potential by making it easier for them to invest and grow. That is why, in March 2021, the Government introduced the new super-deduction. As the Chancellor noted at the Budget, now is not the time to remove tax breaks on investment. The Bill therefore extends the temporary £1 million limit of the annual investment allowance again until the end of March 2023, instead of allowing it to revert to £200,000, as planned, from the start of 2022. This higher AIA level provides businesses with more upfront support and encourages them to bring forward investment.
Measures in the Bill will also help to protect our unique culture and heritage, by making our creative tax reliefs more generous. Social distancing and wider restrictions have had a particular impact on companies relying on live performances and exhibitions to generate their core revenue, such as theatres, orchestras, museums and galleries. It is therefore right that the Government support charitable companies to put on high-quality museum and gallery exhibitions. That is why the Bill extends the tax relief for museums and galleries by another two years, to March 2024. It also doubles the tax reliefs for theatres, orchestras, museums and galleries until April 2023; they then revert to their normal rate only in April 2024. This is a tax relief for culture worth almost £0.25 billion, which will enable our creative industries to continue to flourish.
I turn now to another sector that makes an important contribution to our economic well-being, namely the maritime industry, which is responsible for 95% of our trade in goods. The UK has always been a seafaring nation and we must continue to help our shipping industry to succeed. First, that means removing any requirements for ships in the UK tonnage tax regime to fly the flag of any EU country. We will focus instead on boosting the use of the UK’s merchant shipping flag, the Red Ensign. Our flag has a well-deserved reputation for maintaining the highest international standards, and we want more ships to benefit from this by registering in the UK. Secondly, the Bill will make it easier for shipping companies to move to the UK from April this year, bringing jobs and investment to nations and regions around the UK. These measures will support our thriving shipping industry, helping to drive jobs in our coastal communities and boosting our world-renowned maritime services industry.
In March last year, the Government committed to reviewing the bank surcharge, in light of the decision to increase the corporation tax rate to 25% from 2023. As outlined in the Bill, the surcharge will be set at 3%. From 2023, this means that the overall tax rate on banks’ profits will increase from 27% to 28%, a rate that is higher than that of most other companies. This will ensure that banks continue to pay their fair share of tax, while maintaining the UK’s financial services competitiveness and safeguarding tax revenue. The Bill also raises the annual allowance to £100 million to ensure that the tax system is supportive of growth for smaller retail and challenger banks.
The economic recovery is under way, and we are investing record amounts in our public services. However, we must still take a prudent and responsible approach to our national finances, and this can mean tough choices. As the House will know, the Government are introducing a new ring-fenced health and social care levy, based on national insurance contributions. This will be supported by increasing the tax rates on dividends by 1.25 percentage points in the Bill, ensuring that those with dividend income make a contribution in line with that made by employees and the self-employed. But our generous allowances mean that everyday investors will be entirely unaffected. Around 60% of individuals with dividend income will pay no dividend tax in 2022-23.
I now turn to the new residential property developer tax. This is a 4% tax on the profits made by the largest developers carrying out residential property development activity in the UK. It forms part of the Government’s building safety package, aiming to bring an end to unsafe cladding. It will help to ensure that developers pay a fair contribution to help fund this package, and it will apply from April.
The Bill also contains measures that will help tackle economic crime, tax avoidance and tax evasion, all of which undermine our efforts to strengthen the country’s finances and build a stronger economy. The new economic crime anti-money laundering levy will help to fund new and uplifted anti-money laundering measures, including the ambitious reforms the Government announced in their 2019 Economic Crime Plan. The Bill will implement the levy on entities that are regulated for anti-money laundering purposes. These firms will benefit, both directly and indirectly, from the new and uplifted measures funded through the levy. It will impact an estimated 4,000 businesses, which will be liable to pay the levy. The amount payable will be determined by reference to the business’s size, based on its UK revenue.
I turn to tax avoidance. We know that the vast majority of tax advisers adhere to high professional standards and are an important source of support for taxpayers. However, promoters of tax avoidance schemes who use every opportunity to sidestep the rules to sell their wares fall into a very different category. The Government have taken action to clamp down on these promoters. Indeed, as a result of this action, the tax gap attributed to marketed tax avoidance has already steadily declined from its peak of £1.5 billion in 2005-06 to £0.5 billion in 2019-20—a fall from 0.4% to just 0.1% of total tax liabilities.
But we have not stopped there. We have developed, through continued engagement and consultation with stakeholders, further powers to disrupt avoidance. Measures in this Finance Bill will reduce the scope for promoters to market tax avoidance schemes. They will allow HMRC to clamp down on these schemes by giving it the power to impose penalties on UK entities that enable offshore promoters, freeze promoters’ assets to ensure that penalties they are liable for are paid, and shut down promoters which continue to sidestep the rules.
The Bill introduces tougher sanctions to tackle tobacco duty evasion, which is estimated to have cost the Exchequer £2.3 billion in 2019-20. Electronic sales suppression will also be tackled by the Bill. This is a form of tax evasion whereby a business deliberately manipulates its electronic sales records to reduce the recorded turnover of the business and corresponding tax liabilities. The Bill will make those facilitating ESS liable to a penalty fine of up to £50,000.
The Bill also helps to deliver a simpler and more sustainable tax system; for example, by simplifying the rules around basis periods. These rules determine how profits are split between tax years. The Bill will create a simpler, fairer and more transparent set of rules for the allocation of trading income to tax years. Currently, small businesses that choose an accounting date other than the dates between 31 March and 5 April face complex rules. They also face double taxation in the early years of trade and the need to maintain accurate records of overlap relief, which is often lost and not used by taxpayers. These reforms will remove this double taxation and the existing requirements of the basis period rules, creating a simpler tax environment for many small businesses.
Finally, noble Lords may also have noted that the Government brought forward a new tax during the Bill’s passage through the House of Commons. This is the new public interest business protection tax, a temporary measure aimed at protecting taxpayers and energy consumers. It is, in principle, possible for an energy business to derive value from a valuable financial asset, such as a forward purchase contract, for its own benefit and the benefit of its shareholders, while leaving its energy supply business to fail or increasing the costs of a failure. The costs of that failure would then be picked up by the taxpayer or consumers, because it would trigger a special government-funded administration regime.
Ofgem is now consulting on a range of regulatory actions that it proposes to take to ensure that the right protections are in place in these circumstances. However, it will take some time for these changes to come into effect. It would be unacceptable for the Government to allow business owners to profit from engineering this kind of outcome in the interim period, at great and direct expense to the UK taxpayer. That is why we are introducing this temporary tax. It is our hope and expectation that no business will undertake this course of action and that the tax will therefore not be charged.
There is no doubt that the pandemic has cast a long shadow over this country and our finances, but now is the time to open a new chapter in this country’s story, characterised by economic growth and renewal. We will invest in people, businesses and public services, but we will also never forget our responsibility to strengthen the public finances. A simpler, fairer and more sustainable tax system will help us achieve this. The measures in the Bill support these goals, while also continuing our long-standing efforts to tackle fraud, avoidance and evasion. For these reasons, I commend the Bill to the House and beg to move.
Lord Sikka (Lab)
My Lords, I draw attention to my entry in the register of interests. I am an unpaid senior adviser to the Tax Justice Network. I too thank the Minister for her very eloquent speech, but it cannot hide the fact that the Budget does not really do anything at all for the average person. It is regressive, the word “redistribution” is missing altogether, and taxes are piled upon the poorest. On tax avoidance, all we need to do is look for evidence. I once again ask the Minister to name any big accounting firm that has been investigated, disciplined and fined after the courts declared that the tax-avoiding schemes that it marketed were unlawful. I am still yet to hear any name at all.
In the time available, I will raise three questions about the Bill. They relate to an area that I have not really seen debated either in this House or the other House. The first follows on from the Minister’s speech, relating to the tax rate on dividends. From April, it will be in the range of 8.75% to 39.35%. That is still less than the marginal rate of income tax on earned income. Earned income is taxed at 20%, 40% and 45%. Because the two rates are different, that opens the floodgates for the tax avoidance industry. Numerous schemes designed by accountants and lawyers enable clients to convert income into dividends, so that the beneficiaries pay tax at a lower rate and national insurance contributions at a zero rate. Nobody pays any national insurance on unearned income, and that includes dividends, even though those who are not paying can use the National Health Service and receive the benefit of social care.
The Government’s approach is clearly distorting taxpayer behaviour because taxpayers will try to minimise their duty. The Government are fuelling the tax avoidance industry and then expecting HMRC to go and chase down the avoidance schemes. This is an exercise in futility, and it has gone on for years and years. The Government could take a leaf out of the book of the former Conservative Chancellor, the noble Lord, Lord Lawson, who recognised that there is no difference between earned and unearned income—both augment somebody’s wealth and purchasing power. In 1988, the Government decided that earned income needed to be taxed at exactly the same rate as unearned income; both were taxed at the same rate—at least, that was applied to capital gains, which were taxed at the same marginal rate. So the Government at that time ended a whole variety of tax avoidance schemes. The current Government are fuelling the demand for them.
In respect of this, I ask the Minister two questions. First, why do the Government aid the tax avoidance industry by taxing unearned income at a lower rate than earned income? Secondly, what is the cost of chasing the tax avoidance schemes facilitated by the Government’s own policies? I hope that the Minister will be able to give me some numbers, and then we will see where to go.
The second issue I wish to raise relates to tax reliefs. Under this Government, and other Governments since 2010, the number of tax reliefs have vastly increased. The Office of Tax Simplification, which published its final report in November 2021, had previously identified some 1,140 tax reliefs—that is how many tax reliefs we give. The cost of principal tax reliefs is published, but the disclosures by HMRC do not cover all the tax reliefs. Even worse, little is known about the macroeconomic benefits of handing out vast numbers of tax reliefs, or the amount of tax concessions—the actual amounts that people do not pay.
Following on from this, the related question is about the anomalies and abuses of tax reliefs. Let me give one or two illustrations. The first relates to something called video games tax relief, which the Government created in 2014. It was thought that this tax relief would come to about £35 million a year. By the end of March 2020, 1,000 games had received the kitemark that they need—it is called “culturally British accreditation” and is given by the British Film Institute—as a prerequisite for getting video games tax relief. However, anything seems to go; it is nothing to do with being British. Some of the games that received this accreditation are called “Batman”—I did not know that Batman lived in Downing Street—“Goat Simulator” and “Sonic the Hedgehog” are just some examples of games that have been given this culturally British accreditation and millions in tax relief. The real truth is that this culturally British fig leaf was really designed to get around the EU Commission’s rules on state aid and, in reality, it is costing the taxpayer millions of pounds.
Two of the 1,000 games that have been accredited were published by a company called Rockstar: “Grand Theft Auto V”, which received the accreditation in 2015, and “Red Dead Redemption 2”, which received it in 2019. In 2020, Rockstar claimed £56.6 million in video games tax relief. According to its accounts, it has claimed £136.6 million in total in tax relief over the years. It has paid no corporation tax at all but has paid £67.5 million in dividends. Where exactly did those dividends come from? They came from picking the pockets of the British taxpayer. There is no other explanation for this. It does not seem to me that these kinds of tax reliefs are monitored. No evidence is provided by any government department to show what exactly the benefit to the UK economy is of this American company receiving all these tax reliefs.
I will give noble Lords another example, which relates to the James Bond films. James Bond is a quintessentially British fictional hero, but the enterprise is also very lucrative for minimising the UK tax liabilities of the foreign companies behind it. In recent years, the company known as EON, which controls the Bond movies and is behind the films, has declared pre-tax losses while simultaneously receiving a total of about £120 million in tax credits via the UK’s creative industry tax relief schemes. “Spectre”, a Bond film, received £30 million, with £47 million given to “No Time to Die”. “Skyfall” received £24 million. “Quantum of Solace” received around £21 million. The James Bond films are made and marketed through a complex labyrinth of opaque offshore entities. The upshot is that, despite receiving £120 million of subsidy, EON has been paying less than £500,000 a year in UK corporation tax. So where exactly is the benefit of these things?
I would like to talk a little more about these things. A good example concerns R&D—research and development —tax credits or reliefs. For 2019-20, 85,900 claims were made for this tax relief. Some £7.4 billion of tax reliefs were claimed on an expenditure of £47.5 billion. But the Office for National Statistics data for the UK’s total R&D spend is only £25.9 billion. How come the Government have given relief on £47.5 billion?
One explanation is that, when companies conduct research and development—there is a big issue about what that means and, as an accountant, I can tell you that you can classify almost anything as R&D and claim tax relief on it—it appears that foreign companies can also claim. A company may operate and have a subsidiary here but do its R&D in the Bahamas; it can also claim these tax reliefs. So there is a discrepancy of £21.6 billion between the HMRC and ONS data. No explanation has ever been provided by the Government of why these numbers differ and why foreign entities that have little or no economic link with the UK are able to claim these things. The tax reliefs are clearly being abused, yet there is no urgency from the Government to investigate.
I will ask the Minister to do a number of things. First, at every Budget, can we have a complete list of the tax credits? Tell us exactly what their tax cost is and what the abuses might be. Tell us whether the economic benefits that are claimed actually materialise. Have they been audited? At the moment, we get very little or almost no data.
The last issue I would like to talk about is the impending global minimum tax rate of 15%, which the Government support. While the Government are handing out 1,140-plus tax reliefs, what is the impact of these reliefs on the commitment to a 15% global minimum corporation tax rate? The Government say that they are increasing the corporation tax rate but, at the same time, they are giving so many tax reliefs and allowances—at 130% of the cost and so on—that the effective tax rate is incredibly low, and the Government are reducing it even further by handing out more and more tax reliefs. So can we also see some reconciliation from the Government on the relationship between handing out these tax reliefs and a commitment to a global minimum tax rate of 15%?
Lord Razzall (LD)
My Lords, since 1911 the House of Lords, quite rightly, has not been able to amend or reject a Finance Bill, but, in recent years, we have been given the opportunity to debate them. This enables us to range somewhat more widely over government economic policy. As the Minister realises, this Finance Bill comes at a time of unprecedented financial turbulence that is affecting so many. She will be aware of fuel price increases; oil and gas prices continue to rise, affecting everybody’s bills, and recent events in Ukraine will not help that. As she will be aware, inflation is now at its highest level for 30 years. As she indicated in her remarks, government debt as a proportion of GDP, although falling, is at record levels.
Against this background, although the Minister made a brave attempt to defend the Government’s economic policy, does she not agree that this Budget and Finance Bill are a missed opportunity for the Government? To me, and I suspect to other noble Lords, it is not entirely clear what government economic policy is today. In the light of the problems faced by ordinary families, does the Minister really think that now is the time to raise national insurance? This is ostensibly to fund social care although we know that, in the medium term, it will go towards propping up the National Health Service. Does she really think the Chancellor’s plan to reduce fuel bills is the correct way to help hard-pressed families? Does she also believe that the recent cut in universal credit was fair, just and necessary?
What is the Government’s overall strategy? The Chancellor says in public that he is a tax cutter—but how? It is clear from Mr Gove’s White Paper on levelling up that there is a split at the heart of government. The White Paper contains wonderful aspirations but no details of costs, payments or how levelling up will be funded. There is no commitment to building up business and infrastructure banks to support local enterprise. Where is the financial commitment to serious transport investment so that journey times and frequencies match those of London? Where is the serious investment in social infrastructure that is promised in the White Paper? Do the Chancellor and the Minister really believe in creating one globally competitive city in each of our regions? More particularly, will the Government let him and her do that? There is surely no point in promising a gain of £2.5 trillion, as the Government have done with levelling up to the economy, if they do not provide the resources to achieve it.
I fear that the Government hope that a Brexit dividend will save them, but this is a chimera. The £350 million paid to the NHS from Europe, promised on the side of a bus during the Brexit referendum, was a lie then and is a lie now, as the cartoonist Peter Brookes demonstrated so well in his cartoon last week, with Jacob Rees-Mogg in his favourite position, lying on top of a bus.
Great play was made by the Minister of the highest growth rate in the G7 as a result of Brexit. But, first, after 2022, there is no forecaster who thinks this will last. Secondly, it is a statement of the obvious that it is easiest to be the fastest if you start from the lowest point. Thirdly, and most worryingly, growth has come primarily from a one-off increase in public expenditure as a result of the pandemic, and the private sector has been noticeably flat. It remains the case, as the Office for Budget Responsibility said last year, that our economy will be 4% smaller each year as a result of Brexit, contrasted with only 1% as a result of the pandemic. As the chair of the Public Accounts Committee in the other place said recently, all Brexit has given our industries is
“increased costs, paperwork and border delays.”
The Government cannot say they were not warned.
Lord Bilimoria (CB)
My Lords, in May last year, I chaired the B7 before the G7 in my role as president of the CBI. One of our speakers was Gita Gopinath, chief economist of the IMF. She said that an economy like the UK would have a V-shaped recovery because of our £400 billion of spend to save businesses, jobs and the economy—which is one of the highest in the world per capita, and for which businesses are very grateful—and because of our world-beating vaccination programme. But what has happened since then? We have had labour shortages, supply chain problems, energy prices soaring, with inflation predicted now to go up to 8% and interest rates rising. We have a very fragile recovery. The noble Baroness, Lady Penn, mentioned productivity: productivity has been flatlining since the financial crisis of 2008-09.
On 3 February this year, our director-general of the CBI made an excellent speech on growth. It was very well received all round. He said—the noble Lord, Lord Razzall, just mentioned this—that the Government say we are the fastest-growing economy in the G7 but that V-shaped recoveries around black swan events are not the time for credit or blame. The downward nosedive is not an accurate judgment of economic performance, and nor is the climb back up. He went on to point out that the OBR is forecasting the UK’s economic trajectory, after the rebound is complete in the next 18 months, to grow at 1.3% to 1.7%.
As a country, historically we have grown at between 2% and 2.5%. Between 1993 and 2008, before the financial crisis, we grew at an average of 3%. Are the Government willing to accept a forward growth rate of 1.3% to 1.7%—such a low level of growth? A Government should have low taxes but also fiscal discipline and dynamic regulation. Do the Government agree? Today we have high spending, high taxes and low growth—a vicious cycle. We have a record 6 million people in England on waiting lists for routine hospital appointments. Sajid Javid, Secretary of State for Health, at one stage said that the waiting lists might go up to 13 million people. We have backlogs in courts, schoolchildren who have lost out on learning, transport funding models that are under pressure and, on top of all this, an ageing population. The CBI has worked out that by 2030, we may need to find an additional £40 billion to £50 billion per year to cover the costs of an ageing society. Do the Government accept this?
How do we pay for this? Is it by turning to taxation? Is it by raising taxes? We are already facing the highest tax burden in 17 years. On corporation tax, analysis by the CPS and the Tax Foundation demonstrates that we are currently the 11th most competitive country in the OECD. A lot of that is to do with the super-deduction that the Minister mentioned. However, when this ends in April 2023, and corporation tax increases from 19% to 25% in one swoop, we will fall to 31st place. Will the Minister and the Government accept that?
Our property tax is eyewatering, one of the highest in the OECD. I will come to business rates later. We know that raising taxes reduces growth and cutting taxes drives growth up. Look at the examples just now. We remove road tax to stimulate the buying of electric vehicles and sales are rocketing. We reduce VAT to stimulate consumption. We reduced VAT during the pandemic from 20% to 5% in hospitality. We put that up to 12.5% but the Government are now putting it back to 20% in April. Why are they doing that? I ask them to keep it at 12.5% for a while longer. UK Hospitality and the British Beer and Pub Association are saying that they need help for longer. What is the point in a VAT relief when for the past two years, restaurants, pubs and hotels have been shut? They cannot avail themselves of a relief when they are shut, only when they are open. What is the point, when there is guidance to work from home in December and January and their outlets are empty because of it? They need the help when their outlets are full, which is starting to happen now. Give more help and let it carry on.
We will not pay down todays debt or extend the public services and reduce taxes on a growth rate of 1.3% to 1.7%. We need sustainable long-term growth based on investment, innovation, and productivity. Tony Danker, the director-general of the CBI, where I am president, says:
“Now it has been the Treasury’s job as an institution since the stone age to be sceptics of this kind of talk. But economic policy and fiscal policy are not the same thing. No CEO… puts the Finance Department in charge of sales. Or lets them alone determine strategy. Companies can’t afford not to invest in growth. And nor can countries.”
We have seen this before. The growth rate that I spoke about, at an average of 3% per year between 1993 and 2008, was twice the rate of the last decade, and three-quarters of that growth was driven by investment, technology, and innovation—double what they have contributed over the past decade.
Let us look at other countries and take an example. Tony Danker took the example of Singapore, which reduced its operating costs, cut corporation tax by 10%, incentivised investment, spent on infrastructure, and had new venture capital services, low-interest loans, and tax incentives. The result of all those measures is 6% growth per year.
There is talk of Singapore-on-Thames: the three forces of Brexit, the race to net zero and the end of the pandemic give us a huge opportunity. During the pandemic, we have proven what a powerhouse of innovation and life sciences we are, with Oxford/AstraZeneca and the collaboration with the Serum Institute of India. Three-quarters of companies adopted new technologies. In 2020 alone, 700,000 new businesses were created. In offshore wind, we have shown with contracts for difference that the Government can use the balance sheet to unlock high-growth markets. The Budget mentioned skills bootcamps—this is just the sort of thing we need to do.
The CBI has recommended that, when the super-deduction ends in March 2023, we should replace it with a permanent investment deduction—a 100% tax deduction for capital spending. I will come to that later. Would the Government also agree that it is time to turn the apprenticeship levy into something far more flexible, which would allow businesses, for example, to buy training modules and have greater flexibility in types of training, and to incentivise and reward firms that go the extra mile to train their people, with an upside kicker for any businesses that spend more than their levy?
We must incentivise green growth. We need an extra £3 billion a year to properly retrofit our homes and businesses to bring down energy bills. Hydrogen is the future. The University of Birmingham, of which I am chancellor, was proud to demonstrate at COP 26 the world’s first retrofitted hydrogen-powered train, designed by the university and built in collaboration with Porterbrook, the rolling stock company, and 20 other companies, including Siemens and the Government’s Innovate UK—universities, business and government all working together for a world first. This is the sort of thing we should be doing.
We at the CBI have recommended that the Prime Minister should set up a new office for future regulation. Labour shortages are an acute problem across all sectors; the Government did not listen when we brought up the issue of drivers and butchers last June—sadly, pigs have been unnecessarily culled. We suggest that there should be, in effect, a revamped Migration Advisory Committee, an independent council for future skills; as the Monetary Policy Committee sets interest rates that the Bank of England has to follow and the Low Pay Commission sets a minimum wage which the Government have to follow, this body would from time to time say “We need so many thousand jobs—open up the shortage occupation list and provide a one or two-year visa.” Do the Government agree that this is required to address the labour shortages?
Growth is the only real answer to our cost-of-living crisis, with rising energy prices and high inflation. Better growth ensures that we will not be imprisoned in a cycle in which we cannot afford what we need or raise taxes to pay for it. The noble Baroness, Lady Penn, spoke about the super-deduction; the day before yesterday, the CBI released our survey. A super-deduction successor, which I spoke of, could trigger a £40 billion a year boost for UK business investment. According to our survey, 22% of investment qualifying for the super-deduction would not have taken place in the UK without it; another 19% of investment qualifying for it has been brought forward to take advantage of the relief. The Government announcing a permanent successor now could increase annual capital investment by 17% by 2026—worth £40 billion a year. Will the Government acknowledge this and listen to this recommendation?
We need to incentivise investment much further. It is not just about taxes going up to the highest level in 70 years; we need to reduce taxes. We have seen research time and again which shows that, if you reduce taxes, growth increases. The most famous example is the Laffer curve—in the growth that took place in the 1980s, you had low levels of inflation, a steep rise in private investment and rising incomes. Between 1982 and 1990, the foundations of the Laffer curve enabled the second-longest peacetime economic expansion in the history of the United States—of course, Laffer was an adviser to both President Reagan and Margaret Thatcher. Yet here we are with the highest tax burden in 70 years.
We now really need to focus on investment. Are the Government aware that the UK has been seriously underpowered when it comes to investment? It has deteriorated from 14.7% of GDP in 1989, to as low as 10% at the end of 2019. Of course, we have had the pandemic, but we are still 5% below our pre-Covid levels by the end of 2022. We must do everything we can to increase investment. Between 2021 and 2025, the UK Government were projecting to invest an average of 3.4% of GDP, versus 3.9% in America, 4.1% in Canada, and 5.9% in Japan—let alone 9% in China. Green spending represents 3.8% in the US and 1.8% in the EU, compared with just 0.55% here in the UK. Our business rates, which I mentioned earlier, are four times higher than Germany and three times higher than the OECD average. We invest 1.7% of our GDP in innovation and R&D, compared with 3.2% in Germany and 3.1% in the United States of America.
Instead, we have: a freezing of the income tax thresholds; National Insurance increases of 1.25% for employers and 1.25% for employees; corporation tax going up from 19% to 25%; the super-deduction of 130% being removed in 2023; VAT, having gone down from 20% to 5% and then up to 12.5%, is being put back up to 20%; and dividend tax being increased. On top of that, we were just informed yesterday by the Prime Minister that lateral flow tests will be removed from 1 April. Could the noble Baroness, Lady Penn, tell us that this has surely been penny-wise and pound-foolish? How much of the £2 billion that was spent in January on testing, which the Government speak about, was for lateral flow testing or for PCR testing? What is the bet that a small proportion was for lateral flow testing and the Government are trying to cut-back cost when they should be making that available to people who need it—whether they have symptoms, are visiting vulnerable people or need to test to get the antivirals which the Government have just ordered? People are now used to taking these tests. It has taken a year of people using them regularly to feel comfortable with them.
Finally, debt to GDP went up to 250% after the Second World War—arguably the last major global crisis before the pandemic. We have gone up to 100%. Now is not the time to give up. With the fragile recovery that we have, we need to ensure that we are like India, which did not put up its taxes in the February budgets of either last year or this year, because it did not want to stifle its recovery or for businesses to suffer. What is the result? The IMF has forecast India to be the fastest growing major economy, with a 9% growth rate.
With £400 billion, let us not stop at the last mile; let us keep giving help to businesses. Then we will have the investment, the growth and the jobs that will pay the taxes and pay down the debt.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria, and I will pick up some of the points he raised as I reach the end of my contribution. It is also a great pleasure to listen to the rich, informative speech from the noble Lord, Lord Sikka. Many people outside this Chamber would be interested to learn that the James Bond films enjoy a government subsidy. It does not seem like that, does it? When you consider the amount of money they must make from product placement, you really would not think that they also need to get a subsidy from the taxpayer to be able to make these films. Often, they look more like an advertisement than any sort of creative endeavour.
I want to begin by looking at the formal language behind this Bill—something I am continually informing myself on as I get to grips with the archaic, often incomprehensible, language of the governance of the UK. This is a language which reflects the distance of our Government from the life of the people of these islands. This is a Bill, I learn, of aid and supplies—aid, in this context, means taxation. It provokes the question: who is being aided by this Bill and who is not being aided by this Bill? First, the group I would identify as being aided by this Bill, by an act of omission—which is an action every bit as much as a provision is—are the oil and gas companies. As we heard earlier from the noble Lord, Lord Sikka, in Oral Questions, oil and gas companies are benefiting hugely from the rise in the global price of their product, while the cost of its production remains static.
That is the very definition of a windfall—wealth falling into your lap without effort—yet we do not see an oil and gas windfall tax in the Bill before us. That is despite the fact that the Chancellor, repute suggests, is a fervent disciple of Margaret Thatcher, and it was Margaret Thatcher who in 1981 introduced the first windfall tax on the banks, whose profits had leapt following a rise in interest rates. In her memoirs, Margaret Thatcher said that it was because the increased income was not because of increased efficiency or better services to customers but purely by economic accident that she brought the tax in. Can the Minister perhaps explain to me how the situation now with oil and gas companies is different from that of the banks in 1981?
Of course, there have been very widespread calls for an oil and gas windfall tax, going back to the Green Party leaders who called for it in the autumn. Some of the arguments we heard from the Government and the Benches opposite during the Oral Question from the noble Lord, Lord Sikka, just do not stack up. Investment in the North Sea contributes very little to the UK’s energy security—80% of its oil and gas is exported and the price is decided by the global market. Conversely, if we, say, had that windfall tax and spent it on a massive programme of energy-efficiency measures, particularly for private homes, that is something that could not be exported, could not be lost and could be directed towards the poorest in society.
It is worth noting that we do not hear the Government often talking—in that phrase they like to use—about “windfalls” when it comes to their oil and gas tax regime. This is not surprising, because it is one of the least effective regimes in the world. The Government pull in an average of $2 a barrel from production, whereas Norway, by contrast, collects $21 a barrel. As the noble Baroness, Lady Sheehan, pointed out on the Oral Question, our oil and gas majors are contributing only a derisory amount to investment in renewables. Where is the aid going? To the oil and gas companies. Who is losing out? Energy consumers and the general society.
Secondly, I come to another group being aided by this Bill, again by omission. We saw efforts in the other place to introduce reports on the progress of establishing a register of overseas beneficial owners of UK property and a review of HMRC’s publication of tax avoidance schemes. Opposition amendments to introduce such simple and moderate measures were defeated on party lines. Who does this aid? It is clear who the US and EU allies think it aids: Russian dirty money, much of it closely associated with the regime of President Putin, whose dangerous, aggressive actions we will be discussing later in this Chamber.
On 10 February, the Government laid legislation to allow the sanctioning of entities and businesses of economic and strategic significance to the Russian Government and their owners, directors and trustees. But to impose a sanction, you first have to be able to find the sanctionee. The highly respected NGO Transparency International reports that more than 85,000 properties in the UK are owned anonymously by entities registered abroad. It estimates that £1.5 billion of property is owned by Russians accused of corruption or of links to the Kremlin.
We have been promised this register of beneficial ownership in London since 2016. Provision was included in the 2019 Queen’s Speech, but despite the flood of Bills we are now seeing in your Lordships’ House—a Bill to attack some of the most vulnerable people on this planet: refugees seeking asylum on these shores; a Bill to suppress the turnout of voters least likely to support the Government; a Bill to reduce the capacity of our courts to defend the rule of law—the Government have not found time in the parliamentary agenda for this register to be created. Who is being aided here? I am afraid it is very obvious. Who is losing out? We are all losing out through insecurity for the people of the UK and damage to the security of the world.
Thirdly, I come to something that is apparently being aided by this Bill, social care, for this is the legislative mechanism by which the Government are bringing in the health and care levy. But is it really for social care? What is it doing to address the acute staff shortage or the extreme exploitation by hedge fund owners taking 16% of every pound paid for care? What will be its impact? The first two questions are very easy to answer: nothing. On the third, the Commons Treasury Committee points out that, with this levy being announced outside a fiscal event, Parliament has not been provided with important information that would usually accompany a decision of this kind, such as an independent impact assessment from the Office for Budget Responsibility or a distributional analysis. Who is being aided here? Not the overworked, underpaid care worker or the clients she is trying to serve.
Finally, I shall move away from the question of who benefits to an even bigger one: who decides? This morning, I was at a debate held by UK in a Changing Europe which reflected on the extreme centralisation of power and resources in the UK. Our local councils are left without the funds to provide essential services, simply delivering the statutory requirements decided by Westminster and unable to make the decisions they want to for their local communities. Of course, the centralisation is even tighter than Westminster dominating our councils and, as we often see in this House, resisting the devolved power that is supposed to have been handed to the nations of the UK. Power is in fact concentrated in one address in Westminster, and that is not the Prime Minister’s.
We are all familiar with a Minister apologising from the Dispatch Box opposite for some departmental failing, explaining that there is no money to fix it and rolling their eyes to the heavens, muttering “Treasury”. It is a gesture that is almost guaranteed to get a sympathetic laugh from all sides of your Lordships’ House. I have been delving again into the history of this. The Chancellor of the Exchequer is a post that predates that of Prime Minister by several centuries. The Treasury’s structure, like so much of our governance, was created in early medieval times. Interestingly, the department is the only one that has two Ministers in Cabinet. It has also been said that Prime Ministers govern via the Treasury.
We are aware that the Treasury sees its role as governing for the economy, maintaining economic stability and promoting growth. This is where I get to a bit of a response to the noble Lord, Lord Bilimoria. What is the Treasury operating for? It is operating for the economy and growth. The noble Lord talked about the period he obviously saw as a golden age, when we had regular annual growth rates of 3%. That was a period when we had 15%-plus of pensioners living in poverty. It was a period when we saw increased casualisation of the economy, with the gig economy growing and young people in particular finding it harder and harder to get a steady job. Fewer and fewer people were able to afford to buy or rent a home. We had growth and we had a society of poverty, inequality and very poor public health. The fact is that we have a situation in which people are working for the economy instead of the economy working for people. It is this dedication to growth—the Treasury’s chasing of growth —that has given us this situation.
There are other ways of doing things. I will point, as I have before in your Lordships’ House, to New Zealand—a system based originally on our Westminster model. Its Treasury is guided by the living standards framework. It looks at a balanced set of measures about the economy, yes, but also about poverty, inequality, public health and the state of the environment and says that we need to keep all these at a decent level when managing for people.
Lest noble Lords think that I am standing out here with something just the Greens are saying, I point to a report called The Tragedy of Growth, which was co-authored by, among others, Caroline Lucas, the Green MP, Clive Lewis from Labour and the noble Lord, Lord Deben, from the Conservative Benches. It points out that growth does not enhance living standards, alleviate poverty or protect the environment. To quote the report:
“To protect human wellbeing and avoid environmental disaster, we must escape the growth paradigm once and for all.”
I would say that we need to go further than simply escaping the growth paradigm; we need to see and escape from the dictatorship of the Treasury. There might be quite a number of Ministers and former Ministers in your Lordships’ House who will quietly agree with me.
Lord Butler of Brockwell (CB)
My Lords, as an old Treasury man I cannot go all the way with the noble Baroness, Lady Bennett. It is regrettable that we do not have more speakers in this evening’s debate because it is not, as the contributions so far have made clear, as though there is a lack of important economic and, indeed, social issues arising from the Finance Bill.
Unlike the contributions so far, I will concentrate my remarks on two rather technical aspects of the Finance Bill which were the subject of a report by the Finance Bill Sub-Committee of your Lordships’ House. I was privileged to serve on that sub-committee, as was the noble Baroness, Lady Kramer. One of the aspects covered by the report was—the Minister referred to this—tax basis reform, the effect of which is that self-employed individuals and partnerships are to be taxed on profits arising in a financial year rather than on their own accounting years. The second is uncertain tax treatment, under which large companies will be statutorily required to report to HMRC instances where the company’s view of the likely tax treatment may be different from that of HMRC. I do not need to weary the House by going through the technicalities that these provisions throw up. They are set out clearly in the sub-committee’s report and the government response. I want to just make some general points.
I particularly wanted to speak in this debate because I did not want the report of the sub-committee to go unnoticed by the House. I believe that the sub-committee provides a useful service, excellently chaired by the noble Lord, Lord Bridges, who could not be here tonight because he is on jury service, and expertly supported by the sub-committee’s clerks and advisers. The sub-committee, in effect, provides an additional channel of communication between representative taxpayer associations and HMRC. That is the basis of an objective assessment by the sub-committee. I say an “additional” channel of communication because there are, and certainly should be, close communications already between HMRC and representative taxpayer associations. I hope that the sub-committee’s work, through the process of taking evidence from both sides, supports this process and provides an independent assessment of the position of both sides.
Although inevitably the Government have not accepted all the sub-committee’s recommendations, their response has shown some helpful movement on some of them. On the substance of the provisions, I merely want to say that my main concern with both sets of provisions is that their complexity for both HMRC and taxpayers did not seem to have been properly thought through in the first place. Their introduction was not given sufficient time. In fact, the implementation of both sets of proposals has had to be postponed for a year. Even now doubts remain about their practicability and the resources needed to successfully implement them. An additional complication has been Covid, which must have interfered with the preparations for these changes on both the HMRC and taxpayer sides. I am reminded of Denis Healey’s mot that the best time for removing a man’s appendix is not when he is carrying a piano upstairs.
However, that is not the only cause of difficulty. Some of these proposals could have been surfaced with more notice and been subject to earlier consultation. For example, the proposals for simplifying the tax basis period were first made some eight years ago, yet proposals for implementing it were brought forward at the same time as the changes involved in making tax digital, when they were going to have to be implemented. Also, when the proposals for requiring large companies to report uncertain tax treatment—whatever that may be—were first introduced, those proposals were half-baked, and they are not fully baked even now at the time of their introduction in this Finance Bill.
We know that the resources of HMRC are already under great pressure and these reforms will add to that pressure, at least in the short term. They will also add costs to the taxpayers affected by them. There is a question mark over whether the return in terms of extra revenue will be worth the resources devoted to them. I hope that all goes well but I have to say that, despite the Government’s response to the sub-committee’s report, I remain uneasy about the ability of both HMRC and businesses to cope.
The Minister referred to the Government’s aim of achieving a simpler and fairer tax system. That is a worthwhile objective and I have no doubt that they are sincere about it, but I am afraid I do doubt whether, in the shorter term, this will be the result of these measures in the Finance Bill. The difficulties have been exacerbated by the manner in which the Government, in their zeal to close the tax gap, have introduced them with such little notice and consultation. I hope that HMRC will give serious consideration to the general lessons set out in the sub-committee’s report.
Lord Sharpe of Epsom (Con)
My Lords, I believe that it would be convenient to adjourn the debate and break briefly before the Statement on Ukraine.
Ukraine Update
(2 years, 1 month ago)
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The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:
“Mr Speaker, with permission I will make a Statement about the situation in Ukraine.
Last night President Putin flagrantly violated the Minsk peace agreements by recognising the supposed independence of the so-called people’s republics of Donetsk and Luhansk in eastern Ukraine. In a single inflammatory speech, he denied that Ukraine had any ‘tradition of genuine statehood’, claimed that it posed a ‘direct threat to the security of Russia’ and hurled numerous other false accusations and aspersions.
Soon afterwards, the Kremlin announced that Russian troops would enter the breakaway regions under the guise of ‘peacekeepers’, and Russian tanks and armoured personnel carriers have since been spotted. The House should be in no doubt that the deployment of these forces in sovereign Ukrainian territory amounts to a renewed invasion of that country. By denying Ukraine’s legitimacy as a state—and presenting its very existence as a mortal threat to Russia—Putin is establishing the pretext for a full-scale offensive.
Honourable Members will struggle to understand how, in the year 2022, a national leader might calmly and deliberately plot the destruction of a peaceful neighbour, yet the evidence of his own words suggests that is exactly what Putin is doing. When I said on Saturday that his scheme to subvert and invade Ukraine was already in motion before our eyes, the events of the last 24 hours have, sadly, shown this to be true.
We must now brace ourselves for the next possible stages of Putin’s plan: the violent subversion of areas of eastern Ukraine by Russian operatives and their hirelings, followed by a general offensive by the nearly 200,000 Russian troops gathered on the frontiers, at peak readiness to attack. If the worst happens, then a European nation of 44 million men, women and children would become the target of a full-scale war of aggression, waged without a shred of justification, for the absurd—even mystical—reasons that Putin described last night. Unless the situation changes, the best efforts of the United States, this country, France, Germany and other allies to avoid conflict through patient diplomacy may be in vain.
From the beginning, we have all tried our utmost to find a peaceful way through this crisis. On 11 February, my right honourable friend the Defence Secretary and the Chief of the Defence Staff, Admiral Radakin, paid the first joint visit to Moscow by the holders of their offices since Churchill—who was also Defence Minister at the time—travelled to Russia with General Alanbrooke in 1944. They held over three hours of frank discussions with the Russian Defence Minister, General Shoigu, and the chief of staff, General Gerasimov, demonstrating how seriously we take Russia’s security concerns, how much we respect her history and how hard we are prepared to work to ensure peaceful coexistence.
My right honourable friend the Foreign Secretary delivered the same messages when she met her Russian counterpart in Moscow on 10 February. I have spoken on a number of occasions to President Putin since this crisis began and so has President Biden, while President Macron and Chancellor Scholz have both visited Moscow. Together we have explored every avenue and given Putin every opportunity to pursue his aims by negotiation and diplomacy.
I tell the House that we will not give up: we will continue to seek a diplomatic solution until the last possible second, but we have to face the possibility that none of our messages has been heeded and Putin is implacably determined to go further in subjugating and tormenting Ukraine. It is because we suspected as much that the UK and our allies repeatedly sounded the alarm about a possible new invasion, and we disclosed much of what we knew about Russia’s military build-up.
Britain has done everything possible to help Ukraine to prepare for another onslaught, training 22,000 soldiers, supplying 2,000 anti-tank missiles and providing £100 million for economic reform and energy independence. We stand ready to guarantee up to $500 million of development bank financing. I travelled to Kyiv to meet President Zelensky on 1 February, and I saw him again in Munich at the weekend. I spoke to him last night, soon after Putin’s speech, to assure him—I am sure that the whole House will agree that it was the right thing to do—of Britain’s unwavering support for Ukraine’s sovereignty and territorial integrity.
Now the UK and our allies will begin to impose the sanctions on Russia that we have already prepared, using the new and unprecedented powers granted by this House to sanction Russian individuals and entities of strategic importance to the Kremlin. Today, the UK is sanctioning the following five Russian banks: Rossiya, IS Bank, General Bank, Promsvyazbank and Black Sea Bank. We are sanctioning three very high-net-worth individuals: Gennady Timchenko, Boris Rotenberg and Igor Rotenberg. Any assets they hold in the UK will be frozen, the individuals concerned will be banned from travelling here and we will prohibit all UK individuals and entities having any dealings with them.
This is the first tranche—the first barrage—of what we are prepared to do. We will hold further sanctions at readiness, to be deployed alongside the United States and the European Union if the situation escalates still further. Last night, our diplomats joined an emergency meeting of the UN Security Council, and we will raise the situation at the Organization for Security and Co-operation in Europe.
Let me emphasise what I believe unites every Member of this House with equal determination: the resolve of the United Kingdom to defend our NATO allies is absolute and immovable. We have already doubled the size of our deployment in Estonia, where the British Army leads NATO’s battle group, and when I met President Levits of Latvia and Prime Minister Kallas of Estonia in Munich on Saturday, I told them that we would be willing to send more British forces to help protect our allies if NATO made such a request.
We cannot tell what will happen in the days ahead but we should steel ourselves for a protracted crisis. The United Kingdom will meet this challenge side by side with our allies, determined that we will not allow Putin to drag our continent back into a Hobbesian state of nature, where aggression pays and might is right. It is precisely because the stakes are so high that Putin’s venture in Ukraine must ultimately fail—and be seen to fail. That will require the perseverance, unity and resolve of the entire western alliance; Britain will do everything possible to ensure that this is maintained.
Now, our thoughts should turn to our valiant Ukrainian friends, who threaten no one and ask for nothing except to live in peace and freedom. We will keep faith with them in the critical days that lie ahead and, whatever happens, Britain will not waver in our resolve. I commend this Statement to the House.”
Baroness Smith of Basildon (Lab)
My Lords, I begin by thanking the noble Baroness for repeating the Statement. I also want to put on record my appreciation for the Privy Council briefings that I have had from the Government.
As we have watched events unfold and diplomatic efforts intensify, we have moved between hope that those efforts will succeed and despair that this could end in war. We should not underestimate that this is a moment of huge gravity. At this stage, we do not know how the next few days, or even the next few hours, will play out, but it is clear that this is a dangerous time for Ukraine and, in the longer term, for stability and security across Europe. It is no exaggeration to say that this marks a significant moment in global politics that will have far-reaching implications for future interaction with Putin’s Russia. So let us call this out for what it is: the Russian President has rejected the rule of law and Ukraine’s right of sovereignty and territorial integrity.
The Government have our full support in holding Russia to account. As we heard in the Statement, Putin has sought to create false justification for his actions. Russia faces no threat from NATO or Ukraine. Even at this 11th hour, efforts for a diplomatic solution must continue, but Putin has to know that our values mean that we have no other course but to stand shoulder to shoulder, united with NATO and our allies across the world, in support of the people of Ukraine. Let us be absolutely clear: we will not be divided in that support.
We welcome the military support that has been given to the rightful Government of Ukraine. The pressure they are under in their daily lives and at all times now is absolutely enormous. We can only admire their courage in the face of the threats and the hostile actions. As regional stability weakens, our friends and allies in eastern Europe will feel the closest threat, and we welcome the Government’s engagement with the Baltic states. The UK must always remain committed to the principle of collective defence and that an attack against one NATO ally will always be considered an attack against all. Can the noble Baroness the Leader of the House say anything further today about discussions to strengthen the military assistance provided to our NATO allies in eastern Europe?
On sanctions, regardless of the direction that Putin now takes, a red line has already been crossed. We welcome and support the sanctions announced by the Prime Minister and will fully co-operate in getting this legislation through. But the Government have to go further. Putin needs to understand that his actions carry a huge cost, and that we stand firm with our allies in opposing them. Looking at what more can be done, can the noble Baroness say whether the Government will also consider excluding Russia from SWIFT and other financial mechanisms, and a ban on trading in Russian sovereign debt? We welcome the decision to sanction the five Russian banks, but they apparently represent only a fraction of those which, it has been reported, could be included. Further banks with links to the Kremlin remain active in London and across the West. I do not know how much more the noble Baroness is able to say today, but can she confirm whether work is continuing to prepare for further designations?
Again, as welcome as sanctions on the three named individuals are, we have to recognise that these individuals have already been designated by the United States for over four years. The noble Baroness may not know why we have been so much slower in taking action, but is she able to confirm today that in tackling this issue the Government understand the need to improve co-ordinated action with our allies? Also, what assessment has been made of the impact on Russia’s trading relationship with the rest of the world?
The invasion of Ukraine should represent a turning point for how we interact with Russia, but it is also an opportunity to look at the effects of Putin’s regime in the UK. The Kremlin’s misinformation campaign continues to target the West, with outlets such as Russia Today still able to broadcast its propaganda across the world. Will the Government now take steps to ban RT from operating in the UK?
Similarly, allies of Putin are still able to use the UK to launder dirty money, so why are the Government still failing to act on the recommendations of the Russia report? And, with the Elections Bill introducing new loopholes to allow foreign donations to UK political parties, Ministers have to wake up to the creeping influence of Russian money in our politics. I should notify the noble Baroness that we will seek to amend the Elections Bill to remove these new loopholes, but, in the light of Russia’s recent actions, will she commit today to speaking to the Prime Minister and her Cabinet colleagues about removing these provisions from the Bill, and report back to your Lordships’ House? Failing that, there will be an amendment in this House to remove those loopholes.
The most recent escalation looks set to trigger a prolonged conflict. No one will benefit from that, including the Russian people. We did not seek this conflict, and we always sought peaceful coexistence. But the UK and our allies must ensure that Russia will now feel the consequences of Putin’s aggression, so our sanctions have to be tougher and targeted. We in this Parliament must be as united as we are with our international allies in support of the Ukrainian people.
Lord Newby (LD)
My Lords, this has been a very sombre 24 hours. President Putin yesterday set out his view that Ukraine had no legitimacy as a state, and said he was sending so-called peacekeepers—in reality an invading army—into Donetsk and Luhansk. Today, and even since the Prime Minister made his Statement, he has announced that he is recognising the whole of the Donetsk and Luhansk regions, and not just those parts of them already under de facto Russian control. Against this flagrant aggression and breach of international law, how well does the Government’s response match up?
We support the broad stance that the Government are taking in opposing the Russian aggression and the measures they have so far taken to provide Ukraine with training, anti-tank weapons and other support. We agree with the Statement that the UK Government—and, indeed, all western Governments—have given Putin every opportunity to pursue his aims by negotiations and diplomacy. However, I am a bit bemused by the assertion in the Statement that
“we will continue to seek a diplomatic solution until the last possible second.”
It seems to me that the last possible second expired last night. Can the Minister explain what more Putin would have to do to make the Government believe that there really was no diplomatic solution on offer any more? Surely, that boat has most definitely sailed.
Earlier in the month, the Prime Minister made it clear that, as soon as the first Russian toecap entered Ukrainian territory, the West would impose sanctions that would really hurt Russia. I know that the situation is far from clear, but Putin has already committed to sending in troops, and there are reports that the first have already been deployed. Germany, by announcing today the suspension of the Nord Stream pipeline, has already acted in line with the Prime Minister’s injunction.
What, then, are the Government proposing? They sanctioned four banks, most of which are minnows. They sanctioned a mere three individuals who, as the noble Baroness has already said, have already been the subject of American sanctions for a number of years. We are told:
“This is the first tranche of what we are prepared to do: we will hold further sanctions at readiness.”
Why are we holding further sanctions at readiness? What are we waiting to happen? What more does Putin now need to do? The truth is that the sanctions announced in this Statement are pitifully insignificant. Putin, if he hears of them at all, will simply be smirking at them.
The noble Baroness has set out a number of things that the Government could do, which I agree with. I would like to set out a number of things that I think the Government should do, and I invite the Leader of the House to explain whether the Government have these measures in contemplation—and if not, why not. They should revoke the golden visas of those Russian nationals who have known links to the Russian regime. They should impose a windfall tax on energy company profits, which is desirable in itself, but would hit Gazprom, which channels its trading revenues through London. They should freeze the assets of Russian companies in London and introduce the register of beneficial ownership Bill, which would shine a light on dirty Russian money in London. The Government could surely get this oven-ready Bill through the Commons in a day: tomorrow springs to mind. I am sure that your Lordships’ House would pass it with alacrity. Certainly, from these Benches, we would facilitate its passage as a matter of urgency.
We know that, in addition to London, there are very large amounts of Russian dirty money in Switzerland and Monaco. We could call on the Swiss Government and the Monegasque authorities to do the same as we might do in shining a light on this money. Perhaps we could ask President Macron to have a word with his colleagues in Monaco. So far, there is no evidence that the Government plan to do any of this—or, indeed, anything of any substance.
When Putin invaded Crimea, he got away with it at no discernible cost. When he undertook the Salisbury poisonings, there was no significant response. He has now committed his latest outrage. If we are to have any influence at all in persuading him and the Russian elite that these illegal, aggressive policies are not simply to be met by little more than a shrug of the shoulders, we need to see much more action contained in this Statement, and soon.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
I thank the noble Lord and noble Baroness for their comments and their support for our standing together with Ukraine and the approach that we are taking.
As both noble Lords rightly said, with his actions in the Donbass region overnight, and the further developments today, President Putin has flagrantly violated Ukrainian sovereignty: he has sent troops in, broken international law, repudiated the Minsk agreement and torn up the understanding from Budapest that Ukraine’s territorial integrity was to be respected. We are working tirelessly to co-ordinate our response with our allies, and will not allow Russia’s violation of its international commitments to go unpunished.
NATO allies remain committed to a dual-track approach to Russia: strong deterrence and defence combined with meaningful dialogue. The noble Baroness asked what other actions we had taken. A small number of marines have already deployed to Poland from the UK, and more will travel next week. These personnel were originally due to deploy on Exercise Cold Response in Norway but have been reassigned to Poland. We are also preparing to reinforce the British-led NATO group in Estonia; that will include deploying RAF Typhoon fighters and Royal Navy warships to protect south-eastern Europe. Further details will be provided as things develop.
We are also working with international partners on options for further economic and defence support for Ukraine, but, as noble Lords will know, we have supported the development of the Ukrainian army. Last month, as I mentioned in the Statement, we sent 2,000 anti-tank missiles to Ukraine alongside a package of training by our troops, and last week we provided more equipment. Over the last eight years, under Operation Orbital, we have trained more than 22,000 members of the Ukrainian armed forces.
Both the noble Lord and the noble Baroness talked about sanctions. The ones announced today are only the first tranche, and are targeted at people and financial institutions who have supported Putin’s violation. We will step up sanctions if Russian aggression continues, and we have been clear that in that regard nothing is off the table.
Our toughened sanctions regime will enable us to sanction oligarchs and companies of strategic importance to the Kremlin: this is the toughest sanctions regime against Russia that the UK has seen. The five Russian banks that the noble Baroness referred to are all active in bankrolling the Russian occupation, and Bank Rossiya in particular is close to the Kremlin. We will also look at sanctioning those Russian parliamentarians who supported the recognition decision taken last night.
The noble Lord rightly mentioned today’s announcement by Chancellor Scholz of Germany, which we very much welcome, that he has instructed his economic ministry to withdraw its earlier security of supply report on Nord Stream 2, with the consequence that it will not be certified for operation. Again, that is something that we have been talking to the German Government about, and we are grateful for and pleased by this morning’s news.
The noble Baroness asked about disinformation, which we take extremely seriously. We are working collaboratively with our allies to build a better understanding of the different techniques that can be used as part of malicious information operations, and our counter-disinformation unit in DCMS brings together monitoring, expert analysis and capabilities across government. We will continue to see what further action we can take in this area.
The noble Baroness also mentioned the ISC’s Russia report. As noble Lords will know, we published our response immediately on its publication. Many of the recommendations are already in train and we will continue to work on further implementation.
The noble Lord asked about the register of beneficial owners. We have set out plans to establish a register of beneficial owners of overseas entities that own UK property, in order to combat money laundering, and we have been clear about our intentions to significantly reform Companies House to strengthen our ability to combat economic crime. We will be taking that forward.
Last week the Home Secretary announced that she was closing down the tier 1 investor visa route to all applicants with immediate effect. That route has been under constant review and has given rise to security concerns, and we will be making reforms to the innovator route as part of the new points-based immigration system. Closing this route is just the start of a renewed crackdown on fraud and illicit finance. We are soon to publish a fraud action plan, while the forthcoming economic crime Bill will crack down on people abusing our institutions.
Finally, the noble Baroness talked about the Elections Bill, which is having its Second Reading tomorrow. I am sure my noble friend Lord True will listen very carefully to the concerns raised during that debate and we will have discussions as we go forward.
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
My Lords, this is a convenient moment to hear from the noble Lord, Lord Campbell-Savours, who is taking part remotely.
Lord Campbell-Savours (Lab) [V]
My Lords, instead of threatening alienation, conflict and isolation, can we not seek, even now, to negotiate the agreed-timeframe non-NATO Ukraine that I have been calling for in this House in recent months, in return for buffer state protectorate status under Ukraine for Donetsk and Luhansk? With China wooing Russia and prolonged tension in Europe, undermining economic development and cybersecurity, we do not need turmoil in these volatile times. We are humiliating Russia. German humiliation led to Versailles and war.
Baroness Evans of Bowes Park (Con)
I am afraid I do not agree with the noble Lord’s comments. The action President Putin has taken represents a further attack on Ukraine’s sovereignty and territorial integrity. It signals an end to the Minsk process and is a violation of the UN charter. Unfortunately, it demonstrates Russia’s decision to choose a path of confrontation over dialogue. We remain willing to talk, but it must de-escalate its aggression towards Ukraine.
Lord Robathan (Con)
My Lords, I first applaud both the Prime Minister and the Government in their resolve. Putin has tested the resolve and unity of the West and he has found it wanting. Like all bullies, he senses weakness. I am afraid that the Government’s reduction of our Armed Forces—the Army by 11%, and the number of our Royal Navy ships and RAF airplanes—will also be seen by him as weakness. Will my noble friend take back this plea? Action in increasing our defences—in rearmament, if you like—will speak louder than sanctioning three individuals.
Baroness Evans of Bowes Park (Con)
I thank my noble friend. As he knows, we are one of the biggest contributors to NATO. We are looking at investing in our Armed Forces. We have major investments in ground-based air defence, cyber and electronic warfare, a modernised tank fleet and accelerated procurement. We are committed to ensuring that our brave military has the equipment and training it needs.
Lord Alton of Liverpool (CB)
My Lords, has the Leader had a chance to reflect on the request I made to her some weeks ago that there should be a full-scale parliamentary debate, in your Lordships’ House, about the situation in Ukraine? Can she tell us anything about the position of UK nationals in Ukraine? Will she answer the question put to her by the noble Baroness, Lady Smith of Basildon, about the SWIFT financial system? I do not think she referred to it in her response. Does she not agree that, under the cover of this darkness, other authoritarian regimes will take their opportunistic chances? I think particularly of the situation in Taiwan. Was Churchill not right when he said that, if you go on feeding the crocodile, one day, the crocodile will feed on you?
Baroness Evans of Bowes Park (Con)
Our advice to British nationals is that they should leave Ukraine now. In the event of any military incursion, commercial routes out of Ukraine are likely to be severely disrupted and roads across Ukraine closed. British nationals should leave while commercial travel options remain open, as they are likely to close or become severely limited if an incursion takes place. In addition to any Statements, Questions, debates on statutory instruments and other things we will be doing over the coming weeks—including, no doubt, on Ukraine—we will make time available for a general debate on progress by the middle of March. That will take place in Grand Committee.
Lord Robertson of Port Ellen (Lab)
My Lords, I fully support—we should all fully support—the Government and the resolution of the West against this unprovoked attack on an individual nation state. It is outrageous, and we are at a very dangerous point in European history. But I suggest to the Government that we need to do much more to answer some of the disinformation now being put out by the Russians. For example, President Putin tries to pretend that he has had nothing to do with agreements regarding the sovereignty of Ukraine, but in 2002 Vladimir Putin signed the Rome declaration; I actually have his signature with me here today. The declaration said that the participating states
“respect … sovereignty, independence and territorial integrity of all states and their inherent right to choose the means to ensure their own security, the inviolability of borders”.
That was signed up to by Vladimir Putin 20 years ago, and now he seems to pretend that Ukraine does not exist. Surely we need to do much more—the Government need to do much more—to counter some of the lies that are coming out, because the battle of the narratives is going to matter just as much as the battle of the military on the ground.
Baroness Evans of Bowes Park (Con)
I entirely agree with the noble Lord. We will continue to expose Russia’s false flag operations, disinformation and cyberattacks. Russia is using disinformation to falsely cast Ukraine as a threat, to justify its aggressive stance. That was one of the reasons why we released intelligence to expose its attempts to install a puppet regime in Kyiv and to fabricate a pretext for invasion. We will absolutely continue to focus on this area and call out Russia where we have evidence and can do so.
Lord Campbell of Pittenweem (LD)
My Lords, judging by the content and delivery of Mr Putin’s speech last evening, it is very unlikely that he will be satisfied. Indeed, using the Russian exclave of Kaliningrad, where he has deployed nuclear-capable missiles, he may well turn his malevolent intentions to Lithuania, Latvia and Estonia. I welcome the extra deployments to which reference has been made by the Minister but, if he does, we will require professionalism, strong leadership and unity of purpose in NATO, perhaps to a greater extent than has ever been the case. Can we be confident that Her Majesty’s Government will make a proper contribution if that is necessary?
Baroness Evans of Bowes Park (Con)
I cannot remember whether it was mentioned in the Statement or in my response to the noble Baroness, but when the Prime Minister was in Munich he made it clear that, if we were asked for further contributions to NATO, we would provide them. We have been working very closely with NATO allies in this area and within the broader region, and we are absolutely committed to defending and supporting Ukraine; we certainly will be playing our part.
Lord Lea of Crondall (Non-Afl)
My Lords, will the Minister tell us what she thinks are the pros and cons of maintaining a stance of ambiguity on Ukrainian membership of NATO?
Baroness Evans of Bowes Park (Con)
It is obviously up to Ukraine whether it wishes to apply to join NATO. Under NATO’s open-door policy, all European democracies are entitled to pursue membership; the decision over whether to seek membership is for the people of Ukraine.
Lord Garnier (Con)
My Lords, does my noble friend agree that kleptocrats, like drug dealers, do not like having their money—their ill-gotten gains—removed from them? We have sanctioned three individuals and five banks. That really is not enough. President Putin has vast sums squirrelled away in the West, held by nominees. The Government must know who these nominees are; I suggest to my noble friend that they speedily sanction all those whom they know to be doing President Putin’s work.
Baroness Evans of Bowes Park (Con)
As I said, the sanctions announced today are only the first tranche, and we will step up sanctions if Russian aggression continues.
Lord McDonald of Salford (CB)
My Lords, the Leader has made clear that sanctions will be the cornerstone of the UK’s response. To be effective, sanctions have to be international and co-ordinated. The country that is sanctioning suffers along with the country that is sanctioned. So if Germany is to do everything we need on energy—not just Nord Stream 2 but Nord Stream 1, which provides 55 billion cubic metres of gas per year for Germany—and all of that has to be in place, so must everything that the UK can contribute via the City of London. This needs to be an international effort. It would usually be co-ordinated through the United Nations, but the Security Council is clearly not available as the Russians have a veto, so in what international forum will HMG co-ordinate the necessary sanctions effort?
Baroness Evans of Bowes Park (Con)
We have been working with partners through NATO, the UN, the OSCE and the G7—we are anticipating a further G7 call later this week—and obviously we have been having bilateral meetings with countries around the world. Ministers have talked to our allies in Kraków, Kyiv, Brussels, Tallinn, Munich and New York. We are working internationally and are co-ordinating our response with our allies and partners, for exactly the reasons the noble Lord gave.
Baroness Ludford (LD)
My Lords, I share the puzzlement of those who wonder what else President Putin has to do to get the full barrage of UK sanctions fired at him. The Statement says that he has
“flagrantly violated the Minsk peace agreements”.
The noble Baroness said that he has flagrantly violated Ukrainian sovereignty and the Statement says that
“the deployment of these forces in sovereign Ukrainian territory amounts to a renewed invasion of that country.”
What are the Government waiting for as a further threshold before there is a full barrage of sanctions? The Statement also says that, when the Defence Secretary and the Chief of the Defence Staff visited Moscow and talked to their counterparts, they demonstrated
“how seriously we take Russia’s security concerns”.
What are Russia’s valid security concerns? NATO is not going to invade it, so why are we taking its so-called security concerns at all seriously?
Baroness Evans of Bowes Park (Con)
What we have said, with our NATO allies, is that a dialogue would cover what Russia says it wants, from strategic nuclear weapons and force posture to exercises and incidents at sea. It is a serious offer which would improve European security for Russia and NATO, but we have been very clear that these talks must be based on de-escalation and an end to aggression against Ukraine.
Lord West of Spithead (Lab)
My Lords, we must not delude ourselves: Russia has invaded Ukraine. There is an element here which is almost as if it has not done so. It has invaded Ukraine. Putin has weighed up that this is what he wants to do. Let us face it: he said he wanted to do it and we knew he wanted to. He has weighed up against that the pain he will suffer from doing it and has made a calculation that the pain is not that much. I have to say that, at the moment, I would rather agree with him; he is not getting that much pain.
The other area we must not delude ourselves on is defence. I share the views of the noble Lord, Lord Robathan: since 2010 we have reduced our military by a third, and that has not gone unnoticed. Are we now putting money into our factories to fill the gaps? There are many gaps; again, we must not fool ourselves when we make statements about how wonderful our equipment is and how many forces we have. There are huge gaps in terms of missiles, capability and renovating equipment. We should be calling up reserves. There is a lot that should be being done there, as well as all the other things that people have talked about. Otherwise, Putin is not going to feel pain and will think he can move on and go further.
In terms of combating him in the war of words, my noble friend Lord Robertson is absolutely right. With GCHQ and the NSA, we have far better resources and can run rings around the Russians if we really want to. We should be getting ready to do that with the NSA to really make his eyes water, so that he knows what he has done.
Baroness Evans of Bowes Park (Con)
We have specialist teams of cyber experts and intelligence analysts working around the clock to detect, decipher and deter Russian threats beyond physical borders. This cell, as I mentioned in an earlier answer, is focused on fighting disinformation and ensuring that the UK can combat warfare threats. We have introduced a new autonomous cyber sanctions regime, set out a national cyber strategy and announced new legislation to provide security services and law enforcement with additional tools to tackle evolving state threats. As I said, we are strong supporters of NATO. We set out last year our integrated review and set out plans and investment in defence. We take it extremely seriously, and that work continues.
The Lord Bishop of Coventry
My Lords, these are dark days indeed for Europe, but unlike the noble Lord, Lord Newby, I welcome the commitment in the Statement to unrelenting diplomacy. Does the Leader agree that the stronger the sanctions, the better placed that diplomatic work will be? Is there a particular contribution that Britain can make in the diplomatic engagement even now?
Baroness Evans of Bowes Park (Con)
We are continuing to work with our allies in diplomatic terms. As I said, the Prime Minister spoke to President Zelensky yesterday evening and President Macron this afternoon. We are anticipating a G7 call this week. We will be working through all the channels that we can with our international allies. As I have set out, we have introduced the first tranche of sanctions, which is a strong, tough sanctions regime, but we will increase and step up sanctions if we continue to see Russian aggression.
Lord Skidelsky (CB)
My Lords, I thank the Minister for her Statement. I regret I am going to disturb the unanimity of the Front Benches, and, in fact, all previous speakers, but I am very disturbed about the trend of events. I very much welcome the assurance given to my noble friend Lord Alton that we will have an early opportunity to debate this. My first question is: can the Government give us an assurance that no British troops will be deployed in Ukraine? Secondly, coincident with the economic sanctions, will the Government urgently and imaginatively search for a diplomatic agreement on the Ukraine problem? I say “imaginatively”; I am sure there has been some urgency, but the lack of imagination and the lack of understanding of Russia’s position is absolutely appalling, in my view, and very depressing. The atmosphere of the House reminds me very much of 2003 prior to the invasion of Iraq.
Baroness Evans of Bowes Park (Con)
I am afraid, again, I cannot agree with the noble Lord. Russia has been falsely accusing NATO of provocation and nothing could be further from the truth. NATO has always been a defensive alliance and poses no threat to Russia. As I have also said, NATO allies remain committed to a dual track approach: strong deterrence and defence combined with meaningful dialogue. But Russia has to stop its aggression towards Ukraine.
Lord Cormack (Con)
My Lords, could I suggest to my noble friend that we—global Britain—convene an international conference here in London with all our European friends and allies, with whom we must get closer and closer, because if we do not have a united front we have a defeated front? When we come to debate this issue in the House, could it please be on the Floor of the House and not, as my noble friend suggested, in Grand Committee?
Baroness Evans of Bowes Park (Con)
I have set out what we will be able to do in terms of a debate, and we are delighted to be able to give the House the opportunity to discuss such an important issue. Of course we are consistently meeting our European allies both at home and abroad. I mentioned all the travel, and I am sure noble Lords will have seen the Defence Secretary and Foreign Secretary travelling around talking to allies. I am sure they will be convening meetings across Europe, and indeed, more widely globally, in which these important issues can be discussed, and we can continue our co-ordinated approach.
Lord Lee of Trafford (LD)
My Lords, in the event of serious conflict, has consideration been given to offering medical treatment in this country to seriously wounded Ukrainians?
Baroness Evans of Bowes Park (Con)
We are working closely with partners to ensure that we can quickly provide emergency humanitarian assistance. We have also announced 1,000 more British troops will be put in readiness in the UK to support the humanitarian response in the region, should it be needed. I cannot go into huge specific details, but we are working with international partners because we recognise that there may be a need in the area.
Lord Browne of Ladyton (Lab)
My Lords, we can impose sanctions on the three people who have been identified in the Statement, but we cannot guarantee that we can freeze and seize their assets, because we will not know where they are. They will be hidden behind all sorts of complexities of shell companies and transactions. My right honourable friend Keir Starmer in the other place asked the right questions. He said:
“We need to draw a line under Companies House providing easy cover for shell companies. We need to ensure that our anti-money-laundering laws are enforced … and we have to ensure that money is not pouring into UK politics from abroad.”
When will we be able to say that we have that assurance?
Baroness Evans of Bowes Park (Con)
As I have said, we have set out plans for a register of beneficial owners of overseas entities and we have set out our intentions to reform Companies House. Extensive criminal and civil powers are available to the NCA, including seizure of the proceeds of crime and the ability to deny serious criminals and corrupt elites access to their assets. The NCA has increased its investigations into corrupt assets. The Registration of Overseas Entities Bill will ensure transparency for foreign-owned land in the UK, which is currently easily disguised through offshore companies. A lot of work is going on; as I have already mentioned, we will introduce a new economic crime Bill to take further action in this area.
Lord Sterling of Plaistow (Con)
My Lords, I first went to Kyiv with Margaret Thatcher some years ago. I was very concerned later on with the port of Odessa, which has been blocked by warships, which will cause trouble for granary movement throughout the world—so it goes far beyond that. A great deal of that grain goes to the Sudan, Libya and Yemen; they badly need it, because they have starving people. It goes much further abroad. Does my noble friend know whether they will continue to block that port, which is the key port for everything that moves into and out of Ukraine?
Baroness Evans of Bowes Park (Con)
I am afraid I do not know the answer to my noble friend’s question.
Finance (No. 2) Bill
Tuesday 22nd February 2022
(2 years, 1 month ago)
Lords ChamberRead Full debate Finance Act 2022 View all Finance Act 2022 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 2 February 2022 - large print - (2 Feb 2022)
Baroness Kramer (LD)
My Lords, this almost feels rather an anti-climax—in a sense, I feel privileged to have been able to sit through that crucial, important debate. This is a very technical Bill. Normally at Second Reading I would take the opportunity to discuss the broader economic issues, but we have done that again and again in this House.
I will pick up on the comments made by the noble Lord, Lord Bilimoria, in particular; I agree with so much of his analysis of the condition, although I do not necessarily agree with his solutions. However, the point he made that crystallises the problems we face is the forecast growth rate of 1.3%, with a rate the following year of 1.2%. At that level of economic growth, we cannot sustain the public services and general living style of our population today. Will the Minister go back and try to get somebody in the Treasury to truly take seriously some of the economic issues we are facing? They are not just a series of small, isolated issues; they add up to a critical problem that the Government will have to grapple with. Nothing we have seen grapples with the extent and depth of that problem. I will focus on a few particular points in this Bill; as I say, it is highly technical, but sometimes those technical pieces have consequences.
I start with the reduction in the bank levy from 8% to 3% from 1 April 2023. Taxpayers’ contribution in the form of CBILS, BBLS and bounce-back loans amounted to some £80 billion of support for businesses during Covid; it was vital, but that same money also cushioned the banks. This week, Britain’s four major high street banks are anticipated to report some £34 billion between them in full-year profits and to follow that with payments of huge bonus pots to senior bankers. To quote the FT,
“banks are unveiling the sort of payouts that prompt a run on champagne”.
This is against the background of a rise in NICs of 1.25% for some of the lowest-paid workers and a cost of energy and living crisis for much of the population, who are now facing a choice of “heat or eat”. The Governor of the Bank of England encouraged workers not to ask for pay rises to limit inflation, but his words have clearly not discouraged bank bonuses on the back of some of the highest windfall years that our major banks have experienced. How on earth in that situation do the Government justify a cut in the levy for the banks?
I move on to the issue of freeports, primarily because it directly reflects on the issues we discussed on the Floor a few moments ago. I have raised this issue in the context of the National Insurance Contributions Bill, to which this House was good enough to pass an amendment. The amendment required that for businesses operating in a freeport, there has to be a public—I stress “public”—register of beneficial ownership. We know that freeports are a lure for criminal activity and money laundering because the normal disclosures which are made through customs and tax are not available. We know now that the Government have asked the freeports to have registers of beneficial ownership, but they have declined to make those public, even though they lecture virtually the entire world on the importance of public registers, because then civil society, activists, journalists and others can shine a light on wrongdoing, and only then does it become effective.
Will the Minister go back and say that, when the National Insurance Contributions Bill reaches the Commons again, the Government will change their approach and provide a public register? Otherwise, we are taking a step backwards and providing yet more mechanisms for people who want to launder money. Indeed, in the freeports, since we make them tax attractive, we are basically offering not only money laundering but tax-enhanced money laundering. That is absolutely the wrong message, and we should not believe for a second that Putin’s henchmen and autocrats have not noticed and are not planning to take advantage.
This leads me to ask why the provisions to make a public register of the beneficial ownership of property in the UK—which has been promised over and over—have not been included in this Bill. We know that that legislation has been written and has been sitting on the stocks for weeks now, if not months, and the Government have chosen not to bring it forward. I think we need to understand why the Government are holding back.
I think the noble Lord, Lord Butler, referred to the Economic Affairs Finance Bill Sub-Committee report— I have the privilege, as he does, of sitting on that committee—which looked at the issue of basis period reform. I will not pre-empt speeches which I hope the noble Lord, Lord Bridges, will have the opportunity to make at a later date. He was unable to be here today. But when we as a committee reviewed the case for basis period reform, which now sets the fiscal year for all businesses in the UK as between 31 March and 5 April, I have to say that we were not impressed, to put it mildly. The noble Lord, Lord Butler, addressed many of the reasons why: flawed consultation, rushed proposals, and the fact that a compelling case was not made that this was either simplification or a prerequisite for making tax digital.
There are two things that absolutely stuck in the gullet with this. During the transition period, some companies will be paying tax on profits made over 23 months rather than over a single year. I know the Government are going to allow them five years to make those payments, but a whole lot more flexibility would have been extremely welcome, and I do not understand why it has not been given. The Minister herself mentioned overlap relief—the problem that start-up businesses often have more than one year’s-worth of profits falling into a particular tax year—and that as we go through the transition period, companies will be able to offset any excess profits by subtracting or by qualifying for overlap relief. But, as she said, so many of those companies do not have the records. HMRC has the wretched records, but it is not committed to delve into its resources and provide them, or else reconstruct them from the data that it holds. Will she please go back to HMRC and tell it that it has to act in the interests of taxpayers and make that effort?
However, I have a particular issue that concerns me far more than the transition issues. It is the permanent impact of requiring a significant number of companies in the UK to use a tax year end that makes no sense for their business cycle. Some of this applies to large international partnerships that will now have a different tax year end for their operations in the UK and in other parts of the world—but they can afford all the expensive lawyers and accountants. However, I am concerned about the farmers for whom a March/April year end is entirely inappropriate. They depend on a summer growing season and have no control over weather and prices. I look at the hospitality sector, and again it is highly volatile and highly seasonal and a 31 March to 5 April year end is completely wrong. This applies also to a lot of small seasonal retailers. Those entities will now have to estimate—and given the volatility it is basically “guesstimate”—what profits they will make during that season in order to report their taxes. At the very least, these little companies will need to hire some very expensive accountants and lawyers, and at worst they will constantly be filing tax forms that contain significant and wide-ranging errors.
I just do not understand why, at a time when technology would allow us to deal easily with variable tax year ends, the Government have made the decision to push everybody into this very narrow 31 March to 5 April band. For years, when we dealt with taxes by pen and paper, we accepted the importance of variability, but now that we have programs that can deal with it, the Government have decided not to. The only thing I can think is that they hope through these various measures to up-front a whole series of tax payments because of that transitional year to give them a buffer ahead of the next election. It makes absolutely no sense otherwise and, as we say, it has nothing to do with making tax digital: in fact, making tax digital should enable you to deal with the variability.
On the issue of uncertain tax treatments, mentioned by the noble Lord, Lord Butler, let me just say this. This is a notification of uncertain tax treatments issue and is absolutely classic. Companies that are determined to do the right thing and not take any risks on tax and make sure that they think through everything will spend a fortune trying to comply with the new notification requirements, and the companies that intend to take risks will make very little effort and will probably get away with it. Again, I cannot see why on earth the Government have brought this in.
Because of the time I just want to say something very quickly about a letter that the FBSC has written to the Financial Secretary on off-payroll working. It raised a lot of questions about the CEST—check employment status for tax—tool to determine whether contractors fall inside or outside IR35. The Government really are not taking seriously, I think, the 20% of requests to the CEST system that come back with the result that says “unable to determine”. It is a tool that needs to be refined to deal with that big 20% number and also to reflect the other issue missing from the test that undermines confidence in it, which is that it needs to reflect the mutuality of obligation test for whether one falls inside or outside IR35.
However, underlying all of this is the concern that the Government are still not implementing the Taylor review, which could provide a holistic framework for self-employment. We are moving into a nonsense where we will have people paying tax as if they are employed but having few of the rights of being employed. I think everyone can recognise that that is both unfair and inequitable. Perhaps the Minister will give us an update on what is happening with the Taylor review.
The Finance Bill was also remarkable for what it did not do, and here I am picking up some of the points made by other noble Lords, including the noble Baroness, Lady Bennett. It did not set up a windfall tax on fossil fuel producers with record profits. That could have raised £5 billion to £10 billion. It did not rectify the injustice done to the 5 million excluded self-employed people who got no Covid help. It did not reform the unfair business rates system, rather than just provide short-term relief.
There is one particular issue which small businesses had really hoped would be caught at the time of this Bill—and it was not. As the Minister will know, big businesses are very successful in the recruiting market, stripping people away from small businesses because they can afford to pay joining bonuses and higher wages. As a consequence, small businesses are suffering disproportionately from the labour shortages we are now experiencing. This could be combated by significantly increasing the small business employment allowance. I notice that the Federation of Small Businesses is calling for this. It seems like a small measure—not even an expensive one—but it would make a huge difference by at least providing small businesses with something of a level playing field through the recovery.
There is so much more to say about the economy and about this Bill, but I think I have exercised the patience of the House enough.
Lord Tunnicliffe (Lab)
My Lords, I am grateful to the Minister for introducing this Finance Bill, and to other noble Lords for the contributions they have made.
I am particularly grateful to the noble Lord, Lord Butler of Brockwell, for presenting the work of the Finance Bill Sub-Committee. While the sub-committee’s report focused on just two measures in the Bill, its observations were all too familiar: this is a Government who rush ahead, irrespective of evidence base and without regard to reputational impact.
The work of the Finance Bill Sub-Committee always creates an almost democratic dilemma. An enormous amount of effort goes into the presentation of these reports, and the depth they go into is really powerful, yet it has so little impact on what actually happens. Indeed, I am committing this sin by the fact that I am no longer going to talk about it, other than by talking about the general economic situation. Somehow or other, we must find a way of engaging these talents, especially as so much of the control of the financial services in the future is going to be generated by regulation which will not come before the House. However, the institutions involved in generating this regulation want engagement with parliamentarians and we must find a better way of making that happen.
This has been a very interesting debate, although it must be noted that the Finance Bill seems to attract less interest with each iteration. Today, we have had no Conservative Back-Bench speakers. I am sure there are many reasons, but perhaps one is a growing frustration with the Chancellor’s handling of the economy. If so, who could possibly blame them? The Prime Minister continues to insist that the UK has the strongest economic performance in the G7. This was true over the past year—for reasons I will come on to—but it is no longer the case. Indeed, if we look at the last quarter, the UK ranks fifth out of seven—much closer to the last place than the first. Just over a week ago, the Chancellor said that the fastest annual growth rate since the Second World War amounted to proof that the Treasury was
“making the right calls at the right time.”
Based on their experience of the last two years, I am sure that many creative freelancers and hospitality businesses would vehemently disagree. Given the nature of his resignation, so would the noble Lord, Lord Agnew.
What Mr Johnson seems less keen to stress each week at Prime Minister’s Questions is that the UK experienced one of the largest contractions of any economy when GDP fell by 9.4% during 2020. Annual growth of 7.5% in 2021 may look flattering, but that headline hides several other pieces of bad news. In its latest release, the ONS revised down its initial estimate for Q3. It also noted that, when studying quarterly GDP figures, the economy remained 0.4% below its pre-pandemic level. Looking at monthly figures, it appears that the economy may now match its pre-pandemic level, but that achievement was marginal when considering that GDP fell by 0.2% in December. The Office for Budget Responsibility and other forecasters expect GDP growth to be sluggish in the coming years —just as it has been for the bulk of the last decade. The rate of quarterly growth which puts us fifth in the G7 is far more typical of this Government’s economic performance than the annual growth witnessed last year.
I do not want to labour the point, but in honour of the Deputy Chief Medical Officer, who will shortly move on from his role, there is room for a sporting analogy. The current political and economic situation in this country is akin to a football team on the brink of relegation. The manager, knowing that his job is on the line, is keen to talk up any minor victory. In this case, despite conceding an early, embarrassing own goal, a late equaliser is presented as the result of a tactical masterstroke. In truth, the team’s form remains unchanged; there is no sign of an upturn in its fortunes. The manager’s head is still very much on the chopping block and, despite their attempts to paint a positive picture, the supporters see right through it.
Budgets and Finance Bills are the ultimate expression of an Administration’s priorities. There are some items in this Finance Bill which make sense but, taken as a whole, it fails to address the many fundamental problems which are holding back the British economy. With the Chancellor’s recent economic statements having done little to help working families, there can be no surprise that this Bill does nothing to ease the mounting pressures of the cost of living crisis.
It also does nothing to make the tax system fairer. It facilitates tax reliefs for experimental freeports and lowers the banking surcharge at the same time as the tax burden is due to hit its highest level in 70 years. The hit to family finances comes alongside inflation that has hit 5.5%. Worryingly, it is expected to rise further still, far exceeding the predictions published late last year.
While the measure is not contained in this Bill, on energy prices, the Chancellor has offered only a glorified buy now, pay later scheme. Why, as we discussed during an earlier Oral Question, has he not imposed a windfall tax on the very energy companies which have recently announced billions in profits, share buybacks and dividend payments?
The Government may have capped rail fare increases but many household bills are due to go through the roof. Many essential costs, including broadband and phone subscriptions, will rise by 10% or more from April. Ordinary people are suffering, in some cases having to choose between heating and eating, at the same time that HMRC systematically fails to act on fraud and economic crime.
The Bill establishes an economic crime levy, which we welcome in principle, but monitoring and enforcement agencies have been warning central government for years that they are being outrun and outwitted by criminal gangs. The lack of action over many years means that criminals have been allowed to operate not one but several steps ahead of the bodies tasked with chasing them down. The levy may help address that in years to come, but in many senses the horses have already bolted.
The Commons Public Accounts Committee noted that HMRC has effectively written off £4 billion-worth of fraud. The Treasury continues to dispute that figure but cannot name a more accurate one. Can the Minister provide one today? The PAC has labelled the Government’s plans to recover money as “unambitious”. It says that HMRC’s customer service has collapsed, and that there is a lack of concerted action to tackle tax avoidance. In the words of Dame Meg Hillier:
“Every taxpayers’ pound lost to a fraudster will lead to honest ordinary people feeling the post-pandemic pinch harder and harder.”
It seems that the Chancellor’s Eat Out to Help Out scheme also attracted fraudulent claims, meaning that potentially it spread not only Covid but a perception that fleecing the taxpayer will come without punishment. This is all the more baffling as successive Conservative Administrations have talked tough on benefit fraud. While individuals clearly should not seek to exploit the social security system, many thousands have faced severe financial sanctions for innocent mistakes. Why is it one rule for benefits claimants and another for businesses and criminals?
The Prime Minister talks tough on fraud but is failing to act over Russia. He has recently warned that an escalation in Russian aggression against Ukraine could lead to steps to expose Russian beneficial ownership of firms in the UK. We have been waiting for—indeed, we were promised—public registers of beneficial ownership for years. However, at every opportunity, the Treasury has ducked the challenge. Why are the Government using this threat as a diplomatic tactic? Is it not in the public interest to address money laundering, regardless of the state of international affairs? Why has not a single unexplained wealth order been issued during Boris Johnson’s premiership? The Foreign Secretary recently identified these as the main tool in the fight against corruption. Have the Government thrown in the towel?
We will not oppose the Bill, but we do not see it as credible. It is yet another example of the Government’s failure to adequately address the cost of living crisis, economic crime and other pressing issues. It increasingly feels like the Chancellor is simply going through the motions, rather than steering the economy in the right direction. He may well be biding his time for a leadership bid, but that should not be so apparent to the rest of us. While he holds that great office of state, he has a responsibility to the people of this country. They are assiduous in paying their taxes and following the rules, and they elected this Government to spend that money wisely. It is hard to believe the Chancellor is living up to that duty when one looks at the Bill before us.
Baroness Penn (Con)
My Lords, I thank all noble Lords for their contributions to this debate. In closing, I will focus on responding as far as possible to the many and varied points raised.
The noble Lord, Lord Sikka, asked about the different tax treatment of earned and unearned income. The measure in the Bill increasing dividend tax rates by 1.25 percentage points for all bands is precisely to ensure that those with dividend income contribute to the health and social care spending settlement, as well as those with earned income. This measure supports the Government’s objective of raising revenue to fund our national priorities while also helping to limit the incentive for individuals to work through an incorporated company and remunerate themselves via dividends rather than wages to reduce their tax bill. I also point out that dividend income is paid out of corporate profits, which are usually also subject to corporation tax.
The noble Lord also raised various tax reliefs, specifically for video games, films and TV. They are available only to productions that pass the British cultural test. The production is considered against a range of criteria—not just where it is set but where it is made, and the nationality of the personnel involved in making it. The Government recognise the valuable economic and cultural contribution of the video games industry and other cultural industries. The video games tax relief has supported £4.4 billion of UK expenditure on 1,640 games since its introduction in 2014. I reassure the noble Lord that HMRC keeps these reliefs under review. An external evaluation of the video games tax relief was published in 2017, and a review of the film and TV reliefs is currently under way.
I also noted the request by the noble Lord, Lord Sikka, for information about tax reliefs to be set out at each Budget. I will take his suggestions back to the Treasury. He also asked how the global minimum tax rate will be assessed. The UK is proud that, in October 2021, more than 130 countries signed up to a new global minimum tax framework that built on a deal brokered in principle by the G7 during the UK’s presidency of that grouping. The OECD has published the model rules for pillar 2, which will help to ensure that multinational groups pay a minimum level of tax in each jurisdiction in which they operate, and the UK Government have now published a consultation on how those rules will be implemented in UK domestic legislation.
The noble Lord, Lord Razzall, asked about the timing of the health and social care levy, given pressures on household budgets, and the noble Lord, Lord Bilimoria, spoke more generally about the impact of high tax burden in the UK. I would say to noble Lords that the Government are committed to responsible management of public finances, and the plan for health and social care will lead to a permanent increase in spending. It is important, therefore, that that spending is fully funded, particularly in the context of record borrowing and debt to fund the economic response to Covid.
The health and social care levy will allow the Government to implement necessary adult social care reform, tackle the elective backlog in the NHS as it recovers from coronavirus, develop our pandemic response and preparedness, and ensure that the NHS has the resources it needs through this Parliament. These are things I hear noble Lords call for time and again in debates in this House, and the decision to implement the health and social care levy is the mechanism that means we can afford to do them. I would also point out that the highest earning 15% will pay over half the revenues, and 6.1 million people earning less than the primary threshold and lower profits limit will not pay the levy. The levy also applies to businesses; as those businesses benefit from having a healthy workforce, it is only fair that they contribute.
On the more general point made by the noble Lord, Lord Bilimoria, the fact is that the Government remain committed to fiscal responsibility and funding excellent public services. It is vital not just to borrow to fund those services but to fund them fairly, with both businesses and individuals contributing. That is why the Government have had to make difficult choices, but those choices mean we are now bringing debt under control and investing in public services.
The noble Lord, Lord Bilimoria, and the noble Baroness, Lady Kramer, raised the question of economic growth. I would say to noble Lords that this Government are absolutely seized of the need to drive up productivity, which is why there is such a focus on investment in recent budgets and in the measures in this Finance Bill.
The noble Lord, Lord Razzall, also asked about universal credit. The Government have reduced the universal credit taper rate from 63% to 55% and increased universal credit work allowances by £500 per annum to make work pay. This is essentially a tax cut for the lowest paid in society, worth around £2.2 billion in 2022-23. The change also means that 1.9 million households will, on average, keep an extra £1,000 on an annual basis. That will be combined with the national living wage increase of 6.6% to £9.50 per hour in April 2022 for those aged 23 and over, which will benefit over 2 million workers. Since its introduction in 2016, the national living wage has increased the pre-tax earnings of a full-time worker by over £5,000 a year. That increase is consistent with the Government’s target to go even further and raise the national living wage to two-thirds of median earnings for over-21s by 2024, provided economic conditions allow. That is an ambition to abolish low pay in this country altogether, which I hope will be welcomed across this House.
The noble Baroness, Lady Bennett, the noble Lord, Lord Tunnicliffe, and others raised the issue of the windfall tax. The noble Lord, Lord Razzall, and others also asked whether our approach to support households with the cost of their energy bills is the right one. I do not want to go over all the ground we covered in Oral Questions earlier today, but I would say to noble Lords that the UK Government do place additional taxes on the extraction of oil and gas. Indeed, the headline tax rate charged on the profits from UK oil and gas production at 40% is currently more than double that charged on company profits in most other areas of the economy. To date, the sector has paid more than £375 billion in production taxes.
Noble Lords expressed scepticism about ensuring that there is adequate investment in this sector to secure ongoing energy security and the feed-through that that will have on people’s household bills. In 2020-21, investment in the sector was at an all-time low; that is part of the context in which we need to think about the arguments for a windfall tax on those producers. An abrupt tax change would create uncertainty and potentially deter significant investment opportunities.
As I said earlier, the Government have set out a significant programme of support for households with their energy bills, worth more than £9 billion. I must disagree with the characterisation of the noble Lord, Lord Tunnicliffe, of that support as “buy now, pay later”. A large part of that support is a £150 rebate on council tax bills for all homes in bands A to D. This is a more targeted approach than the VAT cut proposed by the Benches opposite; it also gets support to households faster because the rebate will be available from April, whereas a VAT cut would be spread across the course of the next year.
The noble Lords, Lord Butler and Lord Tunnicliffe, and the noble Baroness, Lady Kramer, touched on the work of the sub-committee that is looking at the Bill. I thank it for its incredibly detailed work. It is an incredibly important part of the system that we have and the contribution that this House makes to these processes, even though we do not amend or vote on Finance Bills. Speaking from the Treasury’s point of view, I know that that work is taken incredibly seriously, is looked at in detail and provides a contribution to the process.
The Treasury’s assessment is that basis period reform creates an ongoing administrative burden saving of £1.1 million a year for business, but the Government are planning further engagement to explore whether and how to introduce easements to reduce possible associated administrative burdens. In agreement with the committee’s recommendation, the Government will reassess the administrative burdens and savings of basis period reform in the course of exploring these options for easements. The Government have delayed basis period reform in response to consultation feedback, giving businesses and accountants more time to prepare. The transition to the new tax year basis needs to take place before Making Tax Digital is introduced, to avoid hard-coding complexity into the new Making Tax Digital systems.
Noble Lords also asked about HMRC’s resources for the Making Tax Digital income tax self-assessment. The spending review process between HM Treasury and HMRC considers demands on the department, including on both customer service and policy development, to arrive at an agreed spending settlement that ensures that HMRC has sufficient resources and capacity to deliver its commitments and service levels. HMRC is confident that it has the resources it needs.
Many noble Lords raised the Government’s efforts to tackle economic crime. Indeed, we heard some discussion of that in the Statement repeat we just had. The Government are absolutely clear that we will not tolerate criminals profiting from dirty money, and that we will do whatever is necessary to bring such criminals to justice. The economic crime plan of three years ago was a landmark piece of work that brought together government, law enforcement and the private sector in close co-operation. I will not repeat all the measures that we have taken under that plan, but we have undertaken around 7,900 investigations, 2,000 prosecutions and 1,400 convictions annually for stand-alone money laundering or cases where money laundering is the principal offence. We have restrained £1.3 billion and recovered £1 billion since 2014 using the Proceeds of Crime Act, civil recovery and agency-specific disgorgement mechanisms.
The Government are bringing forward significant investment to tackle these crimes, including through, in this Bill, legislating for the economic crime anti-money laundering levy. I reiterate to noble Lords the Government’s commitment to reforming Companies House and the register of overseas entities’ beneficial ownership. As we heard from the Prime Minister earlier this month, the Government are committed to bringing forward an economic crime Bill to deliver those reforms.
The noble Baroness, Lady Kramer, and the noble Lord, Lord Tunnicliffe, raised the issue of the bank surcharge and, in particular, pointed out the support that the Government provided to business during the pandemic through bounce-back loans, CBILS and so on. That is exactly why we are asking business to contribute to the costs of the recovery. The combination of the corporation tax increase and the new bank surcharge rate means that banks will have a higher rate of tax under the new regime than currently.
The noble Lord, Lord Tunnicliffe, asked a specific question about the Commons Public Accounts Committee’s claim that HMRC has effectively written off £4 billion of fraud and what the Treasury’s assessment of that is. We do not recognise any claims that we have written off any money. We definitively have not and do not intend to do so. Over the course of this financial year and the next, HMRC expects to recover another £800 million to £1 billion of overclaimed grants on top of the £500 million already recovered to date. Beyond that, we are not giving up on this. We continue to seek to recover everything we can. These overclaimed grants result from error as well as fraud and, where individuals have made genuine mistakes, HMRC will help them to put things right.
The Finance Bill comes before us in a significantly improved economic situation. The Government are rightly focused on economic recovery. In 2020, this country experienced the deepest recession on record, but thanks to the actions this Government have taken, including the vaccination programme, we have recovered fast.
Lord Bilimoria (CB)
I thank the noble Baroness for giving way and appreciate her efforts to answer many of the questions I raised in my speech. I would be grateful if I could have a written response to the ones she was not able to answer. In particular, I specifically asked about the £2 billion that the Government say they spent on testing in January. They are withdrawing lateral flow testing from 1 April, which will be an additional burden on consumers and businesses. I asked for the breakdown of that £2 billion between PCR tests and lateral flow tests. I was attacked in the Chamber earlier for saying that £2 billion is a lot of money, but it could be a small proportion of that. If the noble Baroness could give the figures, it would clarify the situation for the House, the public and business.
Baroness Penn (Con)
I always admire the noble Lord’s ability to cram in the most questions or points in his contributions to these debates. I make an effort to address as many as I can—this one strayed slightly beyond the brief I had on the Bill, but I undertake to take that question back and provide a written answer if I can.
I was nearly the conclusion of my response. We are focused on recovery from the recession that we experienced. I spoke about the vaccination programme and the tribute we should pay to its role in our recovery. However, we still have historically high levels of debt. New fiscal rules will help to ensure that the public finances remain on a sustainable path despite this, a sustainable path that this Bill also helps to chart. It is a Bill that supports our businesses and our economy as we recover from the pandemic. It supports stronger public finances through these exceptional times. It helps to tackle tax avoidance and evasion and contributes to a simpler and more sustainable tax system. For these reasons, I commend it to the House.