House of Commons
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Prayers
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
This information is provided by Parallel Parliament and does not comprise part of the offical record
Oral Answers to Questions
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Peter Aldous (Waveney) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
The Government’s export strategy sets out how we aim to capture up to £170 billion of export sales estimated for 2030 in low-carbon sectors. At the green trade and investment expo earlier this week, we showcased the best renewable energy technologies and innovations that the UK has to offer. Over the last year, the Department for International Trade has supported £5 billion-worth of exports across energy and infrastructure sectors.
Peter Aldous
I welcome my right hon. Friend to her place, and I am grateful for her reply. With 50% of the UK’s offshore wind fleet anchored off the East Anglian coast, local businesses have acquired a unique set of skills, knowledge and expertise that should be promoted abroad, so as to increase trade opportunities. A case in point is the memorandum of understanding between the New Anglia local enterprise partnership and Virginia Beach in the US. I would be most grateful if my right hon. Friend could confirm that a national framework is in place to ensure that we make the most of these great opportunities.
Kemi Badenoch
I am grateful to my hon. Friend for raising that issue and highlighting the good work that DIT is doing. He will be pleased to know that in 2020—the latest figures available—the UK exported £821 million-worth of offshore wind products, with the help of DIT overseas and sector teams. We have a plan in place to carry out promotions, and work is ongoing to continue to build the UK’s extensive export offer and maximise economic value. My hon. Friend will also be pleased to know that in and around his constituency of Waveney, DIT is supporting Lowestoft and Great Yarmouth in the build-out of Iberdrola and Vattenfall’s projects, which are developing capability to export low-carbon technology globally.
Kerry McCarthy (Bristol East) (Lab)
Earlier this week, I had the pleasure of meeting the Foreign Minister from the Maldives. Like many small island states, it would very much benefit from UK support when it comes to renewable energy; it is just not in a position to do that itself. It would also benefit from the lifting of tariffs on tuna, which I hope the Secretary of State is aware of. What support can we give small island states such as the Maldives?
Kemi Badenoch
I thank the hon. Lady for her question. We have a developing countries trading scheme, which we use to assist small countries that are not able to take some of the opportunities that larger, more developed economies can take. I know that Foreign Office Ministers have been having conversations with Ministers from the Maldives, and I am pleased to see that the engagement is extensive. We will do all we can, and I am happy to have conversations on the best way to assist it in reducing tariffs and increasing trade between our countries.
Sir Jake Berry (Rossendale and Darwen) (Con)
The green industrial revolution can seed jobs across the north of England. Will my right hon. Friend say, particularly in advance of COP27, what support is available for small manufacturers in places such as Rossendale and Darwen to ensure that they can access our overseas networks, to push international trade beyond the shores of Lancashire?
Kemi Badenoch
I thank my right hon. Friend for his question. That is one of the things we are promoting during International Trade Week. We have a 12-point export plan, to do precisely what he described. Just this week, I have met export champions across the UK, who have been showing the ways that we can expand our export networks into other countries. I am happy to provide him with more information on what the manufacturing sector in and around his region can do to take advantage of that.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State to her place and wish her well in all that she does. I welcome greater trading opportunities for the energy sector. We must also be aware of the need to self-source and provide our own energy, to be self-sufficient. Has she had the opportunity yet to evaluate nuclear energy options for regions such as Northern Ireland and the ability to then increase trade with other nations?
Kemi Badenoch
The short answer to that is no, primarily because that would be a competency of the Department for Business, Energy and Industrial Strategy, but I would very much like to hear more about the trade opportunities that the hon. Gentleman has identified, which DIT can support in conversations with BEIS, to facilitate those sorts of plan.
Ruth Cadbury (Brentford and Isleworth) (Lab)
On behalf of His Majesty’s Opposition, I welcome the Secretary of State to her position on her first outing. The Government have committed to reaching net zero by 2050, but they continue to approve new licences for oil and gas projects. Projects approved before August 2023 could be protected from being stopped under a revised energy charter treaty. We know that other countries have been sued under the treaty when they tried to close down fossil fuel projects under their net zero commitments. How would the Government prevent that from happening in the UK under a revised energy charter treaty?
Kemi Badenoch
I thank the hon. Lady for her question. She should know that the Intergovernmental Panel on Climate Change believes that those projects are consistent with our transition to net zero. She will know that gas is a transition fuel, so it is not possible for us to get to net zero by cutting off gas completely. We need to ensure that the explorations that are taking place are in line with our strategy; I believe that they are. Responsibility for the energy charter treaty lies with BEIS, but we lead on investment provisions and investor-state dispute settlements. We continue to see it as having an important role in these policies and the UK’s trade policy.
Kate Osamor (Edmonton) (Lab/Co-op)
The Secretary of State for International Trade (Kemi Badenoch)
The last World Trade Organisation ministerial conference, attended by my predecessor, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), brokered an agreement on trade-related aspects of intellectual property rights in relation to covid-19 vaccines. My officials are fully engaged in ongoing discussions regarding TRIPS. The UK remains committed to engaging constructively with the WTO on that.
Kate Osamor
I congratulate the Secretary of State on her new role. A great success was achieved earlier this year when a deal was agreed at the WTO to waiver some rights on the manufacture of covid vaccines, yet the deal does not apply to treatment, so countries such as Pakistan and South Africa are urging an extension of the waiver. Can the Government commit to being a positive voice in negotiations and pledge to support a waiver on covid-19 treatments?
Kemi Badenoch
I cannot make a pledge at the Dispatch Box. I can say that we will do everything we can within the existing framework to support countries that need access to vaccines and treatments. If they are making specific requests about waivers that the DIT can consider, I would be happy for the hon. Lady to write to me so that I can take a look.
Mr Robin Walker (Worcester) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
Building on last year’s success, my Department is holding more than 120 events across the country this week to help businesses of all sizes and sectors to seize export opportunities to support jobs and growth nationwide. I was pleased to welcome more than 100 investors and UK exporters to the green trade and investment summit in Gateshead, attend an Export Academy event in Birmingham and speak at the National Farmers Union dairy export summit to promote UK trade.
Mr Walker
I welcome my right hon. Friend to her place and my neighbour, the Under-Secretary of State for International Trade, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), to his. Worcester is home to some fantastic exporters, including Southco, the products of which reach markets as far afield as the United Arab Emirates, Egypt, Turkey, South Africa and Greece. It has been supported by the DIT to achieve exports worth more than £6 million and it is now working on major opportunities in India. As we celebrate International Trade Week, will my right hon. Friend ensure that we redouble efforts to support Worcester and west midlands exporters?
Kemi Badenoch
I am happy to assure my hon. Friend of that. I am grateful to him for highlighting a lot of the fantastic work that is taking place across the country. He will know, as will hon. Members on both sides of the House, that when it comes to exporting, size does not matter. We want to support as many small and medium-sized enterprises as possible to take advantage of the benefits of international trade. The export support service has boosted our international trade adviser network. He will be pleased to know that five advisers operate in his constituency; more than 180 advisers across the country offer tailored support to SMEs to take advantage of the opportunities for international trade.
Chris Elmore (Ogmore) (Lab)
My constituency makes everything from military grade parachutes to television cameras for US television networks. During International Trade Week, it would be good to do more to include the nations of the United Kingdom to ensure that every constituency in Wales, Scotland and England benefits from that much-needed trade, and that businesses in my constituency from Sony to Wepa and Rockwool are celebrated and supported by the Department.
Kemi Badenoch
The hon. Gentleman raises a good point. We need to make sure that our policies are visible across the UK. I saw many businesses from Wales and similar regions in the west of England at the green trade and investment expo. They are pleased with the support that they are receiving from the Department. I think we have a visit to Cardiff planned with the Board of Trade soon. I hope that these are the sorts of things that he and his fellow MPs in Wales will be able to take advantage of.
Nick Thomas-Symonds (Torfaen) (Lab)
After several months in which Ministers have come and gone without even facing questions at the Dispatch Box, it is good to have a chance, in this International Trade Week, to welcome the new team to the Department. I would of course like to welcome the Secretary of State and to wish her well in her new post, and I would also like to start on a note of consensus. The Secretary of State said during the leadership contest in the summer:
“Why should the public trust us? We haven’t exactly covered ourselves in glory”.
I entirely agree with her assessment of her party.
We know where the Prime Minister thinks that Conservative policy on trade has failed, because he called the Australia deal “one-sided”, so can the Secretary of State set out which other aspects of trade policy have failed and how she intends to improve them?
Kemi Badenoch
I thank the right hon. Gentleman for his warm welcome. He makes reference to comments that I made in the summer, and I am very grateful for the opportunity to clarify them. I was actually referring to all MPs and to Parliament, rather than just to this side of the House—[Interruption.] Indeed; we all know Members of all parties who have not exactly covered themselves in glory, and nobody should pretend that this is about those on one particular set of Benches.
The right hon. Gentleman is talking about trade policy, and one of the things I am very keen to highlight is that there is more to trade than free trade agreements. What we need to do is get our exports and investments going; that is the bread and butter of what trade is about. I disagree with his assertion about the one-sided nature of any particular agreement. What I want to see is businesses selling their products outside the UK and investment coming in.
Nick Thomas-Symonds
Well, trade policy certainly has not been covered in glory, because the 80% of UK trade that was to be covered by free trade deals by the end of year is not going to happen, the comprehensive deal with the US is out of sight and the deal with India by Diwali is a promise broken—but is this really any surprise? The Secretary of State’s predecessor said that her then Minister was not always available to answer the phone, the former exports Minister criticised his Department’s own trade fairs and the right hon. Member for South West Norfolk (Elizabeth Truss) was, it seems, prioritising selfies and wine fridges over standing up for Britain. Is not the reality that this Government’s incompetence is costing growth, jobs and prosperity? Quite simply, when will the Secretary of State get a grip of the Department?
Kemi Badenoch
I find every single thing the right hon. Gentleman has said to be laughable. It is very easy to stand at the Dispatch Box and make political points. I am here to actually deliver for the businesses across the UK, and that is what those of us on the Conservative Benches are going to be focused on. This is International Trade Week, so he will know that by 2030 we are forecasting £1.8 trillion-worth of green trade and £170 billion of UK exports. That is not the work of a Department that is failing; that is the work of a Department that is succeeding. I am very pleased with the actions of the officials at the DIT, and I will continue to support them both in the Department and here in Parliament.
James Wild (North West Norfolk) (Con)
The Minister of State, Department for International Trade (Greg Hands)
Joining the CPTPP free trade area is a flagship policy of global Britain and our independent trade policy. The CPTPP covers 11 countries across four continents, and the UK joining will increase its GDP from 12% of global GDP to 15%. Some 99.9% of UK goods would enter tariff-free, and the CPTPP has groundbreaking chapters on business mobility and digital trade.
James Wild
Given the potential prize of access to markets worth £9 trillion, will my right hon. Friend prioritise not only concluding the negotiations, but working with export champions—such as Captain Fawcett in King’s Lynn, which successfully sells its gentlemen’s grooming products around the world—to encourage more firms to export and to boost productivity and growth?
Greg Hands
My hon. Friend raises two very interesting points. The first is the importance of the CPTPP, which is absolutely one of the Department’s highest priorities. The second is the importance of international trade advisers working on the ground. He mentioned his grooming products company in King’s Lynn, and I can also mention KLT Filtration, based in King’s Lynn, to which we have provided support for its Coldstream filters water-purification consumer brand business. There is a lot of DIT activity happening in his constituency in and around King’s Lynn.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is good to be straight and frank about CPTPP—I am sure the Minister will agree—but if we are to be straight and frank, to have gains for jobs, the economy and living standards, would the Government not need 62 CPTPP deals to compensate for the Brexit economic damage? It also means being straight with small and medium-sized enterprises that they will be exporting to faraway CPTPP countries, with lots of bureaucracy and paperwork instead of tariffs. It will not be as easy as it was before Brexit. I am sure the Minister is all over the numbers, so will he confirm that CPTPP will be worth only one sixtieth of the Brexit damage?
Greg Hands
It is always good to engage with the Chair of the Select Committee, and in my year of absence at the Department for Business, Energy and Industrial Strategy I have genuinely missed him and his questioning of me at the Dispatch Box.
Greg Hands
I am certainly going to answer the question, which is about the opportunities from CPTPP: a free trade area of 510 million people and 11 countries across four continents, with amazingly good chapters on date and digital, mode 4, an SME chapter, liberal rules of origin—all those things are great opportunities. Frankly, it is time that SNP Members started, for the first time, to support a trade deal. They opposed the trade deal with the EU; they opposed the trade deals with Japan, Australia, and New Zealand. I am hoping for the day when the SNP will, for the first time ever, support a trade deal.
Rachael Maskell (York Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
Europe remains a vital export destination for British businesses, which exported £344.6 billion-worth of goods and services in the 12 months to the end of June 2022. DIT Europe has around 300 trade experts, including a dedicated trade commissioner for the continent. We will facilitate some 500 activities and events to support UK exporters by the end of this financial year alone, including the So British event at the ambassador’s residence in Paris, Poland’s New Mobility Congress, and a significant presence at Berlin’s InnoTrans trade fair.
Rachael Maskell
I welcome the Minister to his place. In light of the devastating state of the economy, with the EU trade deficit showing at 26.7% last month, there must be pragmatism in working with the trade and co-operation agreement, to boost economic yield by removing export barriers such as tariffs and border friction, rather than instigating harsh cuts to our public services, wage restraint, and a subsequent recession in the forthcoming Budget. What discussions has the Minister had with the Chancellor, to ensure that better trade terms are negotiated between the UK and the EU, or will ideology trump the needs of our constituents and sacrifice our public services?
Andrew Bowie
I thank the hon. Lady for her question, but I am afraid this Government will take no lessons from the Labour party on trade deficits, given that it inherited a trade surplus of £4.6 billion in 1997, and left office in 2010 with a trade deficit of £35.1 billion. We have regular discussions with the European Union on how we can increase trade, and the Government are determined to drive up trade not just with the European continent, but with new partners around the world.
Dan Carden (Liverpool, Walton) (Lab)
The Minister of State, Department for International Trade (Greg Hands)
Negotiations between the UK and Mexico are taking place right now, and the second round of talks with Mexico started on Monday virtually, with discussions continuing to be positive and productive. The UK team is focused on ensuring that the new deal works for consumers and businesses across the UK.
Dan Carden
I am grateful to the Minister for his update. I have the privilege of chairing the all-party group on Mexico, which is one of the world’s biggest democracies and the second largest economy in Latin America. Trade deals provide an opportunity not only for economic growth, but on the connected issues of climate, environmental protection, human rights, workers’ rights, sustainable development and gender equality. How is progress going on those issues? I understand that the Government are considering appointing a trade envoy to Mexico. Will the Minister update the House on that progress?
Greg Hands
That may have been a job application from the hon. Gentleman, who I think is taking his APPG to Mexico next week. I wish him every success in his engagement with such an important trade partner, looking forward for the UK. We are engaged in trade negotiations with Mexico at the moment, and all those topics are subject to continuous engagement with the Mexican Government, including on the environment, climate, human rights and labour rights. Whether those things are included in a trade agreement is a slightly different matter, but none the less we take up and engage with such issues regularly with the Government. I am looking forward to the hon. Gentleman seeing at first hand next week the excellent work done by our embassy in Mexico City.
Sara Britcliffe (Hyndburn) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
I am delighted to say that UK exports were £728 billion in the 12 months to the end of August 2022—an increase of £49 billion adjusted for inflation. Through our free trade agreement programme, we are creating new opportunities for UK exporters through FTAs covering £814 billion-worth of bilateral trade in 2021. We are also supporting UK exporters through our export academy, which since October 2021 has provided tailored assistance to over 11,500 businesses.
Sara Britcliffe
Last year, more than 160 of the great businesses that we have in Hyndburn and Haslingden exported goods around Europe and the rest of the world. Increasing exports creates jobs, wealth and better opportunities. Does the Secretary of State agree that liberalising international trade as a function of our new post-Brexit freedoms is key to levelling up our country, as that provides more opportunities for businesses in Hyndburn and Haslingden?
Kemi Badenoch
I wholeheartedly agree with my hon. Friend. Opening up new markets for Great British business, whether through the FTA negotiations or our work on trade barriers, will be key to securing the economic growth that the British people want. I am also pleased to hear that the export strategy is having a positive impact in her constituency. We currently have 72 export champions based in the north-west, close to her constituency, who are sharing their export journeys and acting as role models for new and aspiring exporters. As part of International Trade Week, we have hosted more than 120 events, and four of them have been in the north-west.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
A survey of small and medium-sized enterprises for the British Chambers of Commerce found that four in five had not carried out any assessment into what they may need from a trade deal with major international markets. What steps are the Government taking to engage SMEs better with free trade agreements under negotiation?
Kemi Badenoch
The hon. Lady raises a good point. We do have SME chapters in FTAs, but quite a lot of engagement takes place with trade bodies such as the CBI and the Federation of Small Businesses. Many of those trade organisations represent their members fully, but if she thinks that a specific issue has been overlooked in any particular negotiations and she would like to highlight that, she should contact DIT in her capacity as a Member of Parliament and we will look into helping those businesses in her constituency and across the country.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Dave Doogan (Angus) (SNP)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
The hon. Members will be aware that His Majesty’s Treasury leads on this policy area. However, I am happy to provide them with an update on the support that my Department is providing to Scottish exporters during the cost of living crisis. The DIT Scotland team based in Edinburgh—I am sure that they are pleased to see His Majesty’s Government increasing their presence in Edinburgh—was established in 2021 with trade and investment expertise dedicated to supporting Scotland’s businesses to grow through exporting overseas. Scottish businesses can access many UK Government services, including the export support service, the UK Export Academy, UK Export Finance and DIT’s overseas specialists in over 100 markets across the world.
Gavin Newlands
I welcome the Minister to his place. However, let us compare export growth in the first quarter of 2019—pre-Brexit and pre-covid—with the first quarter of 2022. In Belgium, it was plus 49%, in Switzerland, plus 42%, in Poland, plus 35%, in Australia, plus 46%, in the Netherlands, plus 23%, in Italy, plus 23%, in Spain, plus 19%, and so on—I could go on and on. The UK’s figure was zero. Does he agree with Saxo Bank’s assessment published in Le Monde that political instability, trade disruption, an energy crisis and skyrocketing inflation are rendering the UK an emerging market country? Why on earth would Scotland want to remain shackled to it?
Andrew Bowie
It is a bit rich for the SNP to talk about political instability and uncertainty given that its own policy is to rip Scotland out of the United Kingdom, doing more damage to Scottish businesses and the economic foundations of our United Kingdom. The global economic situation in which we find ourselves is putting huge pressure on British businesses, but the Government, and especially the Department, are doing everything that we can to support British businesses to export to new markets and the European Union at this time.
Dave Doogan
I welcome my constituency neighbour to his Front Bench role. We are all relieved he has finally landed the job.
Fuel, feed and fertiliser costs are sky-high in Brexit Britain, compounded by the Tories’ cost of business crisis. How does the Minister suggest that my Angus farmers and his West Aberdeenshire and Kincardine farmers compete internationally? Supply-side pressures are manifest in other markets, but they are most acute in the United Kingdom. Our farmers must also now compete with the scandalous Australia trade deal, which will see Australian farmers laughing all the way to the bank while Angus farmers and other Scottish farmers face bankruptcy,
Andrew Bowie
The hon. Gentleman is a champion for Angus farmers and Angus berries, which we would like to see exported to more markets around the world. Indeed, that is why we are in the middle of negotiating access to the comprehensive and progressive agreement for trans-Pacific partnership. That will reduce 99.9% of trade barriers to that part of the world, an exciting, new and growing market for produce from Angus, West Aberdeenshire and Kincardine, Scotland and the entire United Kingdom.
Mr Peter Bone (Wellingborough) (Con)
Before I came to this place, I ran a manufacturing company and did a lot of exporting, in particular to the United States of America. In relation to the second part of this question, when dealing with a big contract one buys the currency forward. However, is it not a fact that the fall in the value of the pound against the dollar has made Scottish exports much more attractive, because they are cheaper in America, and made imports more expensive? Is that not a good thing?
Andrew Bowie
The Government are committed to stabilising the economy, driving down inflation and increasing British exports around the world. My hon. Friend is a great champion for his constituency and I know he will join us in those efforts moving forward.
Virginia Crosbie (Ynys Môn) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Government have put in place enhanced scrutiny arrangements for free trade agreements. We publish extensive information prior to negotiations, including our strategic objectives and an economic scoping assessment. During negotiations, we engage closely with Parliament, publishing updates and holding briefings for colleagues. I particularly look forward to working closely with the International Trade Committee, whose members bring considerable knowledge and insight. Signed deals, together with an impact assessment, are laid before Parliament at the earliest opportunity, allowing for extensive scrutiny over several months. The House will debate the Australia-New Zealand trade agreement soon.
Virginia Crosbie
I thank the Minister for his answer and I welcome him to his place. This week, I celebrated Back British Farming Day with Aled Jones, president of National Farmers Union Cymru. One of the best ways we can back our hard-working farmers, such as those in Ynys Môn, is by ensuring that once a trade deal is in force, there are people on the ground who know the market and can help get the most out of the agreements. Will the Minister update the House on the progress the UK Government have made in appointing agricultural counsellors and attachés?
Nigel Huddleston
I thank my hon. Friend, who is always a fantastic champion for her constituents and constituency, as evidenced by Anglesey Day, which was a fantastic event earlier this week here in Parliament. Also this week, my officials gathered over 20 small businesses from across north Wales and Ynys Môn to discuss how they can internationalise their businesses and take advantage of our free trade agenda. She is right: we do not just need to do the deals; we need to get the most out of them. We will get help there, too, because our eight new agri-food attachés will help unlock opportunities in growth markets. All have been recruited and will start work soon.
Dame Nia Griffith (Llanelli) (Lab)
Business organisations, trade unions, consumer groups and the trade Committees in both Houses have all called for greater and more timely parliamentary scrutiny of trade deals. In contrast to Parliaments elsewhere, such as the US Congress, which has scrutiny opportunities right from the initial negotiating mandate through to voting on ratification, this Government have done deals with no chance for this Parliament, and therefore the people we represent, to have a real say. With a new team in place, will the Minister now commit to meaningful parliamentary scrutiny of trade negotiations—not an afterthought—and bring back control to this Parliament?
Nigel Huddleston
I am afraid that I have to disagree with what the Opposition Front Bencher has laid out. The Constitutional Reform and Governance Act 2010—that date is significant, because it was introduced that April under the previous Labour Government—outlines the process, which is rigorous and stacks up well with other parliamentary democracies around the world, such as Australia, New Zealand and Canada, which have similar systems. For example, with the Australia and New Zealand agreements combined, we delivered an oral ministerial statement at the launch of each negotiation; 10 negotiating round updates; extensive information on the deals when we reached agreement in principle; 12 sessions with Select Committees, including private briefings; eight MP briefings on the FTA programme; the Trade and Agriculture Commission reports and section 42 reports well ahead of the CRaG deadline; six months of scrutiny time; and many other things. [Interruption.] I just wanted to make that point, Mr Speaker—
Mr Speaker
I am going to make an even bigger point: we are not reading out phone books as answers.
I call the Scottish National party spokesperson, Drew Hendry.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I welcome the Minister to his places—I think that is the right thing to say.
It is vital that, for a change, we get a chance to actually scrutinise proposed deals before they become real. India has no detailed plan, for example, to cut emissions, and 70% of its economy is powered by coal. Cabinet Office emails have shown that the former Trade Secretary and Prime Minister decided to
“drop both of the climate asks”
from the UK-Australia agreement to get it “over the line”, even though Australia has a history of coal pollution. Given that the current Prime Minister had to be shamed into attending COP27, does that mean that no legally binding demands will be made in the UK-India discussions?
Nigel Huddleston
Again, I disagree with that characterisation —respectfully, because I am looking forward to a constructive relationship with the Scottish National party, Opposition Members and the devolved Administrations on trade deals. Let us be very clear: we will not sign any deals that are not in the UK’s interests.
Drew Hendry
The Minister did not answer the question. The UK has rolled over 35 EU agreements and signed trade deals with Australia and New Zealand, yet they have included no realistically enforceable measure to plug the climate change gaps that we have pointed out in all of them from the start. The New Zealand text cannot be enforced and climate has been dropped altogether from the Australia deal. There are gleeful reports from India that there will be no more than warm words on climate change. Why is real action on the climate emergency ignored in every deal that this place brings forward?
Nigel Huddleston
The hon. Member mentions “every deal that this place brings forward”, and again, it would be nice if we actually got support from Opposition Members at some point. He will know that our friends, colleagues and trading partners in Australia, in particular, given the situation they face, are as concerned about climate challenges as we are.
Wendy Chamberlain (North East Fife) (LD)
The Minister of State, Department for International Trade (Greg Hands)
We are committed to ensuring that any deal we sign includes opportunities and, where necessary, protections for UK agriculture. British farming is vital to our trade policy and any deal we sign will work for UK farmers, consumers and companies, increasing opportunities and choice while not compromising our high standards. For example, the UK has secured a range of measures to safeguard our farmers in our recent Australia and New Zealand FTAs.
Wendy Chamberlain
As many said, yesterday was Back British Farming Day and, as part of that, I met Quality Meat Scotland. Although we may not have a final say on trade deals in this Parliament, there are real concerns in the agricultural sector that, particularly around environmental and welfare standards, we are at a significant disadvantage from some of the trade deals. Will the Minister underline what the process is for engagement between agriculture and DIT to ensure that this does not happen?
Greg Hands
Over many years, I have done very extensive engagement with the agricultural sector. I have met the brilliant NFU Scotland president, Martin Kennedy, a number of times, for example, to discuss these various issues. There are very important safeguards in the Australia and New Zealand agreements that effectively phase in product-specific safeguards for UK agriculture. Nothing in any trade agreement forces the UK to dilute or weaken our standards. The independent Trade and Agriculture Commission, which is really important in scrutinising trade deals, concluded that
“the UK is able to prohibit imports of products because it has an agreed interest in certain practices in Australia, either because they are agreed to be a common interest, or because they are agreed to result in an unfair trade advantage.”
So, actually, the independent TAC has given us an endorsement as well.
Mr Speaker
Order. Minister, do not take advantage, please! You have had a little bit too long today, and Mr Cairns has been waiting for a hell of a long time. Come on in, Mr Cairns.
Alun Cairns (Vale of Glamorgan) (Con)
Vale of Glamorgan farmers rear some of the best lamb in the world, and Welsh lamb is recognised globally as some of the best sheepmeat. With a new market open in the United States for the first time in decades, what practical support can my right hon. Friend and his Department provide to farmers in the Vale of Glamorgan to best exploit this opportunity so we can ensure that the best Welsh lamb is on the most expensive plates in the United States?
Greg Hands
My right hon. Friend has been a tireless advocate for his farmers and for all Welsh farmers for the past 12 years. During his time as Secretary of State for Wales, he and I had many discussions about the issue. He will be as delighted as I am that Welsh lamb is going to the US for the first time in more than 20 years, now that the US has removed the small ruminant rule. Achieving that has been a key part of our trade policy objectives for some time. The market is estimated to be worth £37 million in the first five years. We continue to engage with the US Administration—we have very good people in Washington and across the US who are making sure that our access to markets continues to be good.
Paul Howell (Sedgefield) (Con)
The Minister of State, Department for International Trade (Greg Hands)
Over the 2021-22 financial year, we removed 192 barriers to UK agricultural produce across 79 countries. That has included opening the markets for UK poultry meat to Japan and for UK pork to Mexico and Chile. Just last month, the first export of British lamb was sent to the USA for the first time in more than 20 years; as I said, the industry estimates that market to be worth £37 million in the first five years. Millions of American consumers will now be able to enjoy top-quality British lamb.
Paul Howell
I welcome the new team to the Front Bench.
Earlier this year, the then exports Minister, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), visited Billy Maughan and other farmers at the fantastic Darlington Farmers Auction Mart in my constituency. He saw that farmers in our area and throughout the country are proud to produce food to some of the highest standards in the world.
There is real potential to build on existing markets and develop new ones throughout the world. Farmers are keen to see markets developing, and we have discussed how the Government can help to deliver that vision. A key ask from farmers is getting people on the ground in key markets such as the middle east and parts of Asia to promote what we have to offer in terms of quality, sustainability and traceability. What progress can I tell Billy is being made?
Greg Hands
My hon. Friend has been tireless in his advocacy for his Sedgefield farmers, including Billy Maughan and others. We are helping our farmers and food producers to capitalise on the enormous global demand for top-quality British food and drink. We have staff in more than 100 markets around the world, including in the middle east, Asia and the United States, to ensure maximum access for our brilliant produce. That includes two specialist agricultural attachés in the Gulf region and China and three more attachés to cover the Asia-Pacific and India. Next week, I will be visiting Taiwan, which welcomed UK pork exports for the first time in 2018, following my trade talks with Taiwan in 2016.
Ian Levy (Blyth Valley) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Department is working tirelessly to remove the trade barriers that British businesses face across the world. In the last financial year alone, we have removed 192 barriers across 79 countries. The removal of just 45 of those barriers is estimated to be worth £5 billion to businesses over five years, but we want to do more. Targeting the 100 trade barriers on our most wanted list has the potential to deliver export opportunities worth £20 billion for businesses across the UK.
Ian Levy
I welcome the team to the Front Bench.
On Monday, my right hon. Friend the Secretary of State visited the port of Blyth to see for herself the offshore blade testing facility at the Catapult. As the only deep-water port in Northumberland, the port of Blyth is at the heart of international trade, but if we are to continue to trade competitively on a global scale, we must look at the bureaucracy surrounding export licences. Will the Minister meet me to look at how we can smooth the way to a more efficient trading platform and drive exports around the world?
Nigel Huddleston
My hon. Friend and I have talked about this before. I know that the Secretary of State very much enjoyed her visit earlier this week. My hon. Friend is absolutely right to highlight the great expertise in renewable energy and green technology sectors in the UK. We need to do more to export those fantastic skills. The Government take our export control responsibilities incredibly seriously, because there are some sensitive areas, but I am extremely mindful of the commercial pressures that businesses face and of the need to process export licences as swiftly and reasonably as possible. I would be happy to meet my hon. Friend to understand in more detail the specific issues that he is facing.
Patrick Grady (Glasgow North) (Ind)
Is it not the case that the Tories’ hard Brexit has actually increased trade barriers at a range of levels? Is the Minister aware of the challenges faced by touring musicians based in my constituency who are trying to take their merchandise to Europe? Although it is a massive area in which they can profit from their business, either it is not viable for them to sell, or they have to source the merchandise in the country in which they are touring, which means there is a loss to producers of such merchandise in the UK.
Nigel Huddleston
We do, of course, have an arrangement with the European Union now. I am familiar with the issues that the hon. Gentleman has raised as a result of my time at the Department for Digital, Culture, Media and Sport, but I know that Ministers at that Department and, indeed, the Department for Transport are engaging with individual countries and progress is being made on those issues, most recently with Spain and Greece. As well as benefiting from the overall agreements, we are trying to unlock barriers individually, sector by sector and country by country.
Kate Osamor (Edmonton) (Lab/Co-op)
The Secretary of State for International Trade (Kemi Badenoch)
I am delighted that this week the Department is hosting our second International Trade Week. Trading around the world can be transformative for UK businesses, which is why, with more than 10,000 business registrations for about 123 events delivered by the Department and external partners, International Trade Week is the Department’s biggest single showcase for the global trading opportunities that are open to our businesses. It also marks one year since the launch of our Made in the UK, Sold to the World export strategy. Throughout the week, businesses have been able to make the most of key export strategy initiatives, such as advice from the export support service and expert support from the Export Academy.
Kate Osamor
We recently heard that negotiations to conclude a trade deal with India have stalled because of the comments made by the Home Secretary about migrants from that country—just another mess to lay at her door. Will the Secretary of State tell us whether she will ensure that the Home Secretary’s hardline opposition to migration will not harm our economic relationships?
Kemi Badenoch
It is not true that negotiations with India have stalled, either because of the Home Secretary’s comments or for any other reason. They are ongoing. What has changed is the deadline: as a result of my becoming Secretary of State, we are focusing on the deal and not the day, and that is the most important aspect. The Home Secretary is well within her rights to discuss migration issues, and her comments were not specific to the India trade deal. She has a responsibility for migration, and she is doing her job properly.
James Daly (Bury North) (Con)
The Minister of State, Department for International Trade (Greg Hands)
I welcome my hon. Friend’s interest in trade with Pakistan. When I visited the country—I was the last Trade Minister to do so—I observed the excellent co-operation that was taking place between businesses in the UK and Pakistan. Big investments by UK firms such as GSK in Karachi are key to the delivery of £3 billion-worth of trade. I am pleased to say that we will be formalising this relationship through a new ministerial-led UK-Pakistan trade dialogue, in which we will co-operate further on reducing and removing barriers to trade.
Gareth Thomas (Harrow West) (Lab/Co-op)
In the first half of the year, British food and drink exports to Europe were still 5% below their 2019 level, but imports from Europe were up by 22%. The last Secretary of State would not take any action to reduce the barriers to trading with Europe and, indeed, cut the funding for business groups to back British exporters. After the economic car crash that she and the rest of the Government caused last month, is it not time that this Secretary of State took a different approach?
Kemi Badenoch
I disagree with the hon. Gentleman. We are doing everything we can to support businesses. He will know that 2019 was before the pandemic, so of course we recognise that supply chain issues have had an impact on exports. I have been referring to this throughout today’s questions session. We have an export support service, and plenty of support in place to assist businesses trading across Europe and the rest of the world.
Gareth Thomas
I am sorry that the Secretary of State continues to take such a complacent attitude to trade with Europe. This is not just about food and drink; recent data shows that exports of cars and car parts are still significantly down as a result of the trade barriers, and many hundreds of small businesses which were exporting to Europe, according to His Majesty’s Revenue and Customs, have simply stopped doing so. The Secretary of State’s own colleague, the Under-Secretary of State for Justice, the hon. Member for Finchley and Golders Green (Mike Freer)—a former exports Minister—has said that businesses which want to export are simply not getting enough support to do so.
Given the desperate need for growth following the kamikaze Budget that the Secretary of State backed last month, can she tell the House whether there will be more or less support for British exports after the Chancellor’s fiscal statement?
Kemi Badenoch
It amazes me that, even now, Brexit is still being blamed for everything. It is about time that the Opposition, who call other people complacent, paid attention to what is going on in the world and got off their personal hobby-horses. On car manufacturing, there is an issue with battery supply from the US, as everybody knows. We are doing everything that we can to support companies in getting the parts that they need. The export support service is doing a fantastic job, and I commend the officials who work in it.
Sir Desmond Swayne (New Forest West) (Con)
Kemi Badenoch
Items moving between countries normally attract customs duty and import VAT, but my right hon. Friend will know that the trade and co-operation agreement means that there will be no customs duty on goods moving between Great Britain and the EU if the goods meet rules of origin. Delivery companies may charge their clients handling fees for moving products internationally, but the Government do not have control over those charges, which are a commercial matter.
Joanna Cherry (Edinburgh South West) (SNP)
Greg Hands
The hon. and learned Lady raises the important issue of human rights, but the UK Government engage around the world in defence of human rights, as she will be well aware from all her interactions in this place. The Scottish National party has always opposed EU trade deals, and the deals that she mentions that include human rights clauses were opposed by the Scottish National party in Brussels. It is a bit rich to say that EU trade deals are great but UK ones are not when she has opposed every single EU trade deal.
Andrew Selous (South West Bedfordshire) (Con)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
I thank my hon. Friend for his question, and for everything that he does to support business in South West Bedfordshire. Businesses can access advice and support through the Department’s digital exporting programme, which helps UK businesses to use digital, including e-commerce, as a key route to market. To date, the programme has partnered with more than 50 global marketplaces, including Amazon, in more than 20 countries.
Rachael Maskell (York Central) (Lab/Co-op)
Kemi Badenoch
The hon. Lady raises a very important point about the use of trade sanctions. I agree that there are certain countries on which we need an effective trade sanctions policy. Discussions take place across Government, including with Foreign Office Ministers and at official level, and those will continue. I cannot give her the detail of those discussions, but I assure her that we are looking at the issue very closely.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
This is a very important deal. Earlier this year, we launched negotiations between the United Kingdom and Israel on an upgraded, innovation-focused free trade agreement with services at its heart. The first round of negotiations with Israel were completed in September. An upgraded FTA with Israel will cement our relationship with that rapidly growing economy, and take our trading relationship to the next level.
Jim Shannon (Strangford) (DUP)
As the Minister of State knows, the Northern Ireland protocol poses a massive trade barrier for Northern Irish farming and businesses. The farming industry in Northern Ireland is worth £1.3 billion, so what discussions have been undertaken with the Secretary of State for Northern Ireland on smooth and frictionless trade for Northern Ireland’s farmers?
Greg Hands
We know the importance of the agriculture sector to Northern Ireland. We have frequent engagements with, for example, the Ulster Farmers Union, and I was delighted to attend the Irish Whiskey Association reception here in the House of Commons just last week. Obviously, we do not lead on the Northern Ireland protocol, but we make sure the interests of Northern Irish exporters are represented in all our discussions with the Foreign, Commonwealth and Development Office.
Kit Malthouse (North West Hampshire) (Con)
I join my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) in celebrating the opening up of the American market to UK lamb, not least as much of the lamb slaughtered in his constituency is brought to my constituency to be prepared for export by Randall Parker Foods.
The Minister of State will know that the UK is now the world’s third largest exporter of lamb and mutton meat but, when he talked about CPTPP earlier, he did not mention the lamb industry. He talked a lot about data and services. Will he reassure the House that, when he undertakes that particularly important negotiation, the interests of British food and farming, and most particularly of the British lamb industry, will be at the forefront of his thoughts?
Greg Hands
I welcome my right hon. Friend’s interest, and he rightly represents the key agricultural interests in his Hampshire constituency. CPTPP removes tariffs from 99.9% of British goods. We frequently say in this House that Australia and New Zealand are principally motivated by fast-growing markets in Asia when selling their agricultural produce. This country wants a piece of that action. Our ability to sell British lamb into the far east will be key for us, and DIT is engaging on that through CPTPP.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
What recent assessment have Ministers made of the trends in services trade with the EU? What steps are the Government taking to increase that trade?
Kemi Badenoch
There are ongoing discussions about what we can do for services trade. Last month, I met my Dutch counterpart who brought over a trade delegation. We are working with countries individually on everything we can do to improve trade, not just on our services exports but on their exports, too, because they continue to want to sell to the UK.
Wendy Morton (Aldridge-Brownhills) (Con)
Yesterday was Back British Farming Day, and many of us in this place joined the NFU in showing our support for the fantastic British farmers across the country, including in my Aldridge-Brownhills constituency, where we still have a small number of farmers. What more can we do to support our farmers, beyond the fantastic work on lamb in this trade deal?
Kemi Badenoch
I was at the NFU’s dairy export summit yesterday as part of my activities for International Trade Week and Back British Farming Day. My right hon. Friend will be pleased to know that this country’s dairy exports are increasing. I spoke to many businesses at the summit and they want information on exporting. There is a huge gap in knowledge on how to export, and that is one of the areas on which we want to provide additional information to support farmers.
Patrick Grady (Glasgow North) (Ind)
I regularly hear from constituents in Glasgow North who are concerned that the Tories’ desperation for trade deals will lead to a race to the bottom on food standards. Can Ministers guarantee that there will be no chlorine-washed chicken or hormone-fed beef on supermarket shelves in Glasgow North as a result of Tory trade deals?
Greg Hands
I first joined DIT six and a half years ago, and I cannot remember how many times I have had to say from this Dispatch Box that nothing in any free trade agreement alters or reduces UK food and animal welfare standards—that is absolute. The hon. Gentleman talks about our desperation for trade deals, but I would like to see the Scottish National party break the habit of a lifetime and support a trade deal, negotiated by either Brussels or the UK. It is about time he broke his duck and supported one of them.
Greg Smith (Buckingham) (Con)
We heard earlier about our great success in opening up new beef and lamb markets around the world. Earlier this year the Government backed a strategy launched by the NFU to increase agricultural exports by 30% through a 10-point plan. Will the Secretary of State confirm that the Government will continue to work with the NFU to land that 10-point plan to grow British agricultural exports?
Kemi Badenoch
Yes, I am very happy to continue working with the NFU. We, of course, have our own 12-point export strategy plan; I am sure that there is a lot of overlap between the two, but we are all trying to get to the same place, and I am happy to reassure my hon. Friend on that.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) listed the litany of issues with the Government’s approach to trade deals. I mentioned Saxo bank’s assessment of the UK as an “emerging market country”, and with a US trade official describing UK trade policy as a disaster, why does the Secretary of State think the standing of the UK has fallen so far in the eyes of the world?
Andrew Bowie
It is simply untrue that the standing of the UK has fallen anywhere close to where the hon. Gentleman says it has. We are committed to doing trade deals; in fact, this Government have done a record amount of them and are continuing to negotiate, not least on the CPTPP and with others to increase British trade around the world. It would be great if he would come on board and start talking Britain up, instead of talking it down.
Mr Peter Bone (Wellingborough) (Con)
During this hour of International Trade questions, we have had participation from SNP Members, independent Members, Democratic Unionist party Members and Liberal Democrats, but the official Opposition, for most of the period, have had two Back Benchers here. Does the Secretary of State agree that that must mean that the official Opposition approve of what we are doing so much—
Mr Speaker
Order. Mr Bone, that is the most irrelevant question I have heard in a set of questions. This is not like you; I thought your question would be at least on farming—whatever you want it to be.
Mr Speaker
Excellent, that completes questions. Thank you for that contribution—not!
Police Service: HMI Report
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Speaker
Before we begin this urgent question, I remind Members that they must not refer to cases that are currently before the courts and should be cautious in referring to any cases in respect of which proceedings may be brought in the future. I now call Sarah Jones to ask her urgent question.
Sarah Jones (Croydon Central) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on His Majesty’s inspectorate’s report on vetting, misconduct and misogyny in the police service.
The Minister of State, Home Department (Chris Philp)
I thank my constituency neighbour, the hon. Member for Croydon Central (Sarah Jones), the shadow Minister, for her question on this extremely important topic. The report published yesterday by His Majesty’s inspectorate of constabulary and fire and rescue services makes for deeply troubling reading. The inspection was commissioned by the previous Home Secretary, my right hon. Friend the Member for Witham (Priti Patel), following the horrific murder of Sarah Everard by a then serving officer, as well as the emergence of wider concerns about policing culture.
The report concludes that it has been far
“too easy for the wrong people both to join and to stay in the police.”
The inspectorate found that on too many occasions vetting was not thorough enough and that in some cases it was inadequate. The Government take the view, as I am sure Members from across the House do, that that is unacceptable. It is particularly unacceptable and disappointing to hear about these vetting failures given that the Government have provided very substantial additional funding to fund the extra 20,000 police officers and additional resources for the police more widely.
The inspectorate concluded that, although the culture has improved in recent years, misogyny, sexism and predatory behaviour towards female officers and staff members “still exists” and is too high in many forces. That is shameful and must act as a wake-up call. That sort of disgraceful conduct undermines the work of the thousands—the vast majority—of decent, hard-working police officers who perform their duties with the utmost professionalism. More damagingly, it undermines public trust. This matters a great deal to all of us, which is why my right hon. and learned Friend the Home Secretary has made it clear that things must change.
Since the report was published yesterday, we have been studying it carefully; this has been my first week in this position, but I have been studying it carefully. It contains 43 recommendations: three for the National Police Chiefs’ Council; nine for the College of Policing; 28 for chief constables and three for the Home Office. The Home Office will most certainly be implementing those three recommendations. The NPCC said in a statement yesterday that it expects police to act on their recommendations urgently. That is most certainly my expectation as well: all of these recommendations will be acted on as a matter of urgency.
We should keep it in mind that the vast majority of police officers are hard-working and dedicated. They put themselves at risk to keep us safe, and we should pay tribute to the work that the vast majority of officers do on our behalf. The report has uncovered obviously unacceptable behaviour and we expect the recommendations to be implemented urgently.
Sarah Jones
I welcome the Minister to his place. However, I have to say that I am disappointed that the Government are not taking more responsibility and leading from the front following such a grim report.
Yesterday’s report is 160 pages of failure—failure to bar the wrong people from joining the police; failure to get rid of them; failure to protect female staff and officers, and failure to protect the public. A lack of proper action to root out racism, misogyny and serious misconduct means that some communities do not trust the police.
This is by no means the first time that serious failings and horrific examples of unacceptable behaviour have been exposed. After the murder of Sarah Everard by a serving officer, the Opposition came to this place and called for change. After the horrific murders of Bibaa Henry and Nicole Smallman, we came to this place and called for leadership. After the shameful case of Child Q, we came to this place and called for reform. After the shocking Charing Cross station report, we came to this place and demanded action. After the Stephen Port inquiry, we came to this place and called for reform. If the Government had acted and led from the front, we could have stopped people being harmed. Leadership must come from the top.
Yesterday, we learned that Metropolitan police officers had been sentenced to prison after sharing racist, homo- phobic and misogynistic WhatsApp messages. For years, there had been warnings—for example, from the independent inspectorate—about serious problems in the police misconduct system, including long delays, lack of disciplinary action, disturbing and systematic racial disparities and lack of monitoring.
We have heard anecdotal evidence of forces expediting the vetting process to meet the Government’s recruitment targets. What does the Minister know about that? What is he doing to ensure that it does not happen? Will the Minister confirm that the roles of police staff, who do a lot of the vetting work and have been subject to cuts, will be protected so that forces can introduce the right systems? Will the Minister follow Labour’s lead and introduce mandatory safeguards and professional standards, led from the top, into every police force in the country to keep everybody safe?
Chris Philp
I thank the hon. Lady for her initial remarks and for her questions.
The Government have taken action. Indeed, the report we are debating was commissioned by the former Home Secretary directly in response to the issues that were raised. The fact that those issues have seen the light of day is thanks to that Government response. The Angiolini inquiry is also under way for exactly the same reason. We work closely with operational policing colleagues to ensure that the issues are properly addressed. I discussed the issues with Mark Rowley, the Metropolitan Police Commissioner, a few days ago, before the report was published.
As for ensuring that there are adequate resources for vetting and related purposes, the spending review settlement that the police currently receive has meant an additional £3.5 billion since 2019 over the three years of the police uplift programme, not just to pay the salaries of extra police officers but to provide the support and resources required to ensure that they are properly trained and integrated.
The hon. Lady was right to ask about professional standards, which are extremely important. In 2017, national vetting standards were set out in statutory guidance, which the College of Policing published. The report recommends updating some elements of that. Misconduct procedures are set out in statute. We expect the recommendations about improving those areas to be implemented, and we expect police forces around the country to ensure that the report’s recommendations are fully implemented.
Sir Peter Bottomley (Worthing West) (Con)
Most serving and retired police officers will feel as aggrieved as everybody else that a small number have been allowed to get away with bad things for too long.
For seven years in this House, working directly with Ministers and the Metropolitan police, I have been pursuing the case of the injustice to Sergeant Gurpal Virdi. I do not expect the Minister to know it, but does he understand that confidence can be restored only when lessons are learned, and that this is a good case to look at?
After reading the book, “Behind the Blue Line”, may I recommend that Home Office and Justice Ministers meet me with Gurpal Virdi, Matt Foot, his solicitor, the Crime Prosecution Service and the Independent Office for Police Conduct to review what went wrong, what should be put right and how the matter will be reviewed?
Chris Philp
I thank the Father of the House for his question. I do agree that the vast majority of police officers, who are hard-working, brave and decent people, will share this House’s shock at the contents of the report. We should keep it in mind, as I say, that the vast majority of police are hard-working, brave and decent people. In relation to the case that he raised, if he is able to write to me with particulars, I would be very happy to look further into it and meet him.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I welcome the Minister to his place. The report contains very disturbing instances of sexism and harassment perpetrated against women within the police and among the general public, and the systematic failures that contributed to that. The Select Committee has just started an inquiry into police priorities. I want to invite individuals with experience of sexism and abuse within the police and of the systems that failed them to come forward and share those experiences with the Committee. On the specific issues in this report, can the Minister just say whether it is acceptable that police forces are not required to hold face-to-face interviews with candidates or to obtain their employment and character references? How can that be correct and right when the police service has such a pivotal role to play in law and order in this country?
Chris Philp
I thank the right hon. Lady for her question. I strongly welcome the work that her Committee is doing in this area; it is very good that she is doing that. The issue that she raises around misogyny is a serious one. The report finds that progress has been made, but that there is a great deal more to do. I look forward to listening carefully to the recommendations that her Committee makes after it has conducted its own investigation. I think that 35% of officers are now female, which is a record figure—it has never been higher than that—and that an even higher proportion of recent recruits are female, which will hopefully add to the need to improve the culture. The training standards in the Policing Education Qualifications Framework do now include training around bias, tackling prejudice and discrimination, protecting people and looking after people with protected characteristics, but, clearly, there is a lot more to be done.
In relation to the vetting process and some of the issues that the right hon. Lady touched on at the end of her question, there are specific recommendations about them among those 43 items in yesterday’s report, and we expect police forces to adopt all of them.
Rachel Maclean (Redditch) (Con)
I thank the Minister and the previous and current Home Secretary for the leadership that they are showing on this issue, but, clearly, the report makes deeply worrying reading. Obviously, the vast majority of police officers are dedicated and professional, but there are some wrong’uns who are serving in our forces. For example, is it right that male officers are viewing pornography at work on suspects’ phones? Is it right that they are engaging in “booty patrol”, where they are stopping attractive young women who they see driving in cars? When will the Minister come forward with the Government’s response so that women and girls across our country can feel safe and have their trust and confidence in the police restored?
Chris Philp
All of the things that my hon. Friend describes are clearly completely unacceptable. No female officer or female member of the public should experience the things that she has just described. We do expect urgent action to be taken on these areas. The issues that she referenced are included in the 43 recommendations, and we expect implementation of those to be undertaken as a matter of urgency.
Andy McDonald (Middlesbrough) (Lab)
Much has been said at the Government Dispatch Box about the need for integrity, but that has to extend not only to police recruits but to those who purport to govern them. Given that the Tory police and crime commissioner of Cleveland, Steve Turner, has admitted to handling stolen goods from his employer, it cannot be that candidates for such positions who do not disclose their criminally dishonest pasts are able to stand for office or continue in office once such matters come to light. Does the Minister agree?
Chris Philp
I am not familiar with the case the hon. Gentleman refers to, so I will not comment on the particulars. In general, however, when people stand for election, the public pass their verdict.
Sir Jake Berry (Rossendale and Darwen) (Con)
With over 100,000 police officers serving in England and Wales, it is important that everyone in this House accepts that they will be as outraged as we are with the contents of the HMI report. Those police officers will be out on our streets on Saturday night, and the vile individuals identified in the report have made their job of keeping us safe harder. Because they do not have a voice and we do, I rise to say that I stand with our hard- working police officers. I stand with our police officers in Lancashire. They are doing a good job of keeping us safe, and they will be as disgusted as we are.
Chris Philp
My right hon. Friend is absolutely correct. The vast majority of police officers are decent, hard-working and brave people who put themselves at risk to keep us safe, and they will share our horror at these findings.
Wendy Chamberlain (North East Fife) (LD)
As many know, I was a police officer, joining Lothian and Borders police in 1999. I will not pretend that I do not recognise some of the elements of the culture described in the report, but I am concerned that policing by consent, which is the central tenet of policing in the UK, is threatened by reports such as this one. Scotland is not immune—the Minister mentioned Dame Elish Angiolini, who has carried out a similar report in Scotland. We need to sort out the vetting, but I have a real concern that there are people serving in the police force today who should not be there. What actions is the Minister taking to ensure that all forces do that? Given that the picture is quite fractured, with 43 forces, does the IOPC have a role in ensuring that that work is expedited?
Chris Philp
I thank the hon. Lady for her question and for her service as a police officer in Scotland. She is right to point out that this is not just about vetting on entry; it is also about conduct while in office. The recommendations touch on this matter, including in relation to the Home Office and the rule 13 processes around people who are still on probation. I have only been in post for a week, but I do think that making sure that misconduct allegations and wider performance issues are acted on quickly merits further attention, and it is something I will look into.
Alun Cairns (Vale of Glamorgan) (Con)
The significance and seriousness of the report should not be understated, but does my right hon. Friend recognise that the vast majority of police officers are honourable, hardworking and dedicated public servants? Can he assure us that he will take the strongest action to follow through and deliver on the recommendations, but that he will also show and give the greatest confidence to those honourable police officers who are public servants and who work daily to keep us safe?
Chris Philp
My right hon. Friend is absolutely right. This Government and, I am sure, all Members on both sides of the House, stand with and behind the vast majority of police officers, who work hard to keep us safe, often putting themselves in danger to do so. We will continue to give full support to that vast majority while we take urgent action to address the findings in the report.
Tonia Antoniazzi (Gower) (Lab)
The report states that hundreds, if not thousands, of officers who should have failed vetting are now working in police forces across the country, including mine. What measures will he take to identify those individuals and take action?
Chris Philp
There is already a process of periodic re-vetting of serving police officers. One of the 43 recommendations in the report published yesterday is to do that re-vetting more frequently, and that is with police chiefs as we speak.
Scott Benton (Blackpool South) (Con)
It is vital that lessons are learned, and I thank the Minister for confirming that the recommendations in the report will be delivered in full, but does he agree that 99.9% of our police officers in this country do a brilliant job in keeping our communities safe, and that it would be a grave mistake if those who oppose the police for political reasons were to jump on the report as a way to undermine public confidence in the work the police do?
Chris Philp
I agree that the vast majority of police are hard-working, decent and brave. I have not heard any Member attempting to exploit the report today, and I am sure that no Member of this House would do so. I am also sure that all of us will stand with our brave officers who are doing a good job while ensuring that appropriate action is taken where urgent improvement is needed.
Andrew Gwynne (Denton and Reddish) (Lab)
When this urgent question was heard in the other place yesterday, the Minister in the Lords pushed responsibility for standards and reform on to individual police chiefs in individual forces. We know there is a clear postcode lottery with police standards, which is letting the public down. Does this Minister accept that that is wrong and that there must also be leadership from the top at the Home Office too?
Chris Philp
Of course I agree that leadership is important, including setting clear standards and, for example, ensuring that those statutory guidelines were put in place in 2017. Leadership is important, and I believe this Home Secretary and the previous Home Secretary, who commissioned this report and the Angiolini review in the first place, have discharged those responsibilities. The hon. Gentleman is also right to allude to the fact that the police are rightly operationally independent; we must ensure that the institutions and structures are right, that police chiefs are supported as necessary, and that the College of Policing is setting the right standards. That is what many of the recommendations in this report seek to do.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Jonathon Cobban and Joel Borders were serving police officers in Hounslow. Yesterday, they were sentenced to 12 weeks in prison for sharing the vilest misogynistic, racist, ableist and homophobic messages in a WhatsApp group that also included Wayne Couzens and others. In court, they showed no remorse. All those officers had been transferred in from the Civil Nuclear Constabulary to fill gaps in the Met. Is the Minister aware of a wider problem of officers being transferred between forces without any real vetting or suitability checks at the time of their transfer, and what is he doing about it to ensure not only that it does not happen again, but that all officers currently serving in the Met are fully vetted and, if they are found to have issues, are sacked from serving in any police force again?
Chris Philp
I share the hon. Lady’s horror at the case she describes, which was heard in her local area. It is a truly shocking case. On the question of transfers, one reason for the police uplift programme, hiring the extra 20,000 officers, is to ensure that there are no gaps that need to be filled. There are important recommendations among the 43 that address the question of vetting. On her point about checking the existing cadre of officers, I draw attention again to the point I made a few minutes ago about the regular rolling process of rechecking, which the report also refers to.
Nick Smith (Blaenau Gwent) (Lab)
This is a sad saga of Government and police management failure. Understandably, there will likely be increased vetting after this important report, so by when will all the additional 20,000 police officers promised so long ago actually be in post?
Chris Philp
Of the extra 20,000 officers, just over 15,000 were in post by 30 September this year. The information I have been provided with in the last week—my first week in this post—is that by the end of March 2023, in four or five months’ time, all 20,000 will have been recruited as planned.
Clive Efford (Eltham) (Lab)
This issue starts at the very top, and we have missed many opportunities to tackle it. It was also exacerbated by the incredible decision of the Conservatives to cut 21,000 police officers. Now we have a mad dash to try to backfill those gaps in the service. Can the Minister assure us that no lax vetting has been involved in filling those gaps, and what will he do to go back and re-vet those officers to ensure that they are of the highest standard?
Chris Philp
The report made it clear that there have been problems with vetting—that is one of its key and troubling findings. There is a programme of automatic re-vetting of officers on a periodic basis, and one of the report’s recommendations is that that should be done more frequently, for the reasons the hon. Gentleman sets out. More broadly, officer numbers did go down shortly after 2010, owing to the catastrophic economic circumstances at the time, but they are now going up rapidly and by March of next year, as I said a second ago, we will have a record number of police officers—at no point in this country’s history have we had more officers on the books than we will have by March next year. In fact, my understanding is that in the force area covering his constituency and mine there are already a record number of Metropolitan police officers. Never in the Met’s history have there been more police officers on its books than there are today.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his response to the questions that have been asked. I also want to put on the record my thanks to the many police officers who are above reproach and do a wonderful and very courageous job; it is important to say that before asking questions. It is disturbing to learn in this report that petty theft or assault charges were either ignored or not found out in the vetting procedure, which tells us just how broken the system is. What has been done to fix that and to ensure that the past record of people of both genders is known, decisions are made in the best interests of the force and every action is taken to restore the general public’s confidence and trust? That is really important.
Chris Philp
I thank the hon. Member for his question, and I agree with his comments at the beginning. We should keep in mind in this debate, both in the House and publicly, that the vast majority of police officers are decent, hard-working and brave people putting their own safety at risk to keep us safe; we should never lose sight of that fact. I share his concern about the vetting issues that we have discussed, and there are recommendations to improve those. Where applicants have served a custodial sentence or signed the sex offenders register, there is currently an absolute prohibition on them being recruited as police officers, and where they have a criminal conviction of any kind, there is a presumption against their recruitment. That is a rebuttable presumption, so they can make representations, but the presumption is that they will not be hired. Clearly, we need to ensure that that information is always known and always considered, and there are recommendations in yesterday’s report to ensure that that happens.
Abuse and Deaths in Secure Mental Health Units
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
Before we begin, I remind Members that they must not refer to cases that are currently before the courts and should be cautious in referring to any cases in respect of which proceedings may be brought in future.
Dr Rosena Allin-Khan (Tooting) (Lab)
(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on abuse and deaths in secure mental health units.
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
I am grateful to the hon. Lady for raising this important question. Everyone in any mental health facility is entitled to high-quality care and treatment and should be kept safe from harm. The findings from the investigation into the deaths of Christie, Nadia and Emily make for painful reading. The death of any young person is a tragedy, and all the more so when that young person should have been receiving care and support. My thoughts and, I am sure, the thoughts of the whole House are with their families and friends, and I want to apologise for the failings of the care that they received.
As I told the House on Tuesday, these incidents are completely unacceptable. The Secretary of State and I are working closely with NHS England and the Care Quality Commission, and they have updated us on the specific situation and the steps that the Tees, Esk and Wear Valleys NHS Foundation Trust is taking to improve the care at its services. Those include investing £5 million in reducing ligature risks across the estate; improving how it develops and implements care plans for young people; strengthening its policy on observation; and improving staff training and the culture that can exist within the trust.
I recognise that these worrying findings come in the context of broader concerns highlighted by other recent scandals. The Minister for Health and Secondary Care, my hon. Friend the Member for Colchester (Will Quince), was at the Dispatch Box last month responding to an urgent question on the unacceptable abuses at the Edenfield Centre. These challenges are, rightly, the subject of sharp focus in my Department, and we understand that every part of our system has a responsibility to keep patients safe. That is the driving motivation behind our new mental health safety improvement programme and the patient safety incident response framework.
I am not just the Minister for Mental Health; I am also responsible for patient safety, and I am not satisfied that the failings we have heard about today are necessarily isolated incidents at a handful of trusts. The Secretary of State and I are urgently meeting the national director of mental health to look at the system as a whole, the role of CQC inspections and the system for flagging concerns. I will also be meeting the new patient safety commissioner to seek her guidance, and based on that, we will make a decision on how we proceed in the coming days.
Dr Allin-Khan
It pains me that we are here again after failings in patient care and I send my heartfelt condolences to all the families affected. Emily Moore, Nadia Sharif, Christie Harnett: these are the names of three young women who tragically lost their lives after systemic failings to mitigate self-harm. This cannot go on. I thank my hon. Friend the Member for Middlesbrough (Andy McDonald) for his tireless work with the families involved.
Sadly, those are not the only cases. In the last five weeks, there have been reports on the Huntercombe Group, the Essex Partnership University NHS Trust and the Edenfield Centre. Why do undercover reporters seem to have a better grip on the crisis than the Government? Patients are dying. They are being bullied, dehumanised and abused, and their medical records are being falsified—a scandalous breach of patient safety.
The Government have failed to learn from past failings. I wrote to the previous Secretary of State, the right hon. Member for Suffolk Coastal (Dr Coffey), yet I never received a response. I have written to the new Secretary of State and he has not replied. Are the Secretary of State and the Government taking this seriously? It certainly does not seem so.
Will the Government be conducting a rapid review into mental health in-patient services? What are the Government doing to ensure that patients’ complaints about their care are taken seriously? These reports are becoming a weekly occurrence. I ask the Minister to put herself in the shoes of patients in these units and understand what their relatives are feeling. Will she apologise for the anguish that families are experiencing? This is a scandal and the Government should be ashamed.
Maria Caulfield
I will not stand at the Dispatch Box and deny any of the instances that we have seen, their consequences or the failings that have been identified. I apologised in my opening remarks for the care that failed the most vulnerable patients in our system. I commit to right hon. and hon. Members from the Dispatch Box that we are urgently looking not just at these cases but across all mental health in-patient services, and not just at adult mental health, but at offenders and other users of mental health facilities.
We have brought in a number of measures. We introduced new legislation, which was enacted in March, on the use of force and restraint. We are identifying best practice and trying to get that rolled out across the country. We are looking at putting in place a number of measures to improve safety and to support staff in units where staff shortages have been identified as a cause of the problems.
With regard to the hon. Lady writing to the Secretary of State, I signed off a letter to her early on Tuesday, which she should receive any day now. I apologise that she did not previously get responses in a timely manner.
NHS England has commissioned a system-wide investigation into the safety and quality of services across the board, particularly around children and adolescent mental health services. I am pushing for those investigations to be as swift as possible.
On the issue of a public inquiry, I am not necessarily saying that there will not be one, but it needs to be national, not on an individual trust basis. As we have seen in maternity services, when we repeat these inquiries, they often produce the same information and we need to learn systemically how to reduce such failings. My issue with public inquiries is that they are not timely and can take many years, and we clearly have cases that need to be urgently reviewed and to have some urgent action taken on them now. I will look at the hon. Lady’s request but, as I said, the Secretary of State and I are taking urgent advice, because we take this issue extremely seriously. One death from a failing of care is one death too many.
Sir Peter Bottomley (Worthing West) (Con)
Lessons need to be learned and I am glad that the authorities and the Government will do that.
From the time that I served on the council of Mind, which was known as the National Association for Mental Health, I have tried to emphasise the importance of recruiting good people to work in the various categories of profession and assistance in secure units and in the whole mental health field.
I pay tribute to those who, day in, day out and at all hours of the day, cope with some of the most challenging situations and try to help some of the most desperate people. In each of our constituencies, we have tragic suicides; many more are prevented because of the work of these good workers. Let us try to support them and recruit more people to work with them.
Maria Caulfield
I thank the Father of the House for his very important point, because staff shortages often contribute to some of the failings we have seen. We are aiming to recruit 27,000 more mental health workers. As of June this year, there were over 133,000 full-time equivalent people working in the mental health workforce, which is an increase of more than 5.4% compared with June 2021. We are increasing the workforce, but it is a particularly difficult area to work in both in dealing with people with mental health problems and the environments in which they are working. This is not just about recruiting more staff; it is about training, developing and retaining them.
Janet Daby (Lewisham East) (Lab)
Mental health services often feel like the poor relative of the NHS, and financial investment is just not there in the same way. Mental health nurses and support staff work long shifts and are often experiencing burnout, while wards are repeatedly short of staff. There is a high turnover of psychiatrists and many are moving to work overseas. So it stands to reason that there are repeat failures within mental health services and mental health settings. What will the Government do to bring about urgent change and the long-term change that is so desperately needed?
Maria Caulfield
I want to reassure hon. and right hon. Members across the House that mental health is not seen as a poor relation by this Government. We are investing record levels of funding in mental health services—£2.3 billion annually—and we are recruiting record numbers of staff into the service as well. As I said to the shadow Minister, I fully accept the failings that have been laid bare, whether by media investigations or by internal investigations of the individual trusts. I am not shying away from those challenges, and I have set out the urgency with which I and the Secretary of State will be looking at this problem. I want to be satisfied that, across the country, safety is as good as it can be, and that where flags are being raised, they are acted on as quickly as possible, which does mean now, not in 18 months or two or three years. We are seeing young people die because of failings of care, and I understand the urgency of the situation.
Paul Howell (Sedgefield) (Con)
I would like to acknowledge what has been said already about the difficulty for staff working in this environment. It is a very challenging space, and my respect goes to anybody and everybody there. My respect also goes to people who work in suicide prevention, whether in Mind, the Samaritans or organisations like them, because this is a very difficult place.
I would like to come back to the specifics, and I will start by expressing my sincere thanks to the hon. Member for Middlesbrough (Andy McDonald) for his lead on the stuff going on up in our part of the world. It is a tremendous effort, and I applaud him and thank him for it. This week finally saw the publication of the independent investigation into the deaths of the three young ladies in the care of the Tees, Esk and Wear Valleys NHS Foundation Trust. Christie Harnett, one of those young ladies, was a constituent of mine, and her stepfather is among those calling for a public inquiry. I hear what the Minister is saying, but I really would encourage her to have this looked into very closely. I very strongly support the family on this.
Christie, along with Nadia and Emily, were badly let down. In Christie’s case, the report identified 21 care delivery problems and 20 service delivery problems. It was not an isolated mistake; this is systemic and massive, and it really needs to be looked at. May I ask the Minister to support this call for a public inquiry, please, and may I also ask her to confirm that a reply is imminent to the letters delivered by Mr Harnett to Downing Street on 10 October? He cycled from Newton Aycliffe down to here, a distance of 250 miles, to hand them in. This is emotional, but Christie’s family’s description of her in their statement in the report was:
“Family was everything to Christie and we all miss her so much, nothing will ever be the same again now our sunshine has gone.”
It is imperative that we do all we can to give the families of these young ladies what little satisfaction can be delivered by a proper and full inquiry into these atrocious failings.
Maria Caulfield
I thank my hon. Friend for his comprehensive question about the issues we face. He is absolutely right to say that systemic failings were identified, and as I have said, at this stage I have not said no to a public inquiry. We need urgently to address these issues, and ensure that, nationally, the same failings are not happening across the board. My concern about a public inquiry is the time that such inquiries take, and whether a rapid review would be more appropriate. I will make that decision in the coming days once advice has been taken. Nationally, some work is being done. For example, the Care Quality Commission is introducing a new approach into how it undertakes inspections. As with maternity services, one concern I have is that the CQC can do an inspection and rate a service as good, yet soon afterwards incidents are happening. I want to be satisfied that the CQC inspection process and the new approach it is taking will address issues and flag them as quickly as possible.
The National Mental Health Director wrote to every mental health and learning disability trust on 30 September, to ask them urgently to review their services in light of the findings we are seeing. The Secretary of State and I will meet her soon to follow up on that. NHS England is also reviewing everyone with a learning disability or autistic people in long-term segregation mental health in-patient units, because they are extremely vulnerable patients who may not have the ability to speak out when there are problems. I also want to look at whistleblowing, and support staff who want to flag problems but may not feel confident in doing so. We need to look at range of areas, but I very much take my hon. Friend’s points and I will look into the petition urgently today.
Wera Hobhouse (Bath) (LD)
Mental health services are overstretched not only in hospitals but in those services that provide support before patients become so ill that they need to go into hospital. What are the Government doing to support the very overstretched early intervention services?
Maria Caulfield
As I highlighted to the Father of the House, we are increasing the mental health workforce dramatically, with 27,000 extra mental health workers in the system. We have already increased those numbers this year, compared with last year. We are also providing self-referral mechanisms for patients. For psychological and talking therapies patients can now refer themselves without having to go and see a GP, and more than 1 million patients have taken up that offer. I fully agree with the hon. Lady that early intervention is a key factor, and we are supporting early intervention services so that patients can access them more easily and we have the staff to make that happen.
Andy McDonald (Middlesbrough) (Lab)
I thank colleagues across the House for their kind remarks. We must also pay tribute to the parents, who have so resolutely stuck at this campaign for two and a half years, and we now have these reports. I recognise what the Father of the House said: we admire the work that people do in this sector. It is so difficult. But in these particular instances, we had three young women whose needs were known. It was not as if they came by surprise —those families camped outside the hospital saying, “This hospital is killing my child”. Michael, Christie’s dad, cycled down to London. These issues were known by the families and by the parents. I welcome the Minister’s consideration of a public inquiry and a wider inquiry, but I ask that she meet me, the families and colleagues to discuss these matters. The purpose of this is to secure truth, justice and change. We need change in this environment hook line and sinker. A fundamental review is needed, and I trust the Minister will meet us to discuss these matters further.
Maria Caulfield
May I put on record my thanks to the hon. Gentleman for all he has done in raising these issues and supporting families? He is right. One area of concern with mental health care—we have also seen inquiries into maternity services—is that often patients and families have flagged issues and raised concerns to regulators and the individual trust, but they go unheard.
That is why I want to look at things such as making the whistleblowing process easier. The CQC recognises that and is changing its inspection process to ensure that families, staff, friends and patients have input into inspections. That is also why we introduced the patient safety commissioner, who took up her role in September, so that patients, staff and families have another avenue for raising concerns. If they feel that they are not being listened to at a local level, they have someone to go to who will raise concerns on their behalf.
It is absolutely devastating that the families recognised the problems and their voices were not heard. I would be very happy to meet him and the families to discuss that further.
Alex Cunningham (Stockton North) (Lab)
I join in the tributes to my hon. Friend the Member for Middlesbrough (Andy McDonald). As he and others have said, the report into the tragedy that saw three young women die in the north-east points to multiple failures by the Tees, Esk and Wear Valleys NHS Foundation Trust, which still struggles to deliver the services that our community needs.
The Minister will agree that the trust must learn from the tragedy, but it needs much more support to drive up standards and avoid more deaths. The trust, like many others, struggles to recruit the professional staff that it needs, because they are simply not available. I also question whether it has the capacity to drive the rapid improvement that we need. What plans does she have to intervene at the trust? What will she do to ensure that it and others can recruit the people they desperately need?
Maria Caulfield
As I said in my opening remarks, the trust is taking a number of steps urgently to improve its services, from investing £5 million on reducing ligature risks right through to looking at how it develops and implements care plans. However, the response must be wider than the individual trust. We must ensure that when inspections take place, they pick up the red flags that will alert someone to the problems happening in a unit. The CQC is also changing its inspection processes. It is vital that patients, staff and families can raise concerns if they have them and that they are properly inspected. We need to address this issue at a national level. The trust is not an isolated example—there have been a number of incidences—and both I and the Secretary of State want to be satisfied about exactly where the problems are occurring and that we have a national response, not just individual trusts having to deal with problems themselves.
Liz Twist (Blaydon) (Lab)
With young people’s mental health, we often talk about access to preventive services. That is hugely important, but here we have a tragedy of three young people who were in a mental health facility and sadly lost their lives. One can only send out our thoughts to their families and friends. As we review the mental health strategy and the suicide prevention strategy, what steps will the Minister take to ensure that the lessons learned are incorporated?
Maria Caulfield
I take the hon. Lady’s points. Indeed, legislation on the use of restraint has recently come in, which would have influenced some of the actions that perhaps happened previously. We also have the draft Mental Health Bill undergoing pre-legislative scrutiny in the other place, which may provide an opportunity to reconsider some of these issues. This place can inform that legislation going forward. I will obviously update the House on its progress.
Rachel Hopkins (Luton South) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. Too many families are concerned about their loved ones as they wait ever longer for treatment, particularly in children’s mental health services. The Minister said that she wants to look at the system as a whole, so what conversations is she having with the Secretary of State for Levelling Up regarding local government, and local government finances in particular, ahead of the fiscal statement in a couple of weeks? Overstretched and underfunded children’s services in local councils up and down our country are often on the frontline of the crisis in children’s mental health.
Maria Caulfield
The Secretary of State will be having discussions around the autumn statement with colleagues not just in local government but across Departments. The failings that we have seen are of in-patient facilities—these young women had accessed treatment—so the issues are interlinked, but my main concern is about the safety of in-patient facilities. That is where my focus will be over the coming days.
Rachael Maskell (York Central) (Lab/Co-op)
The challenges are not confined to the Tees, Esk and Wear valleys, because the trust also extends to York. The extent of the trust and the size of the organisation perhaps explain some of the challenges. The reality is that the challenges are systemic and widespread. The trust has had 10 years of failed CQC reports, which should have easily raised a flag with the Department way before these tragedies occurred. As well as the steps that the Minister has proposed today, there should be a judge-led public inquiry into what is happening across mental health facilities. Nothing less will do.
Maria Caulfield
I thank the hon. Lady for making those points. As she knows, one of the facilities was closed in 2019 because of failing inspections and it has since reopened under another organisation, so action is taken where failings are found. My concern is that failings are often missed. That is why the director of mental health at NHS England wrote to every single trust on 13 September asking them urgently to review their services. As I said, I am taking advice and will report to the House in the coming days about what action we will be taking.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for her answers. It feels like new cases of abuse of our vulnerable are coming to light weekly and it shakes our society to its very core. Every one of us is annoyed at what has happened. Humanity is judged by how we treat our most vulnerable and it appears that failures just continue to happen over and over again. How can the thousands of facilities that are doing right by their patients have trust in a system that sees them judged by the gross actions of others? Can the Minister confirm the additional support to ensure every facility has adequate staff and that controls are in place?
Maria Caulfield
The hon. Member is right and that is why I want to review at a national level. We are seeing a number of cases coming forward of unacceptable care in in-patient facilities. As more cases come forward, that gives confidence for others to speak out about the care that they or their loved ones received. That is why I want to take a national approach. Whether looking at staffing levels, practice, the ability to whistleblow when there are concerns, or the inspection process itself, we need to make sure that wherever someone is receiving mental health provision they are safe while they are receiving that care.
Business of the House
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Thangam Debbonaire (Bristol West) (Lab)
To ask the Leader of the House if she will give us the forthcoming business.
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 7 November will include:
Monday 7 November—Second Reading of the Social Housing (Regulation) Bill [Lords].
Tuesday 8 November—Opposition day (7th allotted day). Debate on a motion in the name of the official Opposition, subject to be announced.
Wednesday 9 November—Debate on a motion on the UK response to the human rights and economic situation in Sri Lanka, followed by a general debate on levelling up rural Britain. The subjects for these debates were determined by the Backbench Business Committee.
The House will rise for the November recess at close of business on Wednesday 9 November and return on Monday 14 November.
The provisional business for the week commencing 14 November includes:
Monday 14 November—General debate on the Australia and New Zealand trade deals, followed by a general debate on Ukraine.
Tuesday 15 November—Opposition day (8th allotted day). Debate on a motion in the name of the official Opposition, subject to be announced.
Wednesday 16 November—Remaining stages of the National Security Bill.
Thursday 17 November—My right hon. Friend the Chancellor will make his autumn statement, followed by business to be determined by the Backbench Business Committee.
Friday 18 November—Private Members’ Bills.
The provisional business for the week commencing 21 November includes:
Monday 21 November—Second Reading of the Seafarers’ Wages Bill [Lords].
Thangam Debbonaire
I thank the Leader of the House for the forthcoming business.
My hon. Friend the Member for Newport East (Jessica Morden), the shadow Deputy Leader of the House, who is on a Bill Committee, reminded me that it is the 183rd anniversary of the Chartist uprising in her city of Newport. Working people marching against an ineffective Government, high prices and low wages, and demanding more frequent elections—does that sound familiar? The Chartists knew how precious democracy was. Sadly, we have not had an election yet this year, but we have had three Prime Ministers, and I wonder what the Chartists would have made of that.
I am glad to see the Leader of the House in her place and not joining the former Health Secretary, the right hon. Member for West Suffolk (Matt Hancock) down under for any bushtucker trials. We know that she enjoys business questions far too much for that, but we also know that she is a bit partial to reality TV, so perhaps I can suggest something a little closer to home. I hear that Channel 4 might be commissioning another season of “Make Me Prime Minister”. Perhaps the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) fancies his chances on “A Place in the Sun”. The whole Government really ought to get themselves on to something that they are actually good at; I understand that applications for “Pointless” have now opened.
Last week, I asked the Leader of the House to wake up the Environment Secretary and warn her that she had just three days left to set the targets on air quality, water, biodiversity and resource efficiency. Unfortunately, when the Leader of the House did not manage to wake her up and she hit the snooze button, she missed the deadline. Is it too much to ask that Cabinet Ministers actually do the job that they are paid to do? When will the Leader of the House get the Secretary of State to meet those legally required targets?
The measures in the Energy Bill are essential for reaching net zero. I understand that much of that Bill has been consulted on and agreed, so why is there more delay? Last week, the COP26 President lost his place at the Cabinet table, and the Prime Minister has finally given in on the hokey-cokey COP27 saga and is grudgingly popping over briefly. Labour is serious about green economic growth, energy security, bringing down people’s bills and winning the race to net zero. We have a plan for all that, but the Tories clearly do not. Will the Leader of the House tell us whether they are planning to drop the Energy Bill—yes or no?
I have raised concerns about the right hon. Member for Uxbridge and South Ruislip ripping off taxpayers by making them pick up the bill for his legal advice in relation to the Privileges Committee’s investigation into him. The Cabinet Office said that it is okay because he was acting as Prime Minister. No—he is being investigated as an ordinary Member of Parliament by a parliamentary Committee for possibly misleading Parliament. Does the Leader of the House think that the former Prime Minister should pay back the £129,700 of taxpayers’ money?
I was surprised to see Scottish National party Members claiming that yesterday’s 38-nil vote on their motion gave them a mandate for a referendum on independence. Even the Prime Minister got more votes than that—just. The recent instalment of the Scottish Government independence papers has been slammed by the Institute for Fiscal Studies as even worse than the Tories’ mini-Budget. Perhaps the SNP ought to focus on sorting out its spiralling A&E waiting times and its struggling-to-function transport network, instead of pursuing its obsession with a referendum. That word did not even appear in the motion.
This morning, we expect the biggest interest rate rise in decades. Under the Tories, we have rising mortgages, rising rents, supermarket prices up by 17% and the price of a basic bowl of pasta up by a fifth, yet the Government still refuse to bring in Labour’s windfall tax on oil and gas giants, despite energy profits doubling. No one voted for this Prime Minister; he has no mandate. Tories are on the side of the richest 1%; Labour is on the side of working people, pensioners and communities. So it is not just the former Health Secretary who ought to be screaming, “I’m a Tory...Get Me Out of Here!” It is time that the public had the chance to vote the rest of them out. When will the Government give the country the choice between their failing trickle-down economics of the past and a fresh start and a bright future with a Labour Government?
Penny Mordaunt
The Chartists were right: democracy is very important, which is why this Government will implement the manifesto on which we stood in 2019, for which we received an overwhelming mandate from the British people.
I send my good wishes and, I hope, those of everyone in this House to our sportsmen and women for their upcoming matches: the men’s cricket team, the rugby league team—I know you are interested in rugby league, Mr Speaker—and especially the England women’s rugby team, who have a semi-final coming up.
The hon. Lady mentions the latest adventures of the right hon. Member for West Suffolk (Matt Hancock). When I heard that a colleague was volunteering to be squeezed into small spaces with slippery creatures, that they would have to swallow unpalatable things to achieve their goals, and that their credibility and dignity were in jeopardy, I assumed that people were talking about a Member on the Opposition Front Bench, not the right hon. Member for West Suffolk.
The hon. Lady kindly reminisces about my time on “Splash!”. Hon. Members may find it hard to believe, given that the elegance of my performance was compared at the time to that of a paving slab being pushed off a scaffold, but I did actually have training. None of my time was spent away from this House. I have helped to save the Hilsea lido, which is currently being restored to its 1930s glory with help from the levelling-up fund.
The hon. Lady refers to policies and delay—high praise indeed from an Opposition who have no plan and no clue about any topic we might care to name. This is controversial stuff: Secretaries of State are going to be allowed to express their views on their departmental policy area. I know; it is radical stuff. Major investment decisions will be reflected on and discussed across Whitehall. In these volatile economic times, people will be thinking about how they can get the most for taxpayers for their money, but we are conscious that decisions on investment will need to be made and that decisions are needed to reassure people on fixed incomes in particular. Those decisions need to be the right ones: that is grown-up, joined-up, stepped-up government. I remind the Opposition that it took a mere two years for the Leader of the Opposition to ditch all his pledges—not so much a bonfire of the policies, more a puff of smoke.
The hon. Lady mentions the conference of the parties. I thank her for that, because it affords me and all Members of this House the opportunity to pay tribute to my right hon. Friend the COP26 President, who has done a tremendous job. The UK should be proud of our record in the area: we are the first major economy to commit to a legally binding target of achieving net zero by 2030.
On the matter of legal advice, it is standard practice that Ministers would have legal advice under those circumstances.
I agree with what the hon. Lady says about our friends in the Scottish National party. One of the great joys of my job and hers is explaining our procedures and practices to people outside this place. SNP Members chose not to use their Opposition day debate to talk about health, education, care, opportunity, social mobility, business, farming or anything else related to the Scottish people. There were no surprises in the topic that they chose or in how they squandered their precious time on the Floor of the House. Their motion is not a mandate; it was not even a binding motion. What was surprising was that not all the SNP voted for it, but there we go.
I am sorry that the hon. Lady did not mention cost of living issues or the fact that this week we are celebrating the welcome £150 core council tax rebate, the second instalment of the £400 energy bills support scheme and the launch of the energy price guarantee in Northern Ireland. Nor did she have any word of sympathy for the travelling public, who will face further strike action on the railways. We will always speak up for working people and the travelling public. I still live in hope that the Opposition might support our legislation.
Further business will be announced in the usual way.
David Johnston (Wantage) (Con)
Earlier this year, I launched a work experience campaign for local young people, as placements had dried up as a result of covid. I am very grateful to companies such as Rebellion, Hachette and Astroscale for taking part. Will my right hon. Friend join me in thanking them? Does she agree that whatever arrangements employers make for their staff to work at home, they must not forget to provide work experience placements in the workplace, because they are a key way for young people to learn the skills that they need?
Penny Mordaunt
I thank my hon. Friend for his work to ensure that all young people in his constituency have access to good work experience, which is part of the journey in establishing norms that are sometimes not established at home or at school. We should be grateful that we have record low youth unemployment, but we want to do everything to ensure that such opportunities are available to everyone in our communities.
Deidre Brock (Edinburgh North and Leith) (SNP)
Last week the Leader of the House asked me a question, Mr Speaker—and I will answer it, now that I have the opportunity.
The Leader of the House quoted those anonymous but, of course, completely legit—I will pause for a knowing wink here—sources from the EU who apparently told eager journalists something that we have actually all known for a very long time: that countries applying to join the EU, as Scotland can once it regains its independence, must commit themselves to joining the euro at some point in the future. Now, the Leader of the House may not know this, but there are in fact seven countries that have been in the EU for between nine and 27 years and still use their own choice of currency—Sweden, Bulgaria, Croatia, Czechia, Hungary, Poland and Romania —so that is not quite the gotcha that Unionists thought it was.
Given the slide in the value of the pound, from $1.64 in 2014 to just $1.13 today, and after the mad ride of the last few weeks, I am not sure that this Government think all that much of the pound anyway. For the purpose of further useful insights for both the Leader of the House and the Labour Front Benchers, enabling them to acquire some grown-up, stepped-up facts on the issues, I suggest that they look out the series of papers that the Scottish Government are producing on all things Scottish independence. A debate on those would, I think, be very useful to the House.
COP27 will take place next week. I was pleased to learn that the Prime Minister has relented and will now be joining our First Minister at Sharm El-Sheikh, but once the dust has settled on that world event, there really should be a Government debate on the outcomes of COP, examining the role that the UK Government played in negotiations and, crucially, how they intend to step up to their responsibilities in tackling the climate crisis. We cannot allow the terrible economic crisis that we face, or even Russia’s dreadful war in Ukraine, to deflect us from our climate obligations. UN reports have warned that the world is close to irreversible breakdown, with no credible path to even the 1.5° C global warming target.
According to a Public Accounts Committee report released on Wednesday, the UK Government’s commitment that the public sector should “lead by example” in meeting net zero is not being fulfilled. The report criticised the poor quality of emissions measuring and reporting, among other things. Just this week, we learned that parts of this place are apparently producing and leaking heat at an alarming rate. I hope the Leader of the House will be taking up those findings with the House services, and I am sure that you, Mr Speaker, will be taking an interest in them as well. The Prime Minister and his Ministers need to front up and reassure the House and the public that they are taking their climate responsibilities seriously. A debate on this in Government time is essential.
Penny Mordaunt
I thank the hon. Lady for doing the homework that I set her last week. I take it all back: she has had a really productive week, figuring out how to square the establishment of the Scottish pound with joining the euro. We appreciate that very much. However, I say to the SNP again that these are not the issues on the Scottish people’s list of priorities. They are worried about health, about poor education standards, and about their bins being collected. We had an amazing situation last night, when Madam Deputy Speaker had to include herself and the Tellers in the count to make the House quorate. The debate is so far removed from the reality of what is happening in Scotland that Members on both sides of the House are not even prepared to show up to disagree with the Scottish nationalists. I would just ask them to drag themselves back to the real world.
I am pleased to hear about the paper that is being produced. I look forward to its including the almost £1.5 billion that the UK Government have committed for 12 city and growth deals covering every part of Scotland, the £42 million for Scottish fisheries, the £1.9 billion for farmers and land managers over the next three years, the £52 million to support the establishment of two Scottish green freeports, the £179 million levelling-up funding for eight Scottish projects, and, of course, the support given for 1,700 jobs through the fantastic £3.7 billion type 26 shipbuilding programme at BAE Systems’ Govan yard, of which I particularly approve. I look forward to the inclusion of all those things in the paper.
Maggie Throup (Erewash) (Con)
A recent Home Office decision to house 400 asylum seekers in two hotels just 50 metres apart in Erewash is a prime example of Members routinely being cut out of decision making by Government Departments. Had I been asked about the accommodation centres, I would have opposed them, due to the unacceptable pressure they will place on services in my constituency. Will my right hon. Friend facilitate an urgent meeting for me, the Home Secretary and the Immigration Minister, so that I can put the case for the immediate closure of those centres? Will she also consider adding local Members to the list of statutory consultees when such decision are made, so that we have a formal say in key decisions affecting our constituents?
Penny Mordaunt
I thank my hon. Friend for raising that issue. Sadly, she is not alone; I think there are colleagues who have had similar experiences. She will understand that this is an incredibly difficult and complex issue that the Home Office is trying to manage. We want to bring forward legislation swiftly that will help us to tackle the issue, and I hope that all Members will support us in that aim. Clearly, it is unhelpful when Members are not made aware of what is happening, particularly as the local authority will need to prepare, and so will need as much notice as possible. Home Office questions are on 14 November, and I will also write on my hon. Friend’s behalf to the Home Office, and ask it to address the issue swiftly.
Mr Speaker
I call the Chair of the Backbench Business Committee, Ian Mearns.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for the statement, and for announcing the Backbench Business debates that will be held next Wednesday. I am sure that we will also have the tasty morsel of a debate in the afternoon after the autumn statement. May I ask Members from across the House who have live applications for a debate registered with the Backbench Business Committee, and who are on the waiting list for a slot for debate, to please respond as quickly as possible when contacted by Committee staff about slots that become available at relatively short notice? It would really help oil the wheels of the machine if responses were more timely.
I have a special entreaty to the Leader of the House on behalf of two constituents, Mr David Shanley and Chelsie Scott. They have systematically and repeatedly been let down by the almost totally unresponsive Home Office visa application and appeal system. My office and I have received the same non-responsive treatment, despite making repeated requests on my constituents’ behalf over the past three years. Six months after their appeal, these people are still waiting for the paperwork confirming the outcome of the appeal. The outcome was in their favour, but they cannot tell anyone about it, because they do not have official recognition of the outcome.
Penny Mordaunt
I thank the hon. Gentleman for his helpful guidance on Backbench Business Committee admin, which I am sure all Members will have heard. May I say how sorry I am to hear about the case that he raised? He will know that I recently met the permanent secretary at the Home Office, in addition to having raised Members’ concerns with the Home Secretary, and if he gives us the details of the case, we will, immediately after the business question, facilitate a surgery for him with the Home Office to ensure that the case is brought to a good conclusion.
Tim Loughton (East Worthing and Shoreham) (Con)
The Home Affairs Committee was hoping to visit Manston today, but the man from the Home Office, he say no. Hopefully we can go next week. As the Leader of the House has heard, most of the questions she has been asked so far have been about the migration system. The Home Secretary herself referred to it as dysfunctional. We have had occasional chances to ask questions of the Home Secretary and the Immigration Minister, but is it not time for a full debate in Government time on the shambles that is the immigration system, which needs to take a holistic approach? We need a proper discussion on how we will tackle this urgent situation, which is filling up our email boxes and is the headline in all the media virtually every day at the moment.
Penny Mordaunt
I thank my hon. Friend for raising the issue, various aspects of which are obviously of concern to all Members of this House. The Government have a good track record of trying to get ahead of these issues. I refer him to the work done swiftly after 2010, under the Cameron Administration, on conflict states, and the use made of expert advice from Professor Paul Collier. Clearly, we will also face challenges two years hence as a result of what is happening on global food security at the moment. These issues need to be debated. I will certainly raise the matter with the Cabinet Office, as well as the Home Office, and I encourage my hon. Friend to use the routes available to him to secure a debate on this very important topic.
Rachael Maskell (York Central) (Lab/Co-op)
Twenty-six per cent. of children in York are living in poverty. Ahead of the Chancellor’s statement, which we are expecting in two weeks’ time, York had a summit this week on the cost of living, where I launched my cost of living handbook to explain where people can both receive help and get help. We need the Chancellor to come forward with that help, because there is not enough money in the system to help the very poorest. Will the Leader of the House make representations to the Chancellor that he needs to increase benefits in line with inflation and to ensure that our civil society has the support it needs to help our communities?
Penny Mordaunt
I point to the Prime Minister’s record on this as Chancellor. He has been very clear that he wants to protect people as we face what will be a very difficult winter and beyond. I have just announced that the Chancellor will make a statement very shortly. There is a huge number of support schemes—we are doing a lot to support people—but they are quite complicated, so I congratulate the hon. Lady on bringing them all together in her booklet.
Kit Malthouse (North West Hampshire) (Con)
The Leader of the House has revealed that the autumn statement on 17 November will be exactly that, a statement. That will possibly give the House only an hour and a half of questions to examine what we are told will be a profound statement with huge implications for our public services and our constituents. It is surely unacceptable that time has not been set aside for the House to properly scrutinise and debate the statement. Should we not learn the lesson of the late, lamented mini-Budget, when the House was not able to do its job of subjecting it to the scrutiny that might well have improved it and avoided the subsequent economic disaster? Will the Leader of the House please find time in the Government’s schedule for the House to do its job of properly scrutinising the statement?
Penny Mordaunt
I have learned something from that episode because we did have a debate and, actually, what people wanted was a statement. It is proper that the Chancellor sets out his statement. All Members of this House will have the ability to question him. If there is appetite for a debate, and my right hon. Friend makes a good case for one, it should be after people have seen the accompanying documents and assessments, which will be of most help to this House. However, I have raised this matter and, if colleagues agree with him, I would urge them to make representations to that effect.
Wera Hobhouse (Bath) (LD)
When he was Chancellor, the Prime Minister announced that the UK would commit £100 million to the Taskforce on Access to Climate Finance, to make it
“quicker and easier for developing countries to access the finance they need”
to address the climate emergency. With COP27 taking place next week, can we have an urgent statement from the Government about progress on that pledge?
Penny Mordaunt
I will write to the Treasury to make sure it has heard the hon. Lady’s request. The UK has achieved much that we should celebrate, not just in our domestic agenda but in our global leadership. More than 190 countries agreed to ditch coal, and leaders representing 90% of the planet’s forests agreed to halt deforestation. Those are just some of the things that our leadership has enabled.
Katherine Fletcher (South Ribble) (Con)
Too many communities in this country are having problems with transport infrastructure, not on a macro scale but on a significant community scale, with schemes that are too big for local councils but too small to draw the attention of the Department for Transport.
Mr Speaker, you will be familiar with Tarleton, a beautiful village in my patch. Up to 300 heavy goods vehicles a day are going past schools, for want of a small road so that they do not have to drive directly through the village. Can the Leader of the House advise on what we can do to better join up local and national Government structures to deliver transport infrastructure for our communities? Can we have a debate in Government time on how we can make what we invest and how we work, work for local people?
Penny Mordaunt
I thank my hon. Friend for that practical suggestion. I understand she is seeking to hold the Government to account on these issues and I wish her well with her campaign to be Chair of the Select Committee. The kind of schemes she is referring to would benefit from the integrated transport block funding, which is for small and medium-sized transport improvements. It is not ringfenced funding and it is channelled through local authorities. I take the point that larger schemes often would not qualify for that. I will write to the Department for Transport to ask it to contact her on its future plans.
Navendu Mishra (Stockport) (Lab)
In January 2021, Citizens Advice estimated that more than 3.5 million people were behind on their council tax, of whom 51% were not behind before the pandemic. As the cost of living crisis deepens, this will, sadly, only get worse. Many local authorities are using debt collection agencies, despite there being no evidence that bailiff use increases collection rates. These agencies and their methods cause additional stress for people who are already facing hardship. As such, will the Leader of the House allow a debate in Government time on tackling the root cause of missed payments and rising household debt across the nation?
Penny Mordaunt
I thank the hon. Gentleman for raising these matters, which are clearly going to be extremely stressful for his constituents and others across the country. I know that the new Secretary of State, who is back in that Department, is very much looking at this agenda and has had a huge focus on trying to get some practical things to happen for people, particularly those who have no hope of repaying those arrears. I will write to my right hon. Friend and ask him to contact the hon. Gentleman’s office.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
Is it still possible for us to have a full debate in Government time on the threat posed by China, both domestically and internationally? After all, it was at the indulgence of the Speaker that three urgent questions were granted—twice when the Government failed to make a statement on the violent attacks on peaceful democracy campaigners in Manchester, and the other day on the appalling activities of Chinese police inside our country. It is thanks to the Speaker that we actually had any discussion of that here. Then there are the Confucius institutes spying on Hong Kong and Chinese students, on which there has still been no statement from the Government. All this depends on the integrated review, which the Government said they were going to change to make China a “threat” rather than a “strategic competitor.” Given that that country is guilty of genocide, arresting peaceful democracy campaigners in Hong Kong, trashing international treaties, slave labour, threatening Taiwan with invasion, attacking Christians, threatening its neighbours, taking over the South China seas and threatening us here domestically, do we not honestly think the Government should take this seriously and have a full debate?
Penny Mordaunt
I thank my right hon. Friend for raising these matters and for all the work he has done to shine a spotlight on these appalling practices. It is bad enough to watch human rights abuses, intimidation, violent assault and other things taking place on their soil, but these things should never happen on our soil. I will certainly write to the Foreign, Commonwealth and Development Office and the Cabinet Office, because this will be of concern to a number of Departments, and ensure that his well-made points, which I am sure are supported by many in this House, are heard by those Departments.
John Cryer (Leyton and Wanstead) (Lab)
The Leader of the House will have been at Prime Minister’s questions yesterday, when the hon. Member for Broxtowe (Darren Henry) asked a question about the disparity in parental leave systems. It is far too complicated to go into at the moment, but it is probably coming up in most constituencies; it certainly is in mine. May we have a statement or debate on that? Secondly, may I support everything that my neighbour, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), has just said?
Penny Mordaunt
I thank the hon. Gentleman for putting his support for what my right hon. Friend has said on the record, and I think all in this Chamber agree with those sentiments. I did hear the particularly tragic case that was raised yesterday, and of course I am aware of the wider issues involved in this anomaly. Obviously, the Prime Minister will have heard that too and will be looking at these matters.
Bob Blackman (Harrow East) (Con)
On Sunday 20 November, the annual parade of the Association of Jewish Ex-Servicemen and Women will take place at the Cenotaph. I thank you, Mr Speaker, for granting me an Adjournment debate on the subject. This year’s event is special—it is the 100th anniversary of the commencement of the parades. I have attended them every year since I was elected, but unfortunately a Minister has never been present. It will be too late by the time of my Adjournment debate, so will my right hon. Friend prevail upon her Cabinet colleagues to ensure that a Government representative is at the centenary parade?
Penny Mordaunt
I thank my hon. Friend for raising that important anniversary. It is right to mark such events with all due respect and courtesy to the people involved in those efforts. I cannot give him the assurances he seeks today. If he had given me a bit of notice, I might have been able to do so, but immediately after this session, I shall follow up and see what we can do to fulfil his request. I thank him again for raising the matter.
Kirsten Oswald (East Renfrewshire) (SNP)
We know that every second counts when someone suffers a cardiac arrest and that access to a defibrillator can literally mean the difference between life and death. Does the Leader of the House therefore share my disappointment that East Renfrewshire Labour and Tory councillors failed to support their SNP colleagues’ motion calling for a plan to install defibrillators at every local school? May we have a debate in Government time on why the Chancellor must scrap VAT on defibrillators to make that vital, life-saving kit available in a more accessible way?
Penny Mordaunt
I hope that all Members have undergone defibrillator training. If I can use a defibrillator, anyone can—I am renowned for being totally cack-handed. I call on all Members to undertake that training, which ambulance services and others provide, and to encourage their constituents to do so.
There are many ways in which we can install defibrillators. We should work with the ambulance service to ensure that they are registered, too, so that people know where they are. I am happy to write to the relevant Department to ascertain what organisations we can perhaps put the hon. Lady in touch with so that she can meet her objectives.
Wendy Morton (Aldridge-Brownhills) (Con)
We are a nation of animal lovers—I believe you are an animal lover, too, Mr Speaker. Conservative Members stood on a manifesto that included commitments to tackle several animal welfare issues, such as puppy smuggling and pet theft. Can my right hon. Friend give me an indication of when the Animal Welfare (Kept Animals) Bill will return to this place?
Penny Mordaunt
My right hon. Friend knows that I am going to say that future business will be announced in the usual way, but I reassure her by pointing to our record. We introduced the Animal Welfare (Sentience) Act 2022 and the Glue Traps (Offences) Act 2022, and provided for an Animal Sentience Committee. We have reformed the damaging and bureaucratic common agricultural policy. We have banned exports of live animals for fattening and slaughter and we have built animal welfare into our independent trade policy. My right hon. Friend should be reassured by that and I hope to be able to announce future business on the matter soon.
Clive Efford (Eltham) (Lab)
We have seen the shambles that the Home Secretary is presiding over at Manston immigration centre. A solution to the problem cannot be to dump busloads of asylum seekers in the centre of London, reports of which we have seen. May we have a statement by the Home Secretary about how she will improve the system, and not just an attempt to cover up her errors by imposing injustices on people and leaving them desolate in the centre of London?
Penny Mordaunt
I will certainly ensure that the Home Office hears the hon. Gentleman’s concerns, but the Home Office’s plan to address those pressures is clear. We need to legislate to give ourselves more options, and particularly to return those who do not have a claim to asylum here. I hope that Opposition Members will support the Government in those efforts.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
Can my right hon. Friend turn her attention to fish—dead fish, hundreds of them, floating down the rivers of the Levels as a result of excessive pollution by Wessex Water. If that was not bad enough, the company’s polluter in chief has just been appointed to represent the county at every state ceremony. The recommendation came from Mr Jonathan Hellewell, the Prime Minister’s appointments guru, who must have a screw loose to do that. Picking a serial polluter to be Somerset’s flagbearer is like putting Dracula in charge of blood transfusion. This is a disgraceful mess, and, on behalf of all those dead fish, can we have a debate in Government time, please?
Penny Mordaunt
I thank my hon. Friend for getting his views on record. I am sure that he has met his objective today. I cannot comment on the individual case, but what I can say is that this Government have been doing a huge amount to combat pollution ever since 2018 when my right hon. Friend the Member for Surrey Heath (Michael Gove), the then Secretary of State for Environment, Food and Rural Affairs, fired that first shot across the water companies’ bows. Since privatisation, there has been £150 billion of investment and £25 billion to reduce pollution from sewage. In 2021 alone, the Environment Agency concluded six prosecutions against water companies, with fines totalling more than £100 million. He will also know that there is an infrastructure plan that water companies will be held to account on.
Janet Daby (Lewisham East) (Lab)
Our brave NHS staff never fail to sacrifice so much, especially during the pandemic, yet many health professionals across our country are suffering from work-related issues of stress, anxiety and burn-out. Will the Leader of the House ask the Health and Social Care Secretary to come to the House to make a statement on the urgent need for the Government to pay and compensate healthcare staff at a much higher level than is currently on offer?
Penny Mordaunt
I know that my right hon. Friend the Health and Social Care Secretary is very concerned about services, dealing with the backlog and all the pressures that the NHS will be under this winter. Part of that is the wellbeing and robustness of the workforce, and I know that he cares about that deeply. I will certainly pass on the hon. Lady’s sentiments. Clearly, there is a very clear timetable and process for pay awards and so forth, but I am sure that he will keep the House up to date.
Selaine Saxby (North Devon) (Con)
Please can my right hon. Friend explain who is managing the dispersal of asylum seekers to hotels? Having raised this matter previously, I know that it is not the Department for Levelling Up, Housing and Communities and it does not seem to be the Home Office either. I have it in writing from officials just two weeks ago that the Dilkhusa in Ilfracombe was not suitable to be used and would definitely not be used. Last night, the hotel filled up and there was security on the door, which is not normal for tourist hotels in North Devon. Can my right hon. Friend help me to secure details of what is actually going on at the Dilkhusa right now, and will she ensure that whichever Minister is responsible for these decisions comes to this House to update Members and explain why these decisions seem to be taken without any information reaching the councils or their MPs?
Penny Mordaunt
I am always happy to hear from the hon. Lady, but sorry to hear another similar such case being brought to the House—my hon. Friend the Member for Erewash (Maggie Throup) spoke earlier on the matter. I can confirm that it is the Home Office. I will certainly raise this particular case with the Department on the hon. Lady’s behalf.
I reiterate that the only way that we will take pressure off the system and that we will have the resource to deal with those very genuine cases that we want to look after and protect is to ensure that those who do not have a genuine case to be here are returned and are not putting additional pressure on the system.
Andrew Gwynne (Denton and Reddish) (Lab)
The Government profess that their priorities are to improve education and to level up. I certainly agree that the best way to level up is to improve education. May I impress on the Leader of the House the plight of Russell Scott Primary School in Denton, which was the subject of a £2.7 million refurbishment by Carillion that went wrong? Since then, £700,000 has been spent by Tameside Metropolitan Borough Council patching it up to make it safe. Assessments show that a further £5 million minimum is needed to put right all the defects that Carillion has caused. Even then, it cannot be guaranteed that that will fix the problem. We seemed to be getting somewhere with the Department for Education before the merry-go-round of Ministers. Can we have a statement on school building conditions, so that I can reiterate to the new ministerial team the importance of good-quality school buildings and, particularly, the plight of Russell Scott?
Penny Mordaunt
Across the UK there is a huge programme of not only improving schools but building new ones and introducing new types of education setting; 500 schools will be included in that over the next decade. The circumstances of the case the hon. Gentleman raises are pretty unique, and I am sorry to hear about it. I understand the points he makes about ministerial churn and I will write on his behalf to make sure that a Minister picks this case up quickly. It clearly needs to be put right, and I shall do my best to help him to achieve that.
Andrew Jones (Harrogate and Knaresborough) (Con)
Last week, I visited the construction site of the new Knaresborough swimming pool and leisure centre, which is a £17 million investment by Harrogate Borough Council. The building will be powered solely by air source heat pumps and solar panels. Against the backdrop of concerns about our energy security, please may we have a debate to discuss the timing and implementation of new building regulations to ensure that these new technologies are much more widely used in domestic, commercial and public buildings?
Penny Mordaunt
I thank my hon. Friend for highlighting what sounds like a really fantastic project. I know he is passionate about this subject and sharing good practice and design to ensure that we have modern, sustainable buildings. We have done a lot to cut our emissions as a country—more than any other G7 nation. What he describes is part of the solution to the problem, and I shall make sure that the Department hears of it.
Patrick Grady (Glasgow North) (Ind)
I thank the Leader of the House for her assistance with the constituency cases I raised last week, but I do not think that business questions should be turning into an alternative Home Office surgery. She advised my office team to get in touch and make a Home Office surgery appointment. They have been trying to do that since July, and several times every day this week, and they simply cannot get through. The best they have been offered is a roadshow in Aberdeen, 300 miles away. As other Members have said, please can we have a Home Office Minister come to the House to answer our questions about the absolutely chaotic immigration backlog and how it will be resolved?
Penny Mordaunt
I am sorry to hear that. I do not want this session to turn into a Home Office surgery. Clearly a debate is the proper place for general questions about how these systems are being managed, but I know from my meeting with the permanent secretary that the Department is keen to ensure that Members with individual cases get what they need. The offer from the Home Office is greater than the hon. Gentleman describes: for example, it is possible for him to have a Zoom or Teams call with a caseworker to discuss cases and get them resolved. If he is not getting that offer or is unable to secure such a meeting, my office will facilitate that happening.
Mr Peter Bone (Wellingborough) (Con)
When Tony Blair stepped down from office, the unemployment rate was 5.3%. By the time Gordon Brown stepped down, it had gone up to 10%. When my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) stepped down, it was only 3.5%. It seems that Labour likes to talk about creating jobs, whereas Conservative Governments get on and create them. Could we have a debate in Government time in which we congratulate the former Prime Minister on his remarkable achievement and discuss why every Labour Government leave office with unemployment higher than when they came in?
Penny Mordaunt
I thank my hon. Friend for his excellent question. It is true: since 2010, we have got nearly 4 million people into work. That is 4 million people who have the dignity of a pay packet; half of them are women and a quarter are disabled people, who did not have many such opportunities before. There are 1 million fewer workless households. Every time our party has left office, we have left the country in a much better position than when we inherited it. The complete reverse is true of the Labour party.
Ruth Cadbury (Brentford and Isleworth) (Lab)
My constituents living at APT Parkview apartments in Brentford are experiencing shocking treatment from their freeholder and managing agents, including John James Collins, Eight Asset Management, SW4 Management and Paradigm Land—just part of the list of interconnecting directors and companies involved with a single block. The residents face increased safety risks, the withdrawal of services they are paying for and a retrospective charge for air conditioning of which they had no prior notice in their tenancy or lease. I am increasingly hearing from constituents in blocks of flats across my constituency who face the worst of this new breed of landlord, exploiting loopholes in tenancy and leasehold law. Will the Leader of the House find Government time for a debate on how we can protect and support those tenants and leaseholders?
Penny Mordaunt
I am sure all hon. Members will have experienced similar cases, where the situation is incredibly complex and it is not clear who the tenant can get redress from. Governance structures and local residents’ associations can only be effective if they know who they are dealing with. These are important matters, and I will ask the Department to provide the hon. Lady and her office with some advice on them. I know, because measures will be brought forward in the legislative programme, that there will be opportunities to talk about these issues on the Floor of the House.
Rachel Maclean (Redditch) (Con)
After Sally Challen became the first woman to have her murder conviction quashed under our coercive control laws, the then Justice Secretary appointed Clare Wade KC to carry out a review of sentencing laws where women are forced to kill their partners after a lifetime of domestic abuse. The very serious issue involves cases in which a woman may need to take a knife to kill her partner, which in itself attracts a higher sentence. The domestic homicide sentencing review is looking into that. Can we ask the Ministry of Justice to provide a debate and come forward with important recommendations, so that we can look at the sentencing laws and have justice for these women, who have been forced to endure an appalling situation?
Penny Mordaunt
I thank my hon. Friend for all the work she has done in this area and put on record my thanks to Clare Wade KC for her work. My understanding is that that report has now been received by the Ministry of Justice and I know it will want to keep the House informed when it has reviewed it and decided what action it will take. This is an incredibly important area, and I am proud of our Government’s record on protecting women: we have outlawed upskirting, created the offence of coercive and controlling behaviour, outlawed the so-called rough sex gone wrong defence to murder and non-fatal strangulation, created the offence of stalking and then doubled sentences for that, among many other things. However, as my hon. Friend points out, there is more to do.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
In my constituency and across south-east London there is significant concern about the impact of the new December train timetable, which Southeastern drew up without any consultation with passengers, local rail user groups or elected representatives. Can we have a debate in Government time about the role of the Department for Transport in this planned alteration to the services my constituents rely on?
Penny Mordaunt
It is vital that passengers are consulted on any changes to services, whether timetabling or other changes, and I shall raise the matter with the Department for Transport. I do not think the date for transport questions has yet been set, but I encourage the hon. Gentleman to raise it directly there too. In the meantime, I shall write on his behalf.
Martin Vickers (Cleethorpes) (Con)
The introduction of the £400 energy bill support scheme was extremely welcome. On 29 July, the Department issued a press release saying that that would include holiday homes. Tingdene, which operates a holiday park in my constituency, has a different interpretation and is refusing to pass on the £400. Could the Leader of the House please arrange for a Minister from the Department to come and make a statement to clarify the situation?
Penny Mordaunt
I thank my hon. Friend for his question. He is right and Tingdene is wrong, but I understand that the Department has to bring forward some more detail about how the scheme will work. That should clearly be done swiftly in order to reassure his constituents, and after this session I shall write to the Department to ask it to bring forward its plans and communicate that to him and other Members of this House.
Justin Madders (Ellesmere Port and Neston) (Lab)
On Tuesday it was announced that 132 McColl’s stores were to close as a result of the merger with Morrisons. Three of those are in my constituency—in Great Sutton, Whitby and Elton. I should declare for the record that my son works in a McColl’s store, albeit not one of those affected by the announcement. It is a real blow to the communities that rely on those local stores, but the other concern is that 55 of the stores, including two in my constituency, have post offices associated with then. Certainly, in Elton we waited for over a year for a replacement post office the last time it closed. I think that deserves a statement from the relevant Minister about what we will do to ensure that those communities do not lose their post offices permanently.
Penny Mordaunt
The hon. Gentleman is right that those stores, whether or not they have a post office, are desperately important facilities for communities, particularly people who are less mobile, and potentially provide a community hub as well. I will make sure the Department for Business, Energy and Industrial Strategy hears his particular concerns about the post office and provides his office with some advice about what he can do.
Anna Firth (Southend West) (Con)
Will my right hon. Friend find time for a statement on the application process for the UK city of culture 2029? People in Southend West feel totally let down by the proposed decision of the Labour-led Southend-on-Sea City Council not even to consider bidding for that coveted status in 2029, despite our world-famous theatres, the longest pleasure pier in the world, the internationally acclaimed Music Man project and international archaeology. Does she agree that the Labour-led council should stop splashing £5 million on agency staff and instead invest in a legacy that would make Sir David proud?
Penny Mordaunt
I know the city of Southend, as it is now, very well and it has a huge wealth of cultural organisations, venues and schemes—my personal favourite is, obviously, the Music Man project. What it seems not to have enough of, however, is Conservative councillors.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Following the catastrophic Trussonomics, we are told that on 17 November we are likely to face bigger cuts to public services than we saw after 2010. Hull suffered enormously during that decade of austerity, including having Ministers turn down our plans for the electrification of the railway line to Hull. Now that the Government have backtracked on the former Prime Minister’s promise that we would get Northern Powerhouse Rail, could we please have a debate on what levelling up means for cities such as Hull, and how these measures will affect the GDP and growth of this country?
Penny Mordaunt
The right hon. Lady will not have long to wait, and I ask her not to speculate on what might be in the Chancellor’s statement. Since the mini-Budget, the economic situation and the issues that the Treasury is grappling with have been changing and improving. She will not have long to wait to hear the Chancellor’s statement. Rail investment is vital and there are many schemes in the north of England that need to be progressed. There will be ample opportunity to discuss those, both at the time of that statement and in other statements that will be made by the Department for Transport.
Alun Cairns (Vale of Glamorgan) (Con)
The case for a train station at St Athan on the Vale of Glamorgan line is overwhelming, and the demand among the community is unprecedented, yet the Welsh Labour Government have failed to recognise that and to respond. May we have a debate on rail infrastructure spend, so that we can tease out the data to prove the case, and so that I can get to the next stage of the feasibility study and get a train station in St Athan, as has been demanded for so long?
Penny Mordaunt
I thank my right hon. Friend for his vigorous and needed campaign to deliver these important services to his constituents and the wider region. I know that the new Secretary of State for Transport is looking at all these things as a priority. The date for the next Transport questions has not been confirmed, so I will write on his behalf and ask that he is updated.
Gareth Thomas (Harrow West) (Lab/Co-op)
In October 1984, 37 men tried to stop the closure of the Cammell Laird shipyards. They were sent to prison, sacked and lost redundancy and pension rights. I understand that the remaining men and their families have no records of the court proceedings taken against them at the time. Will the Leader of the House encourage Ministers with responsibility for national and local court archives to be sympathetic to requests for assistance to find those records?
Penny Mordaunt
The hon. Gentleman raises an issue that is clearly of great importance to his constituents. We do not yet have a date for the next Justice questions, so if he wants to give me the details or any correspondence he has had with the Ministry of Justice, I will be happy to ensure that Ministers get in touch and give him advice on where such records might be found.
Scott Benton (Blackpool South) (Con)
Over the last few months, I have been inundated with correspondence from constituents regarding retaining the triple lock. It is inconceivable that we would abandon our manifesto pledge on this issue, not least because senior citizens, unlike people of working age, have no means of increasing their income to support themselves with the cost of living. I appreciate that the Government will outline a way forward in two weeks’ time, but may we have a debate in Government time on how we can best support older people with the cost of living?
Penny Mordaunt
I thank my hon. Friend for his efforts to highlight the importance of the triple lock. We know that the older people are, the higher their cost of living. The Chancellor will be making a statement about that shortly, but I thank my hon. Friend for getting his views on the record today.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My constituent Linda suffers from vestibular ear disease, deafness and vertigo, and she has associated mobility issues. She was awarded the standard personal independence payment rate for 10 years, but she cannot get the mobility element, which would contribute to a mobility car, because she is above state pension age. Can we have a Government statement outlining why pensioners are not deemed worthy of a mobility car to allow them to get out and about, and whether the Government will consider a change of policy?
Penny Mordaunt
I thank the hon. Gentleman for mentioning that. Clearly, life is changing for pensioners. Many want to be very mobile, and many want to carry on working. I know that the Department for Work and Pensions is always reviewing its policies and looking to improve not only access to schemes such as Motability, but the schemes themselves. I encourage him to raise this in questions. We had Work and Pensions questions earlier this week, but I will write to the Department with his suggestion, and he knows how to secure a debate on this topic if he wants to.
Robbie Moore (Keighley) (Con)
Although bonfire night is just around the corner, and quite rightly many will wish to enjoy fireworks at organised events, the unfortunate reality is that many of my constituents are plagued by fireworks being let off at all hours of the night throughout the calendar year. That causes distress to many residents and their pets and puts additional pressure on our emergency services, who have to deal with fires or antisocial behaviour. May we have an urgent debate in Government time on licensing provisions on the sale of fireworks, as well as a frank discussion about how local enforcement can clamp down on this antisocial behaviour?
Penny Mordaunt
I thank my hon. Friend for that timely question. There is a comprehensive regulatory framework in place to control the sale, availability and use of fireworks, and we can all encourage our constituents to attend organised bonfire night firework displays. When people do what he describes, it causes distress. I know that he has been campaigning on this issue, and I encourage him to continue to raise it with the Department, but one thing we can all do as we approach bonfire night is encourage people to attend public events.
Alex Cunningham (Stockton North) (Lab)
Mr Deputy Speaker, I know that you are aware of this, but I hope the Leader of the House is also aware of the devastation of sea life off the north-east coast that started 13 months ago and, contrary to the statements of the Tees Valley Mayor, continues to this day. The Environment, Food and Rural Affairs Committee held an evidence session into the tragedy last week, and the Chair, the right hon. Member for Scarborough and Whitby (Sir Robert Goodwill), has since written to the Secretary of State demanding a thorough investigation into the deaths, which may or may not be linked to dredging of the River Tees. I am sure the Leader of the House will agree that it is time for Ministers to be held to account in this House for a year of failures on this issue. Will she encourage them to make a statement?
Penny Mordaunt
From what I understand of that case and the research that has been done on the cause of those deaths—largely of crustaceans, but other sea life as well—the Environment Agency and others have not come to the conclusions that the hon. Gentleman suggests. There would be serious consequences for economic activity in the area and particular schemes if dredging were to cease. I think we would all be concerned about the impact on local sea life and wildlife, but this has to be science-based and evidence-driven. I am not in a position to make that judgment, but that is my understanding of the situation. The hon. Gentleman has put his views on the record, and I am sure he will continue to correspond with the Department on the matter.
Nick Fletcher (Don Valley) (Con)
This time next week, Doncaster may or may not have an airport. Peel, which owns Doncaster Sheffield airport, has had a second substantial offer laid in front of it that will secure the future of aviation in Doncaster and the many jobs directly and indirectly associated with this industry. I believe in capitalism and the good it can do, creating prosperity and jobs, but I do not believe that greed is good, and I do not want Doncaster Sheffield airport to become 800 acres of tumbleweed either. I understand that there have been 13 ministerial meetings regarding this issue, but will the Leader of the House ask the Secretary of State for Transport to speak with Peel directly and ask it to do the right thing: accept this offer and save our airport?
Penny Mordaunt
I thank my hon. Friend for raising yet again this very important issue. He is right that there have been 13 meetings since 21 July. The Government continue to support Peel Group to work with local leaders to find the solution that will benefit local people and, critically, the region’s economy. This is incredibly important. That is why we have the regional airport and ground operations support scheme—we are investing £161 million in these facilities because they are vital to the local economy. My hon. Friend has done everything within his gift to get the right outcome, from securing Adjournment debates to tabling urgent questions, with a huge amount of correspondence and pressure on all parties, and I congratulate him on that. I understand how frustrating it is for him to watch a potential solution not being seized. I urge him to continue in his efforts, and he has the full support of the Government in doing so.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I take the Leader of the House back to the answer she has given to a number of Members, including her hon. Friends the Members for North Devon (Selaine Saxby) and for East Worthing and Shoreham (Tim Loughton)? Since we heard the Home Secretary’s statement on Monday, we have seen reports of a bus full of asylum seekers being dumped at Victoria station. The Guardian today reports that there have been incidents of rape and sexual abuse of children in the asylum system. The Immigration Minister last night on television appeared to accept that Manston was not currently operating legally, in contradiction of what the Home Secretary told the House on Monday. Surely we need a debate on this in Government time. We know that the Government control the business of the House, but that is a privilege not to be abused, and when a Department is failing as badly as the Home Office is at the moment, it should be possible for the Government to make time for the House to examine what is happening.
Penny Mordaunt
I thank the right hon. Gentleman and other hon. Members for raising these issues. I know that people are concerned about a system under great pressure. They will want to ensure that refugees are being treated with dignity and that the provision that is needed for those people is in place. He will know that the system is under great pressure. He will also know that the Government and the people of this country are incredibly compassionate and have a fantastic track record of supporting refugees, as in the work we did together on extracting high-needs lone children from camps in Syria and elsewhere, and on the recent scheme for Ukrainian refugees, whom many hon. Members and their constituents are supporting in their homes. We know what good looks like. The situation is that the system is under immense pressure, and we have to find solutions. The Government will bring forward some solutions and I hope that all hon. Members will consider and support those motions.
Patricia Gibson (North Ayrshire and Arran) (SNP)
In a week when BP saw its quarterly profits rise to £7.1 billion, it is long past time to extend the windfall tax and reinstate the cap on bankers’ bonuses while we are at it. Meanwhile, households continue to struggle and pensioners genuinely fear freezing this winter—a fear that has been exacerbated by the fact that the triple lock commitment has been abandoned. Will the Leader of the House make a statement to set out her concerns about a UK that is increasingly unequal? It is already the most unequal state in Europe.
Penny Mordaunt
On the issues that the hon. Lady mentions, I ask her to wait until 17 November when the Chancellor will bring forward his statement. We want to ensure continued stability and make sure that we are balancing the books and protecting the people who need it through what will be a very difficult winter. The Chancellor will do all those things.
Jim Shannon (Strangford) (DUP)
Last month, Chanda Maharaj, a Hindu girl from Hyderabad in Pakistan was kidnapped and forcibly married to an older man. She is one of an estimated 1,000 under-age girls kidnapped from Christian and Hindu minorities in the last year in Pakistan. She was rescued from her abductor but is still in legal limbo. Will the Leader of the House join me in expressing concern for her and the many hundreds of girls in similar situations? Will His Majesty’s Government work with Pakistan to help to tackle that abusive issue?
Penny Mordaunt
I thank the hon. Gentleman for raising that appalling case. I understand that the initial trauma and tragedy of what Chanda Maharaj has been through will be exacerbated by the legal wranglings that he points to. In such cases, where hon. Members are unable to support their constituents, they should raise them with the FCDO, which will clearly be speaking to the high commission. We must do everything we can to ensure that people can start to rebuild their lives and to reduce the number of times that such appalling things happen to young women and girls.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
My local authority, South Lanarkshire Council, has submitted a bid to the levelling-up fund. It is an excellent proposal to remediate the hexavalent chromium issues at the brownfield site at Shawfield. As part of Clyde Gateway’s continued redevelopment, it would see untold economic and environmental benefits for my constituents, and it has my full support. Will the Leader of the House ask the Secretary of State for Levelling Up, Housing and Communities to provide an update to the House on the fund’s progress?
Penny Mordaunt
I thank the hon. Lady and wish her well in that bid. Clearly, decontaminating land is key to unlocking its use and her community will be keen to see that happen. Round one delivered more than £170 million for eight projects and I am sure that further funding will be brought forward. I thank her for championing her project today.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Leader of the House for responding to questions for an hour and 12 minutes.
Points of Order
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Jeremy Corbyn (Islington North) (Ind)
On a point of order, Mr Deputy Speaker. I rise to make a point of order concerning Prime Minister’s Question Time yesterday. I informed the Prime Minister that I would be raising this point of order this morning. Yesterday, in answer to the Leader of the Opposition, he made reference to me. He gave me no advance notice that he was going to make such a reference, which is surely the convention for all Members of the House, including the Prime Minister. He also gave a wholly inaccurate representation of the 2019 election manifesto, of which he must have been fully aware, because he took part in many debates concerning its contents during the election campaign. Could you guide me, Mr Deputy Speaker, on how the Prime Minister could correct the record? If I am going to live rent free in his head, he could at least accurately reflect what I think and say, rather than inventions made up by him or his office.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Gentleman for his point of order and for giving forward notice of it. Members are, of course, responsible for the content of their own remarks in the Chamber. In respect of what is said in the House, parliamentary privilege allows all Members the right of free speech to ensure that we can represent our constituents and express our views without fear or favour, but that is a right that we must exercise with great responsibility. The Treasury Bench will have heard that point of order and I am sure it will be passed on to the Prime Minister.
The Leader of the House of Commons (Penny Mordaunt)
Further to that point of order, Mr Deputy Speaker. In all seriousness, as you know, I take the rules on giving Members notice very seriously, whether that is about visits to constituencies or mentions in the House, so I will certainly follow that up. I suspect, however, that the right hon. Member for Islington North (Jeremy Corbyn) should be prepared for him, and particularly the Leader of the Opposition’s support for him and the manifesto that he stood on, to be mentioned on at least a weekly basis. If he would like to help to correct the record, he could publish the manifesto that he stood on, which would have weakened this country and dismantled NATO.
Mr Deputy Speaker
I will take a further point of order on that, then that will be it.
Jeremy Corbyn
Further to that point of order, Mr Deputy Speaker. I am grateful to the Leader of the House for what she has just said. The manifesto is freely available. Had it resulted in a Labour Government, we would not have such poverty, such food banks and such misery in this country today.
Mr Deputy Speaker (Mr Nigel Evans)
It would appear that it is not only the Prime Minister who lives rent free in your head, Mr Corbyn. I call Mr Wiggin on a separate point of order.
Sir Bill Wiggin (North Herefordshire) (Con)
On a point of order, Mr Deputy Speaker. The House will no doubt be aware and be as sad as I am about the death of Ronnie Radford yesterday. On 5 February 1972, he scored the goal that became the goal of the year when Hereford United beat Newcastle United in the FA cup third round.
Sir Bill Wiggin
Don’t boo! This is serious. Ronnie Radford was a truly wonderful man who set a tremendous example in his modesty and humbleness. I ask the House to read Brian Viner’s article, which pays proper tribute to this footballing icon. With 19 days to go before the World cup, I congratulate Birmingham on putting up a big screen so that people can enjoy football. I hope that that will happen in London, because it would be a shame if Londoners did not get the opportunity to see such a wonderful example of everything that is good about football.
Mr Deputy Speaker
I am grateful to Sir Bill Wiggin—I forgot to give you due deference there, Sir Bill. There were a lot of nods from Front Benchers and hon. Members on both sides of the Chamber when you mentioned Ronnie Radford.
Ian Mearns
Further to that point of order, Mr Deputy Speaker. I point out that I was not booing the late Ronnie Radford, for whom I have a high regard as a non-league player at the time when Hereford defeated Newcastle all those years ago. I was booing that fact that in the next week or so, we will probably see that goal on many occasions, which I think I have seen on only 4,953 previous occasions—every time the FA cup third round comes on each year. I have great respect and fondness for the late Ronnie Radford, but I hate being reminded about that goal.
Mr Deputy Speaker
What can I say other than to ask that our deepest condolences be passed on to Ronnie’s family? He was remembered in the House today.
Patrick Grady (Glasgow North) (Ind)
On a point of order, Mr Deputy Speaker. Lest I be accused of misleading the House—and given that I am serving on the Procedure Committee, which is currently conducting an inquiry into correcting the record—may I clarify what I said to the Leader of the House? Aberdeen is in fact 150 miles away from Glasgow, not 300 miles, even if it might seem like 300 miles for my staff, should they have to travel all the way there. It would be a 300-mile round trip—[Interruption] —and it is not 500 miles or 500 miles more either. I say that just for the accuracy of the record, lest there be any confusion or misunderstanding.
Mr Deputy Speaker
I thank the hon. Member for correcting that as quickly as he has.
Free Trade Agreements: Parliamentary Scrutiny
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
We now come to the Select Committee statement. Angus Brendan MacNeil, representing the International Trade Committee, will speak for up to 10 minutes, during which no interventions can be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement, and call him to respond to these in turn. Can I emphasise that questions should be directed to Mr MacNeil, not the relevant Government Minister? Contributions should be questions and should be brief, and those on the Front Benches may take part in the questioning. I call Angus Brendan MacNeil.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Tapadh leibh, Mr Deputy Speaker, and it is a great privilege to be called. Before I get going, I want to flag up a letter that has been written to party Whips from influential women in the trade space calling for more women to be on the International Trade Committee. While this is not a matter for me as Chair or for the staff of the Committee, we do think it is worth flagging up that this call has been made. This letter has been written to party Whips by Sally Jones, Catherine McGuinness, Nicola Watkinson, Sabina Ciofu and Noreen Burroughes Cesareo. I think it is worth putting on the record that that has happened.
I am grateful to the Backbench Business Committee for the opportunity to make a statement to the House on the 4th report of the International Trade Committee on parliamentary scrutiny of free trade agreements. I would also like to take the opportunity to acknowledge the hard work of hon. Members on the Committee from all parts of the political spectrum, the Committee staff, who work tirelessly, and those who have provided written and oral evidence to us in our FTA inquiries.
This year, we have completed scrutiny on new FTAs with Australia and New Zealand, and we have commented on the specific content in a report on them. However, as we went through those FTAs, there were themes that kept emerging, as they did from other inquiries. In our role as a critical friend of the Secretary of State for International Trade and the Department for International Trade, we have included these in the report to start a constructive conversation about future parliamentary scrutiny. At this stage, I would put in a disquieting or discordant note by saying that a general debate a week on Monday lumping both together does not really cut it at all.
From the evidence we have received and seen ourselves, as well as the international comparisons we have undertaken, it is clear that the way in which the Government engage with others, including Parliament, through planning, negotiating and delivering FTAs is not all it could or should be. It was particularly galling this morning to see the Secretary of State actually blame Parliament for the now Prime Minister calling the Australia deal “one-sided” at one stage during the Conservative leadership hustings.
We are calling on the Government to undertake longer-term consultative reviews on how they approach this and to report back within this Session of Parliament. Our experience of scrutinising the FTAs, and the Australia deal in particular, was far from what we had expected, so we specifically ask the Government to look at how they work with Parliament and its Committees, and to consider how they can bring us in more closely throughout the process. However, we know that doing this well will not be a quick process, so we call on the Government to make changes in the interim to ensure that the scrutiny arrangements are stronger for all future FTAs, not just those following the review.
The Secretary of State has said she will provide indicative timelines for the new FTAs. She has co-ordinated the formal scrutiny period for the New Zealand FTA with the publication of our report, and we are grateful for that. Our report asks for specific further commitments on the time between key stages in that timeline to ensure that we are able to undertake robust scrutiny in the necessary time, and with increased certainty, in advance of the FTAs being signed.
We are also consider that the provisions for parliamentary scrutiny under the Constitutional Reform and Governance Act 2010—CRaG, as it is known—are out of date and should be included in the Government’s review of scrutiny arrangements. As our report notes, when CRaG was being taken through Parliament it was
“in a significantly different context to that of today.”
The fact that it was considered before the vote to leave the EU means that Parliament did not consider CRaG’s suitability for scrutinising a raft of new free trade agreements negotiated solely by the United Kingdom.
The fact that the Government have made additional commitments—they are welcome, although they have not always been met in the spirit, only in the letter—underlines how the CRaG provisions do not go far enough to meet the needs of the new context and to allow strong parliamentary scrutiny. The Government have said they believe that
“CRaG continues to provide a robust framework”.—[Official Report, 12 October 2022; Vol. 720, c. 162WH.]
We respectfully disagree and urge them to reconsider.
Further, CRaG and the additional commitments previously made by the Government, as set out in an exchange of letters between the then Minister Lord Grimstone and the Chair of the International Agreements Committee, Baroness Hayter, have been shown to have insufficient strength. Parliament cannot reject an FTA, but CRaG gives this House, and only this House, the power to delay ratification indefinitely if it so chooses. However, with the Australia FTA we saw that the Government can prevent us from being able to use this power by refusing to grant a debate and a vote within the CRaG period.
The Committee is clear that the Government must commit to any future FTAs being subject to a debate and a vote on a substantive motion within the CRaG period, giving this House the time to discuss the contents of the deal and to show whether it supports ratification. It is not enough for the Government to say they will do this subject to parliamentary time; they must make time, and they must not tie the House’s hands. This must start with the New Zealand FTA, which will be published on Monday. Particularly given that the Prime Minister, who at the time of his resignation as Chancellor pointed out that he felt a deal was “one-sided”, is now Prime Minister and is back to head-in-the-sand business as usual, this really is selling people short. If someone has such a private view, they can have such a public view on FTAs.
Another key theme common to both FTA inquiries and on which we have also received evidence in other inquiries is the need for a single document that clearly sets out the Government’s trade strategy and the role of FTAs within it. The Government have previously rejected calls for this, pointing to various documents as collectively explaining the strategy, but we have seen and heard that this is not sufficient for businesses and other stakeholders. It is also not enough for us, meaning that we lack a single point of reference against which to scrutinise how successfully and coherently the Government are delivering on their trade agenda around a central strategy.
There also remain questions about other important aspects. Sometimes, trade deals are not solely trade-focused; they have aspects that are not trade-focused, for example in relation to human rights and the environment. There have been mixed messages about whether these should be included in FTAs or addressed via other means, or a combination of the two. Some of these aspects may not have been an issue for FTAs already negotiated, but omitting them from future FTAs could be a significant missed opportunity. We are therefore asking the Government to clarify their position on how and where such issues must and should be addressed.
I am not confident, due to a lack of scrutiny, about whether Members fully understand enough about these trade deals. The New Zealand trade deal is worth about one 250th of the damage Brexit is doing to the economy, jobs and living standards. All the trade deals on the horizon will not make up one 20th of that damage. Do Members understand—I am not confident we all do collectively in the House of Commons—that trade deals merely replace tariffs? The paper-free and bureaucracy-free trading that the UK enjoyed in the single market of the European Union is not being replaced, and nothing can be exported from the UK now without paperwork.
In conclusion, I want to welcome again the recent positive movement by the Secretary of State and her predecessor in seeking to rebuild relationships that had deteriorated significantly. These are steps in the right direction, but as our fourth report shows, there is still a lot further to go before Parliament and the public can be assured that new trade deals are being as rigorously scrutinised as they should be. We hope that the Government will consider and rapidly accept our recommendations, which are cross-party, and help us all to achieve this goal for the good of scrutiny in the House and for the good of all Members’ understanding.
The Minister of State, Department for International Trade (Greg Hands)
I congratulate the Committee Chair on his report, which we will obviously respond to in due course, and I thank him for his warm words about the commitment by our new Secretary of State to engage with his Committee.
The Committee has been consistent under the hon. Gentleman’s chairmanship in calling for more scrutiny. This is not the proper place for me to enter a full defence of CRaG, but I have a question for the hon. Gentleman. CRaG is not the whole extent of the scrutiny, and he did not mention that any changes a trade deal would cause to the UK system would need legislative change. For example, the Trade (Australia and New Zealand) Bill is going through the House at the moment, and it is giving ample time for scrutiny to all Members of the House. Will he say a little about some of the other scrutiny opportunities available?
Angus Brendan MacNeil
I thank the Minister for his congratulations and his kind remarks about consistency. What we find is that by that period it is too late. Things are very one-sided and the Whips are pushing things through. If we are to have a place for consideration we have to take the issue away from the partisanship that we have at that stage in the House. I think the Minister knows it could be done better. When the Prime Minister has said, in one frequency, that a deal is “one-sided”, surely that is a message that things could, and should, have been done better.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I add our thanks to the Chair and his Committee for this important and timely report. One thing it rightly focuses on is the lack of a coherent trade strategy. The Committee has previously said that the approach of the Department for International Trade was “flat-footed”. Does the hon. Gentleman agree that we have not been helped by the fact that over the past three years we have seen Trade Ministers arguing with each other during ministerial questions, and one former Secretary of State spending most of her tenure obsessed with her Instagram posts and coffee orders?
Angus Brendan MacNeil
The hon. Lady tempts me down some interesting rabbit holes. I will not argue with any of the points she raises, and I agree with her on one specific point, which is that the call for a trade strategy from the Government is universal. It comes from all sides of the political spectrum and from everybody who comes in front of the Committee. They do not know what the UK Government are trying to achieve. It looks piecemeal and as if they want to come back waving bits of paper saying “trade deals in our time”, just for the sake of that piece of paper. The problem with that approach is that down the line in years to come, areas that have not been defended properly will see economic damage.
What will the Government do about that economic damage when it comes? For instance, farming, fisheries and forestry will see damage from the New Zealand or Australia trade deals, but that is not being dealt with. That sausage factory approach is not good enough. In the end, people who have been damaged and suffered that loss will come complaining to their Members of Parliament—quite rightly. The Government do not realise this is coming down the line, but when it comes it is going to be sore.
Martin Vickers (Cleethorpes) (Con)
As a member of the International Trade Committee I endorse much of what the Chair has said, although he never loses an opportunity to attack Brexit, so we cannot entirely agree on everything.
Does he acknowledge that there is a cross-party majority on the Committee who acknowledge that the relationship between the Committee and the previous Secretary of State caused problems? There is now an opportunity to reset that. Does he agree that a majority on the Committee want more free trade deals, and we want to do all we can to facilitate that while being a critical friend?
Mr Deputy Speaker (Mr Nigel Evans)
I used to be Angus’s vice-chair, and it is good to hear that nothing has changed as far as his views.
Angus Brendan MacNeil
Thank you, Mr Deputy Speaker—I remember many a ding-dong that we had on Brexit, as you may recall. I thank the hon. Member for Cleethorpes (Martin Vickers) for what he said. He is right—I point out the facts and numbers around Brexit, and they are not good. I compare Brexit to going to the horse-racing with £500 and coming back with trade deals worth £2 or £8 or whatever—we are still £490-odd down, but I will leave that there in deference to the hon. Gentleman.
The hon. Gentleman is right that a majority of the Committee want to reset that, and under the circumstances in which we find ourselves, we want to see trade deals. The question is about the terms of those trade deals, and that is where the House should be involved. That is why we look at trade deals that the European Union might achieve with New Zealand or Australia, versus what we have achieved, and we must also remember the words of the Prime Minister, who said that those deals are “one-sided”.
I was speaking to a member of the Trade and Agriculture Commission who said that—I had better phrase it this way—the Australia trade deal was the biggest giveaway of agricultural liberalisation that has been seen in any trade agreement. We should remember that free trade agreements are not about free trade; they are about bureaucratic trade, and they usually replace tariffs with bits of paper. There is nowhere where trade occurs as freely—to return to that word—as it did with the European Union before Brexit.
John Spellar (Warley) (Lab)
Members on both side of the House share some concerns about the performance of previous Trade Ministers—not only their attitudes to the way deals were conducted, but their relations with this House. May I also express disappointment with the position of the Committee, and perhaps strike a note that dissents from the general congratulatory tone? The Chair rightly identified the issue of questioning Government strategy, but I am not clear what the strategy and trade policy of the International Trade Committee is. I heard nothing in the contribution to outline a recognition that trade has been of enormous benefit to humankind over centuries, and particularly since the second world war, in bringing hundreds of millions, if not billions of people across the planet out of poverty, and nothing about the opportunities for trade. Those who argued for us staying in the EU were surely arguing about the benefits of trade.
I also do not see any indication of the countries with which we ought to be doing trade deals, and I would like a response on that. If we are not able to do trade deals with countries such as Australia and New Zealand with which we share history, family, strategic, security and defence relations, who can we make agreements with? Please do not just tell me it is the EU. We need to look in government but also, I would argue, in the Committee, at having a consistent trade policy, and I look forward to that in future debates.
Angus Brendan MacNeil
I am grateful to the right hon. Gentleman —it is good to be criticised, because that forces people to look inwards and see exactly what is happening and what needs to be done. The role of the Committee is first to scrutinise and sometimes to help the Government, and indeed, as the Minister will know, perhaps to chide them. It is also to set the agenda at times—that alludes to other countries, as the right hon. Gentleman says. We can trade with countries without trade deals, but the terms of trade vary. We pay tariffs, and usually when we get rid of those in a trade agreement we have bureaucracy instead.
The right hon. Gentleman gives me the opportunity to raise an important point on the Floor of the House, which is about resources. He is asking the Committee to do more. Yes, the Committee can do more. We are aware we can do more, but we are very aware that our workload leaves a heavy burden on Committee staff. If he can add his voice to other voices to ensure that the Committee is well resourced, we will be eternally grateful to our critical friend on the Labour Back Benches.
Patrick Grady (Glasgow North) (Ind)
I regularly hear from constituents in Glasgow North who are concerned about the inability of many of us to effectively scrutinise trade deals. We are lucky if we get even a straight up or down vote on the whole proposition, rather than having any influence over the detail of those deals. Does the hon. Gentleman share my concern that this is another aspect of Brexit? We were told that Brexit was about taking back control for this House, and the restoration of parliamentary sovereignty, but what he describes in his report sounds an awful lot like an Executive power grab, where instead of Brussels bureaucrats it is Whitehall mandarins and unaccountable Tory Ministers deciding policy. Surely if the Government really believe in parliamentary sovereignty and the sovereignty of this House, they should adopt the recommendations in the Committee’s report in full.
Angus Brendan MacNeil
I thank the hon. Gentleman for his fair comments about empowering the House on trade deals. That should be welcomed, particularly by Government Members given that they are in the majority. It might also help better trade deals come into existence and be signed—trade deals that people can unite behind, rather than giveaway trade deals or, in the words of the Prime Minister, “one-sided” trade deals. I am not sure whether having revolving doors, with Secretaries of State or other Ministers going from position to position, really helps. It is good to see a retread, if I may be so gentle, because I think this is the Minister’s second or third time back—[Interruption.] The third time, with, I trust, a body of institutional knowledge coming back to the Department. There is a concern, however, that these things gain a momentum of their own. A previous Prime Minister—but which one? The one from Uxbridge—was desperate to see bits of paper being signed. There was that going on.
I understand why the hon. Member’s constituents are frustrated. The House should have a say and have input. There are people out there who will be affected by trade deals, and they should have those concerns reflected in the House of Commons so that the negotiators can know, before they start to negotiate, what the difficulties are for certain parts of the UK and, when trade-offs are made, if the damage is to Welsh hill farmers for the benefit of City types in London, that is recognised in future fiscal transfers.
Backbench Business
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Smokefree 2030
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Bob Blackman (Harrow East) (Con)
[R]: I beg to move,
That this House has considered the recommendations of the Khan review: Making smoking obsolete, the independent review into smokefree 2030 policies, by Dr Javed Khan, published on 9 June 2022; and calls upon His Majesty’s Government to publish a new Tobacco Control Plan by the end of 2022, in order to deliver the smokefree 2030 ambition.
I thank the Backbench Business Committee, on which I have the honour to serve, for enabling us to have the debate this afternoon. On behalf of the all-party parliamentary group on smoking and health, which I chair, I welcome the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Harborough (Neil O'Brien), to his new role as public health and primary care Minister. The all-party group has a long track record of acting as a critical friend to the Government on this agenda and I am confident that that collaborative and constructive approach will continue.
May I take the opportunity to commend the hon. Member for City of Durham (Mary Kelly Foy), who co-sponsored the debate application with me but is not able to be here today? She is currently recuperating from a stay in hospital. I am sure that the whole House wishes her a speedy recovery.
The all-party group originally proposed the debate before the summer recess to ensure that Parliament had the opportunity to scrutinise the independent review by Javed Khan OBE, “Making smoking obsolete”. When the Secretary of State—well, the then Secretary of State, my right hon. Friend the Member for Bromsgrove (Sajid Javid)—announced the Khan review in February, he said that it would
“assess the options to be taken forward in the new Tobacco Control Plan, which will be published later this year.”
We have since had several changes of Health Ministers and Secretaries of State, but it should not be forgotten that a new tobacco control plan was first promised in 2021.
Achieving the Government’s smokefree 2030 ambition and making smoking obsolete is vital to the health and wellbeing of our entire population. It will also help to deliver economic growth, because smoking increases sickness, absenteeism and disability. The total public finance cost of smoking is twice that of the excise taxes that tobacco brings into the Exchequer. Each year, many tens of thousands of people die prematurely from smoking, and 30 times as many as those who die are suffering from serious illnesses caused by smoking, which cost the NHS and our social care system billions of pounds every single year.
Javed Khan’s review, which was published in June, concluded that, to achieve the smokefree 2030 ambition, the Government would need to go further and faster. He made four recommendations that he said were critical must-dos for the Government, underpinned by a number of more detailed interventions. I will concentrate on the four main recommendations, given time.
The four must-dos were: increasing investment by £125 million a year to fund the measures needed to deliver smokefree 2030; raising the age of sale to stop young people from starting to smoke; promoting vaping as an effective tool to help people to quit smoking tobacco, while strengthening regulation to prevent children and young people from taking up vaping; and prevention to become part of the NHS’s DNA and the NHS committing to invest to save. Since then, we have had conflicting reports about whether the Government intend to publish a new plan at all. That has been deeply concerning to me and others who support the ambition and want to see it realised. To abandon, delay or water down our tobacco strategy would be hugely counterproductive when the Government are trying to reduce NHS waiting lists, grow the economy and level up society.
As well as increasing funding, Khan recommended enhanced regulation. Both of those are supported by the majority of voters for all political parties, and the results of a survey published just this week show that tobacco retailers share that view as well. I therefore commend the “Regulation is not a dirty word” report by ASH—Action on Smoking and Health—to the Minister. It shows that most shopkeepers support existing tobacco laws and want the Government to go further in protecting people’s health. Retailers want tougher regulations—that is what they think will be good for business—and not deregulation.
There is no time to be lost. When the ambition was announced, we had 11 years to deliver it. Now, we have less than eight years, and we are nowhere near achieving our ambition, particularly for our more disadvantaged communities with the highest rates of smoking. Research cited in the Khan review estimates that it will take until 2047 for the smoking rates in disadvantaged communities to reach the smokefree ambition of 5% or less. Will the Minister put on record his commitment that the Government, having considered the Khan review recommendations, will publish a new tobacco control plan by the end of 2022 to deliver the smokefree 2030 ambition?
As Javed Khan made clear with his leading recommendation, smokefree 2030 cannot be delivered on the cheap. However, public health interventions such as smoking cessation cost three to four times less than NHS treatment for each additional year of good health achieved in the population. Yet that is where the cuts have fallen to date. The public health grant fell by a quarter in real terms between 2015 and 2021, and funding for tobacco control fell by a third, while NHS spending continues to grow in real terms.
Last week, London launched its tobacco alliance with a vision to deliver the smokefree 2030 ambition across London. Cabinet members for health and wellbeing from across London are writing to the new Secretary of State to make clear their commitment to achieve the ambition and pleading for the funding they need to deliver it. Before I became the MP for Harrow East, I was a councillor in the London Borough of Brent for 24 years, so I am well aware of what local authorities want to do on tobacco, but they lack the resources they need so to do.
Javed Khan called on the Government to urgently invest an additional £125 million a year in a comprehensive programme, including funding for regional activity such as that proposed in the capital. His recommendation was that, if the Government could not find the funding from existing resources, they should look at alternatives such as a corporation tax surcharge—a windfall tax—and a “polluter pays” tax. Banks and energy companies have been made subject to windfall taxes, so why not the tobacco manufacturers, who make eye-wateringly high profits from products that kill many tens of thousands of people every year? Four manufacturers, who are collectively known as “big tobacco”—British American Tobacco, Imperial Brands, Japan Tobacco International and Philip Morris International—are responsible for 95% of UK tobacco sales and the same proportion of deaths. For every person their products kill, it is estimated that 30 times as many suffer from serious smoking-related diseases, cancers, and cardiovascular and lung diseases caused directly by smoking.
A windfall tax could be implemented immediately through the Finance Bill. Experts on tobacco industry finances from the University of Bath have estimated that that could raise about £74 million annually from big tobacco. However, that is much less than the hundreds of millions in profits that big tobacco makes annually, because it would be a surcharge on corporation tax paid in the UK and tobacco manufacturers, just like the oil companies, are very good at minimising corporation taxes paid in the UK. For example, Imperial Tobacco, which is responsible for a third of the UK tobacco market, received £35 million more in corporation tax refunds than it actually paid in tax between 2009 and 2016. In contrast, a polluter pays levy would take a bit longer to implement, but it could be designed to prevent big tobacco from gaming the system as it currently does with corporation tax.
The polluter pays model we propose enables the Government to limit the ability of manufacturers to profit from smokers while protecting Government excise tax revenues, so it is a win-win for the Government and for smokers. Unlike corporation taxes, which are based on reported profits and can be—and indeed are—evaded, the levy would be based on sales volumes, as is the case in America, where a similar scheme already operates. Sales volumes are much easier for the Government to monitor and much harder for companies to misrepresent.
The scheme is modelled on the pharmaceutical price regulation scheme—the PPRS—which has been in operation for over 40 years and is overseen by the Department of Health and Social Care. The Department already has teams of analysts with the skills to administer a scheme for cigarettes, which would be a much simpler product to administer than pharmaceutical medicines. Implementing a levy would not require a new quango to be set up, as the Department has all the expertise needed to both supervise the scheme and allocate the funds.
Despite paying little corporation tax, the big four tobacco companies make around 50% operating profit margins in the UK, far more than any other consumer industry. Imperial Tobacco is the most profitable, with around a 40% market share in the UK. It made an operating profit margin of over 70% in 2021. Why should an industry, whose products kill when used as intended, be allowed to make such excessive profits, when 10% is the average return for business? The polluter pays model caps manufacturers’ profits on sales and could raise £700 million per year, which is nearly 10 times as much as a windfall tax.
Amendments to the Health and Social Care Bill calling for a consultation on such a levy were passed in the other place. Health Ministers were sympathetic, but the Treasury was opposed so they were reversed when the Bill came back to this place to be considered. However, that was before the Government knew they had a fiscal hole of around £40 billion that had to be filled. The £700 million from tobacco manufacturers would more than provide the £125 million additional funding that Khan estimated was needed for tobacco control. That would leave £575 million a year that could be used for other purposes, perhaps even for other prevention and public health measures which otherwise in the present economic climate are unlikely to secure funding.
The polluter pays principle has been accepted by Conservative Governments in areas such as the landfill levy, the tax on sugar in soft drinks and requiring developers to pay for the costs of remediating building safety defects. The Government promised to consider a polluter pays approach to funding tobacco control in the prevention Green Paper in 2019. Surely, we can now put it into practice.
Liz Twist (Blaydon) (Lab)
The hon. Gentleman will know that in the north-east smoking remains the leading cause of death, as well as of inequalities in healthy life expectancy. The all-party group has come forward with the polluter pays model, which is really important, and I ask the Government to consider it again as a means of funding the essential work on stopping smoking.
Bob Blackman
I thank the hon. Lady for her intervention. Clearly, there is a difference in smoking rates across the country, and we need to ensure that that is addressed. I will come on to that in my speech in a few moments.
We need the levy to be introduced, so will the Minister commit to investigating the feasibility of a windfall tax, backed up by a polluter pays levy, to provide the funding needed to deliver smokefree 2030?
I want to talk about the need to protect generations to come. The Government are set to miss the ambition, set in the 2017 tobacco control plan, to reduce SATOD— smoking status at time of delivery—rates to 6% by 2022. Currently, 9.1% of women, or about 50,000 women a year, smoke during pregnancy. Smoking during pregnancy is the leading modifiable risk factor for poor birth outcomes, including stillbirth, miscarriage and pre-term birth. Children born to parents who smoke are more likely to develop health problems, including respiratory conditions, learning difficulties and diabetes, and they are more likely to grow up to be smokers. Reducing rates of maternal smoking would contribute directly to the national ambition to halve stillbirth and neonatal mortality by 2025.
Younger women from the most deprived backgrounds are the most likely to smoke and be exposed to second-hand smoke during pregnancy. Rates of smoking in early pregnancy are five times higher among the most deprived areas than the least deprived. That contributes to this group having very significantly higher rates of infant mortality than the general population. As such, if we can drive down rates of smoking in younger, more deprived groups we will then have a rapid impact on rates of smoking in pregnancy. Two thirds of those who try smoking go on to become regular smokers, only a third of whom succeed in quitting during their lifetime. Experimentation is very rare after the age of 21, so the more we can do to prevent exposure and access to tobacco before this age, the more young people we can stop from being locked into a deadly addiction.
If England is to be smoke free by 2030 we need to stop people from starting smoking at the most susceptible ages, when they are adolescents and young adults, and not just help them quit once they are addicted. The all-party group, which I chair, has called on the Government to consult on raising the age of sale for tobacco to 21, which, when implemented in the US, reduced smoking in young adults by 30%. This is a radical measure, but one that is supported by the evidence and by the majority of voters for all political parties, retailers and young people themselves. It would have a huge impact on reducing smoking rates among young mothers, who are more likely than older women to smoke. It would also reduce rates among young men, so reducing the exposure of young pregnant women to second-hand smoke throughout their pregnancy. If men smoke it makes it harder for pregnant women and new mums to quit smoking, and makes it more likely that mother and baby will be exposed to harmful second-hand smoke. Will the Minister consider committing to a consultation on raising the age of sale for tobacco, as supported by both the public and tobacco retailers?
Finally, I want to warn the Minister about the Institute of Economic Affairs’ alternative smokefree 2030 plan, which popped into my inbox yesterday. The IEA’s plan is an alternative that is entirely in the interests of the industry, which is hardly surprising given the funding the IEA has received from big tobacco. The IEA itself refuses to be transparent about its funding, but through leaked documents it has been exposed as being funded by the tobacco industry for many years. I am sure the Minister is aware that the UK Government are required, under article 5.3 of the international tobacco treaty, the World Health Organisation framework convention on tobacco control, to protect public health from the
“commercial and other vested interests of the tobacco industry”.
The guidelines to article 5.3, which the UK has adopted, spell out that that includes organisations and individuals that work to further the interests of the tobacco industry, which includes industry funded organisations such as the IEA and the UK Vaping Industry Association.
I look forward to hearing contributions from across the House. I hope my hon. Friend the Minister will echo the words of his predecessors in his new role and restate for the record on the Floor of the House the Government’s commitment to complying with article 5.3. I hope he will state that on his watch the Government will continue to prevent the tobacco industry-funded organisations from influencing tobacco control policy.
Alex Cunningham (Stockton North) (Lab)
I draw the attention of the House to my interests as a vice-chair of the all-party parliamentary group on smoking and health. I, too, welcome the Minister to his place and wish him well. I look forward to working with him. I congratulate the hon. Member for Harrow East (Bob Blackman) on an excellent and measured speech. I could make my shortest speech ever by simply saying, “I agree with Bob.” I won’t. [Laughter.] I will reiterate some of the points he made.
When I wander through parts of my constituency, particularly the areas of greater deprivation, I am struck by the number of people who still smoke, including children on their way home from school in school uniform. I know that in recent times rates of smoking have come down across the borough of Stockton-on-Tees, thanks to initiatives by the council, health staff and Fresh, the north-east charity that helped drive a reduction. Although the incidence of smoking has come down overall, it is still a major issue in areas such as the town centre ward, where it remains high, as does the number of young women smoking in pregnancy.
Sadly, public health is in a dire state after 12 years of Conservative rule and, in recent times, the promise to act on smoking does not align with what is being delivered. Time and again, Members from across the House have asked for the long-overdue tobacco control plan, but despite making commitments to introduce the necessary measures to further reduce tobacco harm in this country, the Government have not done so. We will never meet the Government’s targets if we do not have a plan, so I hope that the Minister will today give us a date for the plan and promise to make available the resources to make it work.
I want to be a little parochial and make it clear again why I have always focused on this health issue, in particular, during my 12 years in Parliament. In my patch of Stockton, 13.2% of adults smoked in 2019 compared with 13.9% in England. That rises to 19.1% among those in routine and manual occupations. When we look at the proportion of women who smoked during pregnancy in 2021, it is worrying that the figure for Stockton was 14.1% compared with 9.6% nationally. The fact that one in 10 expectant mothers smoke across the country is bad enough, but the proportion is 50% higher in my patch and much higher, again, in deprived communities. Smoking can be a family issue. Any expectant mother committed to quitting will struggle if their partner or others in their household smoke. We need a plan to work with whole families to discourage smoking and end the dangers to the unborn child.
There is, of course, an economic argument to invest in smoking cessation. At the local level, smoking costs £62.3 million every year. That includes £47.2 million in lost productivity and costs of £9.2 million to the NHS and £5 million to social care. It is particularly distressing that 7.4% of our Stockton North population suffer from asthma—higher than the 6.5% across England. Furthermore, the level of COPD—chronic obstructive pulmonary disease—in my constituency is 3.1%, which again, is 50% higher than the rate of 1.9% across England. In England, 14.1% of people have high blood pressure, but the proportion is 16.2% in my constituency. It is therefore no surprise that 75% of adults in the north-east support the ambition to reduce smoking prevalence to less than 5%—fewer than one in 20 people—by 2030, with just 9% opposed. Along those lines, 76% of adults in the north-east support activities to limit smoking or think that the Government should do more.
We can all celebrate the fact that, in the past five years, the fastest decline in smoking rates in England has been in the north-east, although that was from a very high starting point. That is due to highly effective regional collaboration between local authorities and the NHS, supported by Fresh, to which I referred earlier, but they cannot do that alone. Government action could have a fast impact if they were to bring in legislation introducing the further regulation of tobacco products, as the hon. Member for Harrow East mentioned.
Liz Twist
My hon. Friend is speaking powerfully about the experience in the north-east and nationally. He will be aware that, between 2007 and 2019, when the Government led the way in introducing tough new regulations, our smoking rates declined far faster than in the rest of Europe and most of the world, but that has dropped off, so we need to take further action. Is he aware of this recent research into smoking habits? University College London’s smoking toolkit study has surveyed smokers’ behaviour monthly since 2006. After years of steady decline in adult smoking—the proportion went from 24.1% in 2006, as he said, to 14.8% in 2020—smoking rates have stagnated, standing at 14.9% as we reach the end of 2022. Worse still, although the uptake of smoking among young adults declined year on year from 2007, that started rising again after 2019.
Alex Cunningham
I am grateful to my hon. Friend; I was not aware of some of the research to which she referred. However, the reduction in smoking has plateaued in recent times, and that is lamentable. I have a big enough heart to say that the Conservative Government have done much over the years to reduce smoking, building on much of what the Labour Government did between 1997 and 2010, but we cannot allow ourselves to stop there. We need to do so much more.
There are often arguments—many of which are put forward by front organisations funded by the tobacco industry—that further smoking regulation would be the “nail in the coffin” for small businesses, but that is not so. As the hon. Member for Harrow East mentioned, a recent survey commissioned by Action on Smoking and Health found that small tobacco retailers in the UK support further measures to reduce the harm of tobacco, including increasing the age of sale from 18 to 21, mandating a licence to sell tobacco and requiring tobacco companies to pay for services to help smokers to quit. John McClurey, a retired local retailer from Newcastle said, “Tobacco is a burden” to small businesses. The Government could help to lift that burden and charge the tobacco companies to do so.
In my last speech on smoking in Westminster Hall, I again stressed the need for a levy on the tobacco companies, but Ministers were reluctant. The new Minister will want to take action in this space. As we all know, cash will be tight and the Budget in two weeks’ time will be difficult, so he can earn himself brownie points by requiring the industry that makes billions in profits while killing our people to pay up instead. It needs to pay, because more than 4,000 people died prematurely from smoking in the north-east alone last year, with 30 times as many suffering disease and disability caused by smoking.
Going hand in hand with the personal suffering caused by smoking is the economic cost to our already disadvantaged communities. In their election manifesto, the Government claimed:
“We are committed to reducing health inequality.”
Why, then, are there such pronounced inequalities? In the north-east, 42% of smoking households are in poverty and tobacco spending accounts for a higher share of gross disposable household income per head than in any other UK region or nation. Please do not give me the argument that if people are poor, they should give up their fags. Smoking is an addiction and they need help to quit. Ending smoking in such communities would not just benefit the health and wellbeing of individuals but inject money into local economies that was previously going up in smoke.
The Minister will know that, at the current rate of decline, poorer communities risk being left behind as we move towards the hoped-for smokefree 2030. It will not happen in the communities to which I have referred without robust action. Most of the quitting has been done by people from better-off communities, and the benefits have largely accrued to those communities. In 2019, fewer than one in 10 professional and managerial workers smoked—well on the way to the smoke-free target of less than 5%—compared with nearly one in four workers in routine and manual occupations.
Half the difference in life expectancy between rich and poor is due to smoking, which means that the scope for reducing health inequalities related to social position is limited, unless the many smokers in lower social positions can succeed in stopping smoking. Smoking is linked to almost every indicator of disadvantage. Those overlap different communities, so smokers in routine and manual occupations, or who are unemployed, are also more likely to be living in social housing and to be diagnosed with mental health conditions.
There is a clear need for a new tobacco control plan that targets investment and enhanced support at disadvantaged smokers, wherever they are. As long as smoking remains the norm in some communities, not only will it be harder for smokers to quit, but smoking will continue to be transmitted from one generation to the next. The evidence shows that most people who smoke started as children. Prevention is key, so what will the Government do to reduce the appeal of cigarettes?
Liz Twist
Does my hon. Friend agree that raising the age of sale, as the APPG proposes, would reduce youth uptake? According to the UCL modelling that I spoke about, it would reduce smoking among 18 to 20-year-olds by a third. It would narrow the inequalities in uptake: as my hon. Friend has powerfully explained, children from more disadvantaged backgrounds are more likely to take up smoking.
Alex Cunningham
I have no doubt that everything my hon. Friend says is totally on the money. We can take action, and it need not cost the Government a fortune either. My hon. Friend raises the issue of age. Some parts of the UK have a Check 25 policy—would it not be wonderful if we could introduce such a check on the sales of cigarettes? It might help to put an end to smoking among younger people.
High smoking rates among people with mental health conditions are a leading cause of premature death and disease. Smoking accounts for two thirds of the reduction in life expectancy for people with a serious mental illness. The smoking rate among people with serious mental illnesses is more than three times that of the general population. The rate among people with depression and anxiety is just under twice that of the general population, but they account for 1.6 million smokers. There is now good evidence that smoking exacerbates levels of poor mental health, whereas stopping smoking contributes to improvements in mental health. Tobacco remains the biggest cause of cancer and death in the UK, so Cancer Research would like to see the ambition to make England smoke free by 2030 implemented. I ask the Minister whether we can expect to see that ambition realised.
I would like to say a little about “The Alternative Smoke-Free 2030 Plan” published by the Institute of Economic Affairs, which the hon. Member for Harrow East has also received. After the disastrous free-market policies promoted by the IEA and adopted by the last Prime Minister and Chancellor, I find it hard to believe that any current Minister would give any credence to the IEA’s recommendations on anything. However, the hon. Member makes an important point: as a party to the World Health Organisation framework convention on tobacco control, the Government and all public authorities are required to protect
“their public health policies…from commercial and other vested interests of the tobacco industry”.
If the Minister is in any doubt about the role played by the IEA, he should take note of the leaked documents that show that during the passage of the tobacco products directive, Philip Morris International described the IEA as a “media messenger” on its behalf, able to assist in “policy outreach” to “pro-actively relay our positions”, while British American Tobacco described it as a “vehicle for delivery” of its UK reputation initiatives. I would like the Minister to restate for the record, on the Floor of the House, the Government’s commitment to complying with paragraph 3 of article 5 of the convention and to preventing tobacco industry-funded organisations from influencing tobacco control policy.
The arguments for bringing tobacco regulation forward are multifaceted and can no longer be ignored. As a member of the APPG, I look forward to working with a new Minister who can do the maths to realise the cash value of a tobacco control plan, especially if we make the polluters pay, and—better still—who can help us to ensure that we have healthier people in all our communities.
Maggie Throup (Erewash) (Con)
It is a pleasure to follow the hon. Member for Stockton North (Alex Cunningham). Like him, I could tear up my speech after listening to that of my hon. Friend the Member for Harrow East (Bob Blackman). I congratulate my hon. Friend and the hon. Member for City of Durham (Mary Kelly Foy) on securing this important debate, which I have been eagerly awaiting for some time. I wish the hon. Member for City of Durham a speedy recovery.
I thank the all-party parliamentary group on smoking and health, which is so excellently chaired by my hon. Friend the Member for Harrow East, for all its work on this important area. It has undoubtedly been instrumental in changing the Government’s policy on smoking and their perception of the issue. I am sure that its work has contributed to saving many lives. I thank my hon. Friend for his invitation to become a member of the APPG; I am delighted to accept.
The reasons why we need to tackle smoking and become smoke free by 2030 have been well rehearsed in previous debates in Westminster Hall and this Chamber and repeated today, but I make no apology for highlighting the key reasons again. Smoking remains the single biggest cause of preventable illness and death. Surely we have a duty to do everything in our power to prevent ill health and death. Shockingly, cigarettes are the only legal consumer product that will kill most users: two out of three smokers will die from smoking unless they quit. More than 60,000 people are killed by smoking each year, which is approximately twice the number of people who died from covid-19 between March 2021 and March 2022, yet it does not make headline news. In 2019, a quarter of deaths from all cancers were connected to smoking.
The annual cost of smoking to society has been estimated at £17 billion, with a cost of approximately £2.4 billion to the NHS alone and with more than £13 billion lost through the productivity costs of tobacco-related lost earnings, unemployment and premature death. That dwarfs the estimated £10 billion income from taxes on tobacco products. People often tell me that we cannot afford for people to stop smoking because of the revenue generated by the sale of tobacco, but I argue that as a society, and for the good of our nation’s health, we cannot afford for people to smoke.
Achieving smoke-free status by 2030 will not only save the NHS money but, more importantly, save lives. If we are determined to bring down the NHS backlog, we need to prevent people from getting ill in the first place. If we want to achieve our goal of improving productivity, we need a healthy workforce. It takes a brave and bold Government to implement policies whose rewards will mainly be reaped by the next generation, but that is the right thing to do.
I want to focus on just one of the well-researched and well-received recommendations in the Khan review: the age of sale. The fact that retailers use the Challenge 21 and Challenge 25 schemes indicates just how hard it is to determine a young person’s age. Age of sale policies are partly about preventing young people from gaining access to age-restricted products such as cigarettes and alcohol. More importantly, as Dr Khan states, they are about stopping the start. Dr Khan recommends
“increasing the age of sale from 18, by one year, every year until no one can buy a tobacco product in this country… This will create a smokefree generation.”
That may seem pretty drastic, but so are the consequences of smoking. If we ask smokers when they started, the majority will say that it was when they were in their teens. The longer we delay the ability to legally take up smoking, the fewer people will take it up, and the fewer will therefore become addicted. Let’s face it: never starting to smoke is much easier than trying to quit.
We have already proved in the UK that raising the age of sale leads to a reduction in smoking prevalence. Increasing the age of sale from 16 to 18 in 2007 led to a 30% reduction in smoking prevalence for 16 and 17-year-olds in England. Other hon. Members have mentioned the change in America. I would argue that increasing the age of sale by one year every year is more acceptable than raising it in one go from 18 to 21, for example, or even to 25.
Dr Khan has also called for additional investment in the stop smoking services currently provided by local authorities. However, I am a great believer in making every contact count—every contact that someone makes with a GP, as an out-patient, as an in-patient or on a visit to a pharmacy. Every time a smoker sees a healthcare professional, it should be seen as part of the healthcare professional’s duty to better the health of their patient.
I was honoured to share the stage with Dr Javed Khan at the launch of his review in June, and I was pleasantly surprised by the virtually universal welcome that his recommendations received. Indeed, polling carried out by YouGov backs that up: 76% of respondents support Government activities to limit smoking, or think that the Government should do even more; just 6% say that they were doing too much; 76% support a requirement for tobacco manufacturers to pay a levy or fee, to finance measures to help smokers quit and prevent young people from smoking; 63% support an increase in the age of sale; and, for the benefit of those on the Government side of the Chamber, 73% of those who voted Conservative in 2019 support the Government’s smoke free 2030 ambition.
In our 2019 manifesto we committed ourselves to levelling up, and that commitment has been reiterated by our new Prime Minister. Levelling up is not just about infrastructure; it is also about levelling up our health and life chances. That is particularly important for my constituents, because 16.6% of adults in Erewash are currently smokers, which is above the national average. With average annual spending on cigarettes estimated to be around £2,000, it is not just the health of smokers that is being affected, but their pockets as well. Becoming smoke free by 2030 would lift about 2.6 million adults and 1 million children out of poverty, and so would aid our levelling-up agenda.
Before I end my speech, I want to raise the issue of e-cigarettes, or vaping. The Khan review contains a specific recommendation on this, and I want to explain why it is so important. As with cigarettes, the age of sale is 18, but time after time I see young people at the end of the school day using vapes—and that is outside schools without sixth forms. It is illegal for a retailer, whether online or on the high street, to sell vaping products to anyone under the age of 18, so I am not sure how under- age users are obtaining the devices. The manufacturers are obviously aiming some of their marketing at this age range through the use of cartoon characters, a rainbow of colours, and flavours to match. The function of e-cigarettes should be solely as an aid to quit smoking, and not, as I fear, as a fashion accessory and, potentially, the first step towards taking up smoking.
The proliferation of vape shops in our high streets and online proves that vapes have become an industry in their own right, and are now being used by tobacco companies to maintain their profits as restrictions on tobacco increase. I therefore ask the Minister to work with his colleagues in the Home Office, the Department for Levelling Up, Housing and Communities and the Department for Education to see what more can be done to clamp down on the illegal supply of vapes to those under the age of 18. I also ask him for an update on progress in getting a vaping device authorised through the Medicines and Healthcare products Regulatory Agency—a step that would send the strong message that vapes are an aid to quitting smoking and not an alternative to smoking.
Finally, let me ask a question that has already been asked by other Members today: will the Minister provide a date on which we can expect the tobacco control plan to be published?
Madam Deputy Speaker (Dame Eleanor Laing)
I call the shadow Minister, Andrew Gwynne.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to speak in this important debate. It has been a small but, I think, perfectly formed debate, in which there has been a large degree of consensus throughout the House on our ambition for England to be smokefree by 2030.
I commend the hon. Member for Harrow East (Bob Blackman) not just for the work he has done on this subject over a long period, particularly in the all-party parliamentary group, but for the way in which he introduced the motion, which, as my hon. Friend the Member for Stockton North (Alex Cunningham) observed, enabled us to say, “We agree with Bob.” I congratulate my hon. Friend for his own work on the subject. I thank the hon. Member for Erewash (Maggie Throup) for her contribution, and also thank her for her time as the public health Minister: I used to enjoy our debates across the Dispatch Box, and I wish her well in whatever comes next.
The Health and Social Care Front Bench is a bit like a whirling dervish at the moment. We had the hon. Member for Erewash a few months ago, then the hon. Member for Sleaford and North Hykeham (Dr Johnson)—she was in post for just six weeks, and I want to thank her as well for the work she did in that short time—and now we have the new Under-Secretary of State for Health and Social Care, the hon. Member for Harborough (Neil O’Brien), whom I welcome. Let me also echo the words of the hon. Member for Harrow East in wishing my hon. Friend—indeed, my friend—the Member for City of Durham (Mary Kelly Foy) a speedy recovery after her hospital treatment.
It is now nearly five months since the release of the Khan review. Both the hon. Member for Erewash and I spoke at the launch, and I think the review was universally welcomed. It was generally agreed that we must move apace in ensuring that we meet the ambition of a smokefree 2030. In those five months we have had three different Health Secretaries, and we are now on our third Prime Minister. I do not blame the current Minister for all this chopping and changing, but it is little wonder that the Government have failed to find time to respond to the Khan review amid the endless changes. I hope that when the Minister responds to the debate, we will finally be given some clarity. I hope he will set out a timetable for when the Government will respond to the Khan review, and will outline which measures in the review itself the Government are currently considering. I also hope he will be able to reassure Members on both sides of the House that the Government stand by their commitment to create a smokefree England by 2030.
The importance of that smokefree 2030 cannot be overstated. Tobacco is the primary driver of health inequalities throughout the United Kingdom. In 2019-20, there were more than half a million hospital admissions and more than 74,000 deaths attributed to smoking. My constituency of Denton and Reddish straddles two local authorities, Tameside and Stockport in Greater Manchester. The public health charity Action on Smoking and Health—ASH—estimates that smoking costs those two local authorities about £172 million in lost productivity and health and social care costs. That is unsustainable.
Behind those stark economic figures, however, are individual lives that are being harmed or lost as a direct result of smoking. We know that more than 50% of people over the age of 16 who smoke say they want to quit—in fact, many say that they wish they had never started in the first place—and it is therefore imperative that the Government support them in their efforts to do so. Unfortunately, stop smoking services have suffered a 33% real-terms cut in their budgets since 2015-16. There is a drastic need for that to be reversed.
The Government have made a commitment to a smoke- free 2030, which is commendable. We support them, and we want them to succeed. However, a commitment alone is not enough: we want to see action to get there, and we need to see that action fast. The former Secretary of State had an interesting relationship with the tobacco industry, to put it mildly. She had previously accepted hospitality from the industry, and had voted against several sensible public health tobacco measures. During her brief but eventful tenure, it was reported that she had scrapped the Government’s proposals to publish a tobacco control plan, as well as the health disparities White Paper. I asked the Minister about the White Paper earlier this week during Health questions, and received something of a non-answer. I will therefore ask my questions again today, in the hope of getting some clarity. Are the Government planning to scrap the health disparities White Paper—yes or no? Are they planning to scrap the tobacco control plan—yes or no? We need transparency, as there seems to be an information vacuum in the Department of Health and Social Care. If the Government are indeed rowing back on their public health responsibilities, they should have the guts to say so, and face scrutiny for that decision.
By doing everything from inviting tobacco lobbyists into the heart of No. 10 to accepting gifts from the big four tobacco firms, the Government have shown themselves too willing to ally themselves to an industry that is damaging the health of the nation. However, the damage done by the tobacco industry is not confined to public health. Recent analysis conducted by The Daily Telegraph has revealed that the Russian Government have received almost £7 billion from tobacco companies in taxes since Putin’s invasion of Ukraine. That is despite several tobacco companies pledging to cut ties with Russia. I would be interested to know what the Minister makes of this revelation. Will the Government make it crystal clear to tobacco companies that they are expected to follow the lead of those companies that have ceased trading with Putin’s tyrannical regime?
Labour Members believe that if we want to ease pressure on our NHS and improve public health, we need to get serious about prevention. That means ensuring equitable access to smoking cessation services, and taking on tobacco companies that profit at the expense of public health. Smoking prevalence is not a problem that the Government can ignore and hope will magically go away. As a Greater Manchester MP, I have been really encouraged by Greater Manchester’s “Make Smoking History” strategy. If the Minister has not looked at that, I encourage him to do so, because it really is best practice. Indeed, it is cited as best practice in a case study in the Khan review.
Greater Manchester’s comprehensive approach to tobacco control means that smokers in Greater Manchester have more offers of support in quitting than ever before. Thanks to the scheme, smoking rates among people in routine and manual jobs have reduced faster in Greater Manchester than in any other region of England. If these strategies can work regionally, they can, with the political willpower, be scaled up to national level.
I urge the Minister to take the brave decisions. They are sometimes tough and often very unpopular with a significant vocal minority of people, but taking those decisions is the right thing to do, as history often shows. Smoking has gone up among young adults aged 18 to 24 in the past three years. To put that in context, in 2007, around 41% of young people said that they had smoked. By 2019, that had fallen to just a quarter, but in the short space from 2019 to 2022, that increased to a third. That is going in the wrong direction. Between 2007 and 2020, smoking fell, as successive Governments really ratcheted up the regulation of smoking and introduced smoke-free laws. They increased the age of sale from 16 to 18; banned the display of tobacco products; introduced standardised packaging and large, graphic health warnings; banned smoking in cars with children; and, lastly, banned menthol in 2020. Those measures worked, but they have to continue, as does the pace of change, if we are to meet the goals of Smokefree 2030.
The last Labour Government implemented one of the biggest and most significant public health interventions in modern political history. I am most proud of it, but it was not popular in all quarters; I was almost banned from holding surgeries at Denton Labour club. It was the ban on indoor smoking. When we go abroad to countries that still have smoking indoors in public places—in bars, restaurants and cafes—we wonder how on earth we put up with that in our country until fairly recently. Absolutely nobody with a modicum of common sense would want to reverse that legislation.
When we were in government, we supported taking the bold steps necessary to protect public health, and many thousands of lives were saved as a result. That is why we want the Government to commit to Smokefree 2030. They will miss that target unless they up the pace of change, accept the recommendations of the Khan review, and legislate to put measures in place. For far too long, public health has been an afterthought, or a battleground on which to have ideological arguments. We have had obesity strategies scrapped, tobacco strategies binned, and health inequalities widened. This neglect cannot continue. We will support the Government in being brave on public health. We will give the Minister the majority he needs, if he does not have one, to pass the right measures in this House. Labour Members will do right by Britain, and encourage the Government to do the same. Be brave, and build a healthier, happier and fairer Britain; we will support you.
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)
I thank my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for City of Durham (Mary Kelly Foy) for securing this important debate. I add my voice to the voices of those who have wished the hon. Member for City of Durham a speedy recovery. A lot of the people who contributed to this debate, including the hon. Members for Stockton North (Alex Cunningham), and for Blaydon (Liz Twist), and my hon. Friend the Member for Erewash (Maggie Throup), who all spoke eloquently, have personal experience on this subject, and a real passion for and dedication to achieving a smoke-free England by 2030—a goal to which the Government are completely committed.
I am pleased to update the House on the Government’s work on the Khan review—the independent review of Smokefree 2030 published in June. Tragically, smoking remains the single biggest cause of preventable illness and death across the country. There are still six million smokers in England, and up to two out of three of them will die from smoking unless they quit. Smoking causes seven out of 10 cases of lung cancer, and most people diagnosed with lung cancer die within a year. One in five deaths from all cancers in the UK was connected to smoking in 2019. Smoking substantially increases the risk of heart disease, heart attack and stroke. Smoking is responsible for around 3.7% of all hospital admissions, and so costs the NHS a staggering £2.4 billion each year.
People who start smoking as a young adult lose an average of 10 years of life expectancy, or around one year for every four years of smoking after the age of 30. As many hon. Members have said, action is vital if we are to meet the Government’s manifesto commitment of extending healthy life expectancy by five years by 2035. The Government are committed to levelling up society and extending the same chances in life to all people across the country. As various Members have said, smoking is one of the largest drivers of health inequalities, and rates vary substantially across the country; we heard about that from the hon. Member for Stockton North. As Dr Khan stated in his independent review, smoking prevalence is four and a half times higher in Burnley than in Exeter, so there is huge variation around the country.
Smoking is a huge drain on the household finances of the most disadvantaged families. In Halton in Cheshire, smokers spend an estimated £3,551 a year on tobacco—nearly 15% of their income. That is a shocking statistic. Reducing smoking presents a huge economic opportunity to increase productivity and people’s incomes. Smoking is very high in certain populations, and as my hon. Friend the Member for Erewash said, a third of all cigarettes smoked in England are smoked by people with a mental health condition—an incredible fact.
Behind all these statistics are individuals, families and communities who are suffering from the harms of tobacco. That is why we are so committed to our goal to be smoke free by 2030. We have committed to doing more to help smokers quit and to stop people taking up this deadly addiction in the first place, because we know that most smokers want to quit and many wish they had never started.
The UK is considered a global leader on tobacco control, and investment in evidence-based stop smoking interventions, a strong regulatory framework, local authority stop smoking services and the NHS has ensured that we now have the lowest smoking rate on record: 13.5% in England, down from 21% in 2010 and 45% in 1974. That is a huge change in our society.
In the 2017 tobacco control plan, we set a bold ambition to reduce smoking prevalence among 15-year-olds from 8% to 3% or less by the end of 2022. I am pleased to say we are well on track to meet that target. The Government have also committed to an escalator that increases duties by more than two percentage points above inflation until the end of the current Parliament. In 2010, the average price of a packet of cigarettes was £5.70; and in 2022 the average price is £12.72. Since 2010, duty on cigarettes has more than doubled, and a minimum excise tax has been introduced to increase the price of the very cheapest cigarettes, because we know that one of the most effective ways of stopping people smoking is making it more expensive.
On top of that, we continue to fund a range of comprehensive tobacco control interventions. We have provided £72.7 million to local authority stop smoking services through the public health grant, and more than 100,000 people have quit with the support of a stop smoking service in 2020-21. This year alone, we have provided £35 million to the long-term NHS commitment on smoking, which means that by the end of 2023-24 all smokers admitted to hospital, whether an acute hospital or a mental health hospital, will be offered NHS-funded tobacco treatment services. We will be using those regular touch points, as my hon. Friend the Member for Erewash suggested, to drive down smoking.
My hon. Friend the Member for Harrow East asked about maternal smoking, and the same model is being provided for expectant mothers through the new smokefree pregnancy pathway, including focused sessions and treatments. A new universal tobacco treatment offer is being piloted as part of specialist community mental health services for long-term users of specialist mental health and learning disability services, to help the most vulnerable populations.
The change in treatment for women who smoke in pregnancy is remarkable. Women now routinely get a carbon monoxide test. People will be offered support. In some cases, there are exciting experiments with vouchers and financial incentives that can help, particularly in some poorer communities, people to stop smoking. There is a lot of work on maternal smoking.
Since leaving the EU, we have implemented a new UK-wide system of track and trace for cigarettes and hand-rolled tobacco to deter illicit sales. I have talked about how we have increased duties to drive up prices and to deter smoking, which would of course be undermined if illicit products were circulating.
We have limited the number of cigarettes that people can bring into the country via duty free to 200, making it much harder for those who want to illegally evade excise duties on tobacco. That will help to prevent the sale of cheap cigarettes, further reducing the illicit market.
Although smoking rates have fallen, we recognise that they are not falling fast enough. That is why we asked Dr Khan to undertake the independent review to help the Government to reduce the devastation that smoking causes. The review makes a number of bold recommendations.
Stop smoking services run by local authorities and funded through the public health grant continue to offer smokers the best chance of quitting, and people who get help from local stop smoking services are three times more likely to quit successfully than those who try to quit unaided. I pay tribute to the work of those services, and I assure them that they remain a key part of the Government’s smokefree 2030 ambition.
Alex Cunningham
The Minister knows as well as I do that local authorities have been under tremendous financial constraints in recent times. How can we ensure that local authority public health continues to be funded so that these services can continue? At the moment the services are quite inadequate.
Neil O’Brien
The hon. Gentleman is right that these services are hugely important. All authorities saw an increase last year and there is a 2.8% increase this year, with funding heavily weighted towards more deprived areas, but there is much more we need to do, and we keep it under active review.
We are also building investment in anti-smoking marketing campaigns. It was heartening to see the number of people who joined the annual Stoptober campaign last month. This well-known initiative encourages smokers to abstain for 28 days each October, as we know that smokers who manage to quit for 28 days are five times more likely to quit permanently. In England, the Stoptober campaign has now helped more than 2.1 million people quit since its inception in 2012.
Dr Khan also called for the NHS to prioritise further action to stop people smoking. The long-term NHS plan commitments are a huge step towards preventing smoking-related illness, and they are making significant progress towards reducing preventable ill health and reducing the burden of smoking on the NHS. I have talked about using touch points in hospitals to offer people help to stop smoking.
We have discussed vaping as a substitute for smoking. We recognise that vaping is far less harmful than smoking and can be an effective quitting device. We also recognise that there is more the Government can do to tackle the myths and misconceptions that surround vaping. Our recently published “Nicotine vaping in England” report set out the most up-to-date evidence on vaping, providing an even more compelling case for supporting smokers to switch. However, in recognition of the recent increase in vaping rates among children, which my hon. Friend the Member for Erewash mentioned, we are doing more to prevent children from vaping. We have updated our online materials, and we are working closely with the Department for Education to communicate with schools on how best to set policies around vaping.
My hon. Friend asked a specific question about the MHRA and medical licensing. We are working closely with the MHRA to support a future medically licensed vaping product, which would carry many benefits, including tackling scepticism of e-cigarettes among healthcare professionals. We understand that several products are applying for medical licences early next year. I pay tribute to my hon. Friend for all the work she has done on public health.
As a world leader in tobacco control, the Government continue to support lower and middle-income countries to implement effective tobacco control strategies, and through official development assistance funding to the World Health Organisation-led framework convention on tobacco control 2030, we are supporting a further nine countries to protect their populations from the harms of tobacco.
Both my hon. Friend the Member for Harrow East and the hon. Member for Denton and Reddish (Andrew Gwynne) mentioned article 5.3 of the tobacco control treaty, to which I can confirm the Government are absolutely committed. I consider myself forewarned about the report mentioned by my hon. Friend the Member for Harrow East.
The Government are determined to address the challenges raised by the independent review and to meet our bold smokefree 2030 target. I understand the compelling arguments made by the Khan review and the very strong evidence in the recent “Nicotine vaping in England” report. Over the coming weeks, we will be quickly taking stock on whether a refreshed tobacco control plan is the best way to respond, and on how and when to take forward all the suggestions made by that review.
The Government recognise that more action needs to be taken to protect our people from this dangerous addiction. We know that the action we take must be comprehensive, bold and ambitious. The prize of reaching a smokefree 2030 will be huge for this country, particularly for our most disadvantaged citizens. I thank all hon. Members who have taken part in this debate.
Bob Blackman
With the leave of the House, I thank my hon. Friend the Minister, who is new in post, for answering this debate. I am grateful for the extremely welcome support from the shadow Minister, which demonstrates the will on both sides of the House to deliver a smokefree 2030.
I thank all colleagues who have contributed, including the hon. Members for Stockton North (Alex Cunningham) and for Blaydon (Liz Twist), and my hon. Friend the Member for Erewash (Maggie Throup).
Achieving a smoke-free England is key, and it is a major part of the levelling-up White Paper’s mission to increase life expectancy by five years by 2035. I know this is close to the Minister’s heart, because he was previously the Minister for Levelling Up. I remind him that in that role he said:
“ultimately on public health and on prevention, we need to think extremely radically and really floor it, because otherwise the NHS will just be under humongous pressure for the rest of our lifetimes because of an ageing population.”
I think we all agree with those statements. He needs to act radically and immediately on the Khan review and bring forward those proposals. I think he has the commitment of the whole House to deliver them, if legislation is required, but he could do much of what is in the Khan review just by regulation.
We need a tobacco control plan that will end smoking, increasing healthy life expectancy and narrowing inequalities, but without funding, a plan will not deliver. That is why we are proposing the polluter pays levy, which is popular, feasible and supported by voters of all political persuasions and by tobacco retailers. The idea has come to pass and we must now implement it.
Question put and agreed to.
Resolved,
That this House has considered the recommendations of the Khan review: Making smoking obsolete, the independent review into smokefree 2030 policies, by Dr Javed Khan, published on 9 June 2022; and calls upon His Majesty’s Government to publish a new Tobacco Control Plan by the end of 2022, in order to deliver the smokefree 2030 ambition.
Private Rented Sector White Paper
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
[R] I beg to move,
That this House has considered the White Paper A fairer private rented sector.
I thank my co-chair of the all-party group on renters and rental reform, the hon. Member for Dover (Mrs Elphicke), who is the co-lead sponsor of today’s debate, and the 30 other MPs from across the House who supported it. I also thank the Backbench Business Committee for ensuring that we have such a timely debate on the matter. Of course, I direct Members to my entry in the Register of Members’ Financial Interests and declare that I am the chair of that all-party group.
Many commentators have said that the private rented sector is really three markets. The first is the luxury and high-end market, where people wish to pay high amounts for quality housing. To some extent, that market does not need the regulation we are discussing here. It will not be harmed by it, but this regulation is not aimed at it. The second is the market for people who are unable currently to buy a home or wish to have the flexibility of renting. This White Paper is about making their market a feasible, long-term, sensible one that they can live in. The third is for people who need social housing and often wider wraparound support. They should not really be in the private rented sector, as it will never be appropriate for them, but the White Paper still must protect them while we deal with the social housing problems that the Government, in the Bill they are bringing forward on Monday, recognise we need action on.
The core of the debate is about how we create a private rented sector that is stable, affordable and safe, and where all parties have access to justice. I do not think that is a controversial thing. If it is not, the question is: how do we go about achieving those principles? It is not about whether those principles are desirable. Again, I believe there is broad consensus on the ways of doing it, most of which are laid out in the Government’s White Paper, “A fairer private rented sector”, published in June. It not only covers the points I have mentioned, but discusses information, enforcement, children and pets in the home, and giving people the protections they need.
The chief executive of the National Residential Landlords Association said, on the release of the White Paper, that the
“headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful”.
The renters’ campaign group Generation Rent said:
“This is a serious set of proposals that will help to raise standards in private rented homes and restore some balance to the relationship between tenants and landlords.”
The charity Shelter said:
“This White Paper promises people safety and security in their home”.
I could go on with the countless other ringing endorsements of the White Paper and its proposals that are coming from across the sector, with everyone wanting to go further on one bit or another, but welcoming the core.
That is why it came as such a shock to many of us when it was briefed to The Times at the beginning of last month that all of that was being dropped. In Prime Minister’s questions on the same day, the former Prime Minister—I know it is hard to keep up with which one we have at the moment, but I am referring to the right hon. Member for South West Norfolk (Elizabeth Truss)—recommitted to a ban on section 21, but the full status of the rest of those proposals remains unclear. I hope that the Minister will continue in the good vein that the Minister but one initiated. I put no blame on her immediate predecessor, who did not have the brief long enough to make a difference one way or another. This is about how we make the pledges that we all put in our manifesto a reality.
Let me deal with the substance of this issue. I start with the root of so many of the problems in the private rented sector: the issue of people’s stability and security in their home. Section 21 provides the ability for a landlord to evict without any reason a person from their home—that structural power imbalance is hugely consequential and exists in almost no other form of contract that we have today.
On safety standards, I know of many cases in which renters do not wish to complain about the condition of their property, through fear of revenge evictions. The law at the moment is not good enough on revenge evictions; it currently requires a council to have made an assessment that the home is unsafe or in poor condition, in accordance with the housing health and safety rating system, in order for someone then to have the protections from eviction. That sets the bar well beyond where it is practically useful if it is to protect a renter who complains about something such as a boiler not working or the windows jamming.
On affordability, section 21 is creating a crisis that is spiralling out of control, where we see a wave of assured shorthold tenancies coming to an end and section 21 being used to get higher rents, pushing up inflation, to above 20% in some areas. I know of a schoolteacher who received a demand for a 40% rent increase at the end of their lease. Unable to pay, he is now sofa surfing and homeless. A school teacher who is working full time is homeless not through any fault of his own but due to the state of the housing market today.
Shelter commissioned research to show that some 230,000 private tenants have been served with section 21 notices since the Government made their first pledge in 2019—that is one every seven minutes. But that does not even show the scale of the problem, because a notice is not usually required; knowing they have no rights, renters will often just leave when the landlord asks them to do so, at an inconvenience to themselves. Section 21 provides no real recourse, no appeal and no exemptions, and even if it did, we know that the current court system has delays coming out of its ears, so taking things to court will not be an answer to these problems.
Last week, in preparation for this debate, I asked renters to get in touch with me with their stories. One of the many replies I received was from a young couple who said that before they moved in the landlord agreed to carry out a deep clean, but when they entered the flat they found that it had an insect infestation and it had not been cleaned for months. Both the agent and the landlord refused to do anything. Later, the couple found that two windows were broken and so they asked for repairs, but, again, there was a refusal to do anything. They contacted the council, but it did not carry out an in-person inspection—we all know the pressures on councils—and in the end, on the balance of things, it just accepted the landlord’s word against that of the tenants. At the first possible instance, in November 2021, the couple were issued with a section 21 notice. They had a three-month-old baby and they were homeless.
I have countless other such examples, and I am sure many other Members do, so it is no wonder that the commitment to deal with this was a cross-party commitment in all manifestos, but we cannot allow the abolition of section 21 to be in name only. We must not allow the next crisis to be the use of section 8 evictions due to rent arrears. If we simply abolish section 21 but allow landlords to increase rents uncontrollably, we will create a loophole that a lorry could be driven through. If a renter complains about the state of a property and the owner wants them out, the owner will just raise the rent to £10,000 a month and evict the tenant. The current rental increase protections are inadequate for protecting renters. When I last looked, the only way to make an application to the tribunal was by fax. That is ridiculous.
Potential economic evictions were foreseen by the Renters Reform Coalition, and I am pleased that the White Paper addresses the issue. It states:
“We will only allow increases to rent once per year... We will end the use of rent review clauses, preventing... rent increases that are vague or may not reflect changes in the market price… where increases are disproportionate, we will make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal”.
Those are the Government’s words. If that works, it will be a game changer for stability in the rental market. Personally, I would like the Government to take on more rental controls. I know that they have ruled that out, but I hope that others will press them on the matter. My friend the hon. Member for Dover will say more about rental controls. However, the proposal in the White Paper is a sensible compromise on which we can start to make progress.
I note the concerns of the National Residential Landlords Association about moving from periodic tenancies and the effects on student housing. It points out that both landlords and students need to know that a property will be available many months ahead. I am sure that the Government are working on solutions to that perceived problem, but if I could offer one piece of advice, it would be, please leave the proposals in the White Paper as they are. More loopholes will be taken advantage of.
I offer a solution. Dare I say that there should be an opportunity, if not a duty, for universities to house all their students who wish to be housed? Universities could engage in tenancies with the private rented sector. They would be permanent periodic tenancies, and universities could license rooms to their students. That would give the private rented sector the security it needs and students the wraparound support they often require. In our communities, we often hear complaints about people not coming forward. Such a solution would give universities the knowledge that their students were in safe and secure accommodation. It could also work for other institutions and would still mean that the decent homes standards that the White Paper requires had to be fulfilled in such accommodation.
Security of tenancy is particularly urgent. We are facing a difficult time, with many landlords selling their properties. Mortgage rates are going up and many landlords may wish to leave the market. That is fine. Some say that landlords leaving the sector means that rental provision leaves the sector. However, for every landlord who leaves the sector, there is another homeowner or private rented landlord entering it. My fear, which is shared by many, is that turmoil in the housing market will mean that renters are evicted so that landlords can sell property to another buy-to-let landlord, who would often be more than willing to allow a renter who had been paying rent for a long time to stay there.
The Government stated:
“We encourage any landlord who wishes to sell their property to consider selling with sitting tenants, which may provide an easier and faster solution.”
However, most mortgages do not allow that. I ask the Minister to sit down with mortgage providers and work out a way in which buy-to-let tenancies could facilitate that. It might mean a slightly higher premium in some circumstances or some conditions, but it needs to happen now.
Ideally, we would have a system such as TUPE, whereby when an employer is taken over, the employees continue in employment. If a landlord is taken over, the tenants should continue to live in the property. We should aim for that. Of course, a new buyer might choose to move in and renovate the property. The existing clauses allow them to remove a tenant as they see fit.
There is broad agreement on both side of the House and in the sector on access to justice. Unless we take enforcement and the ability to access redress seriously, this is all a waste of time. The rogue landlords list was set up in 2018 with a great deal of fanfare. It was meant to be a game changer. Earlier this year, the Government were asked how many landlords were on the list. The answer was 61. That makes a joke of the entire system. I could probably name more than 61 in my constituency, let alone the country. That is even more reason why the White Paper’s proposed property portal, which would require all landlords and properties to be registered, is the only way forward. I think that the Government have come to realise that. I genuinely believe that they have seen the error of their ways. That is why they talked about establishing an ombudsperson to
“provide fair, impartial, and binding resolutions for many issues without resorting to court.”
The White Paper goes on to say:
“The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.”
That is spot on. It empowers renters and gives them a body to seek redress, but it also means that landlords know that there is a place where they will be fairly heard. That, combined with the removal of section 21, is a life changer for many. It will give people the ability to complain about poor housing.
One person told me:
“One electrician said that the wiring was the worst he had ever seen. The poor wiring led to us having a power cut, which was only repaired with a temporary fix. The landlord admitted that they were aware of the oven being faulty at the start of the tenancy but refused to fix or replace it.
Our hot water didn’t work when we moved in—the landlord had a friend (who wasn’t a qualified gas safety engineer) disconnect our heating from the boiler without telling us. We had to call out emergency gas and electrical technicians to fix these issues and shortly after” —
surprise, surprise—
“we were served with a Section 21 notice.”
If the Government enact their proposal, renters could go to the ombudsperson and get their home fixed to a decent standard, and they would not have to fear a section 21 eviction notice.
It is vital to include deposit protection schemes in the responsibilities of the ombudsperson. Decisions about such schemes should be published on the property portal. At the moment, they are not and they are only sporadically enforced.
Last year, the APPG heard from a young woman in her early 30s. She said that she was still sharing a house in an insecure renting arrangement, despite earning £35,000 a year. She spoke about wanting to start a family with her partner, but said that she could not because she could not provide a stable home. The system has robbed that young woman of the ability to start a family. The White Paper could not just address some of the imbalances in the system but restore dignity to millions of renters.
As is customary, I will finish with some questions for the Minister. Will she commit to implementing all sections—that 12-point plan—of the White Paper? Does she recognise that the pledge to abolish section 21 is not about getting rid of a clause called section 21 but about providing stability, security, and justice in the housing market? Will she commit to introducing the draft legislation this year? If not, when will that happen? Will she commit, as I have asked, to meeting mortgage lenders to discuss buy-to-rent mortgages with sitting tenants?
Mrs Natalie Elphicke (Dover) (Con)
I thank my friend and co-chair of the all-party parliamentary group for renters and rental reform, the Member for Brighton, Kemptown (Lloyd Russell-Moyle) for his opening speech.
Housing is a long-standing interest of mine, and I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Reforming the private rented sector is an important area of work for all Governments, and I and other Conservative Members signed up to that in the 2019 manifesto on which we were elected. The vehicle for that important pledge is the White Paper, “A fairer private rented sector”, which was published in June. There has been much change in the short time since the White Paper’s publication. I welcome the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Kensington (Felicity Buchan) warmly to her place, and I hope she will not mind if I place on record my considerable regard for the work that her predecessor at the time of the White Paper’s publication, my hon. Friend the Member for Walsall North (Eddie Hughes), undertook.
I wish to illustrate the pressures of capacity in the private rented sector by reference to my own constituency and across Kent, before turning to why these reforms are so important and need to be progressed urgently.
Today, the Home Secretary is visiting Dover. The situation of housing people who have crossed the channel illegally in small boats is putting a huge strain on housing and local services. It is not unheard of for local people to be turfed out of accommodation by landlords who want higher rents. There are concerns that landlords are looking to cash in on lucrative, long-term Home Office contracts. That is why we must push forward on these reforms.
It is a great pity that the Home Secretary had not planned her visit to Dover and to Kent so that she could meet Kent MPs and Kent council leaders to discuss at first hand the serious local impact on residents, including the struggle to access affordable private-rented housing. I hope that she can meet us urgently to discuss these issues. The extent of the issue was laid bare in a strongly worded letter to the Home Secretary from Kent council leaders yesterday. They said:
“Put simply, Kent is at breaking point. Our public services, including health, social care and schools are already under extreme pressure. We have approaching 20,000 households on the waiting list for social housing, soaring costs, limited availability of private sector rented housing and temporary accommodation all fuelled by being in an expensive south-east London periphery, while having pockets of severe deprivation and low average earnings… Kent’s housing sector cannot absorb further asylum places on top of those existing burdens over and above local demand.”
How does the concern expressed by the council leaders translate to my constituents on the ground? Let me give an example of its impact in my constituency. My constituent, who I shall refer to as Emily, is a mother with seven children. She was required to leave her privately rented property on no notice, under section 21, and there was no suitable accommodation. In the end, she was offered accommodation in Leeds, some 280 miles away. She has ended up living with her mother in a two-bedroom house, sleeping on the sofa and the floor. Her grandmother told me how upset she was that migrants were housed in four-star hotels while her granddaughter and great grandchildren faced these conditions and impossible choices.
In an attempt to shut down debate, too often such concerns can be labelled as extreme or even racist. There is nothing extreme for a person to be concerned about their family; that is about as mainstream as it comes. In my area, inevitably, given the scale of the small boats crisis, it is the issue of accommodating migrants and asylum seekers that puts this additional strain on the private rented sector and services. In other areas, it might be holiday lets, Airbnbs or student accommodation. But the underlying point is the same: there needs to be reform of the sector, which needs to be implemented as set out in the White Paper, and consideration of all these different housing markets and drivers.
Building on the White Paper, there is other work that could drive improvement and understanding of local market dynamics further, and that might require supplementary solutions—be that Airbnb registration or other measures. I would be happy to meet my hon friend the Minister to discuss this further.
Pages 7 and 8 of the White Paper set out a 12-point plan of action for private renters. In effect, it is a 13-point plan, as page 8 references that this plan is a support for the journey to home ownership. I shall shortly be developing an argument for a 14th point to that plan: support on the journey to council housing and social housing.
There are three types of housing tenure in England: owner occupation; social rented; and private renting, which is property owned by a person who is different from the tenant and let out at rates and on terms and conditions that are different from those that apply to registered social landlords.
The private rented sector has grown rapidly in recent years. As it has become more dominant, it is inevitable that that has been at the expense of both the social rented and home ownership sectors. Throughout the 1980s and 1990s, and right into the early 2000s, the proportion of total housing in private rented stock was around 10%. Between 2008 and 2017, it mushroomed to more than 20% of all stock, before settling to its current level of around 18.5% of stock. That translates into a doubling from about 2 million to more than 4 million households in private rented homes.
In the context of this debate, housing stability means that a person knows where they stand; that if they pay their rent or mortgage and they do not behave outrageously, they have the choice as to whether to stay in their home. That is not the case for private rented tenancies. The landlord chooses whether a person can stay or must leave, no matter how long they have been in a property or how good a tenant they have been. That is what these reforms are trying to address—otherwise, the expense, time, disruption, distress and uncertainty caused by a section 21 notice all falls on the tenant.
Improving housing stability is at the heart of abolishing section 21 no-fault evictions. The reform is intended to take away the immediate day-to-day worry and concern for tenants that they will wake up one morning to a notice saying that they have to go. The longer-term solution is to introduce more affordable accommodation and council housing as well as promoting home ownership.
Dover District Council is a Conservative council that is compassionate and active in many ways. It has embarked on a council house building programme to help prioritise local need. I wish to give a couple of examples. Walter Hammond Close is a development in Dover, which comprises 16 studio flats, all let at social rents, providing interim housing for local people facing homelessness. It complements the Elizabeth Carter Court project in Deal. Completed in August, it provides eight one-bedroom flats, which are also let at social rents, providing interim accommodation for local people facing homelessness. Those two excellent examples of the work being undertaken by the council are encouraging, but the council cannot build enough to keep up with demand. That is why we need a large-scale affordable and council housing programme across the country.
Helping constituents with private-rented housing is a staple of our work as MPs. I want to refer to one of my constituents, who I shall call Natasha. Her granddad asked for my help. He said:
“My granddaughter and her child have been given notice to quit by a private landlord in Dover and have been desperately looking for alternative accommodation without success… She has suffered domestic abuse, ensuing mental health difficulties”—
for which she has had counselling and has recovered amazingly well. He went on to say that she lives in a property with a dangerous electricity system and that they had battled with the landlord about this for months. He said:
“The current situation is that we are now 52 days away from Natasha’s eviction date, which, ironically, is Christmas day… Here is a young single mother and her two-year-old child who have been given the most awful situation to face when all they wanted to was…to live in a safe environment.”
It is vital for Natasha and all the others in Dover and Deal and all over the country that these measures are brought forward into legislation promptly. I had been concerned that there had been some hesitation about this, so I would be grateful if the Minister could confirm when we can expect these measures to be brought forward.
In Natasha’s case, as hon. Members will have heard, there was an electrical safety issue in her flat. She battled for months, but it did not get fixed. Natasha is now in flat two and her child is three. This is her current position:
“The property is a privately rented flat. The area where she lives affects her three-year-old child’s health due to traffic fumes. He now has a constant cough. The area is overrun by rats, which can be heard scratching and scurrying in the walls of the property and can be seen in the surrounding areas.”
I look forward to seeing how the proposals in the White Paper will help Natasha and the many other cases that fill my inbox and, I am sure, the inboxes of many other Members across the House.
There is good intent in the ombudsman’s proposals for redress, but that redress needs to be extremely swift and enforcement robust. In order for that redress to happen, landlords need to be identifiable as well as accountable. At the present time, we do not know how many landlords there are. In addition to potential revenue loss to the Exchequer, this makes accountability and traceability of landlords very difficult and expensive for councils in instances where they wish to take public health or other enforcement action.
I welcome the proposed measures for the property portal, but I ask the Minister to consider what steps may be taken to ensure that the information contained in it is validated as to ownership and management, and that it can support efforts to ensure that all taxes are paid where they are due, and that the new proposed ombudsman, local authorities and other enforcement agencies may be able to access the portal in order easily to fulfil their obligations.
I wish to move on to the White Paper’s plan around rent management and challenging excessive rent rises. Even before the current cost of living crisis, rent levels were unaffordable for many. The Local Government Association’s view is that the best way to increase housing security is to address the unaffordability of housing, which is the key reason why people lose their tenancies and become homeless.
I agree completely that affordability is a vital ingredient of a good home. In the longer term, there is a need to rebalance the housing market through a tenure strategy to make sure we balance affordable and council housing and increased home ownership alongside a reduction in the private rented sector, but in the near term, there is increasing pressure on rents, making them unaffordable and unsustainable for many.
In the White Paper, the Government rule out rent controls to set rents at the outset of the tenancy. In recent weeks I have proposed controls to freeze current rents for up to the next two years, while the current economic pressures are expected to reach their peak. The proposal would comply with the premise set out in the White Paper because it affects only rent rises, not base rent levels. The measure would be deflationary, not inflationary, and would be to the wider benefit of everyone, including landlords.
A case may be argued for managing rents more widely, but to some extent high rents are the symptom, not the cause. As the hon. Member for Brighton, Kemptown eloquently set out, the private rented sector has expanded to become all things to all people. It is providing both homes to those who can and should be home owners with a mortgage, and a roof over the head of those who have none, who should be in affordable housing.
I understand that many landlords want to be compensated for any costs they pass on to tenants—indeed, some of them are very vocal on that subject—so the nature of the landlord and their relationship with the property is important. The UK landlord market is unusual compared with some other countries, dominated as it is by individuals, not by housing organisations and institutional landlords. The latest English private landlords survey shows that some 94% of landlords are individuals representing 84% of tenancies, so they are strongly dominant. About half of them are longer-term landlords of more than a decade. When people were asked to describe themselves as a landlord, over half said they considered their properties to be a long-term investment to contribute to their pension, and 27% said they considered them to be an investment for capital growth. So while for the tenant the property is their home, for the landlord it is first and foremost an investment, and as we all know, investments can go up and down.
Just as there are longer-term structural issues around tenure, there are longer-term issues with savings and investment vehicles, including property. In that context, I ask the Minister to consider whether the financial management proposals on rents set out in the White Paper could be developed further, and whether there should be more robust measures to assist renters during this cost of living crisis. Communications I have received from landlords seem to suggest that they are unable to weather changing market conditions in the way that other businesses are expected to. The assumption seems to be that the tenant should bear all the financial costs and risk; otherwise, the landlord threatens to sell, even in a falling market.
In that context, I ask the Minister what work has been undertaken to assess resilience to market changes in the landlord market with the mortgage lenders, as happens for individual owner occupiers, and whether stronger mortgage market regulation is needed for landlords with buy-to-let mortgages, to make sure they have sufficient planning and affordability to weather different market conditions. Is the Minister considering interest support or greater interest deductibility to support under-capitalised landlords in the near term? I would be grateful if she also considered whether such support could be linked to, for example, landlords committing to keep their rents in check during this cost of living crisis.
There is strong evidence that the inherently insecure nature of the private rented sector has an adverse impact on people living under that type of tenure. There are measures in the White Paper that will incrementally move the private sector forward, and I welcome them. I look forward to working with my hon. Friend the Minister on this important aspect of her work.
Navendu Mishra (Stockport) (Lab)
Thank you for calling me so early in the debate, Madam Deputy Speaker. This is a very important issue in my constituency and across England. More than 7,000 households—households, not people—are on the waiting list at Stockport Homes, which is one of the main providers of housing in my constituency, and 11 million people rent privately in England. That underlines the importance of this debate, and I am grateful to my hon. and good Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) for securing it.
We heard about reforms the Government were going to bring in some three years ago; unfortunately, in the three long, hard years since, we have seen very little progress. I will describe two separate cases that have recently come into my inbox. The first involves a family of three—a single mother with two teenage children, one of whom has severe autism. They were served with a section 21 notice of no-fault eviction. The mother had always paid her rent and kept the house spotless, and the family had lived in the property for 12 years. When they were served the section 21 notice, the landlord said they wanted to sell, but my constituent suspects that the landlord was seeking a higher rent in the market.
Sadly, the family were evicted. They were rehoused in a hotel outside the borough of Stockport, which caused massive problems for the family, including the 16-year-old son with a medical condition. The three of them were accommodated in a small hotel room, and Stockport Homes has had to extend the six-week period for hotel costs because the son is unable to cope with the trauma of moving into temporary accommodation before being rehomed. Stockport Homes is also paying the storage costs, which the family will have to reimburse, increasing the pressure on the family. The mother is flexible about where the family can be rehoused; she is just desperate for a permanent home. There has been a mental impact on the entire family, but particularly on the son who has autism. It is a serious case and I wanted to highlight it in the Chamber.
The other case is also quite tragic. I was contacted by a recently bereaved constituent who was on a protected tenancy. Her private landlord’s agent had asked for her rent to be increased from £350 a month to £800 a month. She had been living in that one-bedroom flat with her late partner for 44 years on a protected tenancy, with very little upkeep and maintenance of the property undertaken. The valuation office was approached and the formal rent valuation process was gone through. The rent for the property was determined to be £450 a month, not £800 a month as the agent was demanding. This tenant was fortunate to have protected tenancy status at a time when she was most vulnerable, after the loss of her partner of 44 years. Sadly, most people are not so fortunate. Those are two serious cases, but I could go on. My inbox is filled with similar cases of people who are desperate to get housing.
I am grateful to several organisations, but particularly Shelter, which provided an important briefing for the debate. Research from Shelter conducted in April 2022—three years after the Government first committed to scrapping section 21 no-fault evictions—shows us that every seven minutes a private renter is served with a section 21 notice and that more than 200,000 renters have been evicted in the three years since the Government first said they would scrap no-fault evictions. These figures are staggering and very worrying. Other colleagues have mentioned Generation Rent and other organisations, including Shelter, which conduct important research and act as a lifeline for many people in that desperate situation.
While we are debating housing, I want to mention Mrs Sheila Bailey, a local councillor in my constituency who very sadly passed away recently, and highlight early-day motion 428, which I tabled in this House to pay tribute to her work. She was a champion for housing in particular, and played an important role in creating Viaduct Housing Partnership, a local housebuilder, when she was cabinet member for that portfolio.
I know there are several other speakers, so I will not take much more time. I want to mention the inadequacy of local housing allowance. I have raised this matter on several occasions via both oral and written questions. According to the Office for National Statistics, the median rent for a one-bedroom flat in the private rented sector in Stockport borough is £600, yet, by the Government’s own admission in answers to written parliamentary questions I have tabled, in the two broad rental market areas that fall under that local authority, 71% and 52% of households respectively have a gap between local housing allowance rates and their rent. That needs to be looked at.
I could say a lot more; a vast amount of casework comes through my office via letters, emails and telephone calls from people desperate to find housing in my borough. Stockport, I would say, is the best place to live out of the 10 boroughs in Greater Manchester—in fact, I would say it is the best place to live in England—but that means that the housing market is very competitive. People are facing hardship as it is because of the failed economic policies of this Government, but in addition, in Stockport, we have a problem where housing is in a dire state. We must ensure that people are not left behind.
Lastly, I must mention Stockport Tenants Union, which was set up just over two years ago and provides support to people across the borough; Jonathan Billings, who is a long-standing campaigner against homelessness and has set up a charity named EGG, or Engage Grow Go; and the Wellspring in Stockport, which has been serving the local community for decades. My hon. Friend the shadow Minister will speak later on, but I want to congratulate my hon. Friend the Member for Liverpool, Wavertree (Paula Barker), who has just been appointed to the role of shadow Minister for homelessness and rough sleeping.
The Opposition are taking this issue very seriously. We cannot wait three more years for action, or even three more months—we must ensure that it is delivered quickly.
Selaine Saxby (North Devon) (Con)
I thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) and my hon. Friend the Member for Dover (Mrs Elphicke) for securing this important debate.
Apparently I have mentioned this in the House before, but North Devon has a housing crisis. The enormous growth in short-term holiday lets and second homes has resulted in an unsustainable shortage of houses for local residents to live in. Matters are now at such a stage that many businesses and public services are simply unable to recruit and numerous businesses are unable to operate full time.
Many will say, “Well, don’t you welcome your tourists?”. Indeed we do welcome our tourists, but we would like them also to eat in our local pubs and restaurants, which are unable to open full time because they cannot get staff, because there is nowhere for anyone to live.
The private long-term rental sector across Devon has declined by more 50% in the last two years and by more than 60% in my own North Devon constituency. Unfortunately, Government policy has not helped. The changes to landlord tax relief made it preferential to have a short-term furnished holiday let rather than a long-term rental tenancy.
Although the changes were introduced in 2017, they only became fully effective in 2020, when most of us were rather consumed with the pandemic, and came into effect at the same time that people were suddenly desperate to escape to wide-open spaces such as my beautiful constituency. Moreover, as soon as we were allowed to go on holiday, people rushed to North Devon and the prices paid for our holiday lets soared.
In addition, the legislation we passed only last week to raise stamp duty thresholds still applies to second homes and holiday lets. That is more complicated, because we desperately need more people to become long-term landlords again—we must find a way to reverse the demise we have seen in that area. I recognise the challenges, but I hope that we will be able to consider how some of the policies designed to help people to get on to the property ladder are just facilitating more people’s buying second homes or short-term holiday lets that sit empty for half the year.
The Department for Digital, Culture, Media and Sport’s consultation on a registration scheme for second homes or short-term holiday lets is now complete, but we still have no date for when the results will be released, which leaves councils with few tools available to them to tackle the surge in properties that lie empty for months of the year, yet are still more profitable to their landlords than a long-term rental. We must ensure that there are change of use clauses for properties made into holiday lets. Those properties were built as homes and should be lived in. If they are a business, they should have to declare a change of use and be taxed accordingly.
This situation is made even harder by the increased requirements on landlords with regard to energy performance certificates, with rural and coastal properties often requiring huge amounts of investment to achieve the necessary rating. That is resulting in even more rental properties being sold or converted to less regulated short-term holiday lets. While I agree that we must ensure properties do not leak, we need to recognise that rural housing stock is very different from urban housing stock and find other, more creative ways to tackle this, so that landlords do not take the logical way out of selling or moving on to a different type of tenancy.
Swathes of long-term tenants in my constituency have found themselves evicted under section 21 notices, so that landlords could take advantage of the tax breaks available to them when their property is let out as a short-term holiday let. Post pandemic, a small two-bed long-term rental in my patch may cost £800 a month, whereas a short-term holiday let will cost at least that per week, and probably double.
Because of the lack of rental properties in my patch, when people are evicted, there is simply nowhere to go. The council housing list is so long that people are being rehomed as far away as Bristol. Some families stay in the area for their children’s schooling, and we now have multiple children being bussed or taken by private taxi 10 to 15 miles each morning to their primary school. At a time when council resources are under pressure, we are adding layer upon layer of extra cost, simply because we do not have enough homes for people to live in.
For tenants, section 21 notices have been horrific—we all have awful stories of people’s experiences—but not all landlords are bad. Many find themselves struggling to evict people who have not paid rent, for example, and section 21 notices are taking up to 18 months to get through the courts in my constituency. I hope that, as we see some progress in this area, landlords are not demonised, because we need more landlords to come forward, so that we can tackle this section of the market. It is the relationship between landlord and tenant that drives a successful rental relationship. Although we feel that that relationship is unbalanced at present, I hope we can support both sides of this delicate balance. We need to find a way to give security to tenants but also give landlords the ability to evict when they genuinely need to. The concern with some of the proposed legislation is that we are already seeing landlords choosing not to risk not being able to evict a tenant. When a landlord could have a short-term holiday let in my patch, why would they have a long-term rental?
We need the housing stock we have to be better utilised and not sat empty for half the year, but I do not disagree that we need to build more homes. Over 16,000 people are currently on Devon’s housing lists, and even if those lists closed now, at the current rate of building, it would take over 32 years to clear the backlog. We need urgent intervention in the housing market in Devon and many other places around the coast. The demise of long-term rentals makes moving to remote, rural and coastal locations to work nearby impossible, and we have so many job vacancies that many companies are simply not operating at full capacity. If we want economic growth, we need workers who can live close to their place of work and find affordable accommodation.
For communities to thrive, they need people living there all year round, so that we do not have the winter ghost towns that blight far too many of our popular tourist destinations. We warmly welcome tourists, but the balance between visitors and workers is now not there, and urgent intervention is needed. MPs in seats like mine have been raising these issues for years with multiple Ministers, and I hope that this Minister will remain in post long enough to deliver substantive change and find a way to reverse the demise of the long-term rental sector.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Thank you, Madam Deputy Speaker.
“Being a new and first time mum is hard and challenging without having your foundations stripped from you, evicted with no warning, in the middle of winter, when other rent is hard to secure”.
Those are the words of my constituent Katherine, who gave birth to her baby boy in June. Last December, Katherine signed a two-year contract with her landlord, informing them that she wanted a longer contract to give herself stability during her pregnancy. Unfortunately, she received an email in October saying that the owner had noticed that market prices had increased a lot recently and would like to adjust the rent. After she explained the situation to the letting agent and landlord, however, she was told that the landlord was now moving back into the property—surprise, surprise—and there was no room for negotiation. That has left her and her young family without the security of a home and facing eviction just weeks before her child’s first Christmas.
Sadly, having listened to other examples this afternoon, I know that Katherine is not alone in Vauxhall or across the country in facing the sharp end of our imbalanced rental market. My hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) outlined the similar situation of a young woman in her 30s who is hoping to start a family. Katherine has started her family, but now faces that difficulty in the rented sector.
It cannot be right that tenants are expected to find thousands of pounds in moving costs in the space of just two months after a landlord serves a section 21 notice. It cannot be right that tenants, who are paying ever-increasing rents, are denied the most basic security of knowing whether they will have a roof over their head in a matter of weeks. It cannot be right that, during the sharpest cost of living crisis in decades, tenants are expected to bid extortionate amounts against each other to secure even the most basic of properties, as happened recently to a constituent in Clapham.
My hon. Friend the Member for Stockport (Navendu Mishra) mentioned that rents in his constituency total about £600; in my constituency, the average rent for a one-bedroom flat starts at £2,000. A tenant recently contacted me to say that they had contacted an online letting agent to go and view a property, only to be informed that 35 people were already in the queue waiting to view and that they should expect to bid for the property.
The Government announced an end to section 21 notices in April 2019. Since then, we have had four Prime Ministers and six housing Ministers, but not a single act to end section 21 notices. During his short period out of the role, the recently revived Secretary of State for Levelling Up, Housing and Communities reportedly urged the previous Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss)—stay with me now—to stick to a commitment to ban section 21. I will be honest that I am glad to see him back in that role, because I think that he was making some headway in key areas on housing, including cladding. Now, however, I hope that he will put his money where his mouth is and bring forward a date for a renters reform Bill today.
Rents in London have risen by an average of 15%, and across the country by an average of 11.8%. That is not sustainable for our constituents. Sadly, any reforms will come too late for my constituent Katherine in her current property. As the Government delay and dither, more people will be left in a desperate situation as a result of section 21 notices. It is within our grasp to fix this issue. I am grateful to the hon. Members for Dover (Mrs Elphicke) and for North Devon (Selaine Saxby) for raising the issue, but I hope that they will push their Ministers to make sure that we see reform come through now.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow my co-chair on the all-party parliamentary group for ending homelessness, the hon. Member for Vauxhall (Florence Eshalomi). I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
As my hon. Friend the Member for Dover (Mrs Elphicke) said, the private sector rental market in this country has expanded not just to cover what it was intended to provide—a way for people to let out houses as they choose—but to take into account what is needed for social rented housing. I will start with our biggest problem, which is that all political parties have failed for 30 years to build enough socially rented homes in this country. The reality is that we need to build 90,000 socially rented homes a year to provide what is required. At the moment, we expect the private rented sector to pick up that slack, so we have to then interfere with the market.
I counsel my hon. Friend the new Minister to ensure that we do not look at the issue in a piecemeal way, because we need to reform the whole market, not just bits of it. As I have said on many occasions, the biggest cause of homelessness in this country is the end of a private sector tenancy through the serving of a section 21 notice. However, if someone gets a section 21 notice now, they can, thanks to the Homelessness Reduction Act 2017, at least approach the local authority and seek help and assistance, whereas previously they could not.
We have the challenge that, if all we do is abolish section 21, we will force private sector landlords to move to section 8 evictions and all that involves. The problem then is that it not only becomes an expensive process across the board, but lands the tenant, who is probably completely innocent, with county court judgments against their name, and when they go for another private sector tenancy, they get told, “Sorry, you’re a bad risk and we’re going to up the deposit or impose conditions on you to get the private sector tenancy.” That is wrong in principle. What we have to do is to look at the complete area of the market.
One other issue, which my hon. Friend the Member for Dover mentioned, is the changes that have taken place in the promotion of the private rented sector by previous Governments. When Gordon Brown was Chancellor of the Exchequer, he promoted the concept of buy to let, which has of course continued to expand across the piece. When George Osborne was Chancellor, he put brakes on the incentives to do that, which of course did not kick in for several years after he proposed them. The result is that many private sector landlords are leaving the market because it is no longer as profitable as it once was. Where do they go? They go to the Airbnb market or the completely unregulated sector, which my hon. Friend the Member for North Devon (Selaine Saxby) mentioned.
The risk is that, unless we look at the whole ambit of this, all we will do is reduce the size of the sector, increase rents overall and make sure that tenants are put in a worse position than they were in the first place. So there has to be a complete revolution in this regard. I commend the White Paper for offering a menu of choices, but I think we still need to go further in looking at the entirety of the sector to prevent that from happening.
The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) made the point about a landlord being able to sell a property with a sitting tenant. Why not? Many mortgage providers will now allow that to happen—not enough, I would accept, but many do. As we have heard, 94% of landlords have one or two properties, and they dominate the market. Most landlords want the position of having a good tenant, who pays their rent and does not misbehave. If that happens, why should they not continue on that basis?
The model in this country is a six-month assured shorthold tenancy, with limitations on renewing that tenancy and, indeed, conditions on both sides that the landlord and the tenant should honour. My view has been this. The Housing, Communities and Local Government Committee—the predecessor to the current Levelling Up, Housing and Communities Committee—did an inquiry on this, and we recommended long-term tenancies of three years or more, so that people had security of tenure. A capability was enshrined within that about how rents could be increased—in other words, once per year and in line with inflation—so that both sides knew, with predictability, how that should be. That, to me, is a way forward.
We also suggested having a specialist housing court. Rather than have the expensive processes we currently have, we could have a housing court that would concentrate purely on these subjects. We have to face up to the fact that, every single day in this country, there are 300,000 people sofa surfing who cannot get anywhere to live. Also, 7%, at least, of private sector tenants are in severe rent arrears. Some people say, “Well, 7% isn’t too bad”, but that means 300,000 people or families in severe rent arrears who face eviction through the courts at any one time.
Unless we address this problem—I have warned successive Ministers, and we have mentioned how many Ministers we have had—we are going to face a homelessness crisis the like of which this country has never seen before. The reality is that the moratorium on evictions during the covid pandemic was the right thing to do—without question. There were people who could not afford to pay the rent during that time. Perhaps their jobs disappeared, or the benefits system did not catch up with them or they did not apply properly. Others just refused to pay because they knew they could get away with it. I have no sympathy for those people. I have several examples in my constituency where tenants just refuse to pay their landlords; from their perspective, they are reprehensible.
As things have unwound and the economy is coming back into fruition, we are seeing rents and pressures on tenants rise, and a rush by certain unscrupulous landlords to try to increase rents dramatically before the renters’ reform Bill comes into play. We need measures immediately to counter those issues. I have a question for the Minister. I understand that she is new to the job, but there were strong rumours that the renters’ reform Bill would be delayed and postponed, and perhaps even kicked into the long grass. I hope that the Bill will be published and brought forward as rapidly as possible, with, if necessary—I do not normally agree with this—retrospective measures to prevent what could happen while the Bill completes its passage through Parliament; in other words, unscrupulous landlords evicting tenants or hiking their rents to get them out, and causing further problems. We must include within that Bill what to do for the entirety of the market: both the Airbnb market and short-term lets. If we do not, we will drive private sector landlords to the more profitable end of short-term lets without any regulation, and without anything to assist people who desperately need accommodation.
I welcome my hon. Friend to the Front Bench. One quiz question I often have is, “How many Housing Ministers have we had since 1997?” I think we are up to 32 in 25 years. I am afraid that demonstrates the problem we have in this country: a lack of long-term planning in terms of the Ministers at the Department. I welcome the Minister to her position and hope she can give us some good news.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Harrow East (Bob Blackman). I sat on the levelling up Bill Committee, and seven Ministers served us during that time, so I share that frustration. We need a long-term strategy to ensure we address the housing crisis we face.
I congratulate the hon. Member for Dover (Mrs Elphicke) and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) on securing this important debate, which has caused hon. Members to stay behind on a Thursday because we care so passionately about housing. I also welcome the new Minister to her place. I trust she will produce the goods that we are all longing for: not just a fairer private rented sector and a 12-point plan, but the first step of a comprehensive strategy to address once and for all the housing crisis that we see.
The private rented sector has now become the backstop to housing, as opposed to local authorities, which traditionally had that role. As a result, power has shifted from the state into the hands of private landlords, which is why we face some of these deep-seated crises. In York, 20.4% of people live in the private rented sector. I have looked at the number of class 1 measures that need to be taken because of a failure to keep those homes in good condition. A quarter of homes have trip hazards, poor wiring, mould, rodents—the list goes on. That is why today’s measures on raising those standards are so important. But that can be only a first step.
Most landlords are there to serve a community in their own way, but also to realise the value of their estate and investment. Much extraction of property and money removes those opportunities from anybody else. For any tenant I speak to in the private rented sector, renting is not their choice. It is a matter of needing a home and for many people that home is not satisfactory for them. Since the year began, we have seen a plethora of section 21 notices; they are rising in number. I will talk about that because we are seeing a rise in costs and a decline in conditions. Looking at costs, my constituents spend 32% of their income on rent, which means that, with the cost of living crisis and energy costs, there is little left to start saving for that longed-for home. Property prices are rising in York at a rate that is running away from people, so they are trapped, with no assets, in the private rented sector. We must facilitate people’s ability to break out from that.
Some costs fall heavily on people who receive local housing allowance. I really hope that the Minister will talk to colleagues about that—I appreciate that there is crossover of interest in housing—and how the broad rental market is evaluated. The average rental cost in York is £945 per calendar month, and yet someone would receive only £650 in their LHA for a two-bedded property. That gap means that people cannot afford to live in the private rented sector and have nowhere to go. Ultimately, we see that many people with the vital skills needed to ensure that our economy can function are leaving our city. There are deep-seated challenges because the rental market covers a much broader area than York, which has a particular hotspot in property expense.
We also see people taking real advantage of section 21 notices because of the short-term holiday let market. The hon. Member for North Devon (Selaine Saxby) focused her speech on that, and I will do so, too, because it is hitting holiday hotspots across the country at such an alarming rate. Private landlords are flipping their properties over from the private rented sector to short-term holiday lets. In York, a landlord can get £700 from a property for a weekend. In the light of the measures spoken about by the hon. Member for Harrow East and the changes first in buy-to-let mortgages and then when George Osborne pulled back some tax advantages, landlords say that their margins are too tight to maintain their properties in the private rented sector so, to make any profit on their assets, they need to flip their properties.
We have more than 2,000 short-term holiday lets just in my constituency and the surrounding area, which are hollowing out streets and communities. Ultimately, because of that market, people are being kicked out of their homes and having to leave the area and their jobs, and children are being taken out of school. That is why I have a private Member’s Bill—the Short-term and Holiday-let Accommodation (Licensing) Bill—before Parliament. I hope that the Department will work with me to bring it into being and regulate and license short-term holiday lets. It is due to have its Second Reading on 9 December, and it could transform our ability to regulate that market. That is where the inequality sits and where we need to see significant change.
I welcome the measures in the White Paper for greater accountability and for greater power for tenants—something that has been so absent. That is why I very much hope to see those measures brought forward in a Bill at the earliest possible stage. An ombudsman is a way of bringing powers to book, but it needs to be properly resourced. If it is not, it will be ineffective in bringing about the changes that we need to see and to put curbs on landlords wanting to exploit the system.
I turn to students. My hon. Friend the Member for Brighton, Kemptown mentioned the challenges in student accommodation. I met York Residential Landlords Association to discuss the matter as well as the universities in York. Purpose-built student accommodation has an exemption and can issue just one-year tenancies to students. However, in the private rented sector, there is not that option. That will cause real challenge. Next year’s students are already seeking out their accommodation. Landlords are saying that if the legislation comes in, they will simply start looking for their accommodation during the exam period. That, clearly, would not be in anyone’s interests. My hon. Friend the Member for Brighton, Kemptown came up with a really sensible and positive suggestion, and I hope the Minister can look at it, but we do need to solve this issue for the sake of students. I have 40,000 students in one form or another in York, so it is a major issue for us.
I hope the Minister, in her time in the role, will look internationally at good practice, as there is much to learn from across the globe. In particular, I am attracted to measures taken in Finland where tenants are provided with resourcing, instead of just a local housing benefit, to start being able to access the property market themselves. It is an interesting model that should be considered as an opportunity.
I concur with hon. Members from across the House on the need to build social homes. We really do have a crisis, and when there is a crisis urgent measures need to be taken. The problem with housing is that it is still seen as a short-term fix for developers trying to make their revenue. We have to think far more long-term about it. I urge the Minister to think about the opportunities her Government have to use public land for public good. I am talking about disposals of Ministry of Defence land, NHS property services, Network Rail and so on—significant estates. If we can build social housing and affordable housing on those estates, as opposed to housing to market, it could be a real game changer. The interest of the spending Department is to receive a capital receipt, but if we can find that as a mechanism to deliver the housing our communities need it could be really important.
I will close on this point. When Nye Bevan sat where the Minister is and had the opportunity to deliver housing—I think we all recognise that he delivered more for social housing and more for housing in our country than any other Minister ever has, and I certainly pay tribute to him—he said that the only way to deliver the housing the country needed was to empower local authorities, municipal authorities, to have the authority to go ahead and build. He built and he delivered. I trust the Minister will, too.
Fleur Anderson (Putney) (Lab)
I thank my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) for securing this very important debate. It is definitely one of the biggest issues in Putney, Southfields and Roehampton in my constituency. I thank the London Renters Union, Generation Rent and Shelter for their campaigning work to raise concerns that are very common across my constituency, but also for their work in supporting renters. I commend Wandsworth Council for its 1,000 Homes scheme, which are all going to be council housing. That is the right way forward, because, as so many Members have pointed out, the housing crisis across our country needs to be addressed and can only be done so with more homes.
I speak today on behalf of the 41,000 renters in Wandsworth, especially those who feel they are stuck in a rental system that is overheating, burning through their finances and taking an emotional and mental health toll on their lives because of the imbalance of power. We look to the White Paper and to legislation to address the imbalance of power between landlords and renters. Renters are spending so much money, yet still have an insecure system.
There is much in the White Paper that is welcome, but I am beginning to lose faith in whether any of it will be delivered. I hope to hear warm and encouraging remarks from the Minister today, but also pledges for action. The long-awaited renters reform Bill has still not been brought to the House. I therefore ask the Minister: where is it and when will we see it? The Government promised renters reforms in the 2021 Queen’s Speech, but as yet have failed to deliver. The private rented sector did not even get a mention in the most recent Queen’s Speech, yet the stories told today, and there are many more that I know of, really highlight the need for change.
To give one example, I was evicted from my rented home 20 years ago. The landlord told the three of us that we would have to leave because they were going to sell the house. Someone visited who claimed to be a solicitor—I am still not sure whether they were. They made sure that we paid our rent right up to the end, rather than using our deposit for the last month, so we did that quite properly. However, the landlord then gave some spurious reasons for not paying back our deposits and took them all. By then, we had moved on to different places. We could not afford to go to the small claims court. It was all too difficult. We then went back to the property only to find out that it had been re-rented to another group—and on went the landlord. That was so unfair, and it has stayed with me ever since.
The other day, on the way to see a constituent, I went past a house where the family were moving out. They were absolutely furious. They—a nurse and a policeman—had been given a section 21 notice to leave, because they had complained about the mould in their flat. It was a revenge eviction, or—as I hear about so often—an eviction because of complaints to the landlord. They were asked to leave and could not afford to move to any other property in the area, so they were going to have to move north of London and come back every day to their local jobs in south-west London. Their lives were being upturned and, to them, it seemed so unfair.
I also heard from someone locally who described herself as a “beginner teacher”. She moved into a flat that seemed to be absolutely fine, but very soon after moving in, she found that there was damp and spreading black mould in the bedroom. That had an impact on her health. The landlord did not acknowledge the complaints for a long time, took no action to get rid of the mould, and then, after 10 months, served her with a section 21 notice. She had to leave. I have no doubt that the next tenant then moved in, found the same thing and the whole cycle continued, allowing the landlord to leave alone the black mould and the health and safety concerns.
I have also heard from many survivors of domestic abuse, for whom the state of the private rented sector has a huge impact. The fear of abuse versus the fear of homelessness ensures that many women who should move out for their safety do not. Women’s Aid reported that the high costs of the private rented sector create a barrier for many women who want to leave their abusive partners.
The Conservatives pledged to ban section 21 evictions in 2019, and I have raised that issue several times in the House since being elected. They have still not been banned. The latest Prime Minister has yet to confirm whether it is his policy to do so, so I hope to hear from the Minister that the legislation will end no-fault and revenge evictions.
Since the Government first promised to end section 21 evictions in 2019, around 230,000 private renters have been served notice. As has been mentioned, that is an eviction every seven minutes. The introduction of the legislation is very urgent for so many people. Renters need the Government to legislate now to provide them with immediate protection. There have been lots of nice words and aspiration but no delivery. That is perhaps not surprising as there have been five Housing Secretaries —or is it six?—since I became an MP.
Too many people are stuck in a system with no power to challenge rogue landlords and no savings to get on the housing ladder, and they are in housing that falls well below acceptable standards. Renters need a deal that gives them the security and dignity that they deserve, yet the system’s problems are getting more and more acute. Everyone has been vying to give the highest costs of the private rented sector in their constituency, but I thank I can beat all the previous hon. Members. In Putney, the average rent for a two-bedroom flat is £3,900 a month. That is nearly £47,000 a year. [Interruption.] A one-bed flat is about £2,700. That is astronomical. A rented property will go on to the market first thing in the morning. By 11 o’clock, there will be many visits. By 1 or 2 o’clock, offers will be put in and those ratchet up through the afternoon. I have heard of landlords asking for three years’ rent up front and increasing monthly costs. Respective renters have to outdo one another in what they can offer to a landlord, when they are not entirely sure what will make a difference in the sector. I know many people who are having to move out, move to a different place and entirely change their life. They also know, as I do, that their children will not be able to afford to rent in the area they live in.
The insecurity of the sector is having a huge impact on the social housing sector, where many people are living in increasingly overcrowded homes with more and more children. Their fear of moving into the private rented sector is so great that they are living in those overcrowded homes far longer than they otherwise would. It is not just for the private rented sector that we need reform.
Four in 10 under-30s now spend more than 30% of their pay on rent, according to the data. That is a five-year high, and it is absolutely shocking. The Minister knows exactly what the situation is like, especially in London. Demand for homes to rent privately in London has exploded post pandemic, and the ratio of prospective tenants to rooms available is 7:1. The private rented sector also has the highest prevalence of category 1 hazards, which are those that present a risk of serious harm or death. Poor housing costs £1.4 billion a year to the NHS and £18.5 billion to society as a whole.
There are more than half a million more households with dependent children in the private rented sector than there were in 2005; they make up 30% of the sector. Eviction from private tenancy is the second leading cause of homelessness in England. It is all happening in the context of an unprecedented cost of living crisis. I am so worried about what it will mean for my constituents in Putney through the winter ahead.
As I say, much of the White Paper is welcome and will make a huge difference, but it makes no promises about in-tenancy rent increases. It lacks detail on the decent homes standard and makes no mention of the previously promised lifetime deposit. There is a lack of legislation to help renters to afford legal advice when using the new PRS housing ombudsman.
I welcome hon. Members’ comments about students. Will the Minister meet Universities UK to look at ways to make the student rented sector far more secure? I have an interest: I currently have two students in my family, and I have had three, so I have spent a lot of my own money on the student private rented sector. I know that lots of student unions are running campaigns to say, “You don’t have to rush into getting your tenancy very early in the academic year, signing up to unaffordable conditions and paying huge amounts during the summer.” Any way in which universities could take on a larger amount of the private rented sector and ensure that it is stable and fair for students would be welcome and revolutionary.
There is lots of work to do. As a minimum, legislation needs to include increased security of tenure, including longer notice periods, a longer period of protection from no-fault eviction, and an assurance that tenants will be compensated when forced to move. Secondly, there needs to be increased protection from abuse. In particular, landlords must provide unequivocal evidence when they are selling or moving back in. There needs to be a longer no re-let period, with increased resources for local authorities to investigate abuse. Finally, there needs to be a focus on affordability, a limit on unaffordable rent increases, a rent tribunal system that is easier to access—in fact, easy to access—and an end to automatic eviction for arrears. Most of all, we need clarity from the new Prime Minister on whether he will honour the 2019 manifesto pledge to end section 21 evictions.
Renters in my constituency and up and down the country deserve safe, secure and affordable homes. It is time for the Government to put their money where their mouth is and deliver for them.
Ms Karen Buck (Westminster North) (Lab)
I congratulate my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) on securing this debate, but I must be honest: I find it disappointing that we are having a general debate on the private rented sector yet again, three years after we were promised legislation. The time is overdue for us to get beyond discussing policy in the round and on to discussing the substance of legislation and amending it.
Having said that, we have had some really strong speeches. I was struck by the speeches of Conservative Back Benchers, who sounded—well—like us, really. I am pleased that it seems to be appreciated that there are limits to deregulation and we have hit the bumpers in that regard—particularly in respect of short-term lets, which have had a devastating effect on lettings in a number of towns and coastal communities and, of course, in inner London, notably my own constituency, which has the largest private rented sector in the country.
In the years during which we have been waiting for the Government to enact the promised legislation, we have been plunged into a deepening affordability crisis for renters, who are facing an increasing squeeze on their incomes. London rents are now averaging £2,000 a month, and since last year have increased by 20% in inner London and just over 15% in London as a whole. Nationally, one in five renters have faced an increase of £100 a month. As 45% of renters have no savings at all, the fact that they have managed to survive for this long is a miracle. However, as we go into the winter with a cost of living crisis, there is a real risk that a catastrophic number of people will be tipped into homelessness, and certainly into poverty. Even more than any other tenure group, these people will face a choice between keeping a roof over the heads, eating and heating.
It needs to be said that there is an inequalities dimension to this. My hon. Friend the Member for Brighton, Kemptown was right to say that there are three different rental markets. We are most concerned with the average renters, people who would otherwise be buying but are deferring buying because of the cost of rents, but we must also consider the third or so who constitute the poorer renters. Of those, a disproportionate number are women-led households and black and minority ethnic communities. It is members of black and minority ethnic communities who are least likely to have mortgages, and who are therefore most likely—especially given the squeeze on social housing—to find themselves trapped in the poorest-quality private rented accommodation and the most expensive in proportion to income, with all the consequences that will have for those communities. It is important for the Government to understand the inequalities dimension, and to frame the legislation accordingly.
The Evening Standard, which has rightly had a continuing focus on the private rented market, recently ran a piece headed “London’s renting crisis: brutal choices, heartbreak and escalating costs faced by renters at breaking point”. That is absolutely accurate. The competition for rental properties is unprecedented. We hear stories of auctions with people having to bid against each other, and of deposits and other up-front costs. Every time someone has to move, not only do they have to deal with a deposit, but the moving costs are piled on top of that. It is no wonder that younger renters cannot afford to buy, and are locked out of the housing market that most wish to join, as a result of that combination of rents and recurring one-off costs which eat into their incomes.
Today’s interest rate rises will feed into mortgages, which is entirely due to the Government’s mishandling of the economy, and which means that people will be trapped even deeper and for even longer. Those at the lower end of the market who, in any normal and healthy system, would have been enjoying the security and the fair rents of social housing appropriate to their circumstances and their income are locked out as well, because the number of lettings in social housing has plummeted by more than 100,000 in the last 10 years alone.
Why is that? It is because over the past 12 years the Government have deliberately chosen not to build social housing. One of the first acts of the 2010 Government was to halve the housing investment grant, making it impossible for local authorities to build. But it is also because—this has not been understood by successive Ministers—there always used to be a flow out of social housing and into home ownership, and that has effectively stopped.
People end up trapped in the social housing that we do have. They are unable to move into the home ownership that they aspire to, and that they would have been able to afford a decade or 15 years ago. They are keeping those social housing properties and tenures for longer, so there is not a flow into them from other households, and that of course bleeds into increasing homelessness.
We have an affordability crisis and a security crisis—a section 21 notice is issued every seven minutes. We also have a standards crisis and a decent housing crisis, particularly at the bottom end of the market. Close to 1 million households are in substandard accommodation. The private rented sector is the tenure with the worst standards; more than 500,000 premises have category 1 hazards, which represent serious threats to health or life. We have a growing crisis for older renters, who are trapped in the private rented sector. They never expected to be without the means to improve their accommodation.
Hon. Members have cited case studies, and I too want to read one into the record. This is the kind of story that we hear in our surgeries about people in inappropriate and substandard accommodation:
“I have a special needs boy. He has hypoxia, ischaemic brain injury, epilepsy, global development delay, hepatitis… my flat in the last two months was flooded with rainfall bcz the roof has a big leak. We sleep on the floor, so mattress, furniture, clothes get wet… Recently the ceiling light exploded, so now there’s no power in the property. Our flat is only electric supply, no gas. So now there’s no food, no heater, nothing I can do. We are struggling financially bcz my child needs 24-hour support and he has lots of appointments so that’s why”
my constituent
“can’t go to work… So it’s difficult to survive like this…no one will understand my pain.”
I am afraid that that is not uncommon. This kind of case comes before us time and again. People with no power, and no purchasing power in the private rented sector, get stuck in properties, and landlords—I do not call them rogue, because there are far too many of them for us to regard them as exceptions—will exploit that for their own purposes.
We need the promised legislation, but we need more than that. I want to flag up two other issues that need to be seriously addressed. We have heard reference to enforcement; it should not be an empty word. Enforcement requires resources. If the Government do not resource a policy change, and do not give local authorities the resources to take enforcement action against bad landlords in cases of substandard accommodation, that will be exploited. When a landlord is seeking an eviction under section 8 rather than section 21, it is even more important that the tenants have power, or somebody who is on their side and can support and assist them.
Local authorities prosecute in only 1% of cases in which poor-quality accommodation is brought to their attention. Why is that? Sometimes it is because local authorities do not focus on the issue, but it is also a question of resources; councils in London in particular have lost 20% of their resources in the last 10 years. The Government must address the issue of capacity to deal with environmental health matters, and capacity in legal aid on housing, because once again we see evidence of advice deserts, and of people being unable to access housing lawyers.
I want to raise one more issue, which I do not think the Government have addressed. In a post-section 21 environment, if we get there, there will be even more risk of illegal evictions. I come across illegal evictions in my casework; people ring my office to tell me that a landlord is inside their property illegally, and is driving them out. Unfortunately, we have very little data on this, because the Government do not collect data on the extent of illegal evictions. The Greater London Authority and the Mayor of London are doing very good work teaching the police how to handle illegal evictions, and teaching them not to step back and regard an illegal eviction as a civil matter between two parties. However, that work is not done nationally, and a great deal more needs to be done about that.
There is a lot that we can do. If we ever get the legislation, we would look to amend it to improve protection of tenants from illegal eviction; I hope that the Government can address that.
Renters deserve security, affordability and decency. At the moment, far too many do not have any of these things. They all have to be addressed together and in a wider context that includes advice, representation and enforcement. Above all, they all have to be addressed now.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to wind up this important debate on behalf of the Opposition. I congratulate my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) on securing the debate, and I thank the Backbench Business Committee for allowing time for it.
I also thank my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck), and the hon. Members for Harrow East (Bob Blackman) and for North Devon (Selaine Saxby), for their excellent contributions and powerful case studies. Collectively, they highlighted both the particular challenges facing private renters and how these challenges vary across the country, and that, irrespective of geography, there is a need to overhaul the private rented sector and to better regulate both short-term holiday lets and excessive rates of second home ownership as a matter of urgency.
I put on record our thanks to all the organisations that have made the case for rental reform over so many years, including Generation Rent, Crisis, Citizens Advice, the Joseph Rowntree Foundation, Shelter, Z2K, the New Economics Foundation, the Law Centres Network and various renters unions, as well as all the private renters who bravely shared their experiences publicly and the journalists who provided them with space to tell their stories. Their collective efforts have been integral to ensuring this issue is kept firmly at the top of the political agenda.
Labour strongly supports fundamental reform of the private rented sector, and we have called for it for many years. Regardless of whether they are a homeowner, a leaseholder or a tenant, everyone has the basic right to a decent, safe, secure and affordable home. Yet as this afternoon’s debate has reminded the House, millions of people renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal, if any, justification.
On an individual level, the lack of certainty and security that is now inherent to renting privately results not only in ever-present anxiety about the prospect of losing one’s home but, for those at the lower end of the private rental market who have little or no purchasing power and who are increasingly concentrated geographically, as my hon. Friend the Member for Westminster North said—there is an equalities dimension to this, too—a willingness to put up with often appalling conditions for fear that a complaint will lead to instant retaliatory eviction. That is why some of the worst housing standards are to be found in the private rented sector and why, despite the existence of many good landlords and a steady, if glacial, improvement in conditions overall, one in five private rented homes still does not meet the decent homes standard and one in 10 has a category 1 hazard posing a risk of serious harm.
For tenants forced to live in such substandard properties, whether they wake up every day to mould, vermin or dangerous hazards, what should be a place of refuge and comfort is instead a source of daily unease and, in many cases, torment and misery, which takes a huge toll on their physical and mental health.
Far too many tenants are evicted each year from a private tenancy without due cause, which is why so-called no-fault section 21 notices are a leading cause of homelessness in England. This broken system can no longer be tolerated, not least because the numbers affected have risen markedly over recent decades, as the hon. Member for Harrow East said.
This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old—I suspect you were not that much older, Mr Deputy Speaker. The private rented sector has changed beyond recognition in the more than three decades since. Some 11 million people now rent from a private landlord. As well as the young and mobile, the sector now houses many older people and families with children, for whom greater security and certainty is essential for a flourishing life.
To ensure private renters get a fair deal, we need to transform how the sector is regulated and finally level the playing field between landlords and tenants. That is why, with important caveats, Labour welcomed the proposals in the White Paper when it was published in the summer. We unequivocally support the proposed ban on section 21 evictions. There is no justification for such notices, and they should have been scrapped long ago. We support the introduction of minimum standards in the private rented sector through the extension of the decent homes standards, although we have real concerns about how it might be enforced in practice given that it is not an enforceable standard in the social rented sector, where it already exists.
We recognise that landlords will need recourse to robust and effective grounds for possession in circumstances where there are good reasons for taking a property back, for example, because of antisocial or criminal behaviour. However, we want assurances that such grounds cannot be abused unfairly to evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland.
We welcome the proposed limit of rent increases to once per year, but we take issue with the inadequacy of the proposed measures in their ability to address unreasonable within-tenancy rent hikes of the kind that are likely to increase markedly once section 21 is scrapped and with the absence of any measures to tackle illegal evictions, a point that has been raised by my colleagues.
Labour would go further in several important respects, introducing a more comprehensive new renters’ charter, but we do want to see all 12 of the proposals set out in the White Paper translated into primary legislation as a matter of the utmost urgency. I cannot emphasise enough the need for that urgency, a point we have pressed time and again with successive Ministers, to no avail. There is a desperate need for the Government to act quickly, because the problems inherent in a sector that for far too many renters has always been characterised by insecurity, high rents and poor conditions, have become acute in recent months, as those renting privately struggle to cope with the impact of high inflation and rising prices.
As hon. Members will know, and as we have heard this afternoon, in many parts of the country rents in the private rented sector are surging and the costs involved with moving are soaring. With the Government having decided, once again, to shamefully freeze local housing allowance, millions of hard-pressed tenants are now being stretched to breaking point, with the risk of mass arrears and evictions that entails. What is so frustrating for Labour Members, and for those outside campaigning for renters’ reform and for private tenants themselves, is that instead of introducing legislation that we could have fast-tracked through this House to address this looming winter crisis, all we have, despite years of promises from successive Conservative Administrations that they would enact renters’ reform, is the White Paper and a vague promise, one that I had from the Minister’s predecessor just last week, to introduce a Bill at some point during the more than two years that remain of this Parliament.
Florence Eshalomi
On urgency, figures from the Local Government Association show that the ending of a private rented tenancy is the most common reason for homelessness, with this being responsible for 37% of homelessness between January and March this year alone —in those three months. Does my hon. Friend see that this urgent crisis needs solving now?
Matthew Pennycook
I absolutely agree with my hon. Friend on that, and I will come on to say why I think the situation is particularly urgent and what has happened in terms of the delay that has been caused. It is not good enough that the Government have taken so long to make progress on this issue. It is not as though they have not had ample time to legislate, even accounting for the impact of the pandemic. It is now well over three years since the Conservative Administration of the right hon. Member for Maidenhead (Mrs May) promised to abolish section 21 no-fault evictions. In that time, not only have hundreds of thousands of tenants been evicted through a section 21, but more than 45,000 households have been threatened with homelessness as a result of being served such notices. As my hon. Friend just mentioned, the figures released so far this year suggest that possession claims resulting from them are increasing markedly as the cost of living crisis intensifies.
Faced with a phenomenally difficult winter, private renters cannot wait until 2024 for the Government to act. I say to the new Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), whom I welcome to her place, that every extra month the Government delay bringing forward the renters’ reform Bill they have promised means thousands more private renters suffering. The Government must act, and they must act now. If they introduced emergency legislation enacting the proposals set out in the White Paper, Labour would support it and work with the Government to ensure it made rapid progress. But it is the Government alone who control the business of this House and only they can ensure the necessary legislation is given the priority it deserves. As I have put to Ministers before and sadly suspect I will have to do so again, it is high time the Government stopped talking a good game about private rented sector reform and finally got on with delivering it, because private renters have waited long enough for the protections that they deserve and that they rightly expect.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)
I thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), my hon. Friend the Member for Dover (Mrs Elphicke) and the Backbench Business Committee for securing this important debate on the proposals in our White Paper. I thank Members who have spoken for their considered and constructive tone and for speaking powerfully on behalf of their constituents. I also thank hon. Members for their warm words about my hon. Friend the Member for Walsall North (Eddie Hughes), who worked so hard on the White Paper. I pay tribute to my right hon. Friend the Member for Pendle (Andrew Stephenson), who took that work forward.
The Government are determined to deliver a new deal for tenants and landlords in the private rented sector. Hon. Members have made a number of points about reform and I hope to address as many of them as possible in the time I have. If I do not reach some of the points, I am happy to sit down with hon. Members on a one-to-one basis.
I want to make a couple of observations about the sector as a whole. As Members know, the private rented sector has grown significantly in recent decades. It has doubled in size since the early 2000s, with landlords and tenants becoming increasingly diverse. The sector provides a home for 11 million people—19% of all households. At least 1.3 million of those are families with children. However, the sector is also the least secure and has some of the lowest-quality housing. Too often, the current system does not work for tenants, or for the many good landlords operating in the sector.
Everyone in our society deserves to live somewhere decent, warm, safe and secure. The Government are determined to make that vision a reality.
Hon. Members will know that the White Paper sets out a 12-point action plan, and I note that it has received support from Members on both sides of the House. The changes that it sets out amount to a significant shake-up of private renting. We know how important it is to get it right. We are grateful to our partners across the housing sector who have worked closely with us on developing the reforms. We will continue to consult them closely as we move the process forward.
Several hon. Members raised the issue of the poor quality of some privately rented homes. The majority of landlords and agents treat their tenants fairly and provide good-quality, safe homes, but that is not always the case. Too many of the 4.4 million households who rent privately live in poor conditions and pay a large proportion of their income to do so. Poor-quality housing undermines renters’ health and wellbeing. It can affect their educational attainment and it reduces pride in local areas.
I am proud of the action that the Government have already taken to put things right. We have strengthened local authorities’ enforcement powers by introducing fines of up to £30,000, extending rent repayment orders and introducing banning orders for the most serious and prolific offenders. We have introduced new regulations, which require landlords to install smoke and carbon monoxide detectors and ensure that the electrical installations in their properties are safe. We are concluding our overhaul of the housing, health and safety rating system, which is the tool used to assess hazardous conditions in rented homes. That will make it more accessible to tenants and landlords and allow more efficient enforcement.
The Homes (Fitness for Human Habitation) Act 2018 empowered all tenants—private and social—for the first time to take their own action against landlords who let unfit properties. As a result, conditions have improved over the past 10 years, but we know that there is more to be done. Alongside this we have consulted on introducing a legally binding decent homes standard in the private rented sector. That consultation closed on 14 October and we are currently reviewing responses.
Many hon. Members talked about tenancy reform and, clearly, that is critical. Our reforms will provide tenants with security. They will also ensure that good landlords are still able to gain possession when necessary.
Hon. Members have rightly mentioned the insecurity caused by section 21 no-fault evictions. It is not right that a landlord can ask a tenant to leave without giving a reason. The Government are clear that they want to support the majority of landlords who act responsibly, but it is not right that tenants live in fear that their lives may be uprooted at the whim of the minority of rogue landlords. That is why, as we have set out in our manifesto and confirmed in this House, the Government have committed to abolishing section 21 of the Housing Act 1988 and giving millions of private renters a secure home.
At the same time, the White Paper proposes to simplify complex tenancy structures. It will move all tenants who currently have an “assured” or “assured shorthold” tenancy on to a single system of periodic tenancies. Periodic tenancies will allow either party to end the tenancy when they need to. That will enable tenants to leave poor-quality properties without remaining liable for the rent, or to move more easily when their circumstances change—for example, to take up a new job opportunity. Landlords will always have to provide a specific reason for ending a tenancy.
Good landlords play a vital role in providing homes for millions of people across the country. We want to reassure them that the new system will continue to be a stable market for landlords to invest and remain in. No one will win if our reforms do not support landlords as well as tenants. It is only right that landlords should be able to get their properties back when their circumstances change, or when tenants break the rules. A number of hon. Members mentioned the real issues attached to antisocial behaviour. We will reform grounds of possession so that they are comprehensive, fair and efficient, and we will streamline the possession process, removing unnecessary restrictions on landlords seeking to recover their property.
Alongside that, we will continue to listen to landlords and students, as mentioned by a number of hon. Members —landlords provide much-needed accommodation to thousands of students every year—to ensure that the sector continues to work for those in higher education, and I will continue to have those conversations.
I am sure that hon. Members will agree that going to court should be a last resort, when all other avenues have been exhausted. But we know that sometimes it is unavoidable, and that court proceedings can be costly and time consuming for landlords. That is why we are working with the Ministry of Justice and HM Courts and Tribunals Service to streamline the process and ensure that the most serious cases are prioritised. I just checked on the fax point and can assure Members that people can email or make paper submissions. Alongside that, we are reviewing the bailiff process. That is currently a big source of frustration and delay.
Many Members have mentioned issues surrounding the cost of living—
Lloyd Russell-Moyle
Will the Minister give way on the legal question?
Lloyd Russell-Moyle
Does the Minister not recognise that the lack of legal aid is a huge problem for people in the private rented sector? In the last Session, I introduced a Bill that would have cost the Government nothing but provided £20 million in legal aid and early legal support for private renters by taking the interest from the £2 billion- worth of deposits held in this country and putting it into a special, reserved fund for legal aid for renters. Would she look at that measure, so that the court process is supported?
Felicity Buchan
The hon. Gentleman will recognise that legal aid does not fall within my remit, but I am happy to meet him and have a conversation.
We empathise strongly with those affected by the cost of living issues. That is why the Government have provided over £37 billion in cost of living support this year to those who need it the most. We have given unprecedented support to protect households from high energy prices. For tenants who are unable to afford their rental payments, there is a range of potential support available through the welfare system.
My hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for York Central (Rachael Maskell) both raised the issue of second homes and holiday lets. I am aware of the pressures in their constituencies. The White Paper contains a proposal on that issue, and I point both hon. Ladies to the Department for Digital, Culture, Media and Sport’s call for evidence on the topic.
Rachael Maskell
The DCMS call for evidence has closed, but I have a private Member’s Bill before the House. Will the Minister’s Department work with me to ensure that we can regulate short-term holiday lets?
Felicity Buchan
Specifically, that falls under the DCMS, but I am happy to have a conversation with the hon. Lady.
Selaine Saxby
The DCMS consultation took months to see the light of day, and my local council submitted pages of evidence. I recognise that the issue falls within the remit of the DCMS, but one of the reasons constantly given for the inability to tackle it is that it lies with a different Department, either LUHC or DCMS. If anything can be done to bring the Departments together to enable progress to be made, we would be most grateful.
Felicity Buchan
I hear my hon. and good Friend, and I will do everything I can to facilitate that.
I hope that all Members present today recognise that this Government are committed to reforming the private rented sector in a fair and balanced way, abolishing no-fault section 21 evictions and strengthening and clarifying landlords’ rights when seeking possession.
Felicity Buchan
I am sorry, but I have been told that I need to conclude.
The Government are committed to giving tenants the security and peace of mind they need to settle down with confidence and make their house a home. We are committed to empowering tenants so that they can make informed choices and raise concerns, and to supporting responsible landlords. As I said at the outset, we stand by our manifesto commitments to abolish no-fault evictions and to ensure that landlords have rights to repossess when that is required. We published the White Paper in June and we are discussing it with interested parties. The consultation on the decent home standard closed on 14 October, and we are reviewing the responses. We will publish the next steps in this extremely important sector in due course.
Lloyd Russell-Moyle
I am very pleased with the contributions we have had today. I again thank the co-chair of the APPG, the hon. Member for Dover (Mrs Elphicke), and we heard good responses from my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck) and from the hon. Members for North Devon (Selaine Saxby) and for Harrow East (Bob Blackman).
I will not repeat what other hon. Members have said, but my greatest disappointment is that I still do not really know when something is going to come forward. We all know that “in due course” in Government and parliamentary language means the never-never. That is what the Minister has promised us: the never-never. It might come or it might not—we do not know. I am afraid I do not think that is good enough because only last week there was a debate in Westminster Hall on a similar topic, so it is not as though the Department was not forewarned that these questions would be asked. It is not good enough because at least a timetable, even an amendable one, could have been put down.
I am disappointed that we have not had that, but I am pleased that the Government are still committed to reforms. I just want them to get on with it, because we have heard of the desperate need and the proposals in the White Paper are not enough. We did not quite hear a commitment to every single one of the 12 points in the White Paper; we just heard a reiteration of the evolution of section 21.
I will take the Minister’s words in good faith. I am sure we can meet about some of these issues in person, one to one, but I want to see that timetable and I hope she will commit to updating the House “in due course”, in due course.
Question put and agreed to.
Resolved,
That this House has considered the White Paper A fairer private rented sector.
World Biosphere Day
(1 year, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Selaine Saxby (North Devon) (Con)
Today is World Biosphere Day, and as UNESCO has said:
“With each passing year, the urgency of tackling environmental issues becomes clearer: we only have one planet, and it is in danger. Our relationship with nature and with other living beings needs a radical rethink in order to address these issues—we need to design and create a truly shared world.
Biosphere reserves have shown that it is possible to live in this world while also establishing a sustainable and harmonious relationship with nature.
The International Day for Biosphere Reserves is an invitation to take inspiration from the solutions already implemented in these spaces to build genuinely sustainable development everywhere, with full respect for nature and for the living world.”
The UNESCO Man and the Biosphere programme was launched 50 years ago as an intergovernmental and interdisciplinary science programme to research and address the conflicts between humankind and the natural environment. Under the programme, living laboratories called biosphere reserves are designated by UNESCO at the request of member states, with the designations tending to be managed by local partnerships.
There are 738 UNESCO biosphere reserves in the world, in 134 countries, and only seven of them are in the UK: Wester Ross, Galloway and Southern Ayrshire, the Dyfi valley, Brighton and Lewes Downs, Isle of Wight, Isle of Man and North Devon. We were lucky in North Devon to be home to the UK’s first ever biosphere reserve, launched in 1976—one of the first in the world—covering 5,000 sq km of land and sea and integrating land and marine management.
Redefined in 2002, North Devon’s biosphere is this year celebrating its 20th birthday alongside this first International Day for Biosphere Reserves. Birthday congratulations are also due to south-west Scotland, on the 10th birthday of its two biospheres this year.
North Devon’s biosphere is centred on Braunton Burrows, the largest sand dune system in England, which stretches into neighbouring constituencies. The Braunton Burrows core area consists of fixed and mobile sand dune systems; I feel most privileged to have been able to walk the area with a local warden and see the water germander in one of the only two locations it still survives in the UK.
The boundaries of the reserve follow the edges of the conjoined catchment basin of the Rivers Taw and Torridge and stretch out to sea to include the island of Lundy. The biosphere reserve is primarily lowland farmland and comprises many protected sites, including 63 sites of special scientific interest, which protect habitats such as culm grassland and broad-leaved woodlands. It also includes Barnstaple and Ilfracombe in my North Devon constituency and stretches into neighbouring Bideford, Northam, and Okehampton.
The biosphere links designations such as Dartmoor, Exmoor, North Devon area of outstanding natural beauty and Lundy and the land, sea and rivers between them. It is managed by a partnership of 34 organisations from national agencies, local government, non-governmental organisations and community groups. I would like to take this opportunity to thank them all for their work and commitment. I am truly lucky to be able to call the biosphere home.
UNESCO sets out three functions of a biosphere reserve: conservation, learning and research, and sustainable development. Biosphere reserves aim to create and maintain sustainable communities where people can live and work in an area of high environmental quality. These areas can then provide a blueprint for other areas to learn from. The reserve must be environmentally, economically and socially sustainable. To achieve that, the reserve oversees management of natural resources, initiatives to develop the local economy and an effort to reduce inequalities between people.
The biosphere programme delivers policy testing for Government of integrated approaches to tackling environmental, economic and social issues. These living laboratories research the conflict between human activity and our natural environment. The programme’s remit includes several large-scale projects that have been developed through the partnership. A £1.8 million improvement project along the River Taw, funded by the Environment Agency, is designed to decrease polluted surface run-off from fields and urban areas into the river. The project will restore habitats and remove obstacles such as weirs that prevent animals from freely moving between sections of the river. It is hoped that the decrease in pollution will also increase beach quality in places such as Instow, which failed water quality tests in 2012—one of only 16 beaches in the south-west to fail.
A nature improvement area proposed to protect and enhance the catchment of the River Torridge—home of Tarka the otter in Henry Williamson’s book of the same name—was chosen by the Department for Environment, Food and Rural Affairs as one of 12 nationally important landscapes that will receive funding to restore and recreate ecosystems in the area. Other large projects work to use the natural environment to offset the negative impacts of human activities within the biosphere.
The success of the last 46 years’ work shows that on land and sea, biospheres have driven a local nature recovery plan, and in our marine environments they have improved the levels of phosphates. This was the first work of its kind in the country. They have pioneered projects in the 25-year environmental plan, and as part of that they have developed natural capital strategies for the region, which are now in operation with the community renewal fund. Alongside new environmental land management scheme trials, this drive for nature encourages others. Today the National Trust has announced the largest grassland project, stretching from Woolacombe to Exmoor.
The work of our North Devon biosphere also extends abroad, with partnerships in Kenya supporting biospheres there to deliver projects and working with European biospheres to co-ordinate a network of forests. In south-east Asia, work is being done on marine planning and conservation alongside community health. As UNESCO’s oldest intergovernmental scientific programme, our global biospheres are a testament to what we as a world can achieve when we work together. Working together is the only way we are going to combat the global climate crisis, and as we pass on the presidency for COP, 3 November should stand as a reminder of the importance of international collaboration.
The path that biospheres have carved for the last 50 years shows that we can live in a sustainable way. It is not a choice between modern life or saving our planet; both can be achieved. It is up to us all to make it a reality. I thank Andy Bell for his tireless work for the biosphere and his help with the detail behind my speech. The Minister knows from her visit to my constituency how stunning our environment is, and I hope she will therefore support my battle against the disruption to our sand dunes caused by cabling from development projects for floating offshore wind that is too small to go to the main connection point. I also hope she will consider strengthening the protections for our biospheres and perhaps, as a special first birthday present for the International Day for Biosphere Reserves, give them formal status here in the UK.
Mr Deputy Speaker (Mr Nigel Evans)
Bob Seely has permission from the mover of today’s motion and the Minister, who is nodding, to take part in the debate.
Bob Seely (Isle of Wight) (Con)
Thank you, Mr Deputy Speaker, for letting me take part briefly in the debate. My hon. Friend the Member for North Devon (Selaine Saxby) is in competition with me and a relatively select few to deliver more than anyone else for her wonderful patch. I hear nothing but amazing reports of the work that she is doing. Similarly, I try to deliver as much as I can for my folks on the Isle of Wight. We both care so much for our wonderful parts of the UK. I thank her and the Minister for letting me contribute to the debate.
I agree with much of what my hon. Friend has said and I will stress two points. Before I do, our Island biosphere designation came quite late—we got it a few years ago after a campaign led by our area of outstanding natural beauty organisation—but I thank Joel Bateman, Councillor Jonathan Bacon and, more recently, Holly Jones and Natasha Dix for their impressive work in delivering that successful bid to UNESCO and since. There are 17 UNESCO sustainable development goals that we are trying to work into the Isle of Wight Council’s planning. We have lots of exciting projects, such as regenerative farming, carbon sequestration in soil and local agricultural, net zero homes, active travel and smart renewable grids that we are trying to do off the back of getting biosphere status.
The first valuable point that my hon. Friend made that I want to stress is that there is no similar designation in British law that achieves the same effect. I am keen for the Government to take it on board that we have this valuable designation that combines the human world, the natural world and the maritime world. That is actually quite unique; there is nothing like it in UK law, but should there be? For example, 75% of the Isle of Wight comes under some form of UK designation: there are eight separate designations and 13 distinct areas. For an island of our size—it is only 15 miles by 30 miles —that is highly fragmented and somewhat over-complex, and creates a needless bureaucracy when it comes to nature protection and planning. I would love to know how the Government could incorporate and recognise biospheres within UK law. At the moment, we have a tapestry on the Island, but we need a blanket, which is the idea that the biosphere gives.
My second pitch, in the brief time that I have, is that if the Government are going to bring in a Bill about protected landscapes, such as national parks and AONBs, which I hope they do, and if they are going to slightly fudge the difference between them and perhaps bring in new designations, one of the new designations could be a biosphere designation, which would give biospheres a status within UK law, or an island designation. If we are going to have city parks, why can we not have island parks? It is not a national park on an island but an island park that looks at human habitation, maritime protection and landscape protection as a single whole.
I would argue that an island park designation for the Isle of Wight would have AONB status throughout. We have only a finite amount of land and we cannot keep giving it up endlessly to low-density, car-dependent, un-environmentally friendly greenfield developments; we need to use land better. We could have maritime and landscape protection, as highlighted by my hon. Friend, and we could use the island park designation to attract tourism and help with our identity, as the biosphere potentially does. We could perhaps get some targeted support for agriculture, because we do not have an abattoir on the Island, so all the livestock goes to the mainland for slaughter, which adds cost and inhibits the circular economy that we need. Those are some of the ideas that an island designation or a biosphere designation could provide.
The biosphere is about human habitation, so we could also do a great deal with culture. The Isle of Wight was one of the most celebrated places in Victorian England with Tennyson, Keats and many others coming down to enjoy it and paint it. People fell in love with the place and sometimes used it as an escape from mainland Britain. Other people based themselves there, such as the Bonchurch school of artists and the Freshwater set with Julia Margaret Cameron. We also had—who wrote “Alice in Wonderland”?—Lewis Carroll, who used to hang around there back in the day hoping to catch a glimpse of Tennyson. We have had a phenomenal cultural input. Given the Island’s culture, together with its unique species and unique dinosaurs—we have more dinosaur finds than anywhere else in Europe, and in fact it is one of the leading dinosaur places in the world—and our landscape, there has to be a better way of recognising and protecting that. We could do so either by making biospheres part of UK law or, for the Island as a separate issue, having an island designation, which other islands—the Isles of Scilly, Arran in Scotland—could eventually share. It could be a very good idea to have some kind of island designation in UK law. I thank my hon. Friend so much for bringing forward this debate, and I look forward to what the Minister has to say.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)
Mr Deputy Speaker, I know, because we had a little chat earlier, that you share my enthusiasm for this debate, and I cannot imagine a better way to spend the end of the parliamentary day than celebrating the very first World Biosphere Day. Let me begin by thanking my hon. Friend the Member for North Devon (Selaine Saxby), for securing this timely debate—because today is indeed the day—and my hon. Friend the Member for Isle of Wight (Bob Seely) for playing his part today.
As my hon. Friend the Member for North Devon recognised, I have personal experience of North Devon thanks to her very generous invitation, when I was the cycling Minister last summer, to join her on a bike on the Tarka trail. So I have seen for myself the beauty of North Devon, and I absolutely appreciate why her area has secured UNESCO world biosphere status. The UNESCO biosphere programme began in 1971 and there are, as we have heard, seven accredited biosphere reserves in the UK. I would like to spend a little time highlighting the programme and its success, and also the importance of nature.
It is incredibly important that we recognise that much global GDP—more than half, in fact—depends on biodiversity. Over $44 trillion is estimated to be moderately or highly dependent on biodiversity. The loss of tropical rainforests, the collapse of global pollinators and the reduction in marine fisheries would lead to a contraction of global GDP by 2.4% by 2030. That is exactly why we are acting locally and thinking globally. Central banks are directly exposed to nature risk. The Dutch and French central banks have found that 36% and 42% of their portfolios, respectively, are highly dependent on nature.
What has occurred at the North Devon biosphere reserve in is only possible because of collaboration. There is very little that one person can achieve on their own, but I do want to join my hon. Friend with a special mention for Andy Bell, who has co-ordinated the North Devon biosphere reserve partnership. Since its designation 46 years ago—it is as old as me—the biosphere reserve has enabled the fantastic creation of four extra marine conservation zones. It has improved the water quality with habitat and on-farm actions in 34 catchments, planted over 60 hectares of woodland in partnership with landowners, created 20 hectares of saltmarsh, restored 1,500 hectares of culm grassland with the Devon Wildlife Trust and improved over 120 km of riverbank habitat.
This absolutely demonstrates the value of the biosphere programme in bringing together a broad range of stakeholders with a shared endeavour to connect people with nature, and as a mechanism to leverage funding to deliver sustainable development at the catchment scale. It is all very much in line with the principles set out by the biosphere sustainable development aims. This is through nature conservation, with the protection of biodiversity and cultural diversity, and through scientific research, underpinning development through research, monitoring, education and training. We need sustainable development that is socially, culturally, economically and environmentally aligned, symbiotically supporting each other.
The International Day for Biosphere Reserves is UNESCO’s invitation to take inspiration from the solutions already implemented in those areas, and to build genuinely sustainable development everywhere, with full respect for nature and the living world. I absolutely recognise the role that the Man and the Biosphere programme has played in achieving sustainable development goals, by sharing experiences and testing policies. That includes the sustainable management of biodiversity and natural resources, and mitigation and adaptation to climate change.
I also wish to recognise our newer biosphere reserves. Those include the Brighton and Lewes Downs, known as the living coast biosphere reserve, which covers more than 390 square kilometres of land and sea, and—my hon. Friend the Member for Isle of Wight is in his place—the Isle of Wight, which was awarded UNESCO biosphere status in 2019, and covers 914 square kilometres of land and sea. Both those areas are undertaking similar local engagement through their respective biosphere reserve partnerships, reflecting their distinct local terrestrial and marine ecosystems. My hon. Friend called on me to recognise further protections, and we are looking at that as part of what was set out in the Environment Act 2021 for how we protect land. I know that he has already had conversations with DEFRA and Natural England about national park status, and I look forward to engaging in conversations to support that.
Bob Seely
It is kind of the Minister to say that. I am talking about island park designation, not a national park—some of my farmers would be very concerned if they thought I am planning a national park behind their back. It is some kind of designation under the new planning system. I would love a national park, but I think that ship has sailed.
Trudy Harrison
I am grateful to my hon. Friend for that clarification—island park designation, indeed—and I look forward to meeting him to discuss that in more detail.
This is an intergovernmental science programme, and the key point is that we use our biosphere reserves to test our approaches for sustainable development in the real world. That is critical to inform initiatives such as local nature recovery strategies, which are a key tool to meet many of our environmental targets under the Environment Act 2021. As my hon. Friend the Member for North Devon said, a foundation of our new approach to sustainable development will be working with farmers and environmental land management.
Those schemes will pay for more sustainable farming practices, and improve animal health and welfare. They will also bring environmental benefits, including landscape-scale environmental changes, which will be a crucial step towards achieving our 25-year environment plan and subsequent environmental commitments, and our net zero goals. That is why we are working extremely closely with farmers and other agricultural and environmental stakeholders to help shape the new schemes through our tests and trials, including the North Devon landscape pioneer, which took place in the North Devon biosphere reserve.
One of the three main functions of biosphere reserves is the conservation of biodiversity. Under the Environment Act, we have committed to halting the decline in species abundance in England by 2030, and to setting at least one other long-term target for biodiversity. Those targets will drive wide-ranging actions to deliver nature recovery. Our three-pillar approach to restoring and improving biodiversity includes: restoring and creating habitat that is greater, bigger, better, and more joined-up; tackling pressures on species and their habitats, for example by addressing pollution—something I know my hon. Friend cares deeply about—and improving water quality; and taking further targeted action for specific, threatened species.
We are already taking action through, for example, our nature for climate fund, which provides £750 million for the creation, restoration and management of woodland and peatland habitats, and our green recovery challenge fund, which is estimated to deliver 600,000 hectares of habitat creation and restoration within and outside protected sites.
On the international front, the UK is committed to securing an ambitious outcome at COP15 to halt and reverse biodiversity loss globally by 2030. We will continue to champion the protection of at least 30% of land and sea globally and recognise that significantly increasing finance from all sources is absolutely needed to halt nature loss.
At least £3 billion of the UK’s international climate finance will go towards solutions that protect and restore nature and biodiversity. We have launched a £500 million blue planet fund to support developing countries to protect the marine environment and develop sustainable marine economies.
I thank my hon. Friend the Member for North Devon once again for securing the debate, and for raising the profile of our biosphere reserves in facilitating sustainable development at the local, national and international scale, and thus their contribution to a wide range of Government objectives.
Question put and agreed to.
Draft Football Spectators (Relevant Offences) Regulations 2022
(1 year, 6 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Department (Chris Philp)
I beg to move,
That the Committee has considered the draft Football Spectators (Relevant Offences) Regulations 2022.
It is a pleasure, as always, to serve under your chairmanship, Mrs Murray. I expect many members of the Committee will be aware of the recent concerns about football-related violence, disorder and antisocial behaviour. In fact, the 2021-22 season saw arrests far higher than in any of the previous seven seasons. The increase in that year followed a long-term downward trend, but is none the less a matter of significant concern. A particularly low point came during the Euro 2020 tournament, where we saw not only horrendous and unacceptable racist abuse directed at some England football players but serious incidents in the vicinity of Wembley stadium, particularly on the day of the final in July 2021.
Baroness Casey, in her review of those events, found numerous infractions, one of which was the blatant use of cocaine by some football fans in front of other law-abiding citizens, including young children. That is completely unacceptable. A recent study found cocaine traces on nearly all tested toilet cisterns at major football grounds, and the police have carried out match day operations to seize drugs at football matches and to arrest individuals. Unfortunately, the trend of using and supplying cocaine at football matches continued into the 2021-22 season, during which, according to police data, there were over 140 reported arrests for drug offences.
The police have been clear that they have seen an increase in drug-fuelled disorder across all forms of regulated football matches. Cocaine, which is a matter of particular concern, is a class A drug. It is highly harmful and often leads to extremely disorderly behaviour. The trend of detection of cocaine use at football matches is extremely worrying. We have therefore taken the necessary steps to lay this instrument, which will see all those who attend football matches and who supply or use class A drugs subject, or potentially subject, to football banning order proceedings upon conviction.
Football banning orders are an appropriate and effective tool to help to combat football-related disorder. In addition to a regular criminal conviction and whatever sentence may get passed, football banning orders can be used to ban the individual from attending regulated football matches for between three and 10 years. That will obviously prevent troublemakers from continuing to attend football matches, and will provide an extremely strong deterrent. We are determined, alongside the police, to drive down football-related violence and disorder, and this instrument is an extremely important part of that work. I commend the draft regulations to the Committee.
Naz Shah (Bradford West) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray. The official Opposition are grateful to the Minister for setting out the context of the draft regulations, to which we have no objection.
Question put and agreed to.
Financial Services and Markets Bill (Ninth sitting)
Thursday 3rd November 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I beg to move, That the clause be read a Second time.
I wish to say from the beginning that I will push the new clause to a vote. I move the new clause in the name of my hon. Friend the Member for Walthamstow (Stella Creasy). As we heard in evidence, buy now, pay later companies offer consumers the opportunity to spread payments, but they remain unregulated. They represent a large, growing and unregulated form of debt, the growth of which was fast-tracked during the pandemic. Because the loans are initially interest free, consumers lack the key consumer credit protections they receive with other products, which potentially puts them at risk.
We know that buy now, pay later products drive people to spend more money because the providers tell us so. That risks pushing people to spend money that they do not have, without adequate protection against mis-selling. In the cost of living crisis, millions more consumers have turned to this form of credit to make ends meet. As with all forms of high-cost credit, regulation is critical to ensuring that buy now, pay later can be a constructive way for consumers to manage their financial situations.
Labour put forward a proposal to that effect in 2020, which the Government voted down. In 2021, the Financial Conduct Authority called for regulation, and the Government did a U-turn. Now, over two years later, consumers are still waiting for those vital protections, but there is little sign that the Government recognise the urgency to act. In the meantime, the industry has rapidly expanded, so the risks to consumers have grown, which has further increased the need to intervene.
In 2021, Citizens Advice reported that 41% of buy now, pay later users had struggled to make a repayment. One in 10 have been chased by debt collectors, rising to one in eight among young people. Some 25% have fallen behind on another household bill in order to pay a buy now, pay later bill. Those effects of this form of credit were echoed in research by StepChange. Its data shows that 40% of buy now, pay later customers took negative coping actions to cover the debt that they had accrued through this service, including using credit to repay credit, falling behind on housing payments or utility bills, asking family or friends for help, and cutting back to the point of hardship. The figure is 40% for buy now, pay later and 21% for users of other forms of credit.
With Christmas approaching, it is likely that more consumers will be driven to use buy now, pay later and risk unaffordable debt. Equifax data from Christmas 2021 showed that 9% of Christmas shoppers in 2020 used buy now, pay later to spread the cost of presents, and that a quarter of all 18 to 34-year-olds plan to use buy now, pay later to buy presents this Christmas. Last year, one in five people using buy now, pay later said that they felt pressure to buy presents for family and friends, and roughly a quarter—27%—said that they would struggle to afford Christmas without its help. These trends are only likely to increase. The Equifax data shows that two in five users report missing at least one payment in the past, and half of them say that they have been hit with extra fees as a result.
New clause 1 therefore requires that urgent action be taken now to ensure that consumers are protected against being sold unaffordable debt by these companies. It would ensure that some key protections form part of the regulation. That includes ensuring that buy now, pay later users have access to the Financial Ombudsman Service, that there are credit checks before use, and that users are protected by section 75 of the Consumer Credit Act 1974. Those changes would bring buy now, pay later products into line with other forms of credit and ensure that our consumer credit landscape could not be pulled apart by other forms of credit demanding bespoke arrangements.
Dame Angela Eagle (Wallasey) (Lab)
I add my voice to those supporting new clause 1. I commend my hon. Friend the Member for Kingston upon Hull West and Hessle for her speech on this very important issue and my hon. Friend the Member for Walthamstow, who has long campaigned to bring buy now, pay later credit companies into some form of regulation. Obviously, their emergence has been assisted by the shift to online shopping, which we all have experienced and which was turbocharged during the lockdowns.
The consumer credit legislation that protects customers from taking on unaffordable levels of debt and paying over the odds for credit, in a way that is often quite opaque, did not anticipate the existence of online shopping or the explosion in the kind of credit that is now easily available to those who roam the internet or look at TikTok and see lovely things that are just within reach. I speak as someone who has been around for quite a while and whose parents used to put money away in shops so that they could afford Christmas presents, before consumer credit exploded in the way that it did. The Consumer Credit Act tried to make that fair and to regulate it. This is another switch in velocity, capacity and the availability of things, and it is very difficult to discern what the price is when you take something out.
We are now in an instant gratification culture, rather than the place where we said, “Put money away months before and hope you can afford to get the Christmas presents you want for your kids.” It is now a case of instantaneous availability—literally a click on a website. Klarna and various other of the buy now, pay later organisations are everywhere that it is possible to spend money. It is very difficult to imagine how that might be adding up—what the price of it actually is—when a person is in the middle of a purchase, particularly a younger person who is used to that kind of instant availability. It is very difficult for anyone to argue sensibly that the people who are clicking and making those purchases have a good idea of the price of the credit and the burden of the repayments they are taking on.
New clause 1 seeks to bring the new fintech ways of getting access to consumer credit—if I can put it that way—within the existing consumer protections in the Consumer Credit Act 1974, which admittedly is now pretty long in the tooth. Clearly, it is important for those to whom we give the job of protecting consumers to think in detail about how that can best be done, but it is pretty difficult to argue that we should allow the current circumstances to persist. I am interested to hear what the Minister has to say about that.
It is important that people have time to think about what they are doing and that the pricing of credit is obvious at the time of the click, so that people can make genuine decisions and not feel that they have been conned, that the price is wrong or that they have got themselves into a vortex of increasing costs that were not in front of them at the time. The consequences of allowing an entire generation to have access to that kind of consumer credit without protections are too dire to contemplate.
I hope the fact that this Parliament has always put consumer protection at the heart of what it does and legislated for that purpose will prevail, and that the Minister will think about how we can sensibly and quickly bring this part of the growth industry of credit, including consumer credit, into the protected space.
Harriett Baldwin (West Worcestershire) (Con)
Thank you, Mr Sharma, for allowing me to contribute to the debate on new clause 1. My colleagues on the Treasury Committee have raised a very interesting and topical subject for us to debate regarding the best way forward. I must declare an interest, as someone who has bought things on the internet and has used this convenient way of paying for them. Clearly, when we have the FCA in front of us, we need to ask how it is approaching regulation in what has been an area of innovation, where fintech has really come to the fore.
It will be very interesting to hear the Minister’s reply to the points that have been raised, and what he sees as the best way forward. That innovation is supporting our retail sector, but at the same time, consumers deserve to know what they are getting into and to have good information when they make decisions. I look forward to hearing the Minister’s comments.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I, too, support new clause 1, not because I wish to stop buy now, pay later as a form of credit or to restrict people’s choice, but because I want people to fully understand what they are getting into before they do it. I did not understand what Klarna was. I like the Space NK website as much as the next woman who likes to spend too much money on skin products, but I could not quite understand why all of a sudden, about two years ago, Klarna was mentioned as a means of buying now and paying later. I thought, “How terrifying. If you cannot pay that ridiculous price this month, how are you going to pay that ridiculous price next month?”.
My hon. Friend the Member for Walthamstow has done some brilliant work on this issue. Buy now, pay later is the form of credit for the under-30s. They use it more than store cards or credit cards. It is often used on clothing websites, primarily by young women who buy different sizes to see which dress they actually want.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I rise to support the new clause moved by the hon. Member for Kingston upon Hull West and Hessle.
Some things do not change. The technology might, but the need for continuation of consumer protection does not. I heard Members talk about parents using buy now, pay later. I remember buying a sideboard with my sister in the ’80s using the old-fashioned financial system of paying money every week—that took a long time to pay back. That reality does not change, and this form of credit is now happening with single items, whether they be trousers or shoes, or make-up, which raises a whole range of diverse issues. We cannot lose sight of the fact that most people who might utilise the service in my constituency might not know that they do not have the appropriate consumer protections. The SNP will support the new clause if it is pushed to a vote.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Sharma. I start by paying tribute to my hon. Friend the Member for Walthamstow, as others have done, for tabling the new clause and for her relentless work in the House to highlight the risks that unsecured credit poses to the most vulnerable in society, including many of my constituents in Kilburn. I also pay tribute to her successful campaign for better regulation of payday loans and companies. I am sure everyone has heard her speak on that campaign in the Chamber at some point.
As my hon. Friend the Member for Kingston upon Hull and Hessle said, we are disappointed that the Bill has failed to address buy now, pay later regulation. For years, the Government have promised to regulate the sector, but have not done so, which has left millions of consumers without protection. I recognise that many of my constituents, particularly the young, value buy now, pay later products, because they allow people to pay for expensive products over time. However, the products can also result in debt building up quickly and easily. That is why it is so important that the sector is properly regulated, as my hon. Friend the Member for Mitcham and Morden outlined.
An investigation by the FCA, the Woolard review, which reported in February last year, found that many consumers simply do not know that buy now, pay later products are a form of credit, which means that some people do not consider the risks associated with taking out such products and may not look at the products as carefully as they might have done otherwise. That should be deeply concerning to all of us here, and it has left the most vulnerable, financially excluded people at risk of getting trapped in a cycle of debt. The review made it clear that there is an urgent need to regulate all buy now, pay later products.
We are almost two years on from the review and nothing has been done—no action has been taken. The Government’s consultation concluded in June, and this Bill was the perfect opportunity to bring forward provisions to regulate the sector. Will the Minister explain why the Government have chosen not to do so? It is not just consumers who are in desperate need of regulation. As shadow City Minister, I have engaged with the main players in the buy now, pay later sector in recent months. They too have called on the Government for proper regulation to provide certainty for businesses and to keep bad actors out of the market. I hope the Minister will explain why his Government have chosen to leave consumers unprotected and have ignored calls from the sector by failing to include this regulation in the Bill today.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Mr Sharma. It is always a pleasure to follow the hon. Member for Hampstead and Kilburn. I would like to add my recognition for what the hon. Member for Walthamstow has achieved, particularly when it comes to payday loans.
The debate on this clause is not about the ends. Rather, it is about the means and the best way of proceeding from here to an end that, as we heard from my hon. Friend the Member for West Worcestershire, is common to both sides of the Committee. However, there is a difference. The Government will not be supporting this amendment. I want to make it clear that we are trying to find the best path on which to proceed, and we are trying to get this important area right.
The amendment would require the Treasury to make regulations to bring buy now, pay later products into regulation within 28 days of the Bill’s passage. I contend that that would be breakneck speed. I hear and understand the frustration of colleagues that the legislation has taken a certain amount of time to mature, but it is also an innovative product and something that provides real utility to millions of people. It is important that we get this right.
The challenge for us in bringing forward appropriate regulations in this domain is that we must ensure we give no succour to the greater evil of informal or illegal credit. As we look to regulate the credit market, we have to acknowledge that what we do not regulate creates a floor, beneath which nefarious providers operate—for example, those whom the hon. Member for Walthamstow has been vigilant in cracking down on.
I understand the desire to move at pace, but I do not accept that nothing has happened. The FCA has significantly moved the dial on this, although there is more to do. It is our contention that we should do it in a thoughtful way and by consulting with the sector, which is supportive of endeavours to bring forward the right amount of legislation.
We also acknowledge that to many people credit can be a valued lifeline. Like the hon. Member for West Dunbartonshire, I remember being sent to do the weekly grocery shop, and that shop provided credit of a buy now, pay later form. As a growing family, and particularly at certain moments of the year, we had a more-than-average amount of groceries. It was a real lifeline. It was a way to spread the cost in a measured way. We should recognise that we must be very careful of the unintended consequences.
Dame Angela Eagle
I am glad to hear that the Minister was helpful to his mother when growing up by doing the grocery shop. He has just made a subtle point about unintended consequences of unregulated lenders—nefarious was the word he used. We would all associate ourselves with that. I wonder if the Minister would talk about speed, given that he does not agree with a month. When does he expect this process to bring forward the wherewithal to incorporate this kind of lending into regulation? Is it his view that the price and consequences of the interest rates that are attached to lending like this should be presented far more upfront when it comes to the button being clicked?
Andrew Griffith
I will address both of those points. In terms of timing, the Government published, as the hon. Member knows, a consultation on the proposed approach to regulation in October 2021; I acknowledge that was some time ago. The response to that consultation was published in June 2022. The Government are now developing the necessary legislation and intend to consult on that draft legislation soon. The Government aim to lay secondary legislation in mid-2023.
The hon. Member talks about price, and I will defer to her expertise if this is the case, but my understanding is that the category that is defined as “buy now, pay later” is required to be credit-provided for no more than 12 months, in no more than 12 instalments, and interest free. So although I am an addict for data, and I believe that transparency is—in most markets—the best oxygen, in this case it is clear and established that this product category is not allowed to charge interest. That does not mean that it does not have charges; there is hidden small print, and I understand and support the need for that.
Dame Angela Eagle
I accept what the Minister has said, but the price here is not an interest rate, it is actually what happens if one does not make the payments. It is the consequences of falling behind that are the issue rather than an interest rate.
Andrew Griffith
I think that the hon. Member and I are at common cause in terms of what we are talking about. To make a wider point, I think we would all understand and aspire to a culture that was “save first, and buy later”. What we are talking about are societal changes. We live in a society where too many people have early recourse to debt and where we perhaps do not have the level of financial education that we would like. That is something that I discussed yesterday with the Money and Pensions Service.
There is a great deal more work to do. I would like to champion that in my relatively new ministerial role. Although it is important that we regulate, and although we have to recognise that, however much we try to work upstream, there will be people who are exploited or simply vulnerable, or who are not operating on the sort of level of financial resilience that they should be. I know the Treasury Committee spends a great deal of time on that; it is a concern to me and the ministerial team in the Treasury. That is an area that we can collaborate and work on; it need not be something that we divide over. That is particularly pertinent to younger people.
As well as committing to move forward with regulation, we commit to do so in a measured way, in the right way and at the right time. That also brings into consideration wider initiatives about financial education in general.
Emma Hardy
I want to press the new clause to a vote.
Question put, That the clause be read a Second time.
The Chair
With this, it will be convenient to discuss new clause 5—Essential banking services access policy statement—
“(1) The Treasury must lay before the House of Commons an essential banking services access policy statement within six months of the passing of this Act.
(2) An ‘essential banking services access policy statement’ is a statement of the policies of His Majesty’s Government in relation to the provision of adequate levels of access to essential in-person banking services in the United Kingdom.
(3) ‘Essential in-person banking services’ include services which are delivered face-to-face, and may include those provided in banks, banking hubs, or other service models.
(4) The policies mentioned in sub-section (2) may include those which relate to—
(a) ensuring adequate availability of essential in-person banking services;
(b) ensuring adequate provision of support for online banking training and internet access, for the purposes of ensuring access to online banking; and
(c) expectations of maximum geographical distances service users should be expected to travel to access essential in-person banking services in rural areas.
(5) The FCA must have regard to the essential banking services access policy statement when fulfilling its functions.”
This new clause would require the Treasury to publish a policy statement setting out its policies in relation to the provision of essential in-person banking services, including policies relating to availability of essential in-person banking services, support for online banking, and maximum distances people can expect to travel to access services.
Tulip Siddiq
I would like to say from the outset that I will push new clauses 4 and 5 to the vote.
New clause 4 would require the Treasury and the FCA to conduct and publish a review of the community need for, and access to, essential in-person banking services, and enable the FCA to ensure that areas in need of such services receive them, and to make sure that banking services have a minimum level of access.
New clause 5 would require the Treasury to publish a policy statement setting out its policies in relation to the provision of essential in-person banking services, including policies relating to availability of such services, support for online banking and maximum distances that people can expect to travel to access banking services.
Of course Labour welcomes the fact that, after years and years, we finally have a Bill that introduces protection for access to cash. However, the Bill has some serious gaps that we are concerned about. We have already debated in a previous sitting the Government’s failure to guarantee free access to cash, but this Bill also does nothing to protect essential face-to-face banking services, which the most vulnerable people in our society depend on for financial advice and support.
Analysis published by the consumer group Which? found that almost half the UK’s bank branches have closed since 2015. That has cut off countless people from essential services. In its written evidence to us, Age UK called for the Bill to be amended to protect the in-person services that older people rely on, such as the facility to open a new account or apply for a loan, to ensure that banking services can meet their needs.
However, it is not just older people who struggle without support. Natalie Ceeney, chair of the Cash Action Group, who many Committee members will know, warned us at our evidence session of the significant overlap between those who rely on access to cash—around 10 million British adults—and those who need face-to-face support. She said that
“every time I meet a community, the debate goes very quickly from cash to banking. It all merges. The reason is we are talking about the same population.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 49, Q98.]
She is completely right: it is the most vulnerable, the poorer people in society and the older members of society, who depend on that extra face-to-face help, for instance in making or receiving payments, or dealing with a standing order. These are the people who will be left behind if this question about banking is left completely unaddressed. Nor should we forget those without the digital skills needed to bank online, people in rural areas with poor internet connection, or the growing number who cannot afford to pay for data or wi-fi as the cost of living crisis deepens.
As the FCA warned in its written evidence to us, the powers granted to the regulator by this Bill do not extend to the provision of wider banking services beyond cash access. That is why I hope the Minister will today commit to supporting new clauses 4 and 5, which will give the FCA the powers it needs to protect essential in-person banking services.
Just to be clear, Labour is not calling for banks to be prevented from closing branches that are no longer needed—far from it. Access to face-to-face services could be delivered through a shared banking hub or other models of community provision. We also recognise that banking systems will inevitably continue to innovate, which is a good thing. Online banking is a far more convenient way for people to make payments and manage their finances. However, we must ensure—indeed, as constituency MPs we have a duty to ensure—that the digital revolution does not further deepen financial exclusion in this country.
That would require protecting face-to-face services and putting in place a proper strategy for digital exclusion and inclusion. Banking hubs or other models of community provision must be part of that solution. These spaces have the potential to tackle digital exclusion through their dedicated staff, who can teach people how to bank online and provide internet access for those without it. I was delighted to hear this week’s announcement from the Cash Action Group that the sector will be launching additional banking hubs on a voluntary basis, but if we want to ensure that no one is left behind—the most vulnerable in our society—these services must be protected by legislation. I ask the Minister to support these two new clauses.
Siobhain McDonagh
I rise to support new clauses 4 and 5, which we know are supported by our constituents. No matter what kind of constituency we represent, whether it is wealthy, rural or urban, people are desperate for face-to-face services. Recently, in Mitcham town centre, Barclays and Halifax have closed. I stood outside both branches for a week during their opening hours, asking customers why they wanted face-to-face services and if they used online banking. In both cases, about 50% of customers had no access to online services, either because they did not know how to access them or were too frightened to use them because they were concerned about being scammed. That is an enormous concern, but it is completely rational and understandable, when we consider how many people are scammed.
This is about those quintessentially un-financial market issues of community and human contact. The closure of our banks and building societies is symptomatic of so much more—of our town centres being destroyed, of people feeling excluded from progress and the new society, and even of their feelings of loneliness. I am not suggesting that it is the banks’ job to resolve issues of loneliness, but we can talk about these issues as much as we like; people crave human contact to give them the confidence to use financial services and their bank accounts.
The branch staff do an enormous amount for our communities by protecting some of our most vulnerable constituents from doing things they really should not do, such as giving their life savings to people who they have never met who have offered to marry them. So much goes on in our banks and building societies, but it is only through the closure of banks in my town centre that I have understood what is really happening. Banks are retreating from branches on the high street but also from phone services. The number of banks that will allow people to do things by phone is reducing. Anyone here who has tried to contact their bank by phone knows that unless they have a significant amount of credit on their phone, they will not get through any time soon.
Emma Hardy
I thank my hon. Friend for the incredible speech that she is making. Looking at the Royal National Institute of Blind People briefing, does she agree how important it is for visually impaired or blind people to be able to access telephone and face-to-face banking services?
Siobhain McDonagh
Absolutely. As always, I agree with my hon. Friend. I think we will see an even greater explosion of financial fraud if there is an ever-quickening closure of branches in our town centres, and even more reductions in the ability to access services by phone. Unless there is regulation, we can appeal to the best motives of banks and building societies, but I understand that they are challenged. They have new competitors that do not have the infrastructure of the branches or staff. They are doing everything online, but they are doing it for a particular segment of society that does not, and will not, include everybody. We really have to grapple with that.
The work by the CASH Coalition has been excellent, but unless there is pressure from regulation, that will not happen. The idea that we all have to wait for the last bank in our town centre to close before we can even start thinking about a banking hub is as good as useless. I am only saying things that every member of the Committee knows, and that we know the consequences of. We have an opportunity today to do something about it on behalf of our most vulnerable constituents.
Dame Angela Eagle
It is a pleasure to follow the powerful speeches of my hon. Friends the Members for Hampstead and Kilburn and for Mitcham and Morden on this important issue. It is not an issue that affects most people, who have been able to make the switch to online banking and find it more convenient—although it has to be said that there is an increasing level of worry about online banking services because of the increasing prevalence of fraud and scams. We dealt with that in earlier parts of the Bill, but we touched only the very edge of it, as the tide of the problem rises. I am sure that we will come back to the issue many times in future Bills.
A significant number of our constituents cannot participate, for whatever reason, in the IT and tech changes that have made banking available on our phones and computer screens, and that allow us to chat to various bots that put us through to the places where we need to go. I do not know whether the Minister has had occasion to phone a bank recently or, to be honest, any other service after the pandemic, but it is one of the most frustrating things that anyone has to do. It seems there is only one phone line for all the telephone access points. One has to hang on listening to appalling music for hours on end.
Dame Angela Eagle
We will have to come in a Digital, Culture, Media and Sport Bill to outlawing the appalling music that one has to listen to when trying to access any kind of service, private or public, by phone. We have to remember that many people cannot hang on the phone forever. They cannot afford to, and they are the people who tend to need the most help. They may have pay-as-you-go phones that run out quite rapidly. They may be unable to afford to hang on at the whim of an artificial intelligence bot, or the fewer and fewer actual human beings at the other end. They cannot access even ordinary banking in the way that the majority of people do. As I have said, that can be for a number of reasons. All Members present may get to a stage in our lives when we cannot either, and when we cannot remember our PIN numbers.
Dame Angela Eagle
We already have trouble with our PIN numbers, but many people’s memories fail as they get older, or they may be in the early stages of Alzheimer’s or other dementias. They cannot remember things, they cannot deal with the security issues that are required to make banking in this way safe, and they cannot go and ask somebody to help them.
Emma Hardy
On that point, will my hon. Friend flag to the Minister that, if a bank machine does not have buttons and is just a touch screen, it is very difficult for blind and partially sighted people to know where the numbers are, so as to put their PIN in correctly? That is another reason why face-to-face banking is so important.
Dame Angela Eagle
My hon. Friend makes an extremely good point: tech developments sometimes leave people behind. That is not usually deliberate; sometimes it is thoughtless. However, we in Parliament must ensure that all citizens in this country are able to participate in what is, increasingly, effectively a utility, even though it is not in public hands—I make no comment one way or the other about that. Being unable to access banking services for whatever reason is a real disadvantage, whatever an individual’s age or time of life.
That is a primary reason why we must ensure that what the market cannot provide, regulation provides. I am interested in what the Minister has to say about that. This issue will get bigger as more and more services go online. Regulation cannot happen merely at the end of a process, when access has completely disappeared. Even in some places where bank offices still exist, not everybody can access them. As a Parliament, we are people who point our regulators in particular directions to deal with emerging issues, and this is an important one. I look forward to what the Minister has to say.
Stephen Hammond (Wimbledon) (Con)
It is a pleasure to serve under your chairmanship, Mr Sharma. I will make a short speech. It is more of a speech of curiosity. I listened very carefully to my next-door neighbour, the hon. Member for Mitcham and Morden, who said what most members of the Committee would probably say. She will know as well as I do that everybody looks at my constituency and thinks “leafy Wimbledon suburbia”. But she will also know that parts of south Wimbledon, of Raynes Park and of Morden town centre, which we share, have exactly the problems that she spoke about.
I may have misheard the hon. Lady, but she said that she did not wish to compel banks to stay open, or did not think that we necessarily could do so, and she spoke therefore about the establishment of banking hubs. What I am curious about is how banking hubs would be established. Are we saying that, as part of getting or maintaining a banking licence, there should be a contribution to a social fund, so that banking hubs can be established around the country? Are we saying that that levy should be extended, particularly because some of the harm that we are talking about is the rise of online banking? Should online banks make a contribution to the cost of those banking hubs? Or are we saying—I think it was said that the hubs should be inside local authority areas—that local authorities should offer them, for instance in town centres?
That is a genuine point of curiosity. As in previous discussions with the hon. Members for Kingston upon Hull West and Hessle, for Wallasey, and for Mitcham and Morden—my next-door neighbour—there is huge sympathy for ensuring that our constituents, including vulnerable constituents, have access to banking services. But we need to more tightly define the practicality of how we ensure that they have that access.
Siobhain McDonagh
I am completely open-minded about how the hubs are paid for, but they have to be paid for from the banking sector itself. I would not wish to put the responsibility on already overstretched local authorities. Many high street banks have had decades of loyal support from these customers, and they cannot just walk away from that responsibility and ignore them. They have been good, loyal customers. There should be a banking hub, but not at the point that the last bank closes. We need to have a view towards what happens in the future. There can be collaboration about sites, but there needs to be access to those services.
Stephen Hammond
That is extremely helpful in setting out the thought processes behind the new clause. One of the issues that the hon. Member for Hampstead and Kilburn might wish to clarify is that, if the hon. Member for Mitcham and Morden is correct, the new clause has to contain the stipulation that to get a banking licence in the United Kingdom, one needs to pay a certain amount of social levy so that banking hubs can be established. For me, that is the issue with the clause. I therefore suggest that the hon. Member for Hampstead and Kilburn might want to take it away and bring it back on Report, or have a discussion with the Minister about exactly how the levy that the hon. Member for Mitcham and Morden is effectively talking about is to be established. This new clause does not make that clear, and therefore, frankly, the practicality of the new clause—notwithstanding that we all agree with its intent—is clearly flawed.
Andrew Griffith
I once again note the strength of feeling on both sides of the Committee. The hon. Member for Mitcham and Morden has spoken in a number of debates on clauses of the Bill about the importance of bank branches to our constituencies and local communities. When I visit her constituency to see the opening of the new cash machine, perhaps I will be able to review the provision for myself.
Andrew Griffith
The Government do not support the new clause, but if I may make eyes at the Opposition, I would be very open to accepting an amendment about appalling hold music, as suggested by the hon. Member for Wallasey. That is something to look forward to—I am not sure I should say that in front of my Whip, but one has immense sympathy with the point made.
There are very real issues here, which no one disputes. I am familiar with the sobering challenges that the hon. Member for Wallasey talked about. I know from my meetings with charities that one in three of us will end up with dementia. The RNIB has done fantastic work for those with impaired sight or sight loss, and Age UK does lots of great work in our constituencies—very practical work, as well as raising these issues. I am very open to meeting representatives of all three organisations, so I am happy to give that commitment: they are on my long list of people to meet in this role.
Notwithstanding the wider debate about the role of statute in protecting bank branches from closure, I am keen that we harness the positive uses of technology to try to solve problems. We know that voice recognition can help people who are partially sighted, and the internet now has a great deal more regulation—every website now has accessibility options for people with sight issues—so there are things we can do to close that delta. The point about the importance of the consumer voice is also very well made and understood. It is very important that we make sure there is the right level of consumer representation and consumer voice across our entire financial regulatory system, rather than its representatives solely being producers or practitioners.
Emma Hardy
This might not be strictly within the scope of the new clause, but will the Minister take away the point about the problems with touchpads when people pay for things in shops? With flat surfaces, it is incredibly difficult for visually impaired and partially sighted people to know which buttons they are pressing when entering their PIN number. It is one of those cases where, as the Minister has said, technology advances and does not mean to discriminate against people, but it is causing difficulties.
Andrew Griffith
I do understand that point, and I will take it away. We are all challenged by the wonderful two-factor authentication that even the parliamentary authorities require of us as we log in, and I understand that as we move from analogue to digital, some really important protections are sometimes lost.
The availability of alternative channels by which customers can access their banking means that this issue is quite distinct from access to cash. We have talked about access to cash, and we understand the significant steps forward presented in the Bill and the new duty on the FCA. That is very positive. Where a branch is the only source of cash access services, the closure of that branch will be within the scope of the powers, which starts to address the issue of branch closure. We are giving the FCA powers to do its job. As we know, the purpose of the Bill is to give the FCA powers, not for Parliament to be overly prescriptive. In that circumstance, the FCA could delay the closure until some other reasonable provision for access to cash applied.
Tulip Siddiq
The Minister mentions the FCA, and I also want to take the chance to respond to the earlier comments by the hon. Member for Wimbledon. I am not endorsing a specific model—this is something to consider—but the proposed banking hub could work in exactly the same way as the current banking hub model, which is funded by the sector and regulated by the FCA, which also ensures that sites provide in-person services as well. If the Minister is willing to talk further on the provisions in the new clause—the hon. Member for Wimbledon was generous in suggesting that he would do so—I would be happy to explore banking hub models with him.
Andrew Griffith
There is a great deal of good evolution. I suspect that members on both sides of the Committee would say that it has come quite late in the process, but nevertheless there has been evolution in the banking hub solution—that dynamic, sector-led initiative—as well as the work of the Post Office, which offers in-person facilities for a wide range of, if not all, transactions. There may be a gradient of availability, but post offices that offer a certain range of services to deal with the most common and frequently made transactions are almost ubiquitous. The need to travel for more complex needs would not be an unsurprising feature in this market.
I welcome the initiatives developed by the Cash Action Group, Natalie Ceeney and UK Finance, and implemented by LINK, which are making the local assessments to determine where shared solutions are most appropriate. The industry has committed to shared bank hubs in 29 locations across the UK. Yesterday, it committed to a further four, in Luton, Surrey, Prestatyn, and Welling in south-east London. There is a good rate of change coming now, albeit from a low base.
The Government’s perspective is that while many people need and prefer to use in-person banking services, at this time it would not be proportionate to legislate to intervene in the market. Instead, we want to see the impact of closures understood, considered and mitigated wherever possible by the array of initiatives that have been put forward. I will continue to work with the sector, the FCA and other stakeholders from both sides—I mentioned some earlier—on this important issue.
Dame Angela Eagle
The Minister says that it is not enough of a problem at the moment to legislate. Why might that be the case? This is not going to become less of an issue. As more people get to the stage where they cannot access services, I suspect it will get worse rather than better. Could he give the Committee an idea of his thinking about how bad the situation would have to get before regulation would be appropriate? We must make certain that we do not leave millions of people behind and shut them out of access to necessary banking services.
Andrew Griffith
While taking nothing away from the hon. Member’s view, and indeed her experience in this space, I do not entirely share her pessimism that it is a one-way street and that the problem will only get worse. Solutions will be deployed. The rate at which banking hubs can be deployed, the sorts of services that people use, and technology will all evolve. I talked earlier, as she did, about some of the challenges of an ageing society in which loneliness is prevalent, both in urban and rural areas. There are initiatives, both community-led and technological, to help with some of that. We do not decry in any way the statement that there is a problem. I do not think that Members have heard that from me, or from any Government Members. The aim is to proceed in a proportionate manner.
Martin Docherty-Hughes
The Minister talks about how he wants the impact of closures to be understood in the decision-making process. Understood by whom? The banks are telling us why they want to close their branches: they are saving money. The FCA is saying, “The banks are closing their branches to save money.” Our constituents know what it means to lose a bank branch. There is nothing new here. We understand why banks are closing their branches: they want to save cash. They do not want to continue a local service for our constituents, so what does the Minister mean by “understood”? Understood by whom—the banks, the FCA or our constituents?
Andrew Griffith
Ultimately, the banks are downstream of the widespread issue that is the change in consumer behaviour. We have heard both in evidence and in comments made in Committee that 86% of transactions are now digital. The use case of going to a bank branch has evolved rapidly in my lifetime and the lifetime of all Committee members. That is the ultimate macro issue that we are dealing with. Is that issue understood? I think it is.
Solutions could be brought to the table, in terms of both a greater toolkit for the FCA and greater prominence and scrutiny of the FCA as it uses the existing toolkit and the new powers in the Bill. There are also industry-led solutions, which having perhaps started slowly are increasing at greater pace. Proportionality is about giving those developing trends time to mature to see what models can be developed, while accepting the underlying need for action.
I therefore ask the hon. Member for Hampstead and Kilburn to withdraw the motion.
Tulip Siddiq
After listening to contributions from Members on both sides of the Committee, I would like to have a conversation with the Minister about the new clause. I will bring it back at a later stage, but for now I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
National strategy on financial fraud
“(1) The Treasury must lay before the House of Commons a national strategy for the purpose of detecting, preventing and investigating fraud and associated financial crime within six months of the passing of this Act.
(2) In preparing the strategy, the Treasury must consult—
(a) the Secretary of State for the Home Office,
(b) the National Economic Crime Centre,
(c) law enforcement bodies which the Treasury considers relevant to the strategy,
(d) relevant regulators,
(e) financial services stakeholders,
(f) digital platforms, telecommunications companies, financial technology companies, and social media companies.
(3) The strategy must include arrangements for a data-sharing agreement involving—
(a) relevant law enforcement agencies,
(b) relevant regulators,
(c) financial services stakeholders,
(d) telecommunications stakeholders, and
(e) technology-based communication platforms,
for the purposes of detecting, preventing and investigating fraud and associated financial crime and, in particular, tracking stolen money which may pass through mule bank accounts or platforms operated by other financial services stakeholders.
(4) In this section ‘fraud and associated financial crime’ includes, but is not limited to authorised push payment fraud, unauthorised facility takeover fraud, and online and offline identity fraud.
(5) In this section, ‘financial services stakeholders’ includes banks, building societies, credit unions, investment firms, Electric Money Institutions, virtual asset providers and exchanges, and payment system operators.”—(Tulip Siddiq.)
This new clause would require the Treasury to publish a national strategy for the detection, prevention and investigation of fraud and associated financial crime, after having consulted relevant stakeholders. The strategy must include arrangements for a data sharing agreement between law enforcement agencies, regulators and others to track stolen money.
Brought up, and read the First time.
Tulip Siddiq
I beg to move, That the clause be read a Second time.
We fully support the provisions in the Bill that enhance the protection for victims of authorised push payment scams, but we feel that an opportunity has been wasted to do something on fraud prevention. UK Finance, the financial services trade body, recently published data that revealed that the amount of money stolen directly from hard-working families and businesses’ bank accounts through fraud and scams hit a record high of £1.3 billion in 2021. That is bad enough at the best of times, but even worse during a cost of living crisis. We need to get to grips with new types of fraud such as identity theft and online scams, which have seen criminals get rich at the public’s expense, with people’s life savings stolen and their economic security put at risk.
The current approach to fraud will always leave law enforcement agencies one step behind the criminals, who are exploiting new financial technologies and bank accounts to steal and hide the public’s money. The Opposition want to see enforcement agencies given the powers that they need to crack down on digitally savvy criminals, and to track stolen money through payment system operators, electronic money institutions and cryptoasset firms. If the Government are serious about tackling fraud, they will support our new clause to allow regulators and enforcement agencies to pursue criminals and bring them to justice wherever they hide their stolen money, and to protect people’s financial security.
New clause 6 would put in place a single, dedicated national strategy to tackle fraud. It would deliver a co-ordinated, interagency response across the Treasury, the Home Office, the National Economic Crime Centre, law enforcement agencies, the major banks and wider partners in financial services, telecommunications and social media centres. It would put in place a data-sharing agreement to help investigators and the sector prevent fraud and track stolen money. That agreement would extend beyond the banks to include social media companies, fintechs, payment system operators and other platforms that are exploited by tech savvy criminals. That is important, because for too long, tackling fraud has been solely the banks’ responsibility. That approach is completely outdated.
Mike Haley, the chief executive of CIFAS, said in evidence to the Committee:
“Provisions that facilitate greater data and intelligence sharing, particularly on suspicions of fraud and financial crime, would have the biggest impact in helping to prevent this type of crime. It is a crime that is at scale and at speed in the online environment. To be able to share the mobile numbers that are being used, the devices and the IP addresses at speed across the whole of the environment—payment providers, fintechs and telcos—would be enormously powerful. This is a volume crime, and we need to have prevention at the core of any national strategy. That would have a massive positive impact.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 68, Q129.]
The new clause would facilitate that sharing. Does the Minister agree with Mike Haley? If so, will he commit the Government to introducing a fraud strategy with data sharing at its heart?
I am sure, because I have heard the Minister speak so many times in this Committee, that he will tell us to be patient; he will say that change is coming. However, the millions of people who have fallen—or will fall—victim to fraud cannot afford to be patient any more. We cannot drag our feet over this. Scams will continue to rise, and countless more lives will be destroyed or lost. We need to make sure that the outdated way of tackling fraud is challenged once and for all. I ask the Minister to support the new clause.
Dame Angela Eagle
It is a pleasure to talk about this extremely important issue. The Treasury Committee produced a long and detailed report on this issue, with a series of recommendations. I hope that the Government will work cross-departmentally to put those into effect. Data sharing certainly featured in our views in that inquiry.
It is hard to contemplate the size of the explosion in fraud, how little of it is captured, and how few of the perpetrators are brought to justice. That is partly because of the massive number of chances for fraudulent activity to be perpetrated, which have come with changes in access to banking and digital capacity. They range from push frauds, fraudulent emptying of bank accounts and credit card cloning, all the way through to the text messages that we all get regularly on our phones.
The text messages tell us, for example, that we have recently been near someone who has covid—the message is purportedly from the NHS—and we need to give them our banking details so we can pay £1.75 for access to a PCR test. We have all seen them. I am getting a load now on energy support—probably everyone is getting them—which say that the Government’s support for energy bills has to be applied for and that we have to give these people our banking details. These are very plausible texts, which many people fall for. There are phone calls as well, purportedly from the bank, and emails too. This is a sophisticated level of fraud that is psychologically very well organised.
Emma Hardy
One message worth highlighting that I received was, “Hi mum, I’ve lost my phone. Please send some money to this number.” I rang both my daughters to ask, “Is this from one of you?”. They both said it was not. This “Hi mum” one that is going round at the moment has caught many people out. These messages play on emotions and can make people deeply concerned when they receive them.
Dame Angela Eagle
It makes people deeply concerned and it makes them do things that they obviously live to regret in the fullness of time.
Increasingly, there are also phone calls from fraudsters pretending that they are the fraud police and that the person’s bank account has been accessed for fraudulent purposes. It is very difficult to keep up with the level of activity on our phones—we are being bombarded every day—and that is without considering the scamming that the FCA is fighting, day in, day out, on products offered online, such as pensions, insurance and investment products, all of which regularly lie beyond the regulatory border, but can lead to massive amounts of financial loss if they are believed. It is also without considering the areas where younger people tend to get their financial advice, such as TikTok and other places, where we probably—it has to be said, Mr Sharma—do not spend that much of our time.
The windows for getting to people with these kinds of fraudulent intents and sophisticated frauds widen constantly. The capacity to deal with them does not widen as regularly and, by definition, legislation is much slower than the innovation of these people.
We have asked the authorities that are tasked with fighting fraud what they are doing about it. The Treasury Committee has taken evidence on the topic, and we were struck by how fragmented those fighting fraud are across Departments and by how process-related, rather than output-related, the evidence from the authorities was. They said things like, “We have 150 different things that we are meant to do by 2023, and we have done 91% of them,” but fraud is still massively increasing all the time.
We need a system—a national fraud strategy—that looks at the output of fraud, rather than the processes or tick boxes by which the different anti-fraud authorities, which are fragmented all the way through, justify what they are doing. In reality, even if there is lots of work going on, the outcome is not nearly what we would want to see. Levels of fraud are rising significantly, affecting more and more people, and there are fewer and fewer successes in dealing with it.
It ranges from very sophisticated money laundering kinds of fraud—we are not talking about money laundering here, but we could talk about it for a very long time, and about the way banking structures seem to facilitate it—to lower levels of fraud. There is fraud that is perpetrated from outside our country’s boundaries and there is sophisticated money laundering activity. We are talking about frauds that are ruining the lives of the many constituents who fall victim to them. Many people do not get compensation when they have been conned into sharing their bank details and have had their bank accounts emptied or their credit cards cloned, because they have had a hand in it in some way. I know that the authorities work closely with the banks to create circumstances in which compensation can be given when there is no fault, but there are big blurred lines.
Martin Docherty-Hughes
If the hon. Member for Hampstead and Kilburn presses the new clause to a vote, I will certainly support it. I declare an interest as the chair of the all-party parliamentary group on blockchain.
To build on what the hon. Member for Wallasey said, in subsections (2)(f) and (3)(d) and (e), we have a huge opportunity to help the Government by ensuring that there is a strategic overview of how fraud impacts on the technology sector. The problem is not necessarily the technology but the people utilising it. Distributed ledger-type technologies, for example, are used to access investments and assets, but those who are supposedly selling assets are taking advantage of technology that a lot of younger people use.
Critically, I hope that the Government hear the concern that there might be no strategic overview of how such technology can be manipulated. The tech is fine, but we must consider that manipulation—particularly of closed distributed ledger technologies and closed blockchains—and how it can block out the people who actually buy into those systems. I hope that the Government hear what has been said on the new clause.
Emma Hardy
I support the new clause. I refer the Minister to the evidence given by Mike Haley, the chief executive of CIFAS. In respect of fraud, he said:
“Absolutely, there should be a national strategy, and prevention should be at its core.”
He said that the Home Office was looking at
“publishing a national strategy; it has been much delayed and it is very much anticipated.”
One reason for including a national strategy in the Bill is the need for that strategy to be introduced as quickly as possible.
Mike Haley also said that he would like that strategy to be
“more ambitious, and to cover the public and private sectors, as well as law enforcement.”
He made the very good point that
“fraudsters do not decide one day, ‘We only go after bounce back loans because that is a public sector fraud.’ They will go after a loan from the NatWest bank, or a mortgage.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 68, Q130.]
He highlighted the inability to share information and said that some people might say that GDPR was preventing them from sharing information. He went on to say:
“It is a crime that is at scale and at speed in the online environment. To be able to share the mobile numbers that are being used, the devices and the IP addresses at speed across the whole of the environment—payment providers, fintechs and telecos—would be enormously powerful. This is a volume crime, and we need to have prevention at the core of any national strategy. That would have a massive positive impact. ”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 38, Q129.]
Our witnesses called for a national strategy that looks at crime seriously and that is more ambitious than that suggested by the Home Office and broader in scope. Although many of the frauds relate to small amounts, they are numerous and they cause people significant harm. When the Minister responds, I would like him to recall that oral evidence and the reason why our new clause calls for a national strategy.
Andrew Griffith
I will be brief. The Government are committed to tackling fraud, and we recognise that it goes far wider than financial services. There absolutely should be a national strategy, and there will be.
The Government recognise that tackling fraud requires a unified and co-ordinated response from Government, law enforcement and the private sector better to protect the public and businesses from fraud, reduce the impact on victims, and increase the disruption and prosecution of fraudsters. That is why the Government, led by the Home Office, which is the right body to be the lead, but with full Treasury input, will publish a new broad-based strategy to address the threat of fraud. I hope the Opposition will welcome that. The Government intend to publish it later this year.
Andrew Griffith
Indeed.
The Government will work with industry to remove the vulnerabilities that fraudsters exploit, we will work with intelligence agencies to shut down fraudulent infrastructure, and we will work with law enforcement to identify the most harmful offenders and bring them to justice. We will also ensure, with all partners, that the public have the advice and support they need. That should reassure the Committee that a clear strategy to tackle fraud will be forthcoming and that the new clause is unnecessary.
I note the Opposition’s concerns about data sharing, which are specifically referenced in the new clause. I reassure them that the Payment Systems Regulator has work under way with industry participants to enhance data sharing to prevent fraud. The PSR’s managing director, Chris Hemsley, did not raise any legislative barriers to data sharing for that purpose when he gave evidence to the Committee recently.
I will rise to the challenge put down by the hon. Member for Wallasey to turn the tide on fraud, because we all must acknowledge that it is a critical policing issue in this day and age. In that spirit, I hope that she will join us to ensure that her colleagues reverse their opposition to the Public Order Bill, which is tying up hundreds of thousands of police hours that could usefully be spent prosecuting the challenge of fraud. I also hope that she supports our initiative to cut red tape in policing and to end woke policing, so that we no longer arrest people for Twitter posts, we do not send the police off to dance the Macarena at carnivals or Pride events, and they no longer take the knee. If the hon. Lady is as serious as we are about tackling fraud, she has to acknowledge that there is a need to think about how we allocate our resources.
Dame Angela Eagle
After what I thought was quite a consensual debate, it is slightly unworthy of the Minister to resort to those comments in the week when there has been an inspectorate report about the misogyny, behaviour and culture of a lot of the police force. That needs to be reformed so that all members of our communities, whatever their age, gender or ethnicity, can trust the police; we all want to see that.
Will the Minister admit that so-called woke policing is not an issue in fraud? The issue is fragmentation. Woke policing was not raised during the great number of Treasury Committee evidence sessions about the fraud, so it was unworthy of him to make those points at the end of his speech. We need a system that is not fragmentated and that is focused relentlessly on output, and where there is cross-departmental working and proper funding, as well as data sharing, so that we can crack down on something that all of us want to see driven out of our system.
Andrew Griffith
I would never want to be unworthy in the hon. Lady’s eyes, so I am distressed that my offer to build consensus about how the police could best deploy their resources has, at this first stage, been rebuffed.
I ask the hon. Member for Hampstead and Kilburn to withdraw the motion.
Tulip Siddiq
The Minister was doing so well and I was hoping we could go through this sitting without hearing the Conservatives say the word “woke” once, but unluckily that has now been crossed off my bingo sheet.
I will press the new clause to a vote, because I want to hold the Minister to account and ensure he does not push this commitment too far down the road, and because every person in the sector I have spoken to has stressed the importance of legislative change when it comes to data sharing.
Question put, That the clause be read a Second time.
Economic Crime and Corporate Transparency Bill (Seventh sitting)
Thursday 3rd November 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I beg to move amendment 1, in clause 32, page 22, leave out lines 8 to 12 and insert—
“(1) This section applies in relation to a person who has, at any time on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force, become a person subject to relevant financial sanctions and who remains so subject.”
This amendment and Amendment 3 would mean that a person who is subject to sanctions is disqualified under the GB directors disqualification legislation only if those sanctions relate to asset-freezing.
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in clause 32, page 22, line 12, after “force” insert
“, or a person who is suspected of the facilitation of the evasion of sanctions by a person so designated.”
This amendment seeks to expand the criteria for disqualifying individuals from being company directors to include people suspected of facilitating evasion of UK sanctions by sanctioned individuals, in addition to sanctioned individuals themselves.
Government amendments 2 and 3.
Amendment 83, in clause 32, page 22, line 20, at end insert—
“11B Designated persons: requirement to notify the registrar
(1) This section applies in relation to a person who becomes a designated person as defined by section 9(2) of the Sanctions and Anti-Money Laundering Act 2018 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) If the person changes any details relating to any company on the register in the three months prior to the person becoming a designated person, the registrar must inform the Office of Financial Sanctions Implementation and the National Crime Agency of the changes made.”
This amendment requires Companies House to notify the OFSI and NCA if a designated person has changed any details relating to a company in the three months prior to their designation.
Clause stand part.
Clause 33 stand part.
Government amendments 4, 5 and 6.
Clause 34 stand part.
Clause 35 stand part.
Kevin Hollinrake
It is a pleasure to see you in the Chair, Ms Elliott.
Government amendment 1 is one of six amendments that the Government have tabled to clauses 32 and 34. Before I discuss the Government amendments and those tabled by the Opposition, it is worth explaining what clause 32 does in order to understand better the purpose of the Government amendments.
Currently, individuals subject to an asset freeze—designated persons under the regulations that contain prohibitions or requirements of the sort referred to in section 3(1)(a) of the Sanctions and Anti-Money Laundering Act 2018—can continue acting as a director. They can also be involved, directly or indirectly, in the promotion, formation and/or management of a company. It is not appropriate for asset-frozen individuals to be company directors. It would be perverse for a person who is forbidden from dealing with their own funds or economic resources none the less to be free to direct a company.
Clause 32 prohibits individuals subject to an asset freeze from acting as directors, and does so by amending the Company Directors Disqualification Act 1986 to prohibit individuals subject to an asset freeze on or after the day the provision comes into force from acting as directors of companies or directly or indirectly taking part in or being concerned in the promotion, formation or management of a company. Such individuals will only be permitted to take part in such activities with the leave of the court.
An individual in breach of that prohibition will be committing an offence, the maximum penalty for which will be two years’ imprisonment or a fine, or both. It will be a defence for the person if they did not know and could not reasonably have known that they were subject to an asset freeze at the time that they acted as a director or were involved in a promotion, formation or management of a company. The provision will take effect in England and Wales, and Scotland; clause 34 makes the equivalent provision for Northern Ireland.
Government amendments 1 to 6 all work to the same purpose. Collectively, they will ensure that new director disqualification measures impact those who should be prevented for public policy reasons from acting as directors, namely individuals who are subject to an asset freeze. The amendments will also ensure that we do not disproportionately and unnecessarily extend measures to categories of people whose sanction status has no bearing on whether they are fit to act as company directors. The narrower definition introduced via the amendments includes only designated persons subject to asset-freeze measures of the sort described in section 3(1) (a) of SAMLA.
Stephen Kinnock (Aberavon) (Lab)
Could I trouble the Minister to explain a little more about what categories of people who are sanctioned should therefore allowed to be designated as unqualified as directors under the legislation? He has said that amendments are an attempt to narrow the definition to assets-based, but is he therefore saying that someone who is sanctioned for human rights abuses should nevertheless be able to be qualified as a GB director?
Kevin Hollinrake
I will go on to describe the categories. As the hon. Gentleman knows, an assets freeze is a type of financial sanction. Only those sanctions are relevant to someone’s ability to manage, form or promote a company. Non-asset freeze financial sanctions, such as securities and money market instrument prohibitions, can apply to a broader category of person beyond designated persons, for example, all persons connected to a particular country. To subject entire populations of countries to the directorship ban is grossly disproportionate. It would also be operationally unenforceable, as only designated people appear in published sanctions lists.
Dame Margaret Hodge (Barking) (Lab)
I do not understand that. I do not know whether the Minister can explain it in ordinary language. It sounds to me like people with other financial interests will not be subject to this measure. I am sorry if I am being clueless, but I just do not understand what is being excluded at this point, and therefore what is included in this very welcome amendment.
Kevin Hollinrake
As I said in my explanation, for sanctions such as securities and money sanctions, those market instruments can affect entire populations; they do not just affect an individual. Those kinds of broad actions affect whole populations.
Kevin Hollinrake
The right hon. Lady can intervene again if she wants further clarification.
Dame Margaret Hodge
If someone has some ownership in the securities market—I am not a financial expert, so I do not know whether I am understanding this right—and one took action on the assets, that would have an impact beyond the individual. Is that what we are being told?
Kevin Hollinrake
No, that is not what the right hon. Lady is being told. If someone has ownership, they have an asset, and therefore if that asset is frozen they are a designated person. It is just that the instruments themselves can affect the broad category of people who may or may not own assets. What we are trying to do is target people who actually own the assets.
Dame Margaret Hodge
I am very grateful. This is really to understand it. If somebody is sanctioned, are they the sort of individual we would want to be a director of a company?
Kevin Hollinrake
It is not a person who is sanctioned. What we are trying to say is that everybody who is subject to an asset freeze is a designated person—exactly the kind of person the right hon. Lady would want to see sanctioned. Rather than getting into a to-and-fro debate, perhaps we can write to her and explain the situation in layman’s terms.
Kevin Hollinrake
Furthermore, the Foreign, Commonwealth and Development Office does not currently designate people in relation to non-asset freeze financial sanctions. Although that may change in the future, a directorship ban may not necessarily be the most appropriate measure to impose on those designated for non-asset freeze financial sanctions.
Stephen Kinnock
On the point about the FCDO not sanctioning anything apart from asset freezes, does it not impose travel bans? Is a travel ban not a non-asset freeze type of sanction?
Kevin Hollinrake
Yes, that is right. What we are focusing on in the Bill is people who are subject to asset freezes, not travel bans. Hon. Members can argue that other people should be banned from being the director of a company, but we do not think this is the appropriate place to make that restriction.
Stephen Kinnock
Are the Government saying that if somebody has been sanctioned and given a travel ban but not an asset freeze, they are still a fit and proper person to be a director of a British company?
Kevin Hollinrake
The point is that they may be or they may not be. Putting a broad ban in the Bill just because somebody is subject to a travel ban is not the appropriate way to do it, in terms of whether they are a fit and proper person to run a company.
Stephen Kinnock
Are the Government seriously arguing that somebody who has been sanctioned by the FCDO and given a travel ban but not an asset freeze is still a fit and proper person to be a GB director? If the Minister is saying that the Bill is not the proper place to deal with that issue, where in our legislative framework will it be made clear that somebody who has a travel ban under FCDO sanctions is not a fit and proper person to be director of a British company?
Kevin Hollinrake
What we are talking about here is financial sanctions. These matters relate to companies and financial sanctions, not to travel sanctions.
Let me explain these points further. Not automatically imposing these measures on potential future scenarios will give the Foreign, Commonwealth and Development Office the flexibility it needs to impose the most appropriate and meaningful conditions on people designated for financial sanctions beyond asset freezes. Without these amendments, director disqualification measures introduced by the Bill would automatically apply to anyone against whom the designation power under section 9 of SAMLA 2018 is utilised—for example, transport or immigration sanctions, or any future measures that His Majesty’s Government choose to design. Although those are extremely serious matters, such sanctions ought not by necessity impact on the person’s ability to act as a company director. Furthermore, should there be a future need to extend director disqualification measures to people subject to those broader sanctions, that can be done via future legislation as and when the need arises.
Dame Margaret Hodge
I am genuinely sorry to interrupt, and I am looking at the Minister for Security as well. It seems to me that if we consider the behaviour that somebody has done to be so bad that we want to sanction them in whatever way—through a travel ban, asset freeze or other mechanism—surely in those conditions we do not think they are a fit and proper person to start a business? I cannot see the logic of this; I cannot see where the pressure is coming from to have a distinction between the two, and why we should want it. Why are we putting this down? Why should somebody who has been guilty of a human rights abuse, who may not have an asset that we can sanction, still need to be defined as somebody who is not a fit and proper person to set up a company here? We do not want them to do that, do we?
Kevin Hollinrake
I think the best way forward on that is for myself and the Minister for Security to have a conversation. We can set out some of the reasons why that is the case in more detail in writing, as I promised to do earlier. We can then have a further discussion from there.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
When the Minister writes to my right hon. Friend the Member for Barking—which I am sure will be copied to all members of the Committee—it would be helpful to understand who would have been in scope in the original drafting, what specifically changed and who would be out of scope in the revised drafting. It would be clearer for us to know whether it has narrowed correctly, whether it is a tightening—and we should be happy with it—or whether, inadvertently, in dealing with one matter it has excluded others who might be useful to draw into the scope of the provision.
Kevin Hollinrake
That is perfectly reasonable. I tried to set out those kinds of example earlier, so I am very happy to clarify that in a letter to both the hon. Lady and the right hon. Member for Barking. Our position is that somebody might be subject to a travel ban for a number of reasons, and that does not necessarily exclude them from being a fit and proper person to run a company. Now, Members may think of some reasons why that individual should not be a fit and proper person, but I will set out why that person may still be fit and proper, and then we can all either agree, disagree or find a way of dealing with it.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It seems that if somebody is subject to a travel ban, they will fail pretty much every “know your customer” rule for every financial institution in the country. Indeed, we have set out regulations precisely to ensure that there are those tripwires. How will a company director be able to fulfil their duties? If the Minister cannot answer now, perhaps he can set that out in the correspondence to follow.
Kevin Hollinrake
That is exactly what I have already agreed to do. We will move on from that point, but, briefly, there will be instances where that person is not necessarily described as unfit or not proper to run a company, but we will set that out.
Amendment 83, tabled by the right hon. Member for Barking, introduces enhanced data sharing provisions to enable Companies House to more proactively identify and exchange information regarding suspicious activity with partners, including with law enforcement agencies. That is in addition to existing information sharing gateways and arrangements.
The Government believe it is better and more flexible to allow relevant operational agencies to formulate their own preferred approach to information exchange, rather than to define it inflexibly in primary legislation—[Interruption.] The right hon Member for Barking looks at me quizzically. I think she has picked up on one particular situation where she wants Companies House to act in a certain way, but she must agree that we could pick up myriad different situations where we might want Companies House to do something if we sat down and made a list. I am sure she does not want to get into the micromanagement of what Companies House should do in every circumstance. There will be millions of different things we expect Companies House to do. We prefer to give Companies House the objective of promoting the integrity of the registers and then hold it to account through the objectives and the provisions of the Bill. Specifying every single condition that we expect Companies House to operate in a certain situation is the wrong thing to do.
Liam Byrne
The last Bill Committee I had the pleasure of serving on was for the Data Protection Act 2018, which implements the general data protection regulation and prescribes all manner of protections for data privacy. This is our worry. When the new duty set out by the Minister for Companies House clashes with GDPR legislation, how do we resolve those clashes of principles to allow Companies House to share the data they need to share with the people they need to share it with in order to pinpoint the bad guys?
Kevin Hollinrake
That is a fair point and it is covered in the Bill, which seeks to make it easier for Companies House to share information proactively with other organisations or, indeed, commercial organisations and vice versa. Here, we are talking about specifying the exact circumstances in which that should happen, which we think is the wrong approach.
I now turn to amendment 93, which seeks to expand the criteria for disqualifying individuals from being company directors to include people suspected of facilitating evasion of UK sanctions by sanctioned individuals, in addition to the sanctioned individuals themselves. Any person enabling or facilitating the evasion of certain sanctions would already be committing an offence, for example, under regulation 19 of the Russia (Sanctions) (EU Exit) Regulations 2019. The maximum penalty on indictment is seven years in prison or a fine. Those are already dissuasive measures to ensure compliance with sanctions.
It is not appropriate and proportionate to apply director disqualification and offences to an individual who is only suspected of facilitating the evasion of sanctions. It is not clear what would constitute such suspicion and at what point a person would be prohibited to act. That could mean exposing an individual to criminal liability in circumstances reliant on suspicion alone, which I am sure the right hon. Member for Barking would not want to see. The uncertainty of what would constitute the criminal offence and potential interference with presumption of innocence has implications for the rule of law. I therefore ask hon. Members not to press their amendment.
I will now speak to clause 33. New section 11A of the Company Directors Disqualification Act 1986, introduced by the Bill, prohibits individuals subject to relevant financial sanctions, such as asset freezes, from acting as directors of companies. The clause limits the scope that prohibition by disapplying it for building societies, incorporated friendly societies, NHS foundation trusts, registered societies, charitable incorporated organisations, further education bodies and protected cell companies. The Secretary of State may, by regulations, repeal any of the subsections in the section, therefore applying the prohibition on individuals subject to an asset freeze from acting as directors in any of the organisation types in the clause. That allows the Secretary of State to apply those measures only to company directors in line with the policy focus of the measures in the Bill, without that unnecessarily applying to other entities currently not in scope. That will take effect in England and Wales and Scotland. Clause 35 makes equivalent provision for Northern Ireland.
Stephen Kinnock
Clause 32 raises important questions about who we should and should not allow to hold positions of power and responsibility in UK companies.
Currently, under the 1986 Act, the circumstances in which a disqualification order can be imposed are strictly limited. For the most part, they involve individuals with a criminal record for breaches of company legislation involving UK companies. Clause 32 expands the disqualification criteria to provide an explicit prohibition on any sanctioned individual serving as a company director. That is entirely proper, but the Opposition’s question is: why are the Government not going any further? They have considered who should be banned from serving as a company director, but the decision to add only those specifically designated under UK sanctions legislation feels like a missed opportunity.
We tabled amendment 93 to better understand and probe the Government’s thinking and to explore how additional changes could contribute to the Bill’s aims. The amendment is largely self-explanatory: it would add to the criteria those who aid and abet sanctioned individuals, or so-called “enablers” who help sanctioned individuals to evade our laws. The Minister will be aware of the army of lawyers, accountants and other so-called service providers who are in many ways doing Putin’s dirty work in London. In our view, it is crucial that they are caught in the net that the Bill seeks to cast.
Kevin Hollinrake
I totally agree with the hon. Gentleman that we need to clamp down on the enablers of dirty money, but does he understand the point behind the provisions? There are serious penalties for somebody convicted of breaking sanctions—up to seven years in jail—but his amendment seeks to penalise somebody who is not convicted but merely suspected of facilitating that kind of activity. Does he understand why that is a difficultly for the Government?
Stephen Kinnock
I do understand that; the Minister makes a valid point. As I was saying, this is what one might describe as a probing amendment to try to get from him a sense of the proactive action the Government are going to take to go after those enablers.
Dame Margaret Hodge
The Minister is quite right to say that the powers are there, but I hope he agrees that a way to facilitate this would be to introduce a new criminal offence of failure to prevent economic crime. In that case, the enablers to whom my hon. Friend refers could be caught and rightly punished for their role in colluding or facilitating economic crime.
Stephen Kinnock
I thank my right hon. Friend for that extremely useful and eloquent intervention. That is absolutely the case, because the enablers are, by definition, experts in knowing how to play and game the system. We know it is going on, but they are notoriously difficult to track down. If we put the onus on industries to act proactively to prevent this sort of activity, that changes the game and makes prevention much more of a duty. I agree with the Minister that we cannot punish people if they are only suspected, but we can have a proactive ex ante approach. I would be grateful to hear his thoughts on that. In many ways, the amendment was designed to illicit a response from the Minister on what my right. hon Friend has just so rightly described.
The Minister has already pointed out that specifically designated individuals represent just the tip of the iceberg in terms of the scale of economic crime in the United Kingdom. There are any number of others who seek to exploit weaknesses in our laws and our ability to enforce them—for example, by creating opaque corporate structures to hide kleptocrats’ assets. Adding to the criteria those who help to facilitate the evasion of sanctions by designated individuals—not necessarily as our amendment suggests, but through a more root-and-branch, proactive ex ante approach—is one way the Government could really improve the Bill. I would appreciate the Minister’s thoughts on that. Restrictions on company directorships, as envisaged by amendment 93, should go much further.
Clause 33 extends the provisions of clause 32 to sectors other than companies—for example, building societies—and clauses 34 and 35 extend the same provisions to Northern Ireland. We support those clauses and, of course, amendment 83, which was tabled by my right hon. Friend the Member for Barking.
At various points in recent years Ministers have outlined a number of specific proposals, which now appear to have fallen by the wayside. It seems reasonable to expect that all companies should have at least one director who is an actual human being. We do not have to be experts to intuit how easy it is to abuse the existing system, which allows a company to name another company as its director provided that at least one human being is on its board. In the Government’s own words in a 2021 consultation paper:
“Evidence suggests that the use of corporate directors can muddy the waters around ownership and provide a screen behind which to conduct illicit activity…More generally the opacity they create can weaken corporate governance by preventing individual accountability.”
The Government even went so far as legislating in the Small Business, Enterprise and Employment Act 2015 to enable the Secretary of State to impose a ban on corporate directors. After more than seven years, however, regulations to implement that have yet to be published. In fact, clause 37—on which my hon. Friend the Member for Feltham and Heston will speak shortly—makes some changes to the relevant section of the 2015 Act. The apparent intent of the changes, which is to make it easier for corporate directors to be held to account for their action, is certainly welcome, but what is not clear to Opposition Members is why the Government have decided to amend the primary legislation—namely, the 2015 Act—when, as we understand it, the secondary legislation to implement the ban on corporate directorships under that Act has still to be introduced. Perhaps the Minister will shed some light on that.
Another glaring omission is the issue of nominee directorships. As long ago as 2013, the Government raised that as an issue that company law reform should deal with. Again, the Government’s own words provide us with a useful summary of the problem:
“Where a company is being used to facilitate criminal activity, the individuals who really control the way that the company is run will likely want to avoid making this information public. They may use ‘nominee directors’ to do this. Nominee directors are individuals who go on the public record as the director of the company to be, effectively, a ‘straw man’ or ‘front man’ for the company. The beneficial owner ‘stands behind’ the nominee and controls the way that the company is run”,
de facto. The failure to address that in legislation remains a cause for serious concern.
Kevin Hollinrake
I am not sure I understand the hon. Gentleman’s point. Irrespective of who the directors are, if people of significant control are exerting such influence, they will have to be named and have their ID verified under the Bill.
Stephen Kinnock
My understanding is that the regulations under the 2015 Act have not yet been put in place. Our question is: why are the Government not implementing those regulations but instead seeking to introduce the provisions in the Bill? That is simply a point for clarification and explanation. We welcome the fact that ID verification is provided for, but we are trying to get to the bottom of who a nominee director is and who actually controls a company. It would be useful to understand what happened between 2015 and 2022 to prevent the implementation of the regulations.
Kevin Hollinrake
Two separate things are going on. The Bill enables regulations to ban corporate directorships unless the corporation itself has all its directors named and they are all actual persons and ID-verified. It will do exactly that. The other point that I think the hon. Gentleman is talking about is people who sit behind companies and influence them but might not be named in those companies. If people do that, they are persons of significant control; under the definitions in the Bill, someone does not have to own 25% of the shares of a company to be a person of significant control, but they have to be named and ID-verified.
Stephen Kinnock
I will stand up and then allow my right hon. Friend to intervene.
Dame Margaret Hodge
As I understand it, if the owner of a company is an opaque company in the British Virgin Islands or another one of our tax havens, the ability to get behind that and see the person of significant control is pretty nigh impossible, so there is still a mechanism there. People could intentionally set up a company in the UK that is totally owned by a company established in the BVI. That information is not currently on the public register, although we are anxiously waiting for it to be so in 2023. There is no way of getting the persons of significant control verified, because it is outside our control.
Stephen Kinnock
I will now stand up and allow the Minister to intervene on me.
Kevin Hollinrake
There are two separate things going on here: ownership and directors. We were talking about directors, and the right hon. Lady is now talking about ownership, which is a slightly different thing, but we will talk later about ownership and how that information has to be made public under this legislation.
Stephen Kinnock
I thank the Minister; I think he has just provided clarification that he is confident that there is now a ban on the use of nominee directors as a front to obscure true beneficial ownership. We are grateful for that absolute reassurance. There was perhaps a misunderstanding on our side of some of the technicalities in the Bill that I am seeking to probe, so I am grateful to the Minister for that clarification.
It is worth noting that the World Bank published a report just a few months ago that explained how, under current UK law, nominee directors of UK companies can neglect their duties by failing to submit accounts and certify companies as dormant, even though tens of millions of pounds are passing through those accounts. A crucial point is that the impunity of delinquent nominee directors is especially pronounced if such nominees are not UK residents. On the rare occasions that they are questioned, such directors tend to make the legally false argument that because they are only nominees they have no responsibility to know anything about the company, let alone control its actions.
The lack of progress on this issue—certainly until the Bill’s introduction—has raised concerns with us. Again, perhaps the Minister will say a little more about the Government’s thinking. What does he think has been the impact of not implementing the regulations from the 2015 Act? Can he reassure us with absolute confidence that the issue of delinquent nominee directors will be eradicated by the passing of the Bill?
Alison Thewliss (Glasgow Central) (SNP)
The hon. Gentleman is making a really important point about nominee directors. Is he aware of a “File on 4” programme —I believe it was aired last year—about nominee directors being recruited via Facebook groups and paid to take on that role? Is he concerned that it may still be possible to do that? Does the Bill need to do more to clamp down on the recruitment of nominee directors who get some money for taking on that role?
Stephen Kinnock
The hon. Lady raises an extremely important point and illustrates the absurdity of the situation we have got into. There seems to be a “wild west” approach to running corporate affairs in the UK and it is simply not acceptable. I thank her for that intervention and reiterate my hope that the Minister can give us an absolute reassurance that the issue of nominee directorships will be dealt with firmly and clearly in the Bill, without any loopholes. I also hope he will share any other thoughts he may have on the matter.
Liam Byrne
It is a pleasure to serve under your chairmanship, Ms Elliott. I am sorry that I have not checked the sartorial guidance for the Committee, but I assume it is okay for me to speak without a jacket on. I defer to the Chair if she wants me to clothe myself more adequately.
Liam Byrne
The Minister probably did not intend to set hares running, but he certainly has with his suggestions this morning. I know he will be alive to the Foreign Affairs Committee report on illicit finance that was published under the chairmanship of the right hon. and gallant Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security, but I wish to share some of its headlines to underline a point that was wholly missing from the Minister’s presentation.
Let us start with the really bad news. First, the Select Committee concluded that
“assets laundered through the UK are financing President Putin’s war in Ukraine.”
Secondly, the report said:
“The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth.”
It is very welcome that the Government introduced sanctions and have brought forward this Bill, but I am afraid the Foreign Affairs Committee came to the conclusion that our sanctions regime was “underprepared and under-resourced.” We on the Select Committee found that there was not the capacity in the FCDO to match the speed and power of the sanctions regime brought into force by our American colleagues and, indeed, the EU. That is why the House was treated to the spectacle of a piece of enabling legislation that allowed us simply to copy and paste the sanctions regime from other countries into UK law.
There is a serious worry that the FCDO is not equipped to drive through the requisite disqualification of directors at the speed at which it should if it takes decisions on sanctions. I hear what the Minister says about creating some—I guess he would say—safeguards against the automatic suspension of directors, but in the absence of such a regime there is a real concern about an enforcement gap, because the FCDO sanctions and compliance team simply does not have the capacity to work things through with Companies House to ensure that the consequentials are followed through and that directors are disqualified when it is appropriate.
Among the measures that we in the House have previously invented are some of the provisions that I took through in the UK Borders Act 2007. We basically wrote into law the automatic consideration of sanctions such as the suspension of directorships. Many Opposition Members would be an awful lot more confident that bad people would be disqualified from directorships if they were sanctioned if we had some kind of legislative provision that created a duty, and therefore a burden, on Ministers and their officials to automatically consider people for the suspension of their directorships if a sanction of any description was imposed upon them.
This Committee is a chance for us to air different points of view about how we ensure that, as the Minister wants, London is a world capital of clean trade. I put this case before him so that he can reflect on it and perhaps come back to the Committee with further thoughts.
Dame Margaret Hodge
It is a pleasure to serve under your chairship, Ms Elliott.
I rise to speak to amendment 83. I did not quite understand the Minister’s attack on or dismissal of it on the basis that it was somehow an attempt to provide a detailed way for authorities to act. That is way beyond what we are attempting to do; all we want to do is make sure the authorities are aware. The Minister and I know, from working in this policy area for a long, long time, how poor all the enforcement agencies are at sharing information. When whistleblowers and others provide information about wrongdoing, too often that falls between the various enforcement agencies, gets lost and nothing ever gets done. We are not here to tell those agencies how to carry out their work, but to ensure that there is better communication.
The amendment addresses some of the issues my right hon. Friend the Member for Birmingham, Hodge Hill just raised. It tries to strengthen the sanctions regime against individuals and to stop those individuals moving their assets before they get sanctioned. Under the FCDO, the sanctions process inevitably takes a long time and people know they are about to be on the sanctions list, so they have time to rearrange their affairs so their assets cannot be frozen.
All the amendment would do—it is very simple—is put a duty on Companies House to tell the enforcement authority, whether that is the Foreign, Commonwealth and Development Office, the Office of Financial Sanctions Implementation, the National Crime Agency or whoever, about any changes that may have occurred in the accounts held by Companies House of individuals who have been sanctioned and whose assets have been frozen in the three months prior to those sanctions being put in place. That is crucial, but why?
In July 2022, OFSI and other UK Government agencies, together with the Joint Money Laundering Intelligence Taskforce, issued a red alert, which I hope the Minister has had a chance to look at. His colleague, the Minister for Security, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), will certainly have done that. It sets out the evasion tactics that individuals use and that enablers, whom my hon. Friend the Member for Aberavon mentioned, take to support that evasion. The action that designated individuals take, supported by their advisers, includes the transfer of assets, such as shareholdings, to trusted proxies, such as relatives or friends. To quote the red alert, they will
“sell or transfer assets at a loss in order to realise their value before sanctions take effect”
and they will
“divest investments to ensure ownership stakes are below the 50% threshold”
needed for sanctions.
There are numerous other examples—the red alert includes a list of about 15 such examples—of ways that people avoid sanctions and avoid their assets being taken. The individuals may seem to have got rid of their assets, but they will retain control. They will have simply hidden their control and the form that that control takes, but in reality they will still have control. In some instances, assets have been transferred or directed to jurisdictions where sanctions are not in place, such as China, Brazil, India or the United Arab Emirates, or have been converted into cryptoassets, which we will come to later in our discussions about the Bill.
I came upon such tactics in the case of Usmanov, as we have discussed before, who dodged the sanctions, particularly in relation to his Mayfair mansion—I cannot remember how many millions that is worth. The shares in his London property firm were transferred to his Russian business empire on 21 February, less than a fortnight before he was sanctioned. The transfer involved property owned by Klaret Services UK Limited being sold to Russia’s largest iron ore company, Metalloinvest, in which Usmanov has a 49% share. That is just below the 50% threshold, although it is in Russia. That transfer is legal—he was able to act legally and within our law—and he was able to do it because we were so slow to sanction.
The sanctions against Usmanov did not cover his companies, so when he transferred the Mayfair property to a company, a different mechanism would have had to be adopted to capture its owner. As he had a 49% share in that company, it would have been difficult to pursue that. Both the shareholding in the company and the transfer mattered. Under our amendment, Usmanov would not have got rid of the property. Companies House would have had to give the enforcement agencies information about the transactions that had been undertaken in the three months prior to the sanctions, and those agencies could have taken action on it.
Kevin Hollinrake
I always listen to the right hon. Lady very carefully, so she can be sure that I have been listening. I am keen to tie up—as the shadow Minister, the hon. Member for Feltham and Heston, put it—any loopholes that we identify in the legislation. That is one of the purposes of Committee stage.
Broadly, I think the Committee and the wider House would accept that our sanctions regime, and the supervision regime at Companies House, are not fit for purpose today—that is why we are legislating. Clearly, the actions taken by Russia in recent months have further highlighted the work we need to do and the reform we need to put in place. The comments are welcome, and I think we are all trying to get to the same end point; we just want to make sure people do not suffer unintended consequences in the process.
I think the right hon. Lady said that Companies House is very poor at sharing information. That is probably a little unfair. Currently, it is not there to share information, other than by putting things on a public register for people to seek out; that has been its role in the past. Today, it is a register—we might call it a dumb register—and that is what we are seeking to change. We are seeking to give the registrar responsibility for promoting the integrity of the registers so that people can rely on the information in them and, as it says in the registrar’s objectives, to minimise unlawful activities and the facilitation of unlawful activities.
Dame Margaret Hodge
Obviously, Companies House has not had to do this to date; it has just been a library of dud data, really. What I was drawing to the Minister’s attention—I am sure he agrees with this—is that all the enforcement agencies working in this territory are poor at sharing information. That is why the stuff we get from whistleblowers so often falls through the middle somewhere and does not get tackled. That is why we should put a duty on the agencies to share information; we would not tell them how to do it, but just say, “This is really important if we are to bear down on wrongdoing.”
Kevin Hollinrake
I am still not sure I agree. Of course there are elements of our enforcement agencies that we are all frustrated by at times, but to my mind nobody goes to work to do a bad job. People are doing their best, often in very difficult circumstances. We all agree that we need to hold our enforcement agencies to account and properly resource them. What we are trying to do is provide them with more powers and ability, and then hold them to account for the use of those powers.
Liam Byrne
The Minister is being characteristically generous. As he reflects on the huge wisdom of the amendments tabled by my right hon. Friend the Member for Barking and perhaps returns to the Committee with some of his own, could he share with us how many of the 1,200 individuals and 120 businesses that have been sanctioned since Russia’s invasion of Ukraine have had directorships suspended?
Kevin Hollinrake
I do not know the answer to that question. When the Bill has received Royal Assent, it will facilitate exactly that process. At the moment, Companies House does not have the powers we would like it to have to bring that about. That is exactly what we are debating.
On amendment 83, I think the right hon. Member for Barking implies that Companies House knows of the changes with a company on an ongoing, dynamic basis. That is not how things work. Companies House does not have access to information until a company files an annual return. Companies do not provide information to Companies House on a daily or even monthly basis. That is not how it works.
Dame Margaret Hodge
But under the legislation, companies will have to provide information on changes of directorships and so on within 28 days, we hope—we had this argument yesterday—so Companies House will have that. I am not expecting it to go through 4 million companies, but there must be a way that the information can be highlighted by the IT system and, if we know a director is somebody who has been sanctioned, that information can be shared. Under the legislation, if a company has changed a directorship, as Usmanov did, it will have to provide that information within 28 days or whatever, and surely that will be there to share.
Kevin Hollinrake
A change of directorship, yes, but I do not think that is the situation the right hon. Lady was describing. She was talking about a movement of assets, as I understand it. I do not know the detail of the case she is talking about—[Interruption.] May I finish? If she is trying to prevent a person from moving assets around on the basis that Companies House needs to know about that as it is happening, that situation cannot be delivered. Companies can move assets around without asking the permission of Companies House or notifying it, so her amendment does not serve any purpose in that regard.
The right hon. Lady is absolutely right that any information that Companies House is made aware of and deems to be pointing to some kind of risk should be shared with the relevant agencies. We all agree with that point, and the Bill allows Companies House to do that for the first time. That is what we are trying to facilitate, but directing it to act in a certain way on a certain piece of information will lead us down a million rabbit holes, and we do not have the time or the ability to implement that through the Bill. We have to give it the powers and then let it get on with it while holding it to account against those broader objectives.
Alison Thewliss
My reading of the amendment is that it relates to a person changing any details relating to any company in the register in the three months prior. One of the red flags that Graham Barrow raised when he gave evidence was companies that switch their name backwards and forwards multiple times within a short space of time. Surely that would be a useful red flag for Companies House to report on, and the amendment would empower it to do that.
Kevin Hollinrake
That situation would be covered under the Bill because company naming is part of it. That is a different thing from what the right hon. Member for Barking was describing. She was taking about the movement of assets, and Companies House would not have access to that information on a dynamic basis. It clearly would have information on a name or director change, and it can act as it deems appropriate, in terms of notifying authorities or making further enquiries about what the company is doing.
Seema Malhotra
I am grateful to the Minister for giving way. I feel that we have allowed this conversation to get a bit more complicated than it needs to be on one specific point in relation to amendment 83, and I think the Minister has made it slightly more complicated too.
I understand that the Minister may be wondering whether a huge scope of things have happened in the three months prior to a person becoming a designated person. Does he agree that proposed new section 11B(2) could be tighter so that where it says, “If the person changes”, it specifies changes to owners, directors or other information relating to the company on the register in the three months prior to the person becoming a designated person? There should be a way, through the design of the computer systems, which is being undertaken as part of the transformation in Companies House, for the registrar to trigger an automatic alert when somebody becomes a designated person to inform the Office of Financial Sanctions Implementation and the National Crime Agency that something had happened on the record in the previous three months. That would therefore not require a huge amount of resource and labour, but there would be a useful report and trigger if the Bill required the registrar to do that.
Kevin Hollinrake
I do not disagree with that, but my point was not that it would be too much work for the registrar; I never said that at all. My point was that may well be that the Companies House registrar looks at the amendment—she may be listening to this debate—thinks, “It’s a really good idea to do that,” and builds that into her systems. As legislators, we could direct Companies House to do a million things, but surely we should give it the power to share this information in a way that provides the most appropriate risk alert processes. We should let it get on with it while holding it to account for the broader objectives. We should not micromanage Companies House.
Seema Malhotra
I thank the Minister for giving way. I do not think this is a case of micromanagement, and nor are we asking for hundreds of things. We are making a specific request, based on specific research. I think an automatic alert could be triggered, and perhaps the Minister—
Seema Malhotra
I will just finish my point. Should the registrar be watching this debate and decide that an automatic alert is a good idea, does the Minister agree that the power of information sharing would enable the registrar to consult the Office of Financial Sanctions Implementation and the National Crime Agency should a relevant change have occurred in the previous three months?
Kevin Hollinrake
As I have already said, such information-sharing is exactly what the Bill facilitates. It may well be that Companies House decides that that is exactly the right trigger to share information with the OFSI. Our view is that we should not direct Companies House in that level of detail as to how the registrar should perform her wider duty. We will continue to disagree on that point if the hon. Lady presses her amendment.
Stephen Kinnock
I thank the Minister for allowing me to intervene where I should have done in the first place. On the quantum that we are considering, as my right hon. Friend the Member for Birmingham, Hodge Hill has just said, 1,200 individuals and 120 businesses have been sanctioned since Putin’s illegal invasion of Ukraine. We are not talking about a huge number. Perhaps the terms of the amendment tabled by my right hon. Friend the Member for Barking could be more tightly drawn to make it clear that it is not about every movement of assets and everything a company has done, but simply designed to ensure that if there was a change of director or change of address, the registrar should share that information with the other relevant agencies. The quantum is quite small, so would the Minister consider that proposal?
Kevin Hollinrake
I think we need to move on, and I think the hon. Gentleman is missing the point as well. This is not about my deciding whether the proposal is right or wrong, or whether Companies House has or has not got the resources. For me, it should have the resources that it needs. However, it is for the organisation itself to determine the best way to alert other authorities to the risk. That is the principle at issue here, and it is one to which I will strongly adhere.
The argument about enablers has been well made, and we have referred to corporate criminal liability and the failure to prevent that. As the Committee is aware, I have been a key advocate in introducing such liability for fraud and other offences. Members may have noted the details of a case this morning, in which the current offence of failing to prevent bribery was a key element in the case against Glencore, which has pleaded guilty to that offence. The Serious Fraud Office launched a successful prosecution against Glencore and, although the number of times it has proceeded against a company is far too few, that prosecution shows that the current legislation can be effective. I am keen to discuss that further in our proceedings.
On travel bans and securities, Committee members might find it useful to sit down with officials to discuss those measures, so that they then understand why those things might not mean that a person is not a fit and proper individual to be a director of a company. I would be happy to extend that opportunity to members of the Committee.
The hon. Member for Glasgow Central spoke about nominee directors and associated abuses. Under the terms of the Bill, any director, nominee or otherwise, who acts outside the terms of the legislation and is subject to the control of another undisclosed person could be put in jail for two years. That is exactly what we are seeking to do and to clamp down on such inappropriate use of companies.
In terms of what the hon. Member for Birmingham, Hodge Hill said—is it right hon. or hon?
Kevin Hollinrake
Quite right, too; the right hon. Gentleman was Chief Secretary to the Treasury—I will go no further. The Foreign and Commonwealth Office is not responsible for the Office of Financial Sanctions Implementation—that is a function of His Majesty’s Treasury—which determines how the sanctions regime works once people are sanctioned. The OFSI ensures that the regime works effectively. It is fair to say that when that organisation was established fairly recently, it was not ready for the amount of work it had to do. It has been scaled up to make it a more effective organisation, which has been discussed in the context of resources generally.
Liam Byrne
Let me give the Minister a bit of feedback from my time as Chief Secretary to the Treasury. If a spending Minister comes before the Chief Secretary to say: “I’m really sorry, but we have a legal duty to do this”, it is an awful lot easier for them to win the case for the resource that they need than when they do not have the weight of that legal duty on their shoulders. Therefore, automatic consideration of a sanctioned individual for suspension of a directorship is a good thing to enshrine in a legal duty. I am trying to be helpful to the Minister, because I want him to be able to win arguments with the Treasury for the resources that he needs to achieve the objectives we both share.
Kevin Hollinrake
Yes, but we have to make careful use of our resources, otherwise there would be no money left.
We agree that sanctioned individuals should not be allowed to be directors of companies. That is what we are talking about, so there is no disagreement. Our disagreement is about how we share information between different agencies, and whether we should tell them how to do it, or they should do it themselves. We are parliamentarians; we are not experts in financial crime or how the financial system works. Wherever we can, we should leave it to the experts to determine the best way to share the information between agencies and—the important thing we are doing here—give them the powers to do that.
Question put, That the amendment be made.
The Chair
We now come to amendment 83, which has just been debated. Does Dame Margaret Hodge wish to move the amendment formally?
Dame Margaret Hodge
I just wish to tell the Committee that I will write to Companies House and see what response I get from the chief executive or director. Subject to that, at this stage, I will not move the amendment.
Clause 32, as amended, ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
Clause 34
Disqualification of persons designated under sanctions legislation: Northern
Ireland
Amendments made: 4, in clause 34, page 23, leave out lines 13 to 17 and insert—
‘(1) This Article applies in relation to a person who has, at any time on or after the day on which section 34(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force, become a person subject to relevant financial sanctions and who remains so subject.’
This amendment and Amendment 6 would mean that a person who is subject to sanctions is disqualified under the NI directors disqualification legislation only if those sanctions relate to asset-freezing.
Amendment 5, in clause 34, page 23, line 23, leave out ‘designated person’ and insert ‘person subject to relevant financial sanctions’.
This amendment is consequential on Amendments 4 and 6.
Amendment 6, in clause 34, page 23, line 23, at end insert—
‘(4) In this Article —
“designated person” has the meaning given by section 9 of the Sanctions and Anti-Money Laundering Act 2018;
“person subject to relevant financial sanctions” means a person who is a designated person for the purposes of any provision of regulations under section 1 of the Sanctions and Anti-Money Laundering Act 2018 that imposes a prohibition or requirement for a purpose mentioned in section 3(1)(a) of that Act (asset-freezing).’—(Kevin Hollinrake.)
See Member’s explanatory statement for Amendment 4.
Clause 34, as amended, ordered to stand part of the Bill.
Clause 35 ordered to stand part of the Bill.
Clause 36
Disqualified directors
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 37 to 43 stand part.
New clause 35—Person convicted under National Minimum Wage Act not to be appointed as director—
‘(1) The Company Directors Disqualification Act 1986 is amended as follows.
(2) After Clause 5A (Disqualification for certain convictions abroad) insert—
“5B Person convicted under National Minimum Wage Act not to be appointed as director
(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.
(3) An appointment made in contravention of this section is void.”’
This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.
Kevin Hollinrake
Before I turn to the new clause, I will set out the intentions and effect of the clauses in the group. As part of the reform of Companies House, it is necessary to update the provisions regarding company directors. Most crucial to that is the introduction of a prohibition on people acting as company directors when they have not had their identities verified and reported their directorships to Companies House. That is a critical part of improving the integrity of the companies register. Accordingly, it is appropriate to provide teeth to ensure compliance with those obligations. The Bill will also create grounds for director disqualification if the person fails to verify their identity.
On new clause 35, all businesses, irrespective of their size or business sector, are responsible for paying their staff the correct minimum wage. The vast majority of responsible employers make sure they get it right. I assure the hon. Members for Aberavon and for Feltham and Heston that the Government take enforcing the minimum wage seriously, and we are clear that anyone who is entitled to be paid the minimum wage should receive it. We take robust enforcement action against employers who do not pay their staff correctly. Every area of regulation affecting businesses, whether it is employment practices or environmental impacts, has its own enforcement and penalty frameworks.
It is not entirely clear why we should single out breaches of the national minimum wage—important though it is—as being worthy of leading to disqualification. Nor does it immediately follow that someone who has breached their regulatory obligations in one of those areas should automatically be considered unfit to be a company director in the round. Having said that, I have some understanding when it comes to the new clause. There have been 16 people convicted under the National Minimum Wage Act 1998. I want to do some further research on that to see what has happened to those people and their director qualification or disqualification. That might inform debate more clearly.
I draw hon. Members’ attention to the fact that the greater flexibility in the Bill over the use of Companies House fees will cover the company investigation teams at the Insolvency Service, allowing the Government the potential to expand their work and go after a greater proportion of rogue directors. I respectfully ask hon. Members not to press the new clause.
Dame Margaret Hodge
This is a question of clarification: if a director is disqualified, can he or she still act as a shadow director?
Kevin Hollinrake
It depends on how the right hon. Lady defines a shadow director. If she is implying that they are a person of significant control influencing others, which I guess is what she means, I will point her to the definitions of a person of significant control. They are those who hold
“more than 25% of shares in the company…more than 25% of voting rights in the company…the right to appoint or remove the majority of the board of directors”
that might influence or control a company through other means. That means that the person is still covered under the legislation; if a person is exerting that control, they should be designated as a person of significant control and ID verified, as discussed previously. Any person who became disqualified before the clause comes into force and is disqualified at that time will also cease holding the office of director.
Clause 37 amends some yet to be commenced provisions of the Companies Act 2006 on when a corporate director can act and minimum age requirements for directors. The Small Business, Enterprise and Employment Act 2015 amended the 2006 Act to establish—as the hon. Member for Aberavon said—that company directors should, in future, be natural persons except where they have met specific requirements determined by regulations. We will bring forward those regulations following the enactment of the Bill to establish the exemptions to the general natural person director rule. After a transition period, companies must ensure that any corporate directors on their boards are compliant with the regulated exemption criteria. Where they fail to do so, those director appointments will be void once the transition period ends.
The clause makes it clear that should any non-compliant corporate director continue to act in the capacity of either a de facto or shadow director after the end of the transition period, they will be held liable for the consequences of their actions as they would be if they were a validly appointed director. The clause makes a similar clarification in respect of the principles that will apply in respect of an individual who does not meet minimum age requirements for a company director. In such instances, the appointment would also be void, but those who continue to purport to act as a director or operate in a shadow capacity will continue to be exposed to personal liability none the less.
Clause 38 repeals the power for the Secretary of State to require that companies with disqualified directors who have been given permission by the court to act as a director make a statement to the registrar confirming that permission. The power is no longer required, because the Bill introduces new requirements to provide statements about disqualification and permissions to act in sections 12, 12A, 167G and 790LA.
Clause 39 introduces a prohibition on an individual acting as a director unless their ID is verified or exempted from that requirement under the regulations. It establishes a duty on a company to ensure that unverified individuals do not act as directors unless they are exempted from the ID verification requirement. Failure to comply with the duty constitutes an offence committed by the company and every officer of the company who is in default.
Clause 40 will make it a criminal offence for a person to act as a director unless their appointment has been notified to the registrar. It will be a defence for a person to prove that they reasonably believed that the notice of their appointment had been given to the registrar. The actions taken by an unverified director, or a director whose appointment has not been reported to the registrar, will remain valid to ensure that third parties who have relied on the actions of an unverified director are not unfairly disadvantaged.
We want there to be consequences for not complying with ID verification obligations, and clauses 41 and 42 help us to achieve that. The clauses allow for the disqualification of individuals where they are persistently in default of the ID verification requirements for directors and people with significant control, or where they have been convicted by consequence of such contravention. Clause 41 legislates in respect of Great Britain, with clause 42 legislating to create equivalent powers for Northern Ireland.
Finally, clause 43 makes amendments to section 246 of the Companies Act 2006 regarding addresses on public record. It is consequential to other amendments to no longer require companies to hold their own local registers of directors.
The Chair
Before I call Seema Malhotra, I remind the Front-Bench spokespeople that they need to indicate to the Chair that they want to speak.
Seema Malhotra
Thank you, Ms Elliott. It is a pleasure to serve under your chairship.
I will speak for the Opposition on clauses 36 to 43, and I will say a few words about our new clause 35. We welcome what the Minister said, and we do not propose to push the new clause to a vote today, but I want to put some of our comments on the record. It would be useful if the Minister could clarify when he might want to come back and continue the conversation, subject to being able to look at further data on those who have been convicted under the legislation.
As we have established, clause 36 inserts proposed new sections 159A and 169A into the Companies Act, so that those who are disqualified from being a director under UK law cannot be appointed as one. New section 169A also says that a person who has been appointed as a director ceases to be one if they are disqualified. The two new sections appear straightforward, but has the Minister considered whether the provisions could be extended to ban the appointment of directors who may have been disqualified outside the UK? The Government could pursue that by extending the definition of directors disqualification legislation in new section 159A(2) to cover the analogous disqualification regimes in such jurisdictions as the Secretary of State may designate in regulations. That would allow the UK Government to specify or choose countries that have disqualification regimes that we would be happy to rely on. It seems that it might be a useful consideration, and I would be grateful for the Minister’s comments on that.
On clause 37, section 87 of the 2015 Act contains amendments that have not yet been brought into force. It requires all directors to be natural persons, and it contains provision for circumstances in which people under 16 can become directors. We support the clause, which would amend the provisions to ensure that persons remain responsible for their acts as directors—I think we have had a brief conversation on this—even though they are no longer legally considered to be directors. That is important, because the practical consequence of the clause is that if a person continues to act like a director, even if they have officially been removed from office, they can still be legally responsible for any breaches of the law that they commit as a director. That could be on wrongful trading or other matters. We welcome the clause. It is an important provision to ensure that shadow directors remain liable for contraventions of the Companies Act 2006. We recognise the need for clause 38 and support it.
Clause 39 introduces provisions that would provide that an individual cannot act as a director of a company unless their ID has been verified or they benefit from an exemption specified by the Secretary of State. In addition, it provides that breaching that would be a criminal offence for the director, the company and every other responsible officer, punishable by a fine. In practice, it would mean that once the clause comes into force, individuals should not take any actions on behalf of the company in their capacity as director until they verify their identity. We welcome and support the clause. We agree that that is a positive step in ensuring that directors are who they say they are. Hopefully, it will also mean that people will be less likely to commit or even attempt to commit economic crimes.
Questions remain on the implementation and enforcement of identity verification, some of which we have discussed previously. We recognise that there are ongoing concerns. Martin Swain of Companies House said that we are still in the “design phase” for ID verification. It is difficult to be clear on the implications of the legislation we are passing without having clarity over ID checks. When will they be operational? What can we expect to be in them? How quickly will we and the registrar expect them to be completed? Will the Minister confirm that they will be of the highest standards? Nick Van Benschoten of UK Finance said in his evidence to the Committee on verification standards that one of the key points is that they
“fall short of minimum industry standards.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 7, Q3.]
I am sure the Minister will want to ensure that ID verification will be of the highest standard.
I would like to press the Minister on the part of the clause that grants the Secretary of State the power to exempt certain directors from not acting until their identity has been verified. I am seeking clarity on why the measure is needed. Will it be for categories of people or individuals? Finally, will any use of the exemption be transparent and reported on? I think we have raised before the need to ensure there is sufficient clarity and accountability on the use of the powers.
Clause 40 makes it a criminal offence, punishable by a fine, for someone to act as a director unless their company has notified the registrar within 40 days. We welcome that, but I would like the Minister to clarify subsection (5), which allows a defence for a director who can prove they reasonably believed their company had been given notice of a director’s appointment. In the interest of working with the Government on this, may I ask the Minister for assurances on what would constitute proof of reasonable belief in this instance? Would it be possible to provide an example of where an exemption from sanctions might be applied? The Minister may want to write to me.
We welcome clauses 41 and 42. I realise we may be coming to the end of the sitting, so I will speak to clause 43 in detail later.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Economic Crime and Corporate Transparency Bill (Eighth sitting)
Thursday 3rd November 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Clauses 37 to 43 stand part.
New clause 35—Person convicted under National Minimum Wage Act not to be appointed as director—
“(1) The Company Directors Disqualification Act 1986 is amended as follows.
(2) After Clause 5A (Disqualification for certain convictions abroad) insert—
‘5B Person convicted under National Minimum Wage Act not to be appointed as director
(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.
(3) An appointment made in contravention of this section is void.’”
This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Robertson. I will continue to speak to this group, finishing with a few remarks about clause 43 and our new clause 35.
We welcome clause 43 and recognise that it reflects new circumstances that arise from the Bill’s abolition of local registers of directors, set out in clause 50. We have further questions on that, which we will deal with when we come to later clauses.
On new clause 35, let me put our argument on the record. I thank the Minister for his comments, which I hope suggest that we will move on in some form, perhaps with the data he comes back with. Will he update us on when he expects to come back to us, so that we can come to a conclusion, and perhaps on an alternative way to make progress on the matter, during the passage of the Bill?
The reason my hon. Friend the Member for Aberavon and I tabled new clause 35 is to include provision such that persons convicted under the National Minimum Wage Act 1998 cannot be appointed as company directors. There are real questions about whether we would want an employer who wilfully neglected or refused to pay the national minimum wage to a worker who qualified for it to be the director of a company after the Bill comes fully into force. The new clause would strengthen a lot of the measures in the Bill, because we are talking about people we hope to trust to undertake their responsibilities as a director.
The Bill introduces a substantial amount of regulation about who can and cannot serve as a company director as a result of criminal or potentially criminal practices, so this feels like the right place for consideration of such a measure. I will welcome the Minister’s comments and I look forward to continuing to work with him as we make progress.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
It is a pleasure to speak with you in the Chair, Mr Robertson.
I am not quite clear when I will be able to get the information that we should have before we look at the matter in new clause 35. I think it is right to identify the scale and nature of the problem before we legislate, but I am certainly keen to do so, not least in my role as the person responsible for labour frameworks and markets.
I will respond to one or two of the comments of the hon. Member for Feltham and Heston. We already have power to ban directors disqualified overseas, under section 5A of the Company Directors Disqualification Act 1986. We can and have taken steps to disqualify directors who have been convicted of relevant foreign offences. On exemptions, I think we dealt with exemption from identity verification in a previous sitting. This will be set out in regulation, but that will probably include people who have already had their ID verified, for example.
The hon. Lady also asked about the defence of “reasonably believed” in clause 40. That would cover a situation where somebody had broken the rules but perhaps did not know that the rules had been broken. That would of course be subject to some kind of investigation, and the person could say, “It wasn’t me who submitted the return. I am not guilty of an offence.” It is a defence that somebody believed the information had been submitted correctly when actually it had not. I think that is a reasonable provision, which investigators would be able to take into account before taking forward a prosecution.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clauses 37 to 42 ordered to stand part of the Bill.
Clause 43
Registrar’s power to change a director’s service address
Amendment made: 7, in clause 43, page 31, line 10, at end insert
“(but see subsection (4A)).
(4A) Subsection (4)—
(a) does not limit the service address that may be registered for the director under regulations under section 1097B (rectification of register), and
(b) ceases to apply in relation to the director if a new service address is registered for the director under those regulations.’”—(Kevin Hollinrake.)
Where a director’s service address is moved to their residential address under section 246 of the Companies Act 2006, subsection (4) imposes restrictions on further changes. This amendment ensures those restrictions do not bite on further changes under new section 1097B (inserted by NC5).
Clause 43, as amended, ordered to stand part of the Bill.
Clause 44
Register of members: name to be included
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 45 to 48 stand part.
That schedule 1 be the First schedule to the Bill.
Kevin Hollinrake
A core purpose of the companies register is to provide details of company ownership. Users of the register, such as those who use it to confirm basic information about a company or to carry out due diligence work, have reported some problems with the way company ownership data is recorded. These clauses introduce measures to increase the usefulness of the information held on the members of UK companies. Collectively, they will mean that users of the register have more certainty about who they are doing business with, building confidence in the integrity of the companies register and preventing bad actors from exploiting it.
Clause 44 amends sections 112, 113 and 115 of the Companies Act 2006, which concern the provision of information relating to the members of a company. The clause provides that in the case of an individual, the requirement to enter a name in the register of members and the index of members means entering the individual’s forename and surname. In the future, entries will have to read “Joe Bloggs” and not “J. Bloggs”. The clause is necessary because there is currently no definition of “name” for members in the 2006 Act or associated regulations.
Clause 44 also provides that in the case of an individual usually known by a title, the title may be entered in the register of members and the index of members instead of the individual’s forename and surname. The 2006 Act currently allows directors to state their title instead of their forename and surname, or in addition to either or both of them, but it does not contain equivalent provision for members. The clause provides that if a person’s name or title is entered in a company’s register of members in a form that does not comply with the new requirements, that does not affect the person’s becoming a member of the company. It may well be that that was not the fault of the member themselves.
The objective of the clause is to increase transparency rather than introduce a condition around name format into the concept of membership. If a company fails to comply with the requirements of section 113 and/or section 115 of the 2006 Act, an offence is committed by the company, and every officer in default, so non-compliance can be pursued.
Clause 45 inserts into the 2006 Act new section 113A, which will allow the Secretary of State to make regulations to change the information required to be entered in a company’s register of members. Regulations could, for example, require all members to provide an address. Currently, the initial members, or subscribers, of a company are required to provide their name and address, but those who become members later are only required to provide their name.
As reforms are implemented to Companies House and the companies register, it is possible that further opportunities to improve information on shareholdings will be identified, on which the Government would want to act swiftly. For example, law enforcement may identify additional types of information that the registrar could require that would help in the prevention and detection of crime.
The power in clause 45 will align the position for members with that for directors and people with significant control, in respect of which there are already powers to amend the required information. Information provided in a company’s register of members is provided to Companies House via the company’s confirmation statement. This power will increase the usefulness of the information on the companies register.
Clause 46 amends section 125(1) of the Companies Act 2006, which gives the court the power to rectify the register. Without the clause, the court may order the rectification of the members register only in relation to names. The clause broadens the rectification power so that it is available in respect of any information on the members register. It means that a person aggrieved, any member of the company, or the company can apply to the court for rectification of the members register if the register does not contain necessary information, or if it contains unnecessary information. It is conceivable that information other than names may be included in a company’s register of members in error.
Given that clause 45 gives the Secretary of State the power to make regulations that require additional information to be entered in a company’s register of members, it is crucial that the rectification power is broadened. Information provided in a company’s register of members is provided to Companies House via the company’s confirmation statement. A wider power to rectify the members register will increase its integrity and, by extension, that of the company’s register as a whole.
As well as introducing measures to increase the transparency of company ownership, the Bill will introduce measures to prevent the abuse of personal information held on the Companies House register. Proposed new section 120A of the Companies Act, inserted by clause 47, allows the Secretary of State to make regulations that empower the registrar to order a company to refrain from using or disclosing individual membership information, except in specified circumstances. Members of a company will then be able to apply to the registrar to request that the order be made to the company.
Clause 47 also amends sections 114 to 116 and 120 of the Companies Act, so that where a company is ordered not to use or disclose member information, other obligations that would otherwise require that information to be inspectable by the public are switched off. The clause also provides that if a company fails to comply with an order for the restriction of the use or disclosure of information, an offence is committed by the company and every officer of the company who is in default. Adding such an offence is proportionate given the serious risk that individuals who have applied for protection face.
Clause 48 amends the Companies Act to remove the option for private, non-traded companies to elect to keep information about their members solely on the central register maintained by the registrar. The effect will be to require private companies that previously chose to keep information only on the central register to maintain their own register of members. It will be the sole responsibility of the company to update and maintain its register of members. The register of members is separate from the register of companies, which is maintained by the registrar.
Clause 48 also inserts a new transitional provision in relation to the abolition of the option to elect to keep members registers at Companies House rather than locally, requiring companies to enter in their register of members all the information that would have been required had the election never been made. Such companies will then be required to provide any updates to the registrar about their members via the confirmation statement. The clause also makes various consequential amendments to other sections of the Companies Act, which are in schedule 1.
Clause 48 also clarifies that, while the provisions relating to the central register were in force, the information about the members of a company that elected to hold membership information on the central register is to be considered prima facie evidence about the members of the company. However, from the point that the central register is abolished by the Bill, the prima facie evidence about the members of a company can be found in the company’s own register, held under section 113 of the Companies Act 2006.
Seema Malhotra
I thank the Minister for his comprehensive walk through these clauses, which I am sure he wrote overnight. It was very helpful. I have a few questions, but I will start by speaking to clause 44, which amends the Companies Act 2006 so that for individuals entered in a register of members, commonly denoting shareholders, “name” refers to a forename and surname. I have made the point before that it is quite staggering that we have not had such specification of the information that should be required. We absolutely welcome this measure and the encouraging of greater transparency of company shareholders.
We support the clause, but it seems to be countered by moves that arguably encourage less transparency of shareholders. In particular, the withdrawal of the central register, with information held only by the company rather than centrally, will make it harder to have public access and knowledge of who shareholders are.
It is important for us to emphasise why transparency continues to be so important. Transparency International has noted that, until now, shareholder information has been extremely limited and difficult to access. That has been a core factor in the UK’s unwanted reputation as a hub for dirty money and economic crime. The lack of any substantial rules and regulations around shareholder information reduces the reliability of the information published by Companies House and, in turn, of the totality of information about a company held by Companies House. We have tabled amendments to later clauses, but I wanted to make that broader point. While we talk separately about directors, officers and shareholders, in the end we are talking about entities working together as a whole, and wanting transparency about activity, and who is involved in it, as a whole.
Clause 45 concerns the power to amend required information. As the Minister outlined, the clause allows the Secretary of State to make regulations to specify changes to the information that must be entered in a company’s register of members. This is an important clause, and I have a couple of questions for the Minister. First, is there any consideration of what information may be required? I think there was some suggestion about the addresses of company members. In the Minister’s opinion, would the clause provide for a potential future decision by the Secretary of State to bring forward proposals to request identity verification and perhaps directors’ IDs from shareholders with shares of less than 5%?
I wonder whether this should be among the requirements for transparency of shareholder information in the Bill, which specifies changes to information that must be entered. If there are measures that could be brought forward, should they not be in the Bill rather than in future regulations? Is it a case of simply saying, “We will go as far as we think is relevant now and leave the option open for additions later”? Where the Minister thinks there could be further measures later, it would be interesting to debate whether some of them could be brought forward.
The Minister clearly set out the arguments for clause 46, and we support the expansion of the court’s powers.
Clause 47 relates to the register of members and the protection of information. As the Minister outlined, the clause would allow the Secretary of State to make regulations requiring a company to refrain from using or disclosing individual membership information except in specified circumstances. I was not fully clear who may make applications to the registrar not to use or disclose information. There may well be good reasons for such a request, but what individuals do the Government have in mind and in what circumstances could such a direction be made? Procedures in the future may result in less transparency, and for good reason, but it is important that we understand the reasons for that and that they are on public record as we consider the Bill.
It is possible that transparency is countered by the implementation of the Bill and the subsequent legislation for which it makes provision. That may reduce transparency by backdoor means, as it were, and reduce its scope to apply to those very individuals whom we may want to subject to such transparency. I am sure that the Minister understands why we want to probe that issue.
Clause 48 concerns the removal of the option to use the central register. Given all the measures relating to transparency and shareholder information, I am concerned about their total effect. The important principle running through the Bill is increased transparency in terms of publication and searchability, but the Bill also provides for private companies to exercise the option not to be on the central register. Perhaps I have not followed all the detail relating to the disclosure of shareholder information, but after the Bill’s implementation, I think there will be less publicly available shareholder information and not more. I look forward to the Minister’s response to those concerns.
Kevin Hollinrake
I think I have noted all the points raised by the hon. Lady. She is absolutely right that, in future, the Secretary of State could, through regulations, elect for the collection of more information from shareholders or any other relevant parties. We must all acknowledge that we do not want to put undue burdens on people who are trying to go about their normal, legitimate, bona fide commercial business. We are trying to strike a balance to ensure that we get the information from those we need it from, who may be acting for nefarious purposes.
On the hon. Lady’s point about the circumstances in which someone may want to remove details from the public register, that individual could be a celebrity, who would not want their address held publicly, or someone who fears domestic abuse. Those are the types of cases and circumstances that may arise. The information would still be held, just not in public. The law enforcement agencies would still have access to it, but the general public would not. When making such an application for removal, an individual would have to demonstrate evidence of risk, and could not simply say, “I want that information removing.” The registrar can refer cases to law enforcement agencies if she is in any doubt about whether the application has been made for bona fide reasons. She can also revoke a removal, if she feels that she has been given false information. I think they are reasonable provisions, and that judgment will be exercised.
On updating the register, the hon. Lady has tabled amendment 104, which we will consider in the next group. Perhaps we will have a good debate about that then.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clauses 45 to 48 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 49
Membership information: one-off statement
Seema Malhotra
I beg to move amendment 104, in clause 49, page 34, line 32, after “time” insert “and annually thereafter”.
This amendment would require a confirmation statement with company membership information as set out in clause 49 subsection 2 to be submitted annually.
The clause requires a company to provide a full list of shareholders when the first confirmation statement is filed after clause 44(3) comes into force. As I said, the clause is a welcome step in increasing the transparency of shareholder ownership and information, which we support strongly. Nevertheless, as has been said, the provisions in the Bill on shareholder information could and should go further. That is the context in which we tabled the amendment.
The amendment would provide that the confirmation statement about the company membership under this clause is submitted not only on a one-off basis but annually. The principle of shareholder information being submitted is one we support fully. If the Government believe that should be a one-off, I would be grateful if the Minister could explain why it need not be annual.
As I have mentioned, opaque shareholder ownership is a significant barrier to ensuring transparency and tackling economic crime. An example that has been cited already is Savaro Ltd. In August 2020, tonnes of ammonium nitrate exploded in Beirut port, killing more than 200 and wounding thousands more. The reported owner of the chemicals was a UK-registered private limited company called Savaro Ltd. The data provided by Savaro Ltd gives an insight into the poor quality of shareholder information held at Companies House and how that hinders investigation. Transparency International highlighted how, to identify the shareholders, it had to go back to 2015 for documents that named Status Grand as the sole owner.
Instead of identifying shareholders annually, companies only have to say that no shareholders have changed. The information is hidden in PDF documents, so it is unnecessarily time-consuming to establish who held shares in an entity at a particular point in time. Savaro is a clear example of how annual shareholder data, which the amendment would provide for, could assist considerably in investigating even criminal activity in UK companies.
Let me pre-empt the Minister’s pushing back on the amendment. One common argument against companies providing shareholder names annually is that it would prove too onerous a task for UK companies, but in answer to a written parliamentary question that I tabled his predecessor outlined that the average number of shareholders in UK companies in 2021-22 was only 2.15. The average number of directors was 1.59, so the number of shareholders was not that much higher. To argue that it would be onerous for the majority of companies to provide shareholder information does not seem so credible when set against the low average number of shareholders by comparison with company directors, as set out in the Government’s own data.
I urge the Government to consider this important amendment and hope the Minister will respond positively on how we might move forward with the sentiments and arguments behind it.
Kevin Hollinrake
I am grateful to the hon. Lady for her amendment. Clause 49 requires companies to provide to the registrar a one-off snapshot of relevant membership information when the first confirmation statement is due following the clause’s commencement. The amendment would require companies to provide that relevant membership information annually thereafter. The hon. Lady—or is she right honourable?
Kevin Hollinrake
It is only a matter of time. The hon. Lady cited the disturbing case, which I too read about, of Savaro Ltd in Beirut. It may be helpful for me to clarify how the clause as drafted works with existing company law. Companies are already required to provide a confirmation statement at least annually, which records changes in membership information in the previous period. One of the principles behind the confirmation statement is that companies should not be required to resubmit information that has already been filed on the register. Through the process, companies are required to either confirm the information submitted previously or provide Companies House with any updates to a variety of information, including the information contained in their register of members.
For example, if information submitted previously about a company’s members needed to be updated, or there were new members to disclose information about, the existing confirmation statement process already requires the disclosure of that information. Clause 49 introduces a requirement for companies to file a one-off snapshot of relevant information. That will be the means for companies to provide full names for all their members, as required by clause 44. That will give Companies House the starting point to display the information in a more user-friendly way. That information will then be maintained through existing confirmation statement requirements—annual updates, in effect.
The hon. Lady makes a good point about the usability of the information and the different PDFs being held. Companies House is looking at that. The Government would welcome suggestions on how best to display the information—a simple table would be preferable, in my view—which is to be determined as part of the implementation. That will involve user testing in the usual way to ensure that the information is displayed in a user-friendly way, as the hon. Lady seeks. Although I appreciate the intent behind the amendment, it would serve only to duplicate existing requirements, and would introduce the requirement to deliver potentially the same information on a yearly basis in cases where there had been no change in membership. I would therefore be grateful if she could withdraw it.
Seema Malhotra
I thank the Minister for his comments and his recognition of the important sentiments behind the amendment, which I will withdraw. I think some of the measures he outlined regarding the format of the information on Companies House and searchability will go a long way to addressing the point. I hope that we will be able to continue a dialogue on that, perhaps under his guidance about how we can best engage, to ensure that what is published is searchable and meets the important sentiments of transparency, so that frankly we never have another Savaro Ltd. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
Clause 49 is linked to clause 44, to which I spoke a few seconds ago and which introduces new requirements in respect of the names information to be provided to the company in relation to its members, for inclusion by the company in its register of members. Currently, information on shareholders can be contained across multiple filings. The clause requires certain companies to provide the registrar with a one-off list of all shareholders, including their names and how many shares they hold. The first confirmation statement will be due after the new names requirement in clause 44 comes fully into force.
Collecting that information via a one-off snapshot will improve the usefulness of the information on the register by enabling Companies House to display the information in a more user-friendly way. Companies will then confirm the information submitted previously, or provide any updates to Companies House—via the existing confirmation statement process—on the information contained in its register of members.
Seema Malhotra
I have no further points to add.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
Abolition of local registers etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 69, in schedule 2, page 148, line 40, at end insert—
“167GA Unique identification number for directors
(1) On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.
(2) Any information supplied to the registrar under or by virtue of this Act about a person who has been allocated a unique identification number under subsection (1) must include that number.”
Amendment 68, in schedule 2, page 150, line 36, at end insert—
“167KA Limit on number of directorships held
(1) Where notice has been given to the registrar that a person (P) has become a director, the registrar may determine that P may not hold that directorship.
(2) The registrar may make a determination under subsection (1) if the registrar considers that P holds an excessive number of directorships.
(3) The factors that the registrar may take into account in making a determination under subsection (1) are the experience, expertise and circumstances of P.
(4) If the registrar makes a determination under subsection (1), P may not hold office as a director of the company.”
Amendment 70, in schedule 2, page 150, line 39, after “167G,”, insert “167GA”.
This amendment would provide for penalties to apply to anyone failing to provide their unique identification number (see Amendment 69) to the registrar.
That schedule 2 be the Second schedule to the Bill.
Kevin Hollinrake
In last year’s consultation on the powers of the registrar, the Government asked stakeholders for their views about the requirements for companies to hold their own registers and to deliver the information contained in them to Companies House. Stakeholders were also asked whether the election regime, by which companies can choose to keep their registers only at Companies House, should be retained. They were clear that centralising certain registers with Companies House could reduce burdens on businesses. In response, the Government said that we would continue to consider updating the registers regime accordingly.
The Government have decided that, where possible, a single source of information about companies is preferable, and that that source should be Companies House. In future, the definitive registers of directors, secretaries and persons of significant control will, in all cases, be held by the registrar rather by companies themselves. Clause 50 introduces schedule 2, which contains the amendments to the Companies Act to implement that policy by setting out the requirements and processes that will apply upon the abolition of local registers and the existing election regime. The changes will apply to registers of directors, of secretaries and of persons of significant control.
Schedule 2 sets out the detailed requirements necessary to give effect to the new regime for companies’ registers. The schedule is necessarily long and detailed because of the complexity of re-engineering the existing system to repeal obligations to maintain local registers and replace them with a regime that will result in the population of central registers. What have largely been a range of duties for companies to maintain records are broadly being transposed into an analogous set of obligations to report that information to the registrar. In many instances, companies are currently obliged not only to maintain registers but to notify the registrar of changes to them. The eradication of local registers will therefore serve to ease burdens on business.
However, it is worth drawing attention to a number of areas in which the new registers regime will involve new reporting obligations for companies. Proposed new section 167G will replace section 167 of the Companies Act 2006 and introduce additional requirements on companies. When notifying the registrar of a new director, companies will be required to make statements to verify the director’s identity and that the individual is not disqualified or otherwise ineligible to be a director.
Proposed new section 790LB will permit that the notification of a new person with significant control, which is required under proposed new section 790LA, is accompanied by a statement confirming that the individual’s identity is verified. If a statement is provided in relation to a registrable relevant legal entity—a legal entity that itself has significant control in a company—it must specify the name of one of its relevant officers and must confirm that their identity is verified. The notice must be accompanied by a statement from the relevant officer confirming that they are the relevant officer of the registrable relevant legal entity.
On amendment 68, which was tabled by the hon. Member for Glasgow Central, given that in our consultation on potential reforms for inclusion in the Bill the Government considered the possibility of including a cap on directorships, I am sympathetic to the underlying intention of the amendment. Approximately three out of four respondents to the consultation opposed a cap. The Government chose not to proceed with one, believing it preferable to verify identities and provide more accurate linkage of records, thereby providing a more accurate picture of involvement with companies. That reasoning stands today.
Analysis of the companies register, together with comparison against other data sets and the reporting of anomalies from obliged entities, will assist in identifying circumstances in which we believe the number of directorships poses a risk of criminal activity. That information will be shared with the relevant enforcement and supervisory bodies.
The amendment proposes a form of fitness test rather than a cap. I acknowledge that this removes some concerns about the bluntness of such a cap and addresses some of the concerns raised by respondents in our original consultation. However, in return the amendment undermines the agency of company owners to act independently and in their own interests when appointing people to run the business they own. It places the registrar in the position of being a higher authority for such appointments. Would they ever have at their disposal the evidence to make a negative determination? What would be the implications of a negative determination on the actions taken by a validly appointed director up to the point of such a determination?
The possibilities in this policy area were given careful consideration as part of the Government consultation. We have not identified a legislative proposal along the lines of 68 amendment that is workable or appropriate. It would undermine business confidence in the UK if companies could not be sure whether their director appointments would take effect. We believe that the new and existing powers to analyse and query information and on identity verification, along with the enhancement that will be brought to linking people across multiple roles and the wider data-sharing possibilities for the registrar, all serve to strengthen our capacity to identify possible grounds for concern. Such concerns can be reported to the relevant agencies, investigated and acted upon, including by pursuing the disqualification of directors, if appropriate. I hope I have clarified why we do not believe the amendment should be taken forward.
Amendments 69 and 70 will be redundant once the expanded power under section 1082 is exercised, as amended under clause 66. The effect will be that all individuals who are under a duty to verify their identity will be assigned a unique identifier when they successfully complete identity verification. This will include all directors, who will commit an offence if they act as a director without having their identity verified.
Seema Malhotra
Will the Minister clarify what he said? Will all directors be given a unique identifier?
Kevin Hollinrake
Yes, that is in clause 66. Further detail about the use and allocation of unique identifiers will be set out in regulations made via the affirmative procedure, so Parliament will have sufficient opportunity to scrutinise them. There is no need, therefore, for the inclusion of a penalty for directors who fail to provide the registrar with their unique identifier. It will be the registrar who issues a director with a unique identifier, not the company or the director. I hope my explanation has provided further clarity on why the amendments are not needed. I urge the hon. Member not to press the amendments to a vote.
Seema Malhotra
May I ask your advice on procedure, Mr Robertson? Should I speak now on clause 50, the amendments and schedule 2, or should the SNP amendments be moved first?
Seema Malhotra
Thank you, Mr Robertson.
The importance of clause 50, which relates to schedule 2, is obvious and requires no further comment. The Minister’s description of schedule 2 as long and detailed was on the button. Its length is understandable given the changes it is making by abolishing the requirement for companies to maintain their own registers of directors, registers of directors’ residential addresses, registers of secretaries and registers of people with significant control. Instead, that information will be held centrally by the registrar, with the important provision that companies have a duty to update the registrar of any change to the information.
We welcome the proposed changes in clause 50, but I want to comment on amendments on 68, 69 and 70 tabled by my SNP colleagues, to which I am sure they will speak. Amendment 68 would limit the number of directorships that one individual may hold. Where notice has been given to the registrar that a person has become a director, the registrar may determine that they should not hold that position, if the registrar considers that they hold an excessive number of directorships. That may be achieved by setting a cap on the number of directorships held and it might be possible to override that limit if there were good reason, and a simple means introduced by which that application and argument could be made to the registrar. Such a proposal could be implemented sensibly to bring about the benefits that it offers, especially in the light of some of the abuses committed.
From our evidence sessions and debates in Committee, we have learned that individuals with multiple directorships are a massive red flag in terms of potential criminal activity. In evidence to us on 27 October, Bill Browder said:
“Why is it okay to have a person be a director of 400 companies? That does not make any sense to me. Why should there not be some limitation—maybe 10? Ten companies is a lot of companies—but 400 companies, or a thousand companies?”
––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 74, Q151.]
A limit on the number of directorships could easily be set in legislation and that would not stop people conducting their lawful business, but it would make it harder for criminals to use the system and our company structures to launder money and act as drivers of economic crime. It is worth reflecting on the fact that the evidence for that change came from a range of professional bodies. They also said that if they were directors of four, five, six or seven companies, how would they have the time to undertake their responsibilities with the required due care? The Minister referred to the consultation on this issue and said that three out of four of those consulted opposed a cap. Can he give us clarification on the year of that consultation? There are some questions about how we might interpret some of the responses, given the number of respondents and how many responded to all the questions.
In the light of that, I will make a few other remarks. The Association of Accounting Technicians, a registered charity based in London that acts as a professional body for accounting technicians worldwide, echoes Mr Browder’s assessment. In September 2020, it published an article recommending a cap of 15 directorships for one person, but it recognised, I think as we all do, that it is a difficult balancing act. We do not want to stop legitimate, lawful and productive activity, but we want to have a way of putting a stop to mechanisms that are easy to abuse. The AAT noted that there was a cap of 15 in Ireland, a general cap of 20 in India, and a cap of five in France that applies to public companies only.
Bodies that responded to the Government’s consultation made other interesting comments. There was a wide range of views on the cap, from two to 100 I think, with many suggesting between 15 and 25. This is an important conversation in the light of the scale and nature of economic crime, how it is changing, and the scale of abuse of our company structures. Some action has been undertaken in slightly different contexts, with less clarity about what has been happening with Russian money, Russian oligarchs and the connection to our international security. This year has really helped to challenge and expose much of that, albeit six years after legislation on economic crime was first promised. The point is that we have reached a place where our eyes are wide open now—or definitely wider, if not open completely.
Some of the wider comments and contributions to the Government’s consultation may well be worth going back to, in the light of what other countries do seemingly without impeding their economy or their companies’ activities. India is a good example of a nation whose trade is growing and that has a real focus on both domestic growth and international trade. I worry that we are closing down some of these debates, when this is a time to review them, perhaps with a slightly more open mind.
Seema Malhotra
The Minister asks a fair question. He is not necessarily stating a cap. Given what has come out in the consultation, and what has been in the articles about whether there should be a cap and what would be right for British companies, it is certainly open to further conversation. It is interesting that in the Government’s consultation many were suggesting between 15 and 25, which is in the ballpark of what has been happening in other countries. The make-up of our economy could be slightly different. We have to understand it in the round, and in the context of our economy, but it is a question of a scale of 400 to 1,000.
If the Minister is saying that there might be a level at which there starts to be a red flag, and implicitly that Companies House may implement the legislation, perhaps Companies House and the registrar will say, “Maybe we’ll just do a procedural check if we have 25-plus directorships.” I do not know. That is where data and analytics help, rather than a ballpark figure. It must be within a considered understanding of how our economy works, and how and where legitimate business is carried out, with a view from directors as well. We might find that it is an easier answer to reach, because it does not have to be one that only we, as Members of Parliament, comment on; it has to be informed.
We are not arguing for a hard cap. We are saying that, as the logic of the SNP amendment outlines, rather than managing on a case-by-case basis, having a way to manage risk structurally and procedurally is an important response to the evidence, the nature of use that we have seen and the situation we find ourselves in today. There is room to learn from the experience of other countries.
Amendment 69 would insert a provision into schedule 2, requiring that:
“On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.”
Amendment 70 follows from that, and would provide penalties for anyone failing to provide their unique identification number to the registrar. We support the spirit of the amendments, but I refer the Committee to our amendments 102 and 103, which we will be speaking to in later debates. Our amendments take a slightly different approach and place a duty on the registrar to give every director a unique identification number, which is published on the registrar’s website. I think that approach is tighter.
I hope in his response that the Minister will be clear about what the registrar is required to do versus what they can do, and what will be and will not be published on the unique identifiers for directors.
Alison Thewliss (Glasgow Central) (SNP)
I rise to speak to amendments 69, 68 and 70. These are connected amendments to schedule 2. I appreciate the point about clause 66, but we will get to that when we get to it, and we are here now.
The evidence from various witnesses last week, which I have heard over many years, is that the Companies House register is a mess. The amendments seek to tidy it up to some extent. A unique identifier that follows a person all the way through, from becoming a director of a company to perhaps resigning as a director of that company and going on to be a director of a different company at a later stage, would help to trace that person through the Companies House system.
I have mentioned in previous debates that there are three Alison Thewlisses on the Companies House register. They are all me, but they appear three times, and nobody would necessarily know that they are the same person. It would make sense to have a unique identifier attached to me as a person so that people can easily find and trace my history as a company director.
I looked up the Minister on the Companies House register. He is there five times. There are five Kevin Paul Hollinrakes out there in the world. It would be useful for companies doing due diligence or for people seeking to look at somebody’s directorship history if there was only one Kevin Paul Hollinrake on the register and we could see a complete picture of all those registrations over the course of his life and career.
That is the main purpose of the amendments—to make registrations traceable and to make the system easier for users and for me, if I want to be a company director, to provide the correct information. I could say, “I am already a director—here’s my number; just add it on to the previous things I have.”
Amendment 70 seeks to prevent people getting around that system and trying to register themselves perhaps by using their middle name or a different name, as if they were a different person. The unique identifier, once allocated to a person, should always follow that person through the system. If I try to register with my middle name or a married name rather than my maiden name, the system should pick it up. That is often an issue for women in the system. They might look very much like two separate people, with a married name and a maiden name, but they are in fact the same person. That unique identifier within the system would help trace people through, simplifying it for everyone.
Kevin Hollinrake
The hon. Lady has obviously read clause 66, “Allocation of unique identifiers”, which I think is what she is seeking to achieve. What about that clause does she not like?
Alison Thewliss
Broadly, I support clause 66. The amendments are not to that clause, but to schedule 2, to tighten it up and to improve it in any way we can. I accept what the Minister says. Labour, too, has an amendment to tighten the provisions, and I dare say I will support that as well, when we get to that stage, because all such amendments are to press the Government to tighten things up and to improve the Bill.
On amendment 68 and the number of directorships held, in evidence we heard Bill Browder suggesting the scenario of a drunk Latvian having their passport taken and being registered as a director in hundreds and hundreds of companies. Bill Browder said rightly:
“Why is it okay to have a person be a director of 400 companies?” ––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 74, Q151.]
Clearly, that is ridiculous. There is no way that someone could fulfil their obligations as a director if they were the director of 400 companies at once. It would be impractical to suggest that anyone could.
Also, Thomas Mayne said:
“On the point about directors, there certainly should be”
a limit—
“it is crazy that you have these people with 1,000 companies.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October; c. 79, Q162.]
It really is.
I do not want to put a specific number in the Bill—that would be something for Companies House and regulations to decide—but we clearly all understand what an excessive number of companies is. Four hundred is excessive and 1,000 is ludicrous. Perhaps the cut-off could be at 20 or 30, although even at that I would struggle to say that someone could make a good job as a company director keeping an eye on all those companies. It is worthwhile looking at the issue, because it is a red flag in the system: if one person is registered to multiple companies, that is a red flag, and it should be something that triggers Companies House to look into them in more detail.
Seema Malhotra
The hon. Lady is making a powerful argument. The Minister asked her what she thought was not sufficient about clause 66. Does she agree that arguing for a unique identifier is about ensuring that it actually happens? The wording of proposed new paragraph (d) in clause 66(2)(c) is to
“confer power on the registrar…to give a person a new unique identifier”.
It is a power, rather than a duty. That seems to be at the heart of the disagreement—is it a power or is it a duty?
Alison Thewliss
I agree. I do not want to go too far on clause 66, as we have not reached it, but this is about ensuring that something is in the Bill, that it is hard and fast that it happens, rather than having a suggestion, something that the registrar might like to consider, or some kind of “have regard to”. It needs to be there and specified. That is what we are trying to achieve.
Proposed new subsection (3) in amendment 68, on what Companies House should take into account in making its determination under the clause, specifies the “experience, expertise and circumstances” of a director. If someone has long-term experience of running companies that actually existed and have filed accounts, there is something tangible there and then Companies House can say: “Oh yes, that person has 30 directorships, but they are active in all those directorships, and we know what they are.” However, if someone has no active activity that Companies House can fill in, that becomes a red flag under amendment 68. It would give Companies House a degree of discretion. Wherever it might want to put the number is also a factor.
The Minister is trying to suggest that having such a check would be an inhibition to business. I do not believe that, and I am interested to hear what evidence the Minister has to suggest that such a limit on directorships would inhibit businesses in any way. As the Labour spokesperson, the hon. Member for Feltham and Heston, mentioned, other countries have such a rule. Those restrictions are in place elsewhere around the world, so the comparison would be interesting: do they feel that businesses, directorships and the involvement of people in companies are inhibited by having such a rule? We are proposing a change to the Bill to help Companies House do its job, to help it with the red flags and to give it an action to take once it has seen the red flags and identified them through something such as holding multiple directorships.
Kevin Hollinrake
Let me quickly respond. The shadow Minister wanted to know the date of the consultation that the three out of four figure came from. It happened between 2019 and February 2021, so it was pretty recent.
The issue of whether there should be a cap and where it should be set has been raised by both hon. Members. We think it is wrong to set a cap. The hon. Member for Glasgow Central asks the interesting question of, “Why do we need all these companies, and why do they need to be registered?” We believe that it is ours not to reason why. We believe in freedom and that people should be allowed to live their lives as they choose. We do not seek to put restrictions on people for no good reason.
Kevin Hollinrake
I will go on. We think there may be a nefarious reason why a person is a director of many companies. The hon. Member for Glasgow Central mentioned red flags in her speech, and that is exactly how we see this operating. It may well be that Companies House determine that there is a cap of 20, and when somebody gets to 20 directorships, then they become a risk. It may then look further into what that person is doing and share that information with law enforcement agencies. We would rather leave it to the discretion of the registrar to determine where the red flags should be, rather than impose it through the Committee.
The hon. Member for Glasgow Central took the opportunity to google my directorships, and she found that incredibly easy to do. Just type in “Kevin Hollinrake directorships” and it lists all my directorships.
Kevin Hollinrake
It is my name and all my directorships are listed underneath.
Kevin Hollinrake
I am sure it is on Companies House right now. There are 20 records. The hon. Member for Glasgow Central would maybe say that I cannot be director of any more companies, as I am already director of 20, but I have valid reasons for being directors of all those. I can promise her that none of it was for criminal purposes. The hon. Lady may say there should be a limit, but we think that basically we should leave it to the discretion of Companies House and the registrar to do the right thing—set the red flags where most appropriate and then identify risk and act accordingly.
Alison Thewliss
The Minister talks about not wanting to look at someone’s motivation for having, say, 400 company directorships. It is really is a case of, “There might be a reason, but we’re not going to ask about it. Why should we?” I think Companies House should be inquisitive about somebody who has 400 directorships, but the Minister is not tasking it to be inquisitive through the legislation. Tasking Companies House to be specifically inquisitive on that point is important, because the Bill does not put a duty on it or give it the right to be inquisitive.
Looking at the Companies House register, it appears that the Minister is listed five separate times—with one appointment, with zero appointments, with one appointment, with another appointment and with 18 appointments. They all appear as separate entries, not as one single person. A unique identifier would seek to grab those entries and put them in one place. That would make more sense. It would make it more traceable. I gave the example of myself being in there three separate times with three separate directorships, which are from very different points in time. If the entries were all in one place, it would be a neater and tidier way of logging them.
The Chair
Does the Minister wish to speak again? No, okay.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Schedule 2
Abolition of certain local registers
Amendment proposed: 69, in schedule 2, page 148, line 40, at end insert—
“167GA Unique identification number for directors
(1) On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.
(2) Any information supplied to the registrar under or by virtue of this Act about a person who has been allocated a unique identification number under subsection (1) must include that number.”—(Alison Thewliss.)
Question put, That the amendment be made.
Kevin Hollinrake
The clause would make amendments to the Companies Act 2006 to streamline filing obligations and remove unnecessary burdens, and to provide more protection of personal information than is currently the case. Clause 50 will remove the option for a company to elect to hold its register of directors or its register of people with significant control solely on the central register—the one held by the registrar.
Currently, when companies elect to hold their registers at Companies House, personal information, such as a date of birth, is publicly available on the register. That is because the election regime replicates what would happen if a member of the public asked to view the registers at the company’s registered office. When the election regime is removed, clause 51 will ensure that date of birth information is protected from public inspection, in the same way as dates of birth from non-elected filings are protected. The clause also provides that information such as dates of birth provided prior to 10 October 2015 will not receive automatic protection in the same way. Other provisions in the Bill will enable individuals to apply to protect historic information when it still appears on the public register.
The clause will amend the Companies Act 2006 to streamline and protect personal information of individuals that could otherwise increase the risk of identity theft or other fraud. It clarifies the extent of that protection, which, with some exceptions, will be applied to documents received from 10 October 2015.
Seema Malhotra
As the Minister mentioned, the clause amends the Companies Act in relation to individuals’ dates of birth and when they can be restricted from disclosure. The measures are important for occasions when the disclosure of someone’s date of birth would be inappropriate or unnecessary, so we support the clause.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Filing obligations of micro-entities
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
This group of clauses will improve the quality and value of financial information on the companies register.
Clause 52 will require a micro-entity company to file both its balance sheet and profit and loss account with the registrar. It removes the current option available for a micro-entity to omit—or fillet out—its profit and loss account when filing its accounts with Companies House. Clause 53 will require small companies to file a profit and loss account, and a directors’ report, when filing their accounts with the registrar. Clause 54 ensures that clauses 52 and 53 operate as intended by amending references to the existing small company and micro-entity filing obligations in the Companies Act 2006.
Clause 55 requires any companies seeking an audit exemption to provide an additional statement from their directors. That will help to deter fraudulent under-reporting by companies and, where a company director has provided a false statement, provide additional enforcement evidence that can make it easier to successfully prosecute directors. Finally, clause 56 removes the option for small companies, including micro-entities, to prepare and file a set of abridged accounts.
Collectively, the clauses will ensure that more financial information for micro-entities is publicly available on the register, helping to inform better business and lending decisions. They will ensure that the company’s turnover—one of the three eligibility criteria that determine the size of the company and what it must file with the registrar—is publicly available. The clauses will also provide greater transparency of micro-entity accounts, which will help to deter fraudulent or criminal activity and make such activity more easily identifiable.
It is crucial that we strike the right balance between transparency and burdens on business. As micro-entities already file a copy of their annual accounts for other purposes—tax returns with His Majesty’s Revenue and Customs, for example—the changes will not be overly burdensome for them.
Seema Malhotra
I thank the Minister for his comments. We welcome the measures in these clauses.
As the Minister said, clause 52 updates the filing requirements for micro-entities. A company is a micro-entity if it has any two of the following criteria: a turnover of £632,000 or less, a balance sheet of £316,000 or less, or 10 or fewer employees. The technical definition of a small company is any company that has any two of the following criteria: a turnover of £10.2 million or less, a turnover of £5.1 million or less, and 50 employees or less. Although we use the terms micro and small entities—in terms of the scale and size of other companies, that is significant—they can be larger than the terms indicate. That increased transparency from clause 52 is important.
We welcome clause 52 as a reflection of the fact that insufficient information is filed from those micro-entities to give a true and fair view of their financial position. The minimal disclosure requirements at present have also made them attractive to fraudsters who want to present a false picture.
There were 1.3 million micro-entity accounts filed in 2019-20. It is the most common choice for account filings. The Government’s December 2020 consultation on improving the quality and value of financial information on the register noted:
“Fraud investigation bodies have reported that micro-entity accounts are often used by companies that are investigated in money laundering cases.”
It is therefore absolutely right to tighten things up and seek greater transparency in the accounts and financial positions of companies’ activities. However, that raises the important question of whether any further work might be needed on micro-entities, although that question is for another debate.
On roll-out time, the Bill’s impact assessment suggests on page 76 that familiarisation time will be needed to get micro-entities up to speed with the changes, but there should not be significant additional costs, as companies already collect and submit additional information to HMRC in tax filings. In the light of what we and the Minister have said, we want moves that stop the criminal behaviour, but do not impede ordinary, good, productive and lawful business, so the measures are welcome. We want to see them come into force as soon as is practicable. The Secretary of State may make a determination later about when to bring the requirements into force, but perhaps the Minister will indicate today when he expects the Government will want the new requirements on micro-entities to become operational.
We welcome clause 52 as a necessary means to ensure that small businesses that are not micro-entities file full accounts to the registrar—which, again, will increase transparency and the availability of information. Clause 54’s consequential amendments seek to ensure that clauses 52 and 53 function as intended.
I want to make a few comments on clause 55. Perhaps the Minister can clarify the exemptions from audit requirements under this clause. When a company seeks an exemption from the requirement to have its accounts audited—for example, because it is a small company with £10 million or less in turnover—the clause would require directors to make a statement confirming that the company qualifies for an exemption.
I would appreciate it if, in the interest of the robustness of legislation, the Minister would expand on the clause and clarify what qualifies a company to have an exemption in that regard. The Government brought in an increase in audit exemption levels, effectively making more companies eligible for exemptions, and that goes back to the 2013 EU accounting directive, which sought to simplify requirements on companies submitting accounts and gave member states the flexibility to increase the small company accounting and audit exemption thresholds. Is there likely to be any review of those thresholds? Perhaps the Minister can enlighten me as to whether there is clear demand for that.
In the light of current circumstances—the clamping down on, and growth in, economic crime, as well as the transformations we will have seen in the last six, eight or 10 years—will the Minister tell us whether the high thresholds brought in by the Government have reduced audits and the transparency of information on the register? Have they affected the extent to which information filed by companies is trusted? Is the Minister interested in considering whether the levels for audit exemption are acceptable and right in the context of current economic crime, or does he think, in the light of the opportunities presented by the Bill, that there is reason to look at any of that again?
We welcome clause 56 as a necessary provision for improving the accuracy of information in relation to small companies.
Kevin Hollinrake
I will check the implementation date of the new rules around filing full accounts and let the hon. Member know in detail.
In terms of the audit exemption, the threshold is currently £10.2 million. We will always keep that under review, because we are trying to ease the burden on business while ensuring that nothing untoward is happening. Having been through the process myself, I know that auditing a business is very extensive, exhaustive and expensive. It is absolutely right that we seek to reduce burdens on business whenever we can, while also putting appropriate checks and balances in place.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clauses 53 to 56 ordered to stand part of the Bill.
Clause 57
Confirmation statements
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
The clauses in this group will help the registrar to fulfil their new objectives, as set out in clause 1. Clause 57 obliges companies to notify the registrar of additional information that is required to be delivered under new requirements brought in via the Bill. Companies will have to do this before, or at the same time as, delivering their annual confirmation statement. The new information of which companies will have to notify the registrar will be to confirm the company’s lawful purpose. If it is the company’s first confirmation statement, as it is a newly incorporated company, the company will need to notify the registrar of any changes that have happened between its application for incorporation and the incorporation taking place.
The annual confirmation statement is a fundamental aspect of that data. It provides an opportunity for a company to focus its attention on the statutory requirements that it has to meet, and it also re-establishes the benchmark against which a company is assessed by others, including the registrar.
Clause 58 ensures that the registrar will have up-to-date information that will allow them to uphold the investigations and sanctions regime more effectively. The accuracy of the information provided in the confirmation statement is obviously of key importance, given that making false statements, or failing to deliver confirmation statements, may result in an offence being committed.
Dame Margaret Hodge (Barking) (Lab)
What happens if it is a false statement? Who will uncover that?
Dame Margaret Hodge
I ask the question for a reason. I did not intervene during the previous debate, but the Minister might know—I certainly do—that thousands and thousands of microbusinesses are supposed to put their annual accounts in to HMRC, but do not do so, and nobody ever goes after them. There therefore may be thousands and thousands of businesses that put in false statements. Given the anti-regulatory stance that the Minister has displayed today, I am just interested in knowing who will actually check the statements and what will happen then.
Kevin Hollinrake
I am very disappointed that the right hon. Lady regards me as anti-regulatory. I want a system that allows good, bona fide businesses to go about their daily business without unnecessary checks and balances. We cannot control everything that goes on in our society but, in the main, businesses are lawful, and undertake lawful and legitimate commercial activity.
If the right hon. Lady expects a world in which we check every single filing, nobody will be doing any commercial work in our society. The only people we will have will then be box-checkers, and where would the tax revenue come from to pay for all the things that both she and I want in our society?
We must have a proportionate balance between regulation, the cost of resourcing regulators and the needs of law enforcement agencies. That is why our belief, which I know is not entirely hers, is that we need to take an intelligence-based approach to regulation. That is the most effective way to do it.
Seema Malhotra
I think we all agree that we do not want to do things that impede lawful activity—that is not a matter for debate, really. The question is whether the systems will be strong enough. They do not have to be burdensome; there are ways in which systems can have automatic checks, and be underpinned by clear roles and responsibilities. The question of who would know whether there are errors in a confirmation statement, and how that would be checked, is quite an important one for ensuring that we are not—
Kevin Hollinrake
I do not disagree. I agree with the hon. Lady about automation, but checking every single document and every single file would be ludicrously burdensome, because 99% of those filings would be legitimate documents. I speak as somebody who has been an authorised person under the FCA, so I know how many checks, and double-checks, someone in such a position has to make. The vast majority of people who the FCA regulates do a bona fide, legitimate job.
We are trying to find the people who are not doing so, and what we are trying to do through the Bill is to allow the sharing of information and the cross-referencing of information to identify all the red flags—the hon. Lady talks about automation—and then trigger alerts that can be investigated. I think that we all agree about that, and that is the approach that we are taking.
As I was saying, these measures will all ensure that companies, once formed, will reassert to the registrar via their annual confirmation statement that the company’s intended future activities are lawful.
Clause 59 will oblige a company to notify the registrar via its first annual confirmation statement of a change in its principal business activity if such a change takes place between the company’s application to be incorporated and the incorporation taking place. That addresses the fact that there is currently no duty to notify the registrar during the incorporation process. This new obligation builds on the existing obligation in section 853C of the Companies Act 2006, whereby companies have to notify the registrar of a change in principal business activities via their annual confirmation statement.
Clause 60 amends section 853J(4) of the Companies Act so that the framing of criminal offences is consistent with similar provisions in this Bill. It also makes the same amendment to section 853L(1), which concerns the offence of failing to submit a confirmation statement on time. It will clarify that every officer of the company who is in default can commit the offence, as well as every director of the company. It also corrects an irregularity with the framing of the offence, which currently imposes strict liability on all the company’s directors and secretaries, regardless of whether they are in default—in other words, regardless of whether they authorised, permitted, participated in, or failed to take all reasonable steps to prevent, the contravention. I hope right hon. and hon. Members agree that it is important that these measures reach the statute book.
Seema Malhotra
We welcome clause 57 which, as the Minister said, prescribes the company’s duty to notify the registrar about certain events and provide certain information in advance of and at the same time as the delivery of the annual confirmation statement. That is obviously very important.
We have already debated some of the issues that clause 58 addresses. It is obviously an important clause, and the Minister has outlined that the approach is to hope for accuracy, based on risk assessments and red flags. We understand that, but it still does not feel as strong as we need it to be. It does not feel clear and strong on detecting issues, and it does not give the registrar a clear expectation of what the Minister intends. It felt a little like the Minister was just hoping that everything would work out. We should be clearer about what steps should be taken on detection, prevention and enforcement, and ensure that that is as strong as possible through the passage of the Bill. That is incredibly important, because we know that those are weak areas.
My right hon. Friend the Member for Birmingham, Hodge Hill made the very important point that we need to clarify what is expected of the registrar. They will be subject to many different demands, and in some ways it will make their life easier if they see in Hansard that there is a clear expectation from the Government, the Minister and the House about what is to be done. That would aid the call for greater resources, as it is frankly a way of making savings from enforcement later, and increasing the speed of detection will considerably lower the cost of economic crime. I hope that the Minister recognises that I am putting these comments and questions to him in the hope of detecting ways of tightening up the message about what we expect, in order to better implement the Bill and its stated goals.
We welcome clause 59, which I think we referred to earlier. Clause 60 will align terminology around existing offences relating to confirmation statements. The Minister outlined the detail of that. I raise a similar question as previously, because I seek clarity from him on what it will mean in practice for companies that breach the new provisions around confirmation statements. What is the result of failure to comply with the provisions, and who will be held to account? Clarifying that would be quite helpful. It would also be helpful to understand whether the Bill will allow for retrospective penalties, should information on the confirmation statements turn out to be misleading, and perhaps purposefully misleading.
Kevin Hollinrake
The hon. Lady raises some good points on retrospective penalties. I will find out that information and come back to her.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clauses 58 to 60 ordered to stand part of the Bill.
Clause 61
Identity verification of persons with significant control
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 27—Reporting requirement (identity verification)—
“(1) The Secretary of State must publish an annual report on the progress of establishing identity verification procedures in relation to proposed officers and persons with initial significant control.
(2) The first report must be published within three months of this Act being passed.
(3) A further report must be published at least once a year.
(4) The Secretary of State must lay a copy of each report before Parliament.”
This new clause would add a requirement on the Secretary of State to report on the progress of establishing identity verification procedures for proposed company officers and persons with initial significant control.
Kevin Hollinrake
I am aware that hon. Members have tabled amendments in relation to ID verification in the groupings to follow, but I will first speak to the first clause in this chapter. Clause 61 introduces requirements for people who own or control companies to undergo ID verification to improve the reliability of information on the company register. The UK was the first G20 nation to introduce a public beneficial ownership register of companies: the people with significant control register, which has more than 5.8 million entries about people with significant control over entities on the company register. The clause will apply ID verification requirements to persons with significant control and relevant legal entities on the register. It is a vital clause.
If a company has not voluntarily delivered a statement confirming that the identity of a person with significant control is verified, the registrar will direct such a person with significant control to make an identity verification statement within 14 days. A company might be owned or controlled not only by individuals, but by legal entities—for example, other companies. To be a registrable relevant legal entity, a legal entity must meet certain conditions, and be subject to its own disclosure requirements. It is registrable in relation to a company if it is the first legal entity in the company’s ownership chain.
Where there is a registrable relevant legal entity in relation to a company, and the company has not voluntarily made an identity verification statement for that RLE, the registrar will direct such a relevant legal entity. That direction will require the entity to make a statement within 28 days, naming its verified relevant officer. The statement by the RLE must include a statement made by the relevant officer confirming that they are a relevant officer for the entity. That will prevent individuals from being notified without their consent or any relation to the entity.
The clause creates a duty on persons with significant control to maintain their verified status as long as they are registered with the registrar. The RLEs will also be under a duty to maintain a verified relevant officer as long as they are registered with the registrar. That is to ensure that a verified individual is always traceable for each RLE. Failure to comply with the registrar’s directions or to maintain a verified status is an offence under the clause.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Mr Robertson. I think it is safe to say that we are coming to one of the most significant and consequential aspects of the Bill.
Clauses 61 to 67 take up a full 15 pages and provide a framework for the verification of the identities of individuals listed on the register of people with significant control, whom I will henceforth refer to as PSCs. Since its launch in 2016, the PSC register—more colloquially described as the register of beneficial owners of UK companies—has made important progress towards corporate transparency, but it remains very much a work in progress.
Much of this Bill is rightly concerned with closing loopholes in existing legislation and, as it stands, the PSC system has loopholes that are big enough to drive a coach and horses through. Even if we could rely on the good faith of all those who register, we would still be stuck with the fundamental problem of the 25% ownership threshold. The ease with which that can be used to circumvent the registration requirement—for instance, simply by splitting ownership shares between four people, who may all be family members—has been extensively discussed and is well documented.
During last week’s evidence sessions, my right hon. Friend the Member for Barking rightly drew attention to the case for a threshold set much lower than 25%. In response, Professor Elspeth Berry argued that although the threshold should certainly be lowered, even
“a zero percentage could be considered.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 27 October 2022; c. 103, Q194.]
That is the case, given how many different and probably more relevant ways there are of measuring corporate control in the modern business environment.
The Government will likely argue that 25% is a widely used international standard, but we should be clear about what that means. Nowhere is it suggested in any of the international frameworks to which the UK is a party that 25% ownership is anything more than an example of how a country might seek to define beneficial ownership. In fact, many jurisdictions set ownership thresholds much lower than that. Some jurisdictions—including Belize and Jersey, which are not exactly known as paragons of corporate transparency—use a 10% threshold. The Government’s failure to take the opportunity provided by the Bill to revisit the definition of beneficial ownership is, to put it mildly, a disappointment.
I will now look more specifically at ID verification. Clause 61 is the first of a series of clauses in which the Government enable new powers to be introduced to ensure that information on PSCs can be verified. Subsequent clauses stipulate that full details of the verification regime will be set out in regulations at a later date.
The Opposition find the absence of substantial details on verification procedures in the Bill perplexing. It is now more than three years since the Government launched the first of what turned out to be no fewer than four separate consultations on proposed reforms to Companies House, which included proposed ID verification powers. It is not at all clear why, after all this apparent effort, Ministers are still unable to set out specific plans in legislation. Perhaps the reason is that they have been struggling to make a decision and stick to it.
In the first consultation document back in May 2019, the Government stated fairly unambiguously that they believed that Companies House should be given responsibilities for ID checks. That view was reiterated in subsequent consultation documents published in February 2021, which seemed to indicate that the Business Department is better at flogging a dead horse than at drafting legislation. More than a year passed before the Government finally published a White Paper. By that time, Ministers appeared to have gone lukewarm on handing responsibility for ID checks to Companies House, with a shift in emphasis towards outsourcing the checks to third parties that are collectively known as trust or company service providers. Somewhat confusingly, they are now referred to in the Bill as “authorised corporate service providers”, or ACSPs.
That is extremely problematic, for a whole range of reasons. First and foremost, TCSPs represent a highly fragmented sector, making supervision of their activities very difficult indeed. Some may be supervised by professional bodies—for example, if they provide accountancy or legal services—while others may be supervised by HMRC. In some cases, there is no supervision at all, leading RUSI’s Helena Wood to compare the sector to the wild west. Ministers now propose to place an enormous amount of trust, faith and responsibility on the shoulders of TCSPs, about which they know very little.
Speaking to the Treasury Committee earlier this year, Graeme Biggar, the then director-general of the National Economic Crime Centre, said:
“We are developing a plan with HMRC and the Treasury to have both more supervision of, and more enforcement against, company formation agents. We are on it, but it is not the most developed of our plans. We have really got to do more work on that.”
It would be excellent if the Minister could give us an update on the progress of the work that Mr Biggar referred to in that evidence.
As things stand, it is hard to imagine what the Government were thinking with the proposals in these clauses. This is not just a case of sharing responsibilities for supervision between the public and private sectors, as is already the case in the legal, accountancy and some other sectors; this is about outsourcing a set of tasks to the least regulated, least understood and potentially least reliable part of the entire financial services industry. The Government’s own assessment in their national risk assessment was that TCSPs pose a high risk of being used for money laundering purposes. A previous risk assessment said:
“Ineffective AML supervision leads to inadequate compliance with the rules, and low and poor quality reporting of suspicious activity”.
For at least the past seven or eight years, official reports and media coverage have documented the involvement of UK-based TCSPs in the efforts of oligarchs, many of whom are Russian, to conceal their wealth in opaque webs of corporate structures. It should be clear by now that the Opposition have serious concerns about the proposal to outsource ID checks to the sector. We have therefore tabled new clause 27, which would require annual reporting on the progress towards establishing verification procedures, in order to probe the Government’s rationale for the policy. I hope that the Minister will take seriously the concerns I have just outlined, and that due consideration will be given to whether the policy is really in the interests of tackling economic crime and improving corporate transparency.
May I just ask you for clarification, Mr Robertson? Do you wish me to stop there or—
Stephen Kinnock
I would be very happy to pause and provide the Minister with an opportunity to respond, if he wishes to do so, on clause 61.
The Chair
As you wish. I will bring Alison Thewliss in next, but we can come back to you, Mr Kinnock.
Alison Thewliss
I wholeheartedly support Labour’s new clause. There is an awful lot more that needs to be done to tighten up the measure on verification. Nick Van Benschoten, in his evidence, said:
“On the verification measures, one of the key points is that they fall short of minimum industry standards. Verification of identity is necessary but not sufficient. A key thing we have noted is that the Bill does not provide for order-making powers to allow Companies House to verify the status of directors or beneficial owners, and for that sort of requirement on company information agents and so on. That seems an odd gap.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 7, Q3.]
I wholeheartedly agree with that. It is the key part of the Bill. If we are not going to verify people on the register, there is almost no point in having the legislation. It is the verification that is crucial.
Hand in hand with that are the fines for not complying with the verification. I draw the Minister’s attention, again, to the people with significant control over Scottish limited partnerships. There has been one fine of £210 since the rules came into place. That is no kind of deterrent whatsoever. The rules need to be here, the verification needs to be right, and the sanctions for not complying must be enforced. I would say that even the sanctions are far too low.
Leaving trust and company service providers to verify identity leaves the door wide open to abuse. There is already abuse, and the Government’s position in the Bill is to continue to allow that to happen. As the hon. Member for Aberavon said, trust and company service providers have been identified in numerous Government documents as being the gap that allows money laundering and international crime. That cannot be allowed to continue in the Bill. If the Government leave the door open for the trust and company service providers, they will continue to abuse the system and the register will continue to be full of absolute guff.
I raised the issue of verification in the House, albeit, I appreciate, with a different Minister, the hon. Member for Torbay (Kevin Foster). He suggested that a decision had not yet been made on how the verification system would work. My suggestion was that it go through the UK Government’s existing verification scheme, which is used for passports, driving licences and tax returns, because that system is already up and running. The response suggested that that had not yet been decided.
However, it was drawn to my attention today that Companies House has already put out a tender for a verification system. A tender went out on 10 October and closed on 24 October for an “authentication digital delivery partner”, looking for people to come and work on this system. I am curious to know why, when we have not yet got this legislation in place, the Government have tendered the contract and closed the application process for the company to build the system.
I would be grateful for some clarification from the Minister on exactly what the status is of that £3.7 million contract, which Companies House has already put out to tender. Why has it gone out before the Bill has concluded if Companies House does not know what it is building yet, and when amendments are still being tabled? I appreciate that the Government want to move at speed, but putting the cart before the horse in this way seems quite wrong.
We would like the verification to be strengthened, but if the Government have already instructed a contractor on what it will build, why are we even here this afternoon?
Dame Margaret Hodge
I seek your guidance, Mr Robertson: we are talking about clause 60, are we not?
Dame Margaret Hodge
Yes; the others come later.
After the excellent speech by my hon. Friend the Member for Aberavon, I will speak briefly. I have two things to say. We will come back to the issue of shareholders, data and the threshold, which is really important, and I will certainly come back to the issue of trust or company service providers, because Labour Members all think that it is key to get that right if we are to have any credibility about the integrity of the list.
I want to talk about new clause 27. The Minister has said a number of times that he does not want to impede business. I do not think any Opposition Member wants to impede business either. We want to have smart regulation, not too much regulation. The purpose of this debate is to ensure that the regulation is indeed smart. At the moment, there are too many flaws.
The Chair
For clarification, we will not vote on new clause 27 until later in the proceedings, and probably not today. We are discussing it now. In view of the fact that new clause 27 has already been raised, would you like to speak to it now, Mr Kinnock?
Stephen Kinnock
I have made the points that I wish to make about new clause 27.
Kevin Hollinrake
As an overriding point, we all know how important the integrity of the ID verification system is. I completely agree with that and we need there to be confidence in it.
On the point raised by the hon. Member for Glasgow Central, it is not right that a tender has gone out already. A request for information has been put out to determine some of the characteristics of the suppliers to learn what services they provide, but a tender has not gone out. Once determined, the ID verification system will be brought to the House to be approved by affirmative resolution. There will be opportunities for debate at that time to make sure it is fit for purpose, both in the framework and how it will be operated.
On the comments the hon. Member for Aberavon made about persons of significant control, first, I think he makes the exact case that we would make. A 25% threshold is pretty much the global standard, but even if it were lowered, people could find ways around it—even if there were a 0% threshold, as was suggested by Professor Elspeth Berry. That is why the definition of a person of significant control is not solely about the percentage of the shareholding of a company. There are five definitions, including one I that believe will interest the hon. Gentleman, which is somebody who, other than by shareholding,
“has the right to exercise or actually exercises significant influence or control”
over a company. Therefore, there could be zero shareholding and they would still be a person of significant control. How is that enforced? If directors allow that to happen and do not declare that they have a person of significant control, they are liable for a fine and a custodial sentence of up to two years. We do deal with that in a reasonable way.
Some valid concerns have been expressed about company formation agents. I am happy to write to the National Crime Agency to ask what it has done about them. However, not all company service providers are company formation agents; there is a distinction. A company service provider may well be a large accountancy practice, such as Deloitte, PwC or KPMG. The hon. Member for Aberavon stated that such organisations know very little about their clients and offer a blanket service, but I do not think that is fair. My accountants can verify my ID and they know a great deal about me, I can promise the hon. Gentleman.
Of course we must make sure that the system is robust, and I acknowledge that there are some concerns about the supervision of those registered as supervised for money-laundering purposes. Of course we must be sure that the system is right. As hon. Members are aware, I think, the Treasury is looking at means of improving the regime to ensure that the supervision is much better, and it needs to be. The difficulty is—we will have more debate about the issue in forthcoming sittings—whether we want to get everything perfect in the system before we start ID verification, or whether we start ID verification. In my view, it is essential that we get that ID verification done as quickly as possible. Waiting until the AML supervision regime is absolutely perfect would be a mistake, in my view. The two things should happen concurrently.
I understand the reasoning behind new clause 27. I completely agree with the idea of giving confidence to Parliament that the matters are being taken forward. I am happy to commit to return to Parliament to communicate by whatever means is preferable—written ministerial statement or oral statement—what progress has been made to ensure that Parliament has the information that it needs to hold Companies House and other agencies to account.
The Chair
The Minister is finished. If someone else wishes to speak, they can stand in the normal way and indicate.
Dame Margaret Hodge
I am grateful to the Minister for saying that he will return to Parliament, but new clause 27 is designed to ensure that there is an annual report to Parliament. That means that our successors—certainly mine—will be able to hold Companies House to account over time. He knows that accountability is absolutely vital to ensuring the integrity of the system.
Question put and agreed to.
Clause 61 accordingly ordered to stand part of the Bill.
Clause 62
Procedure etc for verifying identity
Stephen Kinnock
I beg to move amendment 108, in clause 62, page 47, leave out lines 14 and 15.
The Chair
With this it will be convenient to discuss the following:
Amendment 109, in clause 62, page 47, leave out lines 18 to 20.
Amendment 78, in clause 62, page 47, line 20, at end insert—
‘(2A) No verification statement may be made by an authorised corporate service provider until the Treasury has laid before Parliament a report confirming that the Treasury’s review of the UK’s anti-money laundering and countering the financing of terrorism regulatory and supervisory regime has been completed.’
This amendment prevents an authorised corporate service provider from making a verification statement prior to the completion of the Treasury’s review of the UK’s anti-money laundering regime.
Amendment 107, in clause 62, page 47, line 20, at end insert—
‘(2A) The regulations must make provision for the evidence required to verify an individual’s identity for the purposes of subsection (2)(a) to include—
(a) an identity document with a photograph of the individual’s face; and
(b) an identity document issued by a recognised official authority.
(2B) For the purposes of subsection (2A)(b) above, “a recognised official authority” includes—
(a) a department or agency of the UK government;
(b) a department or agency of any of the devolved nations;
(c) a department or agency of the government of another country;’.
Amendment 110, in clause 62, page 47, leave out lines 34 to 37.
Amendment 111, in clause 62, page 47, line 43, leave out from “registrar” to the end of line 44.
Amendment 112, in clause 62, page 48, leave out lines 4 to 26.
Clause stand part.
Stephen Kinnock
I have spoken at some length about the Opposition’s concerns about the provisions in clauses 62 and 63 to authorise third-party trust or corporate service providers—or authorised corporate service providers, as they are described in the Bill—to carry out ID checks on the Government’s behalf. Amendments 108, 109 and 110 to 112 would simply remove those provisions from the Bill in the hope of prompting a rethink by the Government.
I should like to explain the thinking behind the amendments tabled by me and my hon. Friend the Member for Feltham and Heston. The purpose of amendment 107 goes back to what I have said about the surprising lack of specific details on the proposed verification process. As I have said, it is not as though the Government have not had enough time to think through what procedures might be necessary; four consultations have already taken place on the topic. Amendment 107 would incorporate into the Bill requirements for some form of official identification, including photo ID, to be submitted to the registrar. That should not be controversial. In fact, the amendment would merely reflect international best practice guidelines, including those published by the Financial Action Task Force, the IMF and the World Bank, among others, and the commitments made in the Government’s own White Paper.
Dame Margaret Hodge
It is a pleasure to rise to speak under your chairmanship, Mr Robertson, and I do so to speak to amendment 78. The amendment is part of a batch of amendments that we will get to later. I hope that hon. Members will bear with me if I speak longer on amendment 78, so that amendments 79, 82 and 83 will not require a long explanation.
This is one of the most important series of amendments that we have placed before the Committee. The purpose is to ensure that we close any loopholes, so that we do not find ourselves back in debate in a couple of years’ time, bemoaning the fact that we failed to create watertight legislation and that we do not have the information and data that we need to hold businesses to account.
I stress that our aim is not to be bureaucratic. The last thing anybody wants is bureaucratic regulation. However, if we do not have effective, smart regulation, we will not achieve the objective, which is shared across the House, of bearing down on illicit finance and on the abuse of our corporate structure system by ne’er-do-wells. Today, we are paying the price of those who came before us, from both political parties, who thought that by simply deregulating the whole of the financial services sector, they would encourage growth in the economy. They did encourage growth, but they also made us a destination of choice for too much illicit finance. That has come into focus with the war in Ukraine and the role of Russians in bringing their financing here. That money is used to fund Putin and his allies in the attack on Ukraine.
The Government have decided to outsource responsibility for checking the unique identification of beneficial owners. I can see why they have done so. It is quicker to do it that way than to build up the necessary resources in Companies House. Like my hon. Friend the Member for Aberavon, I would have had more confidence if we had done it in house, but that was the Government’s decision. The purpose of my amendment is not to challenge that decision. However, we need to trust the corporate service providers. We need to trust both the professionals and the others involved, whether they are lawyers or accountants, to do the job properly and honestly. At present, confidence and trust are not there.
I thought that the Government were on the same page on this issue. From all the leaks, and from all the information and intelligence about how illicit wealth from all the kleptocracies has reached our shores, I thought that they understood the role played by the TCSPs. I thought they understood the role that the TCSPs play, and therefore shared our concern that we need to get that regulatory framework right before we unleash a new system that, if it is not right, could lead to us peopling the new Companies House register with dud information that we do not want.
James Daly (Bury North) (Con)
I refer to my entry in the Register of Members’ Financial Interests as a practising solicitor and a partner in a firm of solicitors. The right hon. Lady has essentially said that everybody involved in the legal sector and financial advisers are potentially dishonest. They absolutely are not. The vast amount of people involved in the sector are honest, decent people who have a lot of regulation and try their damnedest to abide by all of it. The picture that the right hon. Lady paints is not correct.
Dame Margaret Hodge
That is not what I said. The hon. Gentleman may have chosen to interpret it that way—
Dame Margaret Hodge
No, I did not. I said that none of the professions has sufficient supervisory or regulatory capabilities, policies or practices in place to pull out the bad apples. I have nowhere ever stated that that applies to everyone, but I hope the hon. Gentleman agrees that the extent of people setting up shell companies —we are talking largely about shell companies—as vehicles to move illicit finance, whether through drugs, kleptocrats or people trafficking, is shocking.
Let me tell the hon. Gentleman my most egregious story, which has been mentioned—the Savaro story. We had this terrible explosion in Lebanon, with hundreds of people killed and lots of property destroyed. We were told that it was fertiliser held in the warehouse that was going to Mozambique. A couple of months after the explosion, I was rung up by a Reuters journalist with whom I have worked down the years, who said, “Did you know it was a UK limited company—Savaro Ltd?” He went on to say that not only was it a UK limited company, but, interestingly enough, it had told HMRC it was dormant, so it had not filled in its tax returns. It was registered in the name of a company service provider, a woman who lived in Cyprus. There were two lies in the system: a lie about the company service provider, and lying to HMRC.
I gave the usual quote and was then overwhelmed by people from Lebanon contacting me, including the Bar Association, all of whom were trying to find out the origins of what had happened. It then emerged that three Ukrainian Syrians—this was before the Ukrainian war—were the real owners. There was no way the fertiliser was going to be used in Mozambique; it was going to Assad to drop as barrel bombs on the civilian population of Syria. That is the sort of shocking outcome that comes from lack of proper regulatory control.
Kevin Hollinrake
I will deal first with amendment 78, tabled by the right hon. Member for Barking. As she knows, it would place a restriction on the permitted ID verification processes set out elsewhere in the Bill. It would allow a person such as a company director or beneficial owner seeking to verify their identity through an authorised corporate service provider to do so only once His Majesty’s Treasury had completed its review of the AML supervisory regime and laid the report before Parliament. I think that if the right hon. Lady thinks about it, she will probably want to go further than that, based on her remarks. I think she wants to go ahead only once the AML regime is properly supervised generally, not just to the point where we have the report from the Treasury. We are potentially talking about getting some way down the line before we are in a situation where she would be happy with the regime.
I take on board many of the comments the right hon. Lady made. Parts of the regime are not operating as they should—I quite agree. We absolutely need to fix that. As with other amendments proposed today, I am sympathetic to the intention; however, I think that there better ways to do it.
The practical effect of the amendment would be to place a temporary restriction on the functions that legitimate businesses may carry out. That restriction is unrelated to and may be unaffected by the publication of the review to which it is linked. It is anomalous and unfair that those businesses affected will still be subject to their current regulatory obligations to carry out ID checks. However, they will be prevented from making a statement reporting to Companies House that such checks have taken place, effectively delaying the whole regime. I also draw attention to the impact of the right hon. Lady’s amendment on those people who use agents to manage their interests. I accept that some are shady characters, but, as my hon. Friend the Member for Bury North stated, the overwhelming majority are not.
Alison Thewliss
The Home Office report, “National risk assessment of money laundering and terrorist financing 2020,” states:
“Company formation and related professional services are therefore a key enabler or gatekeeper of”
trade-based money laundering activity. Should that not raise more concerns for the Minister?
Kevin Hollinrake
The hon. Lady is mixing up two different things. I am not saying that some company formation agents are not shady—I have just said that. However, not all service providers are company formation agents. Many are bona fide solicitors or accountants that are household names. I think we need to keep this in perspective. The hon. Lady cites statistics on the capability of some of the sector in terms of proper supervision. According to OPBAS, 50% of professional body supervisors were “fully effective”. I think that figure should be much higher, but in its opinion 50% are fully effective, so it is not as if there are not some actors in this area that are doing the job absolutely right.
Many company directors and people with significant control that are currently registered at Companies House, all of whom will need to verify their identity under the transitional provisions post enactment, would prefer to do so by using their professional adviser. They will suddenly find that their long-established legal adviser is deemed fit by the Government to verify their identity for money laundering purposes, but unfit to report that to Companies House. The amendment would therefore create considerable inconvenience to individuals, as well as to corporate service providers.
I can assure the right hon. Member for Barking and the Committee that I will urge my counterparts at the Treasury to bring forward their consultation as quickly as officials can ready it. I also point to the powers in the Bill that will enable the registrar to keep an audit trail of the activity of agents to support the work of supervisors both immediately and following any changes from the Treasury’s review. I hope my explanation has provided reassurance.
Let me touch on one or two of the right hon. Lady’s other comments. On the light-touch financial services regulation that I think she was suggesting was responsible for the global financial crisis, this is not deregulation. This is the opposite of deregulation; we are making regulations about the verification of ID. I would also point to the penalties for wrongdoing. In certain circumstances, if someone is found guilty of the aggravated offence of false filing under these rules—I think some of the examples she gave would constitute that—the sanction would be two years in jail. That is not for fraud, but for the false filing. There are real teeth to this legislation, which will reduce the likelihood of this stuff happening in future.
The right hon. Lady’s amendment would effectively delay the whole regime we are talking about. She talks about Transparency International. As I said earlier, TI welcomes the reforms to the operation of Companies House that will effectively help to prevent money launderers from abusing the UK’s system. We need to ensure that this happens as effectively as possible. I agree with many of the concerns that she raises, but it is wrong to delay implementation as she suggests.
I turn to amendments 107 to 112. I thank hon. Members for their contributions. The procedure for ID verification, including the evidence required, will be set out in secondary legislation under the powers in new section 1110B of the Companies Act 2006 inserted by clause 62 of the Bill. The regulations will set out the technical detail of ID verification procedures, which will reflect evolving industry standards and technological developments. The regulations can specify the process of ID verification and the evidence of identity that individuals will be required to provide when verifying their identity with the registrar. The amendments, particularly amendment 107, would limit the documents acceptable for the purposes of ID verification to photographic IDs issued by Government agencies and identity documents issued by a recognised official authority. That would exclude individuals who do not have a photo ID, such as a passport, from verifying their identity.
Stephen Kinnock
It is absolutely clear that our amendment 107 uses the words “to include”. We are not limiting anything. The amendment sets out what the minimum should be. Surely the Minister agrees that an identity document with a photograph of the individual’s face and an identity document issued by a recognised official authority should be the bare minimum we would want in the Bill.
Kevin Hollinrake
Under the cross-Government identity proving framework in “Good Practice Guide 45”—GPG 45—a combination of non-photographic documents, including Government, financial and social history documents, can be accepted to achieve a medium-level assurance of identity. That includes birth certificates, marriage certificates and recent utility bills. The framework, which also recognises ID documentation from authoritative sources, such as the financial sector or local authorities, is routinely used to build a picture of identity. Restricting that process by defining a recognised authority as a Department or agency could therefore inadvertently disenfranchise individuals from meeting ID verification requirements. I take the hon. Member’s point that the amendment seeks to include certain forms of ID, but it might not serve the purpose that he thinks it would.
Seema Malhotra
I understand what the Minister says in relation to GPG 45. I wonder whether he has considered that, in circumstances where an identity document with a photograph of the individual’s face may not be available, for whatever reason, in some way having a photograph of the person’s face is the most important thing. Is that something he has considered as part of verification checks?
Kevin Hollinrake
All these matters need to be considered in the round when we come to the further details of ID verification. I was simply pointing out some of the shortcomings of the amendment.
In certain circumstances, non-photographic verification should also be available, to ensure that the Companies House service meets digital inclusion drivers and accessibility requirements, as set out in the Department for Digital, Culture, Media and Sport digital identity and attributes trust framework. The Companies House service must also adhere to the public sector equality duty.
The ability to verify using a range of documentation will maximise the number of service users able to verify digitally or at all. Not having that route would prospectively drive users toward assisted digital or non-digital routes, resulting in additional burden, an impact on ease of doing business, and increased cost and resource. It would also lead to far higher rejection rates, impacting company incorporations and appointments. As I said, the vast majority of companies are law-abiding, and it is disproportionate to put this burden on them.
I turn to the amendments that seek to remove parts of clause 62. Again, I have sympathy with my colleagues who are concerned about the effectiveness of the AML regime. Indeed, the measures in the Bill requiring corporate service providers to register with Companies House are intended to support the AML regime—a point raised earlier by the right hon. Member for Barking. There is a requirement for corporate service providers to register with Companies House as well as an AML supervisor. We will know who corporate service providers are registered with, and we will be able to provide their supervisors with information that will enable them to do their job more effectively. Where corporate service providers fail to act effectively, the registrar will be able to suspend or de-authorise them.
The practical effect of the amendments would be to limit verification pathways to the registrar only, preventing verification by the AML regulated sector from being acceptable for the purposes of ID verification under the Companies Act. That is unnecessary, and it would come at the expense of people and businesses conducting their activities entirely legitimately.
About half of company formations are currently submitted by third parties, very many of which take their responsibilities seriously and are highly diligent in conducting ID verification checks. They include high street accountants, regional legal firms servicing small businesses, and so on. I am concerned that preventing third parties from being able to register with Companies House and verify identities would have disproportionate consequences for those entities, possibly driving business away from them. That effect would be particularly acute where ID verification is taken as a package with company formation and other services. It is not clear how the amendments would affect the ability of corporate service providers to deliver documents on behalf of their clients if they are not required to be authorised, for example if they represent limited partnerships.
Many company directors and people with significant control currently registered at Companies House, all of whom will need to verify their ID under the transitional provisions post enactment, would prefer to do so by using their professional adviser. They would suddenly find that their long-established legal adviser was deemed fit by the Government to verify their ID for money laundering purposes under the money laundering regulations but unfit to do so under the Companies Act. The amendments would therefore create considerable disruption for individuals as well as corporate service providers. I hope that my explanation has provided reassurance and that hon. Members will consider withdrawing their amendments.
I have already described the new powers provided by clause 62. Beyond that, it is important to note that the regulations provided for by the clause can also specify the records that authorised corporate service providers will be required to keep in connection with the verification or reverification of identity. Those record-keeping obligations on authorised corporate service providers can be enforced through offences for non-compliance. Additionally, the Secretary of State can confer, by regulation, discretion on the registrar about when an individual’s identity ceases to be verified. The individual will then be required to re-verify their identity. Finally, regulations under the new sections introduced by the clause will be subject to the affirmative resolution procedure.
Stephen Kinnock
No. I have made clear to the Minister that we are deeply unhappy, particularly with the failure to take on board the recommendations under amendment 107 and the very important points my right hon. Friend the Member for Barking made.
Dame Margaret Hodge
Similarly, I will take the matter up elsewhere during the course of the Bill.
Stephen Kinnock
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 62 ordered to stand part of the Bill.
Clause 63
Authorisation of corporate service providers
Dame Margaret Hodge
I beg to move amendment 81, in clause 63, page 49, line 38, at end insert—
“(3A) When an application is made under this section, the registrar may request evidence from HMRC that a fit and proper person test has been carried out on the applicant.”
This amendment allows the registrar to request evidence from HMRC that a fit and proper person test has been carried out on a person applying to be an authorised corporate service provider.
The Chair
With this it will be convenient to discuss the following:
Amendment 82, in clause 63, page 49, line 45, at end insert—
“(ba) the registrar is satisfied—
(i) that HMRC has carried out a fit and proper person test on the applicant, and
(ii) that the applicant has met the requirement of the fit and proper person test, and”.
This amendment would mean that the registrar could only grant an application to become an authorised corporate service provider if satisfied that an applicant had passed HMRC’s fit and proper person test.
Government amendment 8.
Amendment 79, in clause 63, page 52, leave out from line 42 to line 28 on page 53, and insert—
“1098G Duty to provide information
(1) The registrar must carry out a risk assessment in relation to any authorised corporate service provider to establish whether the verification of identity by the authorised corporate service provider is likely to give rise to a risk of economic crime.
(2) If the risk assessment identifies a real risk of economic crime, the registrar may—
(a) require an authorised corporate service provider to provide information to the registrar; or
(b) require a person who ceases to be an authorised corporate service provider by virtue of section 1098F—
(i) to notify the registrar;
(ii) to provide the registrar with such information relating to the circumstances by virtue of which the person so ceased as may be requested by the registrar.
(3) The registrar may require information to be provided on request, on the occurrence of an event or at regular intervals.
(4) The circumstances that may be specified under section 1098F(2) or 1098G(1) (ceasing to be an authorised corporate service provider and suspension) include failure to comply with a requirement under subsection (1)(a).
(5) A person who fails to comply with a requirement to provide information under this section commits an offence.
(6) An offence under this section is punishable on summary conviction by—
(a) in England and Wales a fine;
(b) in Scotland and Northern Ireland a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.”
This amendment would give the registrar the power to require information from an authorised corporate service provider. This would replace the current provision in the Bill giving the Secretary of State a power to make regulations requiring the provision of such information.
Dame Margaret Hodge
I will speak very briefly. It would be nice if the Minister could agree to the amendments, which are simply there to tighten up the oversight of the bodies. Amendments 81 and 82 are connected, and would force HMRC to do what it is not currently doing and carry out proper checks on the TCSPs and monitor them properly. Amendment 79 gives the registrar the power to require information. At the moment, as I read the Bill, there is no power for the registrar to challenge any of the information provided to her by any corporate service provider.
Kevin Hollinrake
I thank the right hon. Lady for her contribution. Clause 63 introduces a requirement for third party agents who wish to provide corporate services to clients, such as incorporating companies and filing documents on their behalf, to be registered with Companies House as authorised corporate service providers. ACSPs will be required to be supervised for the purposes of the money laundering requirements at all times and to notify the registrar of any changes to supervision.
I understand and am sympathetic to the intention behind amendments 81 and 82. They are driven by concern that the UK’s AML supervisory regime is not as robust as it could be. The Government recognise that, as do I. It is being addressed by my colleagues at the Treasury, who are responsible for the supervisory regime. I am afraid, however, that the amendments would duplicate some of the regulatory obligations of HMRC, the default supervisor for corporate service providers, by adding to the role of the registrar of companies. Their effect would be to make an agency of my Department responsible for overseeing activities of another Department. Not only is that duplicative, but it is wrong for one branch of Government to mark the homework of another branch. The most efficient means to address any issues with the quality of supervision is to tackle them at source, which is work that HM Treasury is undertaking on supervisory reform. I hope I have provided clarity on why the amendments are not needed.
On amendment 79, I understand the right hon. Lady’s concerns, but I consider the amendment to be unnecessary. As I have set out, under the measures in the Bill corporate service providers will need to confirm they are supervised for the purposes of the money laundering regulations, register with the registrar and, in the case of an individual, have their identity verified before they are allowed to form companies or registerable partnerships or to file on their behalf. The ID verification checks undertaken by those providers will achieve the same level of assurance of the claimed identity as those undertaken through the direct verification route.
Dame Margaret Hodge
I am grateful to the Minister for giving way. Yes or no: will Companies House be able to challenge at any point information given to it by a TCSP—an authorised provider?
Kevin Hollinrake
As I understand it, yes, Companies House will have the rights and powers to do that, though we do not at this point know to what extent it will do so. The right hon. Lady spoke in a previous debate about spot checks. It would seem sensible to take that kind of risk-based approach. Certainly, an AML supervisor would have that ability as well.
Providers will be required to declare that they have completed all the necessary identification checks when they interact with the registrar. Under money laundering regulations, all agents are required to retain records, and the registrar can request further information and ID verification checks if necessary, which I think answers the question that the right hon. Lady just asked. The agent will be committing an offence if they fail to carry out the ID checks to the required standards, or at all.
Under the Bill, proposed new sections 1098F and 1098G of the Companies Act 2006, as introduced by clause 63, will enable the registrar to suspended and deauthorise an authorised corporate service provider. The Bill will allow the registrar to maintain an audit trail of agent activity and to share it with supervisors. That will serve as a prompt to supervisors to up their game. I hope that that explanation has further clarified why the amendments are not needed.
Dame Margaret Hodge
I will look in detail later to ensure that what I asked for is there, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 8, in clause 63, page 50, line 23, leave out “registered or”.—(Kevin Hollinrake.)
This amendment would mean that a firm applying to become an authorised corporate service provider would always have to state its principal office, rather than having the option of stating its registered office.
Stephen Kinnock
I beg to move amendment 98, in clause 63, page 53, leave out from line 29 to line 5 on page 54.
This amendment removes the provision enabling the authorisation of foreign corporate service providers.
The Chair
With this it will be convenient to discuss the following:
Amendment 99, in clause 63, page 53, line 37, leave out from “that” to “similar” and insert,
“has been assessed by the National Crime agency as having”.
This amendment would ensure that the judgement as to whether foreign jurisdictions have similar regulatory regimes would be in the remit of the National Crime Agency, rather than in the view of the Secretary of State.
Amendment 100, in clause 63, page 53, line 40, at end insert—
“(2A) No person who is subject to a relevant regulatory regime under the law of a territory outside the United Kingdom may become an authorised corporate service provider if there is evidence that they have been disqualified from acting as a corporate service provider in any other jurisdiction”.
This amendment ensures no corporate service provider based outside the United Kingdom can become an Authorised Corporate Service Provider if there is evidence that they have been disqualified from acting as a corporate service provider abroad.
Stephen Kinnock
Once again, I find myself somewhat baffled by what the Government are trying to get into the Bill. The provisions set out under clause 63 in proposed new section 1098I of the Companies Act 2006 would enable the Secretary of State to allow foreign corporate service providers to operate in the UK, outside the scope of the UK’s money laundering regulations. There has been such extensive coverage in recent years of the risks that that would entail that I am really quite amazed that this needs to be reiterated yet again, but, in a nutshell, any UK laws attempting to regulate the activities of company formation agents, some of which have been responsible for the most flagrant examples of money laundering and sanctions evasion according to recent reports, could well be rendered essentially meaningless by these few clauses.
I say that because, if enacted as drafted, the clauses would appear to hand the Secretary of State a blanket power to disapply the money laundering regulations to foreign agents, on no one’s authority but his or her own. We need not look too far for examples of how profoundly damaging that could be to our own laws, given how significant the divergences often are between anti-money laundering regimes in countries such as the UK, and those in overseas jurisdictions better known for their corporate secrecy than anything else. In fact, we need look no further than the UK’s own overseas territories and Crown dependencies.
Any Member who is either unaware of or in denial about the scale of the problem would be well advised to read an enlightening, although also alarming, article published by Forbes on 9 March 2022. It had the somewhat provocative title of “Evading Sanctions: A How-To Guide For Russian Billionaires”. The piece documented the use of opaque offshore corporate structures to launder literally billions-worth of assets held by Russian oligarchs in the last few months and years. What is most troubling about the account is that most of the jurisdictions that it specifically mentions as hotbeds of money laundering and sanctions evasion are UK-linked territories. It will surprise nobody that the list includes the Isle of Man, the British Virgin Islands and the Cayman Islands—in other words, the usual suspects.
I do not wish to dwell too long on the overseas territories, because I am sure there will be further discussions in the Committee when we come to debate later sections of the Bill. The point the Opposition are trying to make is simply that if we are going to allow businesses of any kind to operate in the UK, we should expect them to abide by our laws. If we start letting them off the hook, for reasons that Ministers have entirely failed to make clear, we are complicit in their actions. In short, the proposed new section 1098I would have us trust in the infinite wisdom of the Secretary of State to allow corporate service providers to operate outside the law, on the basis that those powers would be used only in cases where the relevant overseas jurisdiction has a regulatory framework with “similar objectives” to the UK’s own rules.
I frankly do not trust the wisdom of the Secretary of State to use those powers for good. I do not believe that it is at all appropriate for such sweeping, ill-defined powers to be conferred on the present or any other Secretary of State. Although amendments 99 and 100 are probing amendments that give us the opportunity to seek answers from the Minister on these extraordinary provisions, amendment 98 is intended quite simply to remove the powers from the Bill.
Kevin Hollinrake
Once more, I am sympathetic to the aims of the amendments. They are driven by concerns that AML supervisory regimes outside the UK may not be robust. That is why the Government are specifying that authorised corporate service providers must be subject to the UK’s AML regime. Nevertheless, it is possible that in the future the UK may become a party to an agreement—a trade agreement, for example—that would require it to accept applications from abroad where that regime is equivalent to that of the UK. I do not think the example the hon. Gentleman gave of Russia would qualify in that regard.
The power in the Bill would facilitate such an agreement and remove the need for primary legislation to implement it. I draw Members’ attention to the wording already in the Bill, in proposed new section 1098I(2), introduced by clause 63. The UK would only become a party to an agreement if it could be assured that the regime was no less effective than its own. To be confident of that parity, the Secretary of State would need to establish that a regime was the equivalent of the UK’s by considering evidence and advice from a range of sources, including the National Crime Agency. That would include the consideration for whether prospective authorised corporate service providers are disqualified under the relevant legislation.
As the legislation makes clear, the power would be subject to the affirmative resolution procedure and parliamentary scrutiny. While I understand any concerns expressed, I hope that Members will withdraw the amendment.
Stephen Kinnock
I thank the Minister for his response. As with the previous debate, I am not particularly happy with the position, and we will look for opportunities to return to the issue during the further passage of the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 63, as amended, ordered to stand part of the Bill.
Clause 64
General exemptions from identity verification: supplementary
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
We debated the clause at length in the previous groupings. I do not propose to repeat the arguments, and I hope the Committee agree with the Government’s position.
Stephen Kinnock
We have no further comments to add on clause 64.
Question put and agreed to.
Clause 64 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Westminster Hall
(1 year, 6 months 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.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Climate Change and Human Security
(1 year, 6 months 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.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Wera Hobhouse (Bath) (LD)
I beg to move,
That this House has considered climate change and human security.
It is a pleasure to serve under your chairship, Mr Efford. I am grateful to the Backbench Business Committee for granting me this debate, which follows on from the debate we had last year on global human security. There is an urgent need to consider how compatible the UK’s security approach is with tackling the climate emergency.
The climate threat is one of the largest threats facing humans. Too many politicians are still treating our vital net zero targets, which will keep temperature rises below 1.5° C by 2050, like buses: if we miss one, we can just catch the next. We must comprehend that there will be no coming back and no next time if we miss net zero by 2050. Doing so would be catastrophic, exacerbating worldwide challenges such as rising sea levels and the loss of natural resources. It would contribute to increased conflict, poverty, malnutrition and gender inequality. Some 1.2 billion people are set to be displaced due to climate change by 2050. If people are concerned about migration now, they have not seen anything yet.
Climate change can no longer be seen as a problem for the future; it is having a material impact on people worldwide now. Between 1970 and 2019 global surface temperatures increased at a higher rate than in any period over the past 2,000 years. Since 1950 the global number of floods has increased by a factor of 15 and wildfires have increased by a factor of seven. The abnormally hot and cold temperatures experienced worldwide contribute to as many as 5 million deaths a year—that is now, not in the future. Climate change is causing havoc around the world. Last month a new study of the Greenland ice cap concluded that a major rise in sea levels of 27 cm is now inevitable, even if fossil fuel burning worldwide were to end overnight. That is terrible news for the 150 million people globally who live less than 1 metre above sea level.
Earlier this year Pakistan was just one of the countries across south Asia that experienced a heatwave that took temperatures over 50° C. That country has now faced floods that have directly affected 33 million people, causing at least $10 billion in damage. Spring rains in Somalia have been the weakest in 60 years, contributing to drought and famine across east Africa, which has put 22 million people at risk of hunger and starvation. Devastating climate change effects can also be seen at home. The World Weather Attribution group found that human-induced climate change made the recent UK heatwave at least 10 times more likely. The Joint Committee on the National Security Strategy has declared that the UK’s critical national infrastructure is
“very vulnerable to extreme weather and other effects of climate change”.
Over 570,000 UK homes are not suitable for high temperatures.
We are not just in the middle of a climate crisis; nature is in crisis too. Our way of life, especially in developed nations, is exploiting our global resources in a way that is becoming increasingly unsustainable for our planet. As nature declines, so does the quality of human life. Pollution and poor air quality alone cost millions of lives every year across the globe. We in the UK are not excluded, and all those things beg the question of whether the way in which we currently look at security policy limits the extent to which the Government keep us safe.
We are used to the Government declaring that their first duty is to keep citizens safe and the country secure. However, the way that they define our security matters. For years, we have thought that security is about the risks to our nation from hostile actors. That narrow conception risks sidelining the climate threat. The Russia-Ukraine war has shown that temptation. We have already seen countries such as Germany move back to using coal. Even in the UK, the former Prime Minister used the war to lift the fracking ban, and announce more than 100 new licences for oil and gas drilling in the North sea. It is of course important that we are properly aware of and equipped to tackle risks from hostile actors. However, the need for energy security should never lead us to downplay the existential threat that the climate crisis poses to humanity.
The term “human security” was first championed by the United Nations Development Programme in its annual report on human development. It is about security for people, and emphasises economic, food, health, environmental, personal, community and political security. Human security puts the experience and wellbeing of the individual at the centre of security policy, prioritises international co-operation over national competition, and focuses on the shared security of all humanity. The concept of human security is acknowledged by multiple influential international organisations, including the UN, the International Committee of the Red Cross, and the World Bank.
The climate threat goes beyond national borders, and has far-reaching consequences. State-centric security practices cannot comprehend the vast array of threats that we face. We must move towards a model of security that cares for people above all else. If we do so, the true scale of the climate threat is thrust into the spotlight. Countries must be incentivised to prioritise it. After all, the sooner we act, the more people can be protected. The Intergovernmental Panel on Climate Change suggests that limiting global warming to 1.5°C rather than 2°C may save around 520 million people from frequent exposure to heatwaves.
Putting climate action at the heart of any Government plan is the best way to protect the UK against hostile actors. Putin’s war has shown how long-term dependence on fossil fuels can power hostile regimes. Russia has used Europe’s dependence on its natural gas as a weapon. If the UK had moved towards renewables harder, faster and earlier, Putin would not have that leverage, and our constituents would not be paying the price for the war.
What must be done to protect people from the climate threat? How can a human security approach help the world to reach net zero? A human security approach addresses the root causes of vulnerabilities, and takes early action on emerging risks. Threats such as climate change are predictable and incrementally destructive, yet consecutive Governments have failed to do anything meaningful about them in the long term. The worst impacts of climate change stretch well beyond average election cycles. The evidence is clear that the costs of climate change are dwarfed by the consequences of inaction.
The country’s finances are already straining under the weight of recent Conservative Government incompetence. They are set to shatter completely if we do not get a grip of the climate emergency now. The London School of Economics predicts that we will lose £340 billion a year by 2050 because of this Government’s refusal to take action fast enough. University College London issued similarly stark warnings about the world’s financial system, which is set to lose 37% of global GDP by the end of the century as a result of the climate crisis. Such losses will be unrecoverable.
That economic dark age is not inevitable. A green future should be seen as a prosperous one. A recent University of Oxford report states that if we move to a decarbonised energy sector by 2050, the planet will save $12 trillion. A net zero economy is an opportunity for this country. We can be the world leaders in this financial age.
Change must begin at home. The Liberal Democrats are calling on the Government to announce an action plan, backed by a £150 billion public investment programme, to fire up progress to reach net zero. Our plan proposes a major restructuring of the UK’s economic and financial model, and investment in renewables is vital to it. Renewables are the world’s cheapest source of energy now. Investing in them is good for the planet. It secures our energy and protects our wallets. As the Committee on Climate Change notes, reducing demand for fossil fuels will help to limit our constituents’ energy bills.
The UK must invest in renewable power so that at least 80% of electricity is generated from renewables by 2030. That is a tough target. We set the targets, but fail to deliver them. We must press ahead to make more of our renewable energy targets. The Government must now deliver on the many promises and targets they have set for the nation. We desperately require a department at the heart of Government that is dedicated to co-ordinating the many fragmented activities across Government and society. We urgently need to bring back the Department of Energy and Climate Change, which provided essential leadership during the coalition years. Will the Minister tell us whether the Government have any intention of re-establishing such a Department, given that we are falling behind in the delivery of our net zero targets?
The climate crisis should be at the forefront of every decision the Government make between now and the time that net zero is reached. We Liberal Democrats propose having both a department of climate change and a Cabinet chief secretary for sustainability to co-ordinate all Government activity in response to the climate emergency. That would ensure that climate change is given the priority it deserves in every Government action and in every Department.
The UK must put aside its damaging approach of isolation and the language of division. Climate change is a huge problem that can be solved only through collaboration with everybody else. I recently met John Kerry, who noted that the approach to climate change in the US changed completely when Joe Biden became the new President. Leadership matters, and we need such leadership from our Government now.
Ahead of COP26, the then Chancellor, the right hon. Member for Richmond (Yorks) (Rishi Sunak), cut air passenger duty on domestic flights. Last May, he brought in a windfall tax that incentivised firms to invest in fossil fuel extraction. During the latest Conservative leadership campaign, he pledged that he would make it more difficult to build onshore wind farms in England. To have our new Prime Minister effectively dragged along to COP27 is humiliating for the UK. That is not the leadership we need from our new Government. The UK must lead from the front to encourage others to act. As the Committee on Climate Change suggests, it should prioritise strengthening the ambitions of countries around the world while preparing for a focus on climate finance and adaptation at COP27 next week, and COP28 next year.
For too long our response to climate change has been complacent. Climate action cannot be ditched in favour of status quo interests. After all, people can never be secure in a world ravaged by extreme weather events. It is time the world moved away from viewing our security simply at state level and started looking at the bigger picture. We cannot be safe until the world is safe from the worst fallouts of the climate emergency. The floods, heatwaves, wildfires and storms of 2022 are alive in our minds. There is no better time than now to put in long- lasting protections to save current and future generations from the crippling consequences of climate change.
Climate change must become part of the UK’s security thinking. The Conservatives must get a grip and take the lead on this issue. I hope that the UK Government will look at my recommendations. We are all in a war against climate change and must begin to treat it as such.
Patrick Grady (Glasgow North) (Ind)
It is a pleasure to serve under your chairmanship, Mr Efford. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing such an important debate and my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) on supporting it, as numerous Members have done.
In 2007 the Stern report stated that climate change was the greatest and widest-ranging market failure that the world had ever seen, but here we are—all these years later—and it seems that warning is still falling on deaf ears. I used to stand in Westminster Hall debates and say that climate change threatens to undo progress towards the millennium development goals and the sustainable development goals. After only seven years since I was elected in 2015, we can now say that climate change is undoing progress towards the millennium development goals and the sustainable development goals. It is making it harder to reach poverty eradication targets, gender equality targets, and education and health targets. In some cases, we are going backwards on those indicators, after a period of progress that should be acknowledged.
Climate change is not something that is happening somewhere else, in faraway parts of the world; as the hon. Member for Bath said, it is beginning to disrupt our own way of life in these islands, across western Europe and across what we call the developed world, and it is becoming increasingly clear that things are going to get worse before they start to get any kind of better. This is an issue of huge concern to my constituents in Glasgow North, who I hear from regularly on all the points raised by the hon. Lady.
Glasgow could not have been prouder to host COP26 last year, but the conference was not a one-off: the clue is in the name. It is part of a process, and in the very near future—next week—COP27 will take place, where the work must continue on the progress towards making real the commitments to which Governments have pledged, whether that is coming up with the funds that have been committed to mitigation and adaptation measures, or making clear statements and demonstrations of action towards the targets that have been agreed upon and that we need to go further and faster to reach. The security implications—in the broadest meaning of that word—can already be seen all around the world.
The scarcity of vital natural resources, water scarcity and crop failure are often the root of instability in so many of the flashpoints and troubled parts of the world that we debate not infrequently here in Westminster Hall, including the situation in Tigray, Ethiopia. I firmly suspect that if people had more confidence in predicting the rains and being able to grow crops to feed themselves and their families, the chances are that the instability there and in so many other parts of the world would be significantly lessened. Many of the roots of such conflicts are to do with scarcity, particularly of water and food, the supply of which is directly affected by climate change.
Wera Hobhouse
Does the hon. Gentleman agree that we always look at these things in silos and do not make the connections, and that if we put climate change in the centre of the connections we created, we might tackle these issues much better?
Patrick Grady
The hon. Lady is absolutely right. I will reflect a little more on those interconnections later. This is exactly about that kind of domino effect, because the Government are really concerned about the small boats crisis and people coming to the United Kingdom, but what are many of those people fleeing? They are fleeing scarcity and instability in their home countries. The changing climate is leading to the massive displacement of populations across the world. Difficult though the UK Government might think the migrant crisis is on the shores of Great Britain, it is considerably greater in other parts of the world, such as Africa and Asia, where there are massive movements of populations—and climate change is at the root of it all.
It is worth reflecting on the instability that even the concept of climate change is starting to cause; and I will return to some of these ideas later. There is climate change denial in so many parts of the world, even in so-called western liberal developed democracies. When climate change starts to become an ideological divide, that in itself causes instability and is part of a polarisation that we are seeing across the world, particularly in the United States, which the hon. Member for Bath mentioned. The extremes of response to the climate crisis that we have seen in the space of the change of one Administration—and the risk of that swinging back in the other direction—is in itself a significant challenge to the world’s ability to respond to climate change. That has an impact on the politics of those countries and, perhaps, to a certain extent here.
Here at home we are also experiencing the effects of climate change. Just in the past 12 months we have experienced increasing extremes of weather. There was a heatwave not just down here in London: we even had record temperatures up in Scotland. Although on one level people might make a joke about that and say it is quite a nice thing—“It makes a change” and so on—it is becoming a new reality that we have to adapt to, and that is not cost-free.
As the hon. Lady said, climate change also affects the food supply and food security in Scotland and across these islands. Last week, there was a Westminster Hall debate about global food security; we used to talk about food security as a problem elsewhere, but it is becoming a real challenge in the United Kingdom too. That is also true of our energy security, as she set out.
There is a real danger of a feedback loop: we have a shortage of energy so we dig more coal out of the ground and burn it, but that worsens the problem of climate change and increases the challenge and the costs to the Government in the long run. The Government have to grasp that tackling climate change is the ultimate idea of preventive spend. We are going to have to pay for the costs of a changing climate, which has largely been brought about by the process of industrialisation in the west over the past 150 years or so, and we can do that either now in such a way that we prevent, mitigate and adapt to the changes, or later as the changes become more extreme and severe. That will cost us more in the long run, so it makes financial sense to start to invest now in tackling the causes and effects of climate change. It will also enhance our security.
That brings me to my challenges to the Government. I do not know what the right word is, but this is not about ideology. There may be free market, right-wing solutions to the climate crisis—setting aside what Lord Stern said back in 2007—so bring them forward. Let the market compete to find the most effective form of renewable energy and the most effective way to maximise crop yields, but not in a way that continues to cause problems. Externalising the costs of those things in the first place led to where we are.
Some of us might think that we need a bit more in the way of state intervention and direction of spending, but we should all start from an agreement that the climate and nature emergency is real. Sadly, I am not 100% convinced that everyone on the Government Benches would be willing to stand up and say that. In the Chamber, I asked the previous Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for North East Somerset (Mr Rees-Mogg)—in the short time he was in post—whether he believed that the climate emergency is real and that anthropogenic climate change is happening today, and he completely dodged the question. Ministers in the western world in this day and age should not be dodging that kind of question. The answer to the question, “Is anthropogenic climate change happening today in front of us?” is yes. There might be a debate about how we tackle it, how we respond and how we prevent it from getting worse, but the answer to the question is yes.
I am sure the Minister will confirm that the Government’s position is that the climate change that is being experienced all over the world is the direct result of human behaviour over the past 150 years or so. It might be a bit difficult to get the Government to start to adopt the language of climate justice and to recognise the historical obligation that we in the west have to people in other parts of the world who are being hit by climate change first and hardest, but the point of debates such as this is to put those points to them and hear them argue either why that is not necessary or why they do not agree.
In among all that is the mainstreaming of our net zero targets. We should put that at the heart of Government policy and then, yes, debate how things will be delivered and the best way to invest resources, and the best way to let the market respond, if that is what people believe, or whether to let the state intervene more heavily, if that is what people believe.
Wera Hobhouse
The hon. Gentleman is generous to give way again. He is coming to the issue of delivery. Ultimately, we all agree that the pathway is there but the delivery is not happening fast enough. That really worries me, which is why I said at the very beginning of the debate that this is not a bus that we can miss: we have to get on with things now. Does the hon. Gentleman agree with the Climate Change Committee, which has said that the Government must now urgently focus on the delivery of their own targets?
Patrick Grady
Yes, absolutely. The Government have agreed to the targets and achieved a certain amount of cross-party consensus on them. That is important given how some people want to use the very concept of climate change as a political wedge issue, when in fact it is something that should unite us as far as possible. Especially among all the chaos and revolving doors for Ministers of late, the Government should speak with one voice on these issues. Irrespective of which Department or Minister happens to respond to this debate, we should hear the voice of the UK Government, with all the weight that that is supposed to carry.
Even though we do not have a Foreign, Commonwealth and Development Office Minister responding to today’s debate, it is important to address the question of the aid budget, its diminution, the cuts to it that are being applied across the board and the risk of further cuts to come. I come back to my point about preventive spend. If we do not support small farmers in different parts of Africa to grow sustainable crops without the need for expensive and polluting fertilisers, if we do not support communities to access fresh and clean water, and if we do not support girls to get into education so that they can raise healthier and stronger families and contribute to their economy, we really should not be surprised if, further down the line, those people start to get quite annoyed and upset about the kind of lifestyle that is being forced upon them and decide to take matters into their own hands. Indeed, they may decide to get on a small boat and come across to the United Kingdom, where everything seems to be much more comfortable. The Government must realise the importance of preventive spend and not just address the issues of climate justice and poverty eradication but understand that it is to everybody’s benefit to tackle such issues.
We all have to agree that this is the defining challenge of our times. By all means we should have a debate about the precise way in which we can reach our goals, but let us not argue about whether those goals have to be met, because not meeting them will simply make matters considerably worse, not just for people overseas but for people on these islands, too. We have to continue to hold the Government to account in the way that our constituents want us to, and we have to hope that the Government are prepared to recognise the consensus that can exist and get us forward and closer to tackling the causes and effects of climate change.
Jim Shannon (Strangford) (DUP)
It is an absolute pleasure to serve under your chairmanship, Mr Efford. I thank the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) for leading this debate. It is also a real pleasure to follow my friend and colleague the hon. Member for Glasgow North (Patrick Grady); he and I agree on this subject. I agree with the hon. Lady on it, too.
I am pleased to add my contribution to this debate. There has been some confusion over the past few days regarding the confirmation of the attendance of the Prime Minister at the COP27 summit in Egypt, which starts this Sunday. I am pleased that the original decision was reviewed and that the Prime Minister will now attend the summit to commit to our COP26 promises, as he should because he leads this country.
We all recognise the commitment that the Government gave at COP25 and COP26. I know that the Minister will respond to confirm the positive direction that the Government have taken and how important that is. As Members have rightly stated, climate change is set to exacerbate worldwide challenges such as rising sea levels, poverty and malnutrition. To say that we have a role to play is clearly an understatement: we have a massive role to play, not just singularly but collectively with other countries.
I look forward to hearing the Minister’s comments from a human security perspective, too, as that is just as important. I know he will respond in a positive fashion. As my party’s spokesperson on human rights, human security means a great deal to me and my party. Like other Members, I receive hundreds of emails each week about many different and pressing issues from my constituents in Strangford; however, I must say that climate change and its impact on human security feature highly in my mailbox, so I am pleased to support Members in this debate.
Some notable events in the past couple of years have posed a real potential threat to human security. For example, the United Kingdom’s Climate Change Committee has found a 16 cm rise in UK mean sea levels since the start of the 20th century. That cannot be ignored: it is a fact of life. We have to address those things. Can we address them in a way that will make a difference? I think we can.
Like other areas of the United Kingdom, Northern Ireland has fallen victim to multiple extreme weather events in the past couple of years. We used to say that these sorts of floods happened every 100 years, but no: the 100-year floods happen every four or five years now. They happen regularly. On Tuesday night, I phoned my mother, as I do every night, and she said she had never rain quite like it. She is 91 years old, by the way, so she has been in this world for a long time. If she says that to me, I tell you what: I can say there has been some exceptional rainfall. The yellow warnings and the floods are there.
Most memorably, in summer 2018 we saw the warmest June since 1910, with the mean temperature 2.1° above the 1981-2010 average. That is another example of extreme weather—another 100-year event. It ultimately resulted in a hosepipe ban, which some laughed at at the time, thinking it was ridiculous. In hindsight, it shows the impact that climate change has had on our daily lives and security. In the summer of ’22, we had extreme heat that I cannot recall having experienced for a long time, and water levels fell in many places.
I am interested in planning matters. I see an example of the practical, physical way that change is coming in my constituency, where planning conditions have been introduced in the past couple of years to stop people building on floodplains, which they should not be doing, by the way. Ten or 20 years ago, and whenever I first joined Ards Borough Council in 1985—that was not yesterday either—that was not an issue: people were able to build on that land. Now, they cannot. Why is that happening? It is because climate change is coming and things are changing. With what it can see and from its plans, the planning department has projected where the floodplains will be. In some areas, we would have to go back to the beginning of the century to see where the land flooded in some exceptional conditions.
The Northern Ireland Assembly’s equivalent of the Department for Environment, Food and Rural Affairs is the Department of Agriculture, Environment and Rural Affairs. DAERA has released its climate change adaptation programme for 2019-24. It underlined the impacts of the “beast from the east”—that is not Russia, by the way. The “beast from the east” was a spell of extreme weather conditions. We all experienced them in the United Kingdom of Great Britain and Northern Ireland. They were exceptional. Northern Ireland experienced a spell of severe weather with low temperatures and significant snow, the likes of which we had not seen for a lifetime. It caused a real problem for travel and, moreover, healthcare provision was significantly interrupted. We must take into consideration the effects that climate change has on our local businesses and especially our food security. That is why today’s debate is so important.
Food security is described as people having physical, social and economic access to sufficient, safe and nutritious food. It is important for human security reasons such as poverty. We should expect to see a rise in poverty as our access to food decreases. It is my understanding—I am sure the Minister will confirm this—that the United Kingdom imports some 46% of our food. I know that the Government have committed to producing more food at home, as I believe we should—we need to be more self-sufficient—but the fact is that we import 46% of our food products from around the world.
We are ever mindful that we cannot grow everything here, so there will always be some imports. Northern Ireland has a population of 2 million but we have a highly productive farming sector. We export some 75% to 80% of our produce overseas to mainland EU and further afield. We are bucking the trend in relation to the rest of the United Kingdom, and that indicates how important our farming sector is to us in Northern Ireland.
It is clear this is not a domestic concern alone: internationally, we must come together as nations. This is a world crisis. We are here debating this issue at Westminster, in the mother of Parliaments, but we need buy-in from the rest of the world to make it happen. We need to take a joint approach to tackling climate change. There are widescale human security issues that can apply globally if we do not commit to our prior engagements, including the Paris agreement and the Kyoto protocol.
I know this is something that the hon. Member for Glasgow North is interested in, as, I suspect, everyone is. I chair the all-party parliamentary group for international freedom of religion and belief. In 2018, we published our report “Nigeria: Unfolding Genocide?” Why is that applicable to today’s debate? This debate is not about food; it is about more than that. The FCDO response to the report was that it was climate change driving violence in Nigeria, not attacks on religious minorities. The fact is that it is a combination of both.
When the APPG visited Nigeria in May and June this year, we had discussions and talks with Government officials and some of the landowners in north-east Nigeria where things are happening. The Fulani herders are losing their grassland to the encroachment of sand and desert, so they moved further south into the land that just happens to be owned by Christians, along with some Muslims. In other words, the Fulani herdsmen are moving their cattle and herds closer to and encroaching on land that farmers need to grow their crops and look after their families.
Climate change is affecting us all, but not equally. The latest correspondence this week between Open Doors and some of the APPG’s members indicated that tensions are continuing to rise in Nigeria to an even greater level than when we visited back in May and June. When it comes to the issue of human security and climate change, that is a supreme example of what is happening. That is why we need to do things collectively and better together.
Minority groups and often religious minorities find themselves facing the worst impacts of climate change. In many cases, families want to produce food just to feed their families—not necessarily to sell on, although they may barter on occasions—and for Christians in north-east Nigeria, for example, land degradation is combined with the constant threat of attacks from Boko Haram or the Fulani herders.
Climate change and human security is not a topic that will be going away any time soon. The hon. Member for Glasgow North is absolutely right: we might have talked about the matter six or seven years ago, saying “the threat of”, but no, the threat and the reality is here today. I agree with him absolutely. We have the opportunity to respond in a timely and vital fashion. Delay can no longer be looked upon as acceptable in any way. We must ensure our commitments to our promises made at COP 25, COP26 and this weekend at COP27 and do what we can to curb national disasters, not just here in the United Kingdom of Great Britain and Northern Ireland but for all nations around the world. We all need to live together and do our best for everyone.
Clive Efford (in the Chair)
Do any other Back Benchers want to speak?
No. In that case, I call Stewart Malcom McDonald.
Stewart Malcolm McDonald (Glasgow South) (SNP)
I am grateful. It is a pleasure to see you in the Chair, Mr Efford, and I congratulate the hon. Member for Bath (Wera Hobhouse) on securing the debate. It was a pleasure to be a co-sponsor—or whatever the correct terminology is—in the application to the Backbench Business Committee. Though the issue is serious, nothing says taking climate security seriously like the acres of empty green chairs before us on a Thursday afternoon in the House of Commons.
Nothing says taking climate change seriously like, after being the host country for COP26—as was mentioned by my hon. Friend the Member for Glasgow North (Patrick Grady), from north of the Clyde; we were only too pleased to host that conference in my home city of Glasgow—a grudging Prime Minister sulking his way to Egypt for the COP27 conference. Nothing says taking climate security seriously like stripping the COP President and the Minister present today of their places in Cabinet. Indeed, if all that was not bad enough, even the King—a man who, in this country at least, is perhaps uniquely credible on the international stage on climate change and the environment—was banned from going to COP27, not just by the former Prime Minister, but the new Prime Minister. Come Monday next week, maybe a new Prime Minister will have changed that. As well as having a practically empty Chamber, I am willing to bet that this debate, which is scheduled to last 90 minutes, will not go the full way and we will adjourn early. [Interruption.] I can hear some challenges to that behind me.
Turning to climate security, I know the Minister takes his portfolio extremely seriously and I do not aim this at him—in fairness, it may have been down to how the application was made—but it would have been good to have an FCDO or even a Defence Minister to respond to the debate.
Richard Foord (Tiverton and Honiton) (LD)
Does the hon. Member agree that the failure of the UK Government to invest properly and sufficiently in renewable energy in recent years has damaged our ability to see security through the lens of human security, rather than what matters to Governments? Does he agree that the £4.5 billion of energy exports to the UK that Russia profited from last year emboldened that country to sustain its traditional state-centric view of security and, in that sense, has exacerbated climate change?
Stewart Malcolm McDonald
I agree with the hon. Gentleman and will come to some of those points in turn. I want to speak about how I view climate security and where it fits in the broader issue of the security strategy across Government. We can learn great lessons from countries such as Sweden, which follows what is called a total defence concept, where the dynamic and changing threat picture that countries and national Governments face is given commensurate space in their national security strategy. Whether that is the hard military invasion, a pandemic, a shock weather event or a virus, the dynamic threat picture is represented in that national security strategy.
As my party’s spokesperson on defence, I have found it difficult to criticise the MOD over the past 10 months, not least in what it has done to support Ukraine, as have many Members across the House. However, we now have a situation where the integrated review, which can only be two years old, was going to be reviewed and then was maybe going to be reviewed, and I understand that it will now definitely be reviewed under this Prime Minister. We have an opportunity to get this right and give climate change and climate security the representation it deserves in the overall national security posture of the UK. I have an interest in this as a Scottish Member of Parliament. There are unique factors about climate change for our part of the country but, as hon. Members have said, this is a matter for the planet as a whole. In thinking about how we work on that, there are three key areas when it comes to defence and security. Climate change is a threat multiplier. The secretary-general of NATO, Jens Stoltenberg, gave an eloquent speech earlier this year on how that threat multiplier can and should be taken seriously by NATO member states. Indeed, it runs through NATO’s strategic concept, and NATO is one of the twin pillars of European security.
The second pillar is the European Union’s strategic compass. Traditionally, the European Union has not done as much in the area of defence and security, but it is doing more. When NATO leads on hard security—military security—the European Union absolutely complements it as the second twin pillar for things such as disaster management and resilience, and for dealing with climate change and other shock events that its member states will experience. That makes the case for the British Government to take off the blinkers and pursue a comprehensive defence and security treaty with the European Union in which it can partner with a major role-setter. About half a billion others on our shared continent can partner on a strategy for climate change.
Even more importantly, the European Union can help pursue a strategy that gives the global south its rightful place at the table. For all the experiences we have in this country—whether it is in the high north of Scotland, or the extreme weather in July this year—those in the global south feel ignored not just on climate, but on much else. To see the manifestation of that, we only have to look at the votes at the United Nations in condemnation of Russia and in support of Ukraine. Across the global south, the pattern of abstentions and voting against the interests of European and Ukrainian continental security, or against sanctions on the Russian regime being deepened and widened, is a product of our ignoring the global south for far too long.
I will end by talking about an issue that the hon. Member for Glasgow North rightly mentioned: climate scepticism. I want to go slightly further and talk about climate disinformation. We will all be asking our constituents to do more as we try to achieve our climate goals. We will be asking them to do more now, as the cost of switching on the boiler and leaving on the lights goes up and up and up. What an opportunity there is for climate deniers, sceptics or whatever we want to call them to pursue political strategies, much like we have previously seen in other policy areas in this country and elsewhere, not least the United States. What an opportunity there is to pursue disinformation strategies against what is a major threat to the people on this planet: climate change. What an opportunity there is for those on the extreme right—I certainly do not include the Minister in that—to sow disinformation, increase polarisation and set democratic countries off course in what they have to do on climate change. That is why it is really important that we have a national strategy to counter disinformation on this issue and much else, and that we build as much information resilience as possible across the population.
Wera Hobhouse
Is it not true that we really need unmitigated support from the Government? Otherwise, we will not tackle the immense problem that we are facing.
Stewart Malcolm McDonald
Yes, and that is perhaps a neat way for me to conclude my remarks. We do need that support, and we need all the parts of the state architecture working in concert with devolved Governments, the private sector and many other actors to pursue a national strategy for robust climate security that is at the centre of a broader national security strategy that works in concert with European and NATO allies and gives the countries of the global south their rightful place at the table.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Mr Efford. I thank the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) for securing this debate, which is a very timely one, given that COP is about to start. I think I agree with the hon. Member for Glasgow South that this debate should have fallen within the remit of the FCDO or the Ministry of Defence, but the Minister and I, with our climate change briefs, will try to do justice to some of the issues that have been raised.
The hon. Member for Bath was right to talk about Putin’s hostile actions in Ukraine, which have drawn energy security to the forefront of people’s minds. It has always been quite difficult to get people interested in energy policy—it is sometimes seen as a very techy issue—but when we put it in the global context of how undue reliance on Russian energy supplies affects our security and the security of many countries, the lesson to be learned is that we need to be more self-sufficient. Obviously, the way to achieve self-sufficiency is through a quicker shift towards renewables, and—as I hope Members spotted—at its recent conference in Liverpool, Labour made a pledge for clean power by 2030. That is not just based on the awareness that we need to tackle the climate emergency, or that renewables are far cheaper—nine times cheaper—than gas; it is about our energy security needs as well.
It was interesting to hear the hon. Member for Bath talk about the impact on the financial system. I have spoken to insurance companies that are having to reappraise what they do, given that some of the risks they are used to insuring against are getting to the stage where they are either uninsurable, or those companies are far more likely to have to pay out on them. Flooding is an obvious example, but there is also this issue of stranded assets when it comes to their investments. Both the hon. Member for Glasgow North (Patrick Grady) and the hon. Member for Bath talked about how this is an opportunity, and as the shadow Secretary of State for climate change, my right hon. Friend the Member for Doncaster North (Edward Miliband), said at Labour conference,
“It’s cheaper to save the planet than it is to destroy it.”
Most people—although perhaps not the previous BEIS Secretary, the right hon. Member for North East Somerset (Mr Rees-Mogg)—are beginning to realise that we have huge opportunities in this space.
The hon. Member for Strangford (Jim Shannon) spoke about the irony of there being flooding one moment in Northern Ireland and hosepipe bans the next, which brought home the fact that this is not just something that is happening in the most climate-vulnerable countries: we are seeing the impacts of climate change everywhere. Even just in recent times, we have seen floods in Pakistan, as has been mentioned; droughts and famine in east Africa; extreme weather events hitting central America, the Caribbean and the Asia-Pacific; and wildfires in California. We are seeing those physical manifestations of climate change around the globe, and the associated geopolitical risks.
Obviously, climate migration—the outflow of people from areas where their lives or livelihoods are threatened—is one of those risks. In some cases, those people are in mortal danger and it is imperative that they flee; in other cases, it is because their former way of life is no longer economically viable. A report from the World Bank suggests that 216 million people may be displaced by 2050 due to climate breakdown. Of course, not all of those people will choose to leave their homes, but they will then be left in an increasingly vulnerable situation where they are likely to be in immense poverty and at risk of resorting to desperate measures.
The other aspect is the battle over resources—for example, the melting of the ice on the third pole, the Himalayas. That is absolutely crucial to the water supply in India and China, and we may well see those two major superpowers at war with each other over access to that resource. Increasingly, we also see criminal elements being involved in deforestation in a bid to plunder the forests. Somali piracy, which was an issue a few years ago, is not quite a climate change issue, but it is closely linked to overfishing. It might not be climate change, but it is about the plundering of the world’s natural resources, and the inadvertent consequences of Somali fishermen not being able to make a living from their traditional way of life, and therefore turning to other activities.
The climate crisis accelerates instability around the world, and opens up a vacuum in which extremism can fester. As the UN Secretary-General said, it is a “crisis amplifier”. It often contributes to a breakdown of law, increased inequality and rapid social change. For example, in the Lake Chad basin, Boko Haram has taken advantage of a scarcity of natural resources to conscript young people to its cause. In war-torn Yemen, the humanitarian crisis has been exacerbated by drought. ISIS has exploited water shortages in the middle east. As well as turning people towards terror, the damaging effects of climate change also risk leaving countries dependent on hostile states. A delegation from Madagascar is here this week, for example, and we know the role that China is beginning to play there. Countries in desperate need of economic support and security are turning to China, which gives China a huge degree of influence over their politics and full access to their resources.
I appreciate that this is a matter for FCDO, but one way in which the Government could make an immediate impact, if they wanted to, would be to reinstate our overseas aid commitment of 0.7% of GDP. The cut was a stark betrayal of the world’s poorest people, and may well have security consequences. Given our respective briefs, however, I will focus primarily on COP and what can be achieved there.
At COP, there should be a big focus on climate mitigation, renewed ambition when it comes to countries’ nationally determined contributions, and a focus on keeping 1.5° alive. Somebody said during a debate this week, I think, that 1.5° is on a life support machine, but we certainly must ensure that it is still very much the ambition. However, COP cannot be just about mitigation. We must also hear much more about adaptation, and how we can support the most climate-vulnerable countries as they try to make their nations more resilient. That could be about building sea walls; about natural defences against rising sea levels, such as planting mangroves; or about buildings that can better withstand extreme weather events.
There is a lot that we can do, but those countries need finance. In some cases, they are very poor countries that would normally be in receipt of aid, or they are tiny countries, for example the small island developing states. They tell me that they find it almost impossible to access climate finance. There are too many hurdles for them to jump over. In some cases, that is because they do not have the resources: they are tiny countries, and do not have the people to do all the research for the paperwork.
According to the UN, the 10 most environmentally fragile countries receive a mere 4.5% of all climate funding. That falls far behind other nations. It is not just about giving them climate finance; it is also about supporting them with their own initiatives. For example, the island and coastal states are increasingly looking at blue bonds. I know that Seychelles is doing so, as is—I think—Belize. As the centre of global finance, whether it is green finance or blue finance, the City of London could play a good role by helping those countries to access that money. That would be money from investors that are looking to do climate offsetting, for example. I am not that keen on carbon offsetting. It is not the solution to reaching 1.5°, but if there is an opportunity to get climate finance to climate-vulnerable countries, the UK ought to be playing a leading role.
We need to see progress at COP27 on loss and damage, too. There should be a formal mechanism in place so that those with the responsibility and capacity to pay for it do so. I was part of a meeting last week in Parliament with John Kerry, the US climate envoy. I asked him about the issue, and it was good to see that he thinks that it is important. He spoke about trying to bring forward progress on loss and damage, so that it is something we can deliver on at the 2023 COP, rather than perhaps something for 2024.
I also met the Foreign Minister of the Maldives recently, on Tuesday. That is an island state with a small population that covers a massive territory when we include the ocean around the islands. Seventy of its islands flooded this year. I wonder whether the Minister remembers when the then President Nasheed held a cabinet meeting underwater with scuba gear. I think he addressed the Conservative party conference around the same time. He was highlighting the fact that they will all be living under water if they are not supported. They are paying a price for a problem not of their own making.
The Foreign Minister spoke to me about how the country hopes to get to fully renewable energy by 2030. Although its own carbon footprint is absolutely minuscule, it is doing its bit. The islands are of course surrounded by salt water, but fresh water is really important, and the rain water is so polluted by the industrialisation of neighbouring India that it cannot be used. That demonstrates the interface between what the industrialised world is doing, and small countries such as the Maldives. They cannot sort out this issue by themselves. They need collective responsibility to be shown.
On finance, it was shocking to hear that the UK has not yet coughed up its contributions to the green climate fund and the adaptation fund—the $300 million promised in Glasgow. We currently hold the COP presidency. If we cannot meet our promises when we are meant to be showing leadership, we really cannot expect anybody else to do so. It is a total abdication of responsibility, as is the Prime Minister’s reluctance to attend COP27. He is going now, but it is pretty obvious he regards it as an inconvenience. I suspect he is only going because the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) is going and he does not want to be upstaged.
I hope that when he gets there, the Prime Minister rises to the challenge. It is crucial that, in the outgoing days of our presidency, we bring together countries to co-operate and that we show climate leadership. I hope that he has a bit of an epiphany as he flies out to Sharm El Sheikh and realises that he is there to do a serious job, and that he does it.
The Minister for Climate (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mr Efford, and to participate in this important debate, although it is a shame that there are not more people here on this Thursday afternoon. What we have lacked in quantity of Members, we have perhaps made up for in quality of contribution.
I congratulate the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) on securing the debate. I pay tribute to them for their work in promoting the importance of the international agenda. The hon. Member for Bath has been a strong voice for climate action and the protection of women and girls in that context throughout her time in Parliament, constantly challenging the Government to do more. I thank her for her commitment to the issue.
I do not want to be divisive, but I would gently say that if we were to compare the hon. Lady’s useful contribution with that of the hon. Member for Bristol East (Kerry McCarthy), the spokesperson for His Majesty’s Opposition, it was more balanced. If one listened purely to the comments of the hon. Member for Bristol East, one would think the Government were a laggard and the country was far behind. One would not believe that we had invested more in renewables than any other European nation, that we had transformed the economics of offshore wind, hosted COP26 and led the global conversation—that my colleague, the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma), had taken us from the beginning of our presidency, when just 30% of the world’s GDP was covered by net zero, to now, when that figure is 90%.
There are plenty of things to pick apart in what any Government do, but surely it is perfectly possible to acknowledge the situation honestly. If people give speeches that absolutely fail to reflect the reality, they do not gain credibility, they lose it. It is perfectly possible to challenge this Government effectively, but it is best to acknowledge the reality of where we are at in order to do so. The hon. Member for Glasgow South talked about climate disinformation. I suggest that there are certain Members here who are guilty of that by not acknowledging what has gone on.
Graham Stuart
I will come back to the hon. Gentleman in a moment, but I want to talk about him. I acknowledge his strong support for the people of Ukraine, which has created a severe context for our discussion on energy and climate, and his support for helping them in their fight against Putin. I wanted to acknowledge that before I give way to him.
Stewart Malcolm McDonald
I thank the Minister for acknowledging that. He is brave to want a debate on credibility right now. It is not disinformation to point out that the COP presidency—of which he correctly seems so proud—has been demoted from the Cabinet, or that he himself has been removed from the Cabinet, or that the Prime Minister has been dragged kicking and screaming to COP. That is not disinformation; it is fact. Calling it disinformation is disinformation in itself.
Graham Stuart
To be fair to the hon. Member, he is a good debater. I was not particularly referring to those points, which are political fair play and not in themselves inaccurate, albeit presented in a certain way. Failing to recognise our overall position and making out that we are somehow, as we heard suggested by another hon. Member, not investing in, promoting and seeking to accelerate renewables is to misrepresent the situation. I sometimes think that, even by myself in a telephone box, I am capable of creating an argument where there would otherwise be agreement.
Wera Hobhouse
I am a little perplexed by what the Minister said. I said in my speech that, yes, we made lots of pledges and there are lots of targets. We are agreed on those, but it is about the delivery. The Committee on Climate Change itself has said that the delivery of the targets we have set ourselves is far too slow. We need to accelerate the pace of change. Will he acknowledge that we need to accelerate the pace at which we move toward net zero?
Graham Stuart
The hon. Lady is right in that respect, but it is important to acknowledge where we are. We have gone further and faster than any major economy on Earth in reducing our emissions while also leading the global conversation. If we do not acknowledge those points, we do not create a properly contextualised conversation. That is all I have sought today, but I entirely agree with her; my job from the Prime Minister is precisely about accelerating this. We need clean baseload, and that is why we are seeking to do more on nuclear. It is a great shame that the Opposition parties—with some exceptions—do not support that. It is interesting to see that if Scotland were to have 100% renewable energy, it would be reliant on the baseload provided by nuclear in England.
Kerry McCarthy
The Minister is talking about what the Government are doing on renewables. It was not clear, in his response to the shadow Climate Secretary at COP questions this week, what the current position is on the ban on onshore wind. We know that the new Prime Minister spoke against onshore wind during his unsuccessful leadership campaign. Can the Minister confirm if there is now a ban on onshore wind, or if it has been lifted?
Graham Stuart
Onshore wind is our single largest renewable source, providing about 14 GW altogether, 3 GW of which are in England. In order to deliver, we need all these energy sources, but we need to do this in a way that works with the grain of communities, whether that is through ground-mounted or roof-mounted solar, onshore or offshore wind, nuclear, hydrogen, carbon capture, utilisation and storage—without which it is hard to see how we can do industrial decarbonisation. We need all those things in order to deliver the targets, which, as the hon. Member for Bath suggested, are extremely challenging, but which we are on a firmer path toward than any other major economy on Earth.
It is great that the Americans have now come back to this agenda, and it is good that they passed the Inflation Reduction Act to promote it. I met with John Kerry recently, and discussed how we need to work co-operatively. In that context, at Glasgow we brought about the break- through agenda, looking sector by sector at collaborative ways to drive forward change across nations.
The UK, and indeed the world, as colleagues have said, is facing unprecedented challenges. I and the Government agree with the picture that has been painted. The food and energy crises, the war in Europe, inflation and recovery from the covid-19 pandemic are all part of the context, but in all the short-term pressures, around energy bills and the like, we must not lose our focus on climate change and we must recognise that it has an impact on human security, precisely as the propagators of the debate have suggested.
Extreme weather events are increasing in frequency and severity, and this summer we observed record-breaking temperatures, as other hon. Members have said, across Europe, the US and China, including the temperature rising above 40°C in this city for the first time. It was reported that the European Union saw 53,000 excess deaths in July as a result of the heat. As has been mentioned, the devastating floods in Pakistan affected 33 million people and a third of the country—an area about the size of Britain—was under water at one stage, which is truly horrifying.
These events serve to underscore the point that climate change and its impacts are being felt today, not in some distant future. It is driving food and water scarcity, displacement, migration and humanitarian and economic crises, while eroding resilience and reducing our capacity to respond. People, countries and regions will be impacted differently and over different timescales, but climate-related disruptions will increasingly strain international security arrangements globally, precisely as has been said today, causing a knock-on impact on human security worldwide in ways that we cannot always predict. Urgent action is needed to adapt and build the resilience of people, economies and ecosystems to current and future climate change and nature loss, and to the associated risks and impacts.
Climate change exacerbates existing vulnerabilities. It was acknowledged as a threat multiplier by the UN Security Council and the science is absolutely clear. A rapid reduction in greenhouse gas emissions and a significant scaling up of investment in climate change adaptation is needed to avert the most damaging impacts, but some of those impacts are already baked in, as has been said. That is why the integrated review identified tackling climate change and biodiversity loss as a leading priority over the coming decades—so it is in our national security strategy, in the form of the integrated review—and highlighted the inextricable links between climate change, nature and national security.
We were the first country to bring the security implications of climate issues to the UN Security Council in 2007, and the first to convene a leader-level debate on climate security in 2021. We have also convened workshops within NATO and we are seen as an international thought leader on the security implications of climate change—something to which hon. Members are contributing today. So we recognise and understand that human insecurity caused by climate change is a significant challenge.
The UK’s COP26 presidency helped us to continue our leadership in this area. COP27 starts on Monday in Egypt, and the Prime Minister’s attendance demonstrates the importance this Government attach to the climate agenda. An African COP, in a continent on the frontline of climate change, will rightly shine a light on the need to follow through and deliver on the commitments that have already been made, and scale up action on adaption and mitigation. COP26 secured many important commitments. Countries reaffirmed their commitment to keep 1.5°C alive, albeit on life support. Among many other important pledges, developed countries agreed at least to double their adaptation finance from 2019 levels by 2025. Those commitments must now be delivered.
To achieve human security in the face of climate change, the world must act. We need to reduce emissions faster than ever before. We need to seek to stop damage to nature and rebuild the biodiversity that is so central to human security, so we will continue to push for a landmark agreement to protect nature at COP15, the convention on biological diversity in Montreal in December—that is the other big COP, so we have COP27 and COP15. We need to enable countries and communities to avert and minimise losses and damages, while providing means to address impacts when they occur.
We estimate that, between April 2011 and March 2022, the UK’s international climate programmes directly supported 95 million people to adapt to the effects of climate change. We have pledged to double our international climate finance to £11.6 billion between 2021 and 2026, with the goal of mitigating climate change and supporting countries to adapt and build their resilience to its impacts, as well as protecting and restoring nature. Those investments directly support the improvement of human security.
We can and will do more. It is not just about the amount of money spent; the UK is making sure we spend smarter, plan more effective responses and utilise our world-class diplomatic service to support countries to be more resilient in the face of climate impacts. It is also about following through on our commitment to deliver net zero and nature action at home and internationally and to support the scaling up of adaptation globally as we build the legacy of our presidency and support Egypt to drive forward progress.
Hon. Members are right to challenge us to ensure that this takes place right across Government. I met the lead non-executive director of BEIS this afternoon, who leads on net zero. All Departments now have a non-executive member on their board with responsibility for net zero, because it is a matter for every Department. Through the Climate Action Implementation Committee and other Cabinet Sub-Committees, in my role as Minister for Energy and Climate Change I will be working to ensure that Ministers in every Department recognise the imperative to deliver net zero.
Kerry McCarthy
The Minister mentioned the Climate Action Implementation Committee, which came up in, I think, Prime Minister’s questions or perhaps COP questions. The Prime Minister is no longer chairing that Committee. The Chair of the Environmental Audit Committee, I think, asked who will chair it, but we did not get an answer. Can the Minister tell us who is in charge?
Graham Stuart
The Climate Action Implementation Committee has up to now been chaired by the COP26 President, my right hon. Friend the Member for Reading West. He will cease to be President of COP in a few days, of course, but he will lead our negotiations through Sharm El Sheikh. It will be up to the Prime Minister, I guess, but I do not know. It is quite likely that it might be the Minister for Energy and Climate Change—I do not know. It will be a Minister who leads that Committee, which reviews carbon budgets, gets presentations from the Climate Change Committee and others and ensures that we stay on track, as we must if we are to deliver that.
Our agenda is not just about avoiding harm; it is strongly in our national interest. By leaning in ahead of the rest of the world, by cutting our emissions more than many others, and by investing in renewables in a way that has led Europe, we can create industrial capability that we can then export to the rest of the world. We genuinely can do the right thing by the environment, build a more prosperous and reindustrialised nation—in some parts of the country—and serve the interests of humanity and the planet as a whole, while delivering greater economic security and prosperity at home. That is very much what we are focused on; it is all about accelerating what we are doing in order to enable that. That will be my job and those of my officials.
The transition to a net zero economy presents job and export opportunities. McKinsey estimates that the low-carbon transition could present a £1 trillion opportunity for UK business by 2030; it is genuinely enormous. At Glasgow, we took steps to make London the first net-zero aligned financial centre. There are opportunities for the City of London and our industry in things such as hydrogen and carbon capture. Up in the north-west and right across the country, there is an appetite to see that happen. Taking a lead will drive prosperity here in the UK and globally, as global markets transform.
International action enables us to meet our own net zero target more efficiently and cost-effectively, while positioning ourselves to take advantage of the global economic opportunities that arise. If we engineer it right, we can come out not only with a net zero, emissions-free energy system, but one that is internationally competitive because we have helped to lead the global conversation and others are following us. We can use our natural resources—for example, the North sea basin—not just to get out the oil and gas for now. With ever higher environmental standards around production, that is the right thing to do while its production declines. We can also use it for offshore wind, storage of CCUS, and storage of hydrogen, which might be part of that whole hydrogen story. We have a European resource here by which we can help to serve the whole continent of Europe in a way that helps with the net zero challenge, and also helps with prosperity, not least in areas that otherwise would be left behind, because levelling up remains a central mission for us.
COP27—we will hand over the presidency next week, a year on from the brilliant COP26 hosted in Glasgow—is an opportunity for the world to come together to address climate change. With the Prime Minister at the helm and leading our delegation, the UK will be front and centre in driving forward meaningful action, without which the security of all humanity is at stake. I entirely agree with colleagues across the Chamber who have given such powerful speeches today in support of that positive objective.
Clive Efford (in the Chair)
Before I call Wera Hobhouse, I just point out that, although we have nine minutes left, this is not an opportunity for a second speech, but a short summing up.
Wera Hobhouse
I take that on board, Mr Efford. I thank Members for contributing to this debate. The fact that people were wondering who would respond to this debate—the MOD, the Foreign Office or indeed BEIS—seems to reinforce my call that we should have the Department of Energy and Climate Change back, which would co-ordinate all the questions and issues that we have debated this afternoon. That would address them together, rather than always having them addressed in a fragmented way.
I am pleased that so many Members have contributed from across our family of nations, which shows how important this debate is for all our constituents. As the hon. Member for Strangford (Jim Shannon) said, our MP mailboxes are full of constituents’ concerns and worries about their futures if we fail to act. That very much shows how this is a human issue and how the security issues of countries should be brought down to the human level. We must do more. The Government can always blow their own trumpet—they do that very well—but I must point out where the Government can and must do better. We must no longer dither and delay. We must deliver now.
Question put and agreed to.
Resolved,
That this House has considered climate change and human security.
Yemen Peace Process
(1 year, 6 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mrs Flick Drummond (Meon Valley) (Con)
I beg to move,
That this House has considered the peace process in Yemen.
It is a pleasure to serve under your chairmanship, Mr Davies. I thank the Backbench Business Committee for granting this important and timely debate.
Just over 60 years ago, I was born in Steamer Point Hospital in Aden, and I began a long fascination with Yemen in its various guises. I was born with British citizenship as my father was serving in the British Arab army, and we left when I was three. Ever since then, I have tracked how things have changed over the years as I have written down the changing names of my country of birth. I have not been back since but I dream to, much like the right hon. Member for Walsall South (Valerie Vaz) and her brother, the former Member for Leicester East, who were also born in Yemen.
Over the last 60 years, Yemen has been divided and come back together again, and it has now become a long-forgotten war for many. Why is Yemen important to us? The UK has a historic interest in Yemen through the existence of the Aden colony from 1839 to 1967. More importantly, today we are the UN penholder. The Government must continue to play their leading role in promoting peace. I pay tribute to the UN special envoy, Hans Grundberg, and his predecessor, Martin Griffiths, for all their work.
Today I will set the scene, as I know others will want to talk about different aspects. I thought it would be good to remind people about the complexity of the war and our role. That is not to say that we should impose a western-centric, top-down structure of government for Yemen. That has been disastrous in places such as Iraq. Like other middle eastern countries, Yemen is made up of different communities, and there is currently little feeling of a whole national identity. The war is not as clear as some may wish it to be. Often, there is too much focus on Saudi Arabia and the Iranian involvement, but it is an internal civil war, not a surrogate or proxy war. Although outside countries are involved, either by backing the Houthi rebels or supporting the Yemeni Government, they do not necessarily control them politically.
Yemen has had a history of civil wars for centuries, and a continual battle along the Saudi Arabian border—a border that has cut through some of the historical Yemen. It is a country divided by tribal and religious loyalties. The Houthis are more doctrinally close to the Sunnis than the Iranian Shi’ite regime with which they are often linked by the outside world. The Houthis are also more conservative than the southern tribes in their Sunni doctrine.
John Spellar (Warley) (Lab)
The hon. Lady seems to be implying that there are only allegations of Iranian involvement with the Houthis, whereas the Iranian regime is absolutely up to its neck in this, stimulating and providing massive amounts of material. Frankly, the Houthi attacks would not be successful without the destructive and disruptive behaviour of the Iranian regime.
Mrs Drummond
If the right hon. Gentlemen was listening carefully, I said that although other countries are involved, they are not politically involved. They may be supported militarily, but the Houthis are thinking for themselves rather than being dictated to by the Iranian Government. That is the point that I was trying to make.
The sectarian divide in Yemen is not clearcut, as tribal loyalties cut across religious beliefs, making it a confusing and shifting picture, particularly for those looking from the west. Unification in 1990 was to bring forward a representative Government, with elections every seven years. However, it was fragile because of the problems with power sharing that we see elsewhere, including closer to home.
The origins of the present war lie in the political and economic marginalisation of northern Yemen by the former President Saleh. Many of the 301 members of the Yemeni Parliament, who were elected under universal suffrage, felt disenfranchised and unable to effect change. That was a missed opportunity to show that democracy works, in a part of the world surrounded by authoritarian regimes.
The war is a result of decades of exclusion of different parts of the population around the country. Yemen has been run by elites who have concentrated power with their own allies and disenfranchised large parts of the population, even when elections were held. With that in mind, we need to look at how that impacts the peace process and the route to lasting peace.
On 2 April, Yemen’s warring parties began a two-month nationwide peace brokered by the UN. That was extended until October, but it has not been extended again, although the fighting has not resumed at the same intensity as before. On 7 April, President Hadi transferred his powers to a new eight-person Presidential Leadership Council, and the new President is Rashad al-Alimi, a politician with long experience and a diplomatic background.
The six-month ceasefire has been the nearest thing to a reprieve since civil war broke out eight years ago. Casualties have come down countrywide, there has been an increase in fuel deliveries, and international commercial flights to and from Sanaa have recommenced for the first time in six years. However, the latest proposal put forward by the special envoy has not been accepted by the Houthis. The proposal is wide ranging and includes the payment of civil servants’ salaries and pensions, the opening of specific roads in Taiz—the second most populous city—a commitment to release detainees urgently, and the strengthening of the de-escalation mechanism through the military co-ordination committee. The main obstacle is that the Houthis want their security forces to be included in the salary payments to civil servants, which the Government could not accept. This is really disappointing.
Taiz has been in a state of a partial siege since the beginning of the war, and life has been tough, with a war economy inflating prices and insecurity. It was not until 2021, when Hans Grundberg became the first diplomat to visit Taiz since the start of the war, that the profile of the city and its plight were raised. Improving communications with and around Taiz must be central to negotiations, and this is one of the areas where the UK Government can help by working with the special envoy to call on the Houthis to show flexibility.
The outside world must remind the Houthis that all citizens have benefitted from the peace over the past year. Any attempt to prevent oil and goods from arriving at the port of Hodeidah impacts on the already difficult humanitarian crisis. Food is becoming more expensive as it becomes even more scarce, and there is not enough equipment to keep hospitals and schools functioning. Only 48% of the aid needed through the 2022 Yemen humanitarian response plan has been funded so far. The Houthis must realise that working towards a long-term peace process will help that and is in everybody’s interest.
Politically, the Presidential Leadership Council under President al-Alimi has unified the resistance to the Houthis. The Southern Transitional Council is the most well-known group, so we should recognise the role of Mr al-Zubaidi and, just as importantly, the other members —Tareq Saleh, Abdullah al-Alimi Bawazeer, Sultan al-Arada from Marib, General al-Bahsani, Othman Majali and Abu Zara’a al-Muharrami for their contribution to leading the council. However, the situation with the PLC is delicate, and support from the international community is vital to maintain its credibility.
John Spellar
The hon. Lady mentioned the Southern Transitional Council. She may be about to come on to this, but what consideration should be given in the discussions to the desire for self-determination in south Yemen?
Mrs Drummond
I do not think it is for us to determine the future of Yemen. It is up to the people to decide what they would like to do through the negotiations, so I would not dream of putting what I think on to what they are going to decide. That is very important, as I mentioned at the beginning. We cannot apply our western-centric views to what is going on in Yemen. If the people decide that they want to divide as they used to be, that is fair enough, but I do not think we should be talking about that at the moment—
John Spellar
Does the hon. Lady recognise that there is considerable demand in southern Yemen for a degree of self-determination, if not independence, and that that is very much recognised by the south Yemeni diaspora here in the UK? This is not about us pressing for that as colonialists; it is very much a local demand.
Geraint Davies (in the Chair)
Order. When someone intervenes, the speaker needs to accept the intervention before the other person starts speaking.
Mrs Drummond
Thank you, Mr Davies.
It is all very well for people in the UK to say that that is what should happen, but the country has been divided before. It came back together and started to have a Government who, unfortunately, were not run properly. Unifying the country could happen again, but if it is the will of the people of Yemen to divide again, we must accept that. It is up to the people of Yemen who are living there and those who are running the Government, who are beginning to run it with a lot of credibility. We have to wait for that to settle down.
The special envoy and other allies must also make clear that help and aid will come if the Government of Yemen take the opportunity to move on from their former position under President Hadi. Any weakness will be exploited by the Houthis and delay any future peace process. The UN special envoy has been tireless in his diplomatic efforts, and has been asking for a new six-month truce to allow time for negotiations for a formal ceasefire, the resumption of an inclusive political process, and talks on wider economic issues. We must help to make those things happen. On the humanitarian angle, Joyce Cleopa Msuya, the UN Assistant Secretary-General for Humanitarian Affairs, has spent time in Yemen, helping the 4.3 million people who have been internally displaced since the start of the war in 2015. Her role can also help to encourage negotiations, showing that peace brings dividends. Mine clearance needs to be a priority, as mines are presently being washed into farm fields.
Before the civil war, 45% of the population of Yemen lived below the poverty line; that figure is now around 90%. Today, 24 million people are in danger of famine, of whom 14 million are at acute risk, and 2 million children are at risk of starvation. Huge parts of the population are being sustained by relief efforts. The UK has always been one of the leading donors supporting Yemen, providing more than £1 billion of aid during the conflict, and many British non-governmental organisations have been doing fantastic work. However, we must recognise that the Yemeni economy will need considerable help and support even after a return to peace.
Yemen is facing huge challenges from climate change, with near-constant drought and desertification of agricultural areas. Since the start of the war, the population of Yemen has doubled, but GDP per head has more than halved. There is a need to rebuild Yemeni society on an equal and fair basis, which includes the promotion of women’s rights. Lastly, there is the threat of an environmental disaster from the oil tanker FSO Safer, moored off the coast of Hodeidah. I have been raising awareness in Parliament about that potential catastrophe for many years. I am pleased that the UN has now raised enough money to start transferring the oil to a temporary vessel, but I have an immediate ask of the Government: that they work with our partners to make sure that transfer is completed as soon as possible, and to secure a safe disposal of the Safer. If that is not done, there is a risk of environmental damage to the whole of the Red sea for decades.
This war has gone on for too long, and too many people have died or been displaced. I urge the UK Government to work tirelessly with all parties and bring peace to a region that deserves it. The British Council is already working in the north and the south; there is a huge demand for English teaching and transferrable skills in Yemen. Our soft power influences can be a big help to Yemen in its post-war reconstruction and rehabilitation. That is important, because there is a compelling geopolitical reason why the west must help the people of Yemen: China or Russia, for example, could fill the vacuum, which could be disastrous for the region’s security. Our support for people in crisis in the world, helping them to build stable and fair regimes, is an investment in our own security as well as theirs. If we can achieve that, then perhaps I, the right hon. Member for Walsall South, and many Yemenis displaced around the world can one day safely return.
Valerie Vaz (Walsall South) (Lab)
It is a pleasure to serve with you as Chair, Mr Davies, and I thank my hon. Friend the Member for Meon Valley (Mrs Drummond) for suggesting this debate. We both went along to the Backbench Business Committee and were able to pitch the debate, because—like my brother and my sister—she and I were born in Aden, and we did say we wanted to go back and visit it in all its beauty. I left when I was 10 years old, so I do remember quite a lot of it. It is important that the Backbench Business Committee has granted us this debate at this time, because amid the millions of ongoing problems and crises that are going on around the world today, the prolonged conflict in Yemen has been forgotten.
We wanted to draw the House’s attention to the dreadful state of affairs in Yemen, which has already been outlined by my hon. Friend the Member for Meon Valley and which we cannot simply stand by and watch from the sidelines. We are a great nation and we have always stood up against what is wrong in this world—we were the framers of the European convention on human rights—and we owe that to the thousands of innocent people who are dying in Yemen.
I will set out the background to the conflict. It has been eight years in the making, which is almost as long as the time I spent in Yemen. The eight-year-old conflict in Yemen is between the internationally recognised Government, who are backed by the Saudi-led military coalition, and Houthi rebels, who are supported by Iran.
After almost a decade of this prolonged conflict, the parties involved are far from reaching a peaceful solution. The failure in October 2022 to renew the ceasefire agreements is alarming and disturbing. But it is good that there was a ceasefire. The peace efforts gained some momentum in April, when Yemen's new governing council helped to consolidate anti-Houthi forces, a move that could set the stage for inclusive negotiations. The first nationwide ceasefire in years allowed commercial flights to resume from Sanaa and some fuel ships to dock in Hodeidah.
After six months of relative peace, however, the parties failed to renew the ceasefire agreements. Both the Yemeni Government and the Houthis have blamed each other for the disintegration of the deal, which has led them back to heavy fighting and plunged Yemen into a full-scale crisis.
I will outline some really upsetting and disturbing statistics, which my hon. Friend the Member for Meon Valley has already touched on. The United Nations Development Programme estimates that more than 370,000 people have died as a result of this war, with indirect causes, such as lack of food, water and health services, causing almost 60% of those deaths. According to the United Nations Refugee Agency, three out of four Yemenis require humanitarian aid and protection and 4 million are internally displaced. Five million are at risk of famine and the cholera outbreak has affected over 1 million people. Fewer than half of the health facilities in Yemen are functioning, and many that are operational do not have even the basic equipment they need. Some health workers have not even been paid their salaries. In March, about 17.4 million people were in need of food assistance, with a growing proportion of the population having to cope with emergency levels of hunger. The conflict’s death-toll has been growing.
This is an urgent humanitarian situation, because the crisis in Yemen is exacerbated by the effect of the war on the humanitarian footprint and thousands of innocent people. An economic crisis continues to compound the ongoing humanitarian crisis in Yemen. In autumn last year, the sharp depreciation of Yemen’s currency significantly reduced people’s purchasing power, so it was more difficult for them to purchase even the basic necessities, taking them even further out of reach. With around three quarters of Yemen’s population living in poverty, disease is rampant and of course the pandemic made matters worse.
This beautiful country is being destroyed and fragmented, town by town, street by street, and house by house. We are in the midst of a terrible war in Yemen and the humanitarian impact of this war on the Yemeni people, especially women and children, is painful for us to watch as silent bystanders.
So how can we go forward? The UN-backed peace negotiations have made limited progress. I, too, want to acknowledge the incredible work of Hans Grundberg, the UN’s special envoy of the Secretary-General to Yemen. He is looking at de-escalating mechanisms through the military co-ordinating committee, turning swords into ploughshares and spears into pruning hooks. And of course I also acknowledge Martin Griffiths for his work on the Stockholm agreement.
The regional conflicts and tensions among the actors involved have simply turned this crisis into a prolonged war. All the actors involved seem to be wedded to a military solution, but war can never be a solution for the millions of people who are suffering.
I have a series of questions for the Minister. Will he pursue every effort for an immediate ceasefire in Yemen, as well as for the implementation of the Stockholm agreement? Will he look at establishing a new international accountability mechanism for Yemen? The existing mechanism is simply not enough. We need independent reporting on war crimes. Will the Minister, as the UK penholder, consider drafting an appropriate resolution immediately that moves the country on to a peace process? We have done it in Northern Ireland. There are people who can facilitate a peace process. Even today, there is peace negotiated in Ethiopia.
We cannot stand by and watch the destruction of a country and the death of so many innocent civilians. The situation in Yemen is tragic and heartbreaking. The war and the stalemate have led to the worst humanitarian crisis in the world, because of widespread hunger, disease and attacks on innocent civilians. The country is burning and the people are suffering. I know we have our own problems to deal with here, but ignoring this massive crisis is a disgrace to humanity.
Bob Stewart (Beckenham) (Con)
It is a real pleasure to speak under your chairmanship, Mr Davies. Yemen is important to us, and I want to concentrate on why that is. The south-eastern end of the Arabian peninsula was once crucial to the functioning of the British empire. A settlement in Aden was occupied by Royal Marines in 1839. It became a bunkering port for passing ships on the way to India. After the opening of the Suez canal in 1869, Aden became vital as a staging post for ships going to and from India and the far east. When oil replaced coal as the main fuel for ships, the importance of Aden was reinforced, particularly as it is so close to the middle-eastern oil fields. Unsurprisingly, BP built a rather large facility there.
As time passed, Aden and its hinterland became a formal part of the British empire, the Aden protectorate. That was the southern bit, as my two lady friends, my hon. Friend the Member for Meon Valley (Mrs Drummond) and the right hon. Member for Walsall South (Valerie Vaz), will recall, although they were still in nappies when I was running around there—I am old, in other words. I have lost my place now.
Valerie Vaz
Yes, we have reminisced a lot together about what a lovely country it was. It was wonderful for me that there were so many different nationalities there; I was taught by Italian nuns and had Greek friends. There were people from Goa, and all sorts of other people, including of course the Arabs, with their brilliant hospitality. I am sure the hon. Gentleman will agree that we need to restore that beautiful country.
Bob Stewart
I thank the right hon. Lady, whom I call a good friend, although she is not formally meant to be a friend; technically, she is not a friend, but she really is a friend. I have been able to find my place now—thank you.
The colony of Aden consisted of 23 sultanates when we were there. There were emirates, sultanates and several independent tribes. All this was run from London and controlled by the British Government, although not completely. In the 1950s, when I was there, some tribes were in open rebellion against British authority, which led to a protracted insurrection that we all remember. Well, others might not remember it as much as I do.
In 1967, the United Kingdom had enough. Aden was given independence as South Yemen, and British forces withdrew. The Aden protectorate was renamed the People’s Republic of South Yemen. The Yemen Arab Republic was to its north—that is the division we were talking about. In 1990, north and south joined to become Yemen.
My particular interest in Yemen comes from the fact that as a child I lived there from 1953 to 1957. I was there because my father served there, like the father of my hon. Friend the Member for Meon Valley. My father was a company commander in the 1st Battalion of the Aden Protectorate Levies, charged with keeping order “up-country”, as we called it. He was always away, and I never really saw him. He was always on operations, and there was pretty fierce fighting. In 1955, he was awarded the Military Cross.
Since 1990, Yemen has gone from bad to worse. It is such a dangerous place that it would be utterly foolhardy for foreigners to go there without protection. We have already identified how poor the country is; it is actually very poor. It is the poorest country in the middle east and a very fragile state. Yemen has essentially become a cockpit where some would say the two main branches of Islam are fighting tooth and nail by proxy. The official Government of Yemen are now backed by Saudi Arabia, Jordan, Egypt, Morocco, Sudan, the Gulf states and, through them, us as their allies, and the United States. The rebels are mainly from the northern Shi’a Houthi grouping, who, I seem to recall, used to take great delight in shooting at my father in the 1950s.
Mrs Drummond
They are not Shi’a; they are Sunnis from the Zaidi part of the Sunni doctrine.
Bob Stewart
Forgive me if I got that wrong; I am perfectly willing to be corrected. To complicate the situation further, al-Qaeda has turned up. Perhaps the most dangerous of the al-Qaeda factions is in Yemen. Just to make the problem even more difficult, so-called Islamic State is present as well, or Daesh, as I might prefer to call them. That is a very rude word in Arabic, and I will not explain what it means, but frankly it is correct.
We have a responsibility here, because we drafted the original UN Security Council resolution 2216 in April 2015, which demanded that the Houthis withdraw from all their seized areas and relinquish all seized arms. We established an arms embargo against the Houthis and the forces loyal to the former president. Security Council resolution 2216 was passed unanimously. The five permanent members of the Security Council must agree it; otherwise it does not pass. In this case, four did. Russia did not, but it abstained, which under the rules allowed the resolution to pass, so it passed unopposed. United Nations action on the ground has not been very effective, but that does not stop leaders of the United Nations doing their very best to try to sort out the situation.
There remains little access to large parts of Yemen, but I am pleased that the UK provides so much aid. Are we the fourth or the second-largest provider of aid to Yemen?
Bob Stewart
We are second. Aid must get through. We have mentioned people starving and a lack of medical supplies, but all I can remember about Aden is how little water there was there. Water is crucial—good clean water. Certainly, in the early days, some of the Saudi-led airstrikes went wrong, and they have clearly killed innocent people. However, in 2016, when I visited the Riyadh air operations centre, which controls all operations, I was impressed by the attitude of the air controllers and the coalition pilots to what ex-military people like me call weapons release. From what I saw, they were doing their very best then, and have done since, to avoid civilian casualties. Indeed, I heard real evidence that they often returned with full bomb loads. They were not positive that they would not hurt people, so they did not have weapons release.
The Gulf Co-operation Council and Saudi Arabia are very close allies of our country. We must be quite clear that, regardless of its mistakes, the Saudi-led coalition is operating under the authority of a unanimously adopted Security Council resolution. It is acting for the Security Council. It is acting for the forum of the world. It is doing the work on the ground in response to the Government of the world, if one wants to think of the United Nations like that. After all, the usurpation of power in Yemen was illegal. The Government of Yemen are a legal Government. We do well to remember that. It is far too easy for us to sit here and castigate what our allies do sometimes. The Saudi-led coalition is doing its very best to implement international law and the Security Council resolution that we, the British, drafted.
Obviously, everyone here realises that the only way ahead for Yemen is a political solution. That solution must obviously involve the United Nations. I suspect that it has to involve countries such as ourselves, other Arab countries and the United States. Perhaps, dare I suggest, it has to include Iran.
According to the United Nations, as we have heard, 150,000 people have been killed in the war in Yemen, and that does not include the 227,000 who died as a result of famine. I cannot believe that people in this world are dying because they do not have enough food. That is appalling. It is something that, as human beings, we have a real responsibility to sort out. Lack of food, kids dying—it is just dreadful. The lack of healthcare facilities just piles it on, too.
I should stop shortly, because others want to speak, but I hope that I have emphasised that we, the British, have a responsibility for action in Yemen. I know that the Foreign, Commonwealth and Development Office is acutely aware of the United Kingdom’s long-standing concern about what has happened in the country, and that the issue is not on the backburner. It is very difficult to sort this one out, but surely a world that can land a spacecraft on a flipping comet can find a way to stop Yemen going through the bloody awful hell that it is enduring.
Several hon. Members rose—
Geraint Davies (in the Chair)
I want to take the Front-Bench spokespeople at 3.58 pm, and by my arithmetic that leaves eight minutes each for the three remaining speakers.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
It is always a pleasure to serve under your stewardship, Mr Davies. I thank the hon. Member for Meon Valley (Mrs Drummond) and my right hon. Friend the Member for Walsall South (Valerie Vaz) for putting the debate together. It is of huge importance, and good to hear of the fond memories that they, and certainly the right hon. Member for Beckenham (Bob Stewart), have of the place where they spent part of their lives. I gained my information on this subject over almost 40-odd years. My father had a friend called Said Abdi who came from Yemen. He would tell us about the issues and what was going on there. He was a Labour councillor, and he introduced me to the Labour party, so I have a lot to thank him for.
As has been said, significant human rights abuses have taken place in Yemen. There has been huge, indiscriminate mining of the ports by the Houthis, and they have recruited young people as soldiers. That is inhumane and barbaric. As the right hon. Member for Beckenham said, there have been issues and mistakes made in some of the military attacks by the coalition, but there have also been huge sacrifices, particularly by the UAE. It lost over 150 soldiers in an ambush on its camp; we have to recognise that. That is a huge tragedy, but the biggest tragedy is for those people in Yemen whose children are starving, and who have all sorts of diseases that we would not expect people to have in this day and age. It has been a sorry state of affairs for the whole country. What is essentially a proxy war should not affect the people of Yemen, but it is being played out by people from a different arena using Yemen as a base.
My concern—it was raised by my right hon. Friend the Member for Warley (John Spellar), who is not in his place—is about south Yemen. We have a group of people who can, in this difficult situation, make at least some things work. On the negotiations, I am not advocating a partitioned country; I am saying that there should be support given to people to manage their own affairs regionally. That would not only give some stability to the region, but get the peace process moving, because we could see elements of peace there. It is no secret that the interference—the supply of arms—has predominately been by Iran. The only way we will get the peace process moving is by engaging people and getting them together to understand what the conflict is about.
The United Nations is producing a report, and has been involved for a long time, but that work needs to be reinforced with more robust reporting about what is going on, and that reporting needs to consider people’s actual position. It needs to consider all of Yemen, but particularly south Yemen. We need to make progress, and we can only do that by trying to resolve at least an element of the problem, and seeing how we can move forward. Considering the time, I will stop, but it is important for the Minister to look at how we can get the peace negotiations going and engage with the south.
Claudia Webbe (Leicester East) (Ind)
It is a pleasure to serve under your chairship, Mr Davies. I thank the hon. Member for Meon Valley (Mrs Drummond) for bringing forward this important debate and the Backbench Business Committee for granting it. We are debating the peace process in Yemen, but the brutal fact is that before the UK can make any meaningful contribution to any peace process in Yemen, the Government need to make up their mind what their position and intentions are towards Yemen and the horrific situation there. The Government are wringing their hands about the deliberate killing, widespread rape and intentional starvation of millions of people—there are more than 20 million people in need of humanitarian assistance and 4 million displaced—while knowingly fuelling the emergency by refusing to ban arms sales to one of the main actors in that brutality, with the ridiculous excuse that there is “no clear risk” that weapons sold to one of the main aggressors against civilians in Yemen might be used on civilians in Yemen.
UK-produced weapons make up around 20% of Saudi arms purchases. Even the US Government, which made up most of the rest of the Saudi arms supply, has now decided to pause its weapons sales to the country and has gone as far as to reset its military relationship. At the same time, we have the UK acting as penholder for Yemen on the United Nations Security Council, supposedly taking the lead on the Council’s activities and resolutions regarding Yemen. The UK Government do not just wring their hands about the emergency that they help to fuel; they lead the international hand wringing.
The penholding has done nothing practical to improve the situation for Yemeni civilians. Instead, earlier this year the UN decided to shut down its investigation into war crimes in Yemen, apparently under pressure from the Saudi Government—a lack of oversight that observers say has seen an acceleration in the rate of atrocities committed as perpetrators feel able to act without scrutiny, let alone consequences. The UN’s abdication of its role in Yemen mirrors the UK’s two-faced stance, and makes it all the more urgent that the UK finally acts in a manner consistent with its expressed concerns about all the horrors taking place in Yemen.
Ending arms sales to Saudi Arabia is the obvious first step if our Government are serious about the UK’s role in helping to end the mass murders, rapes and starvation. But it must not end there. The UK must also use its penholder role to—
Bob Stewart
Can I ask the hon. Lady who she thinks is most responsible for the mass murders and rapes? According to my understanding, it is the Houthis.
Claudia Webbe
I think our responsibility is to work towards peace, and we need to focus our efforts on ending the arms sales that rain bombs down on the Yemeni people.
The UK must use its penholder role to push the UN into restoring its mandate for war crimes investigation immediately to ensure that those who carry out those crimes are identified and held to account. The horrific situation in Yemen demands nothing less than a concerted and consistent political stance and a matching push for action. Instead of turning a blind eye while companies profiteer from the horror, the Government must step up now.
Jim Shannon (Strangford) (DUP)
I give special thanks to the right hon. Member for Walsall South (Valerie Vaz) and the hon Member for Meon Valley (Mrs Drummond). I think they both set the scene very well for a subject we are terribly interested in.
I have an incredible friendship with the right hon. Member for Beckenham (Bob Stewart), but I might have to disagree with him on one small point. I want to set this out at the beginning to have it out of the way: I believe that Saudi Arabia does stand condemned in the courts of this world for its bombing of innocent women and children. It cannot be ignored. I want to put that on record. At the same time, the right hon. Gentleman is right that when it comes to the issues of sexual abuse, murder, arrests and intimidation, that is clearly down to the Houthis. I have expressed my deep concerns about the unholy alliance between Iran and the Houthis, which disturbs me greatly, as it disturbs peace in the middle east and across the whole world.
I declare an interest as chair of the all-party parliamentary groups for international freedom of religion or belief and for the Pakistani minorities. There are many issues in this debate, but I want to focus on one issue. Being chair of those APPGs gives me a deep interest in the issue of persecution. Recent FCDO reports on Yemen have stressed abuses occurring such as arbitrary arrests, the mistreatment of journalists, sexual violence against women and children and the persecution of religious minorities. It is the ordeal facing religious minorities that I want to focus on today. These are the stories we are getting back from Yemen. I want to focus on that specifically, as everyone else has done a marvellous job of highlighting the issues from different perspectives. It is important we do so.
When the ceasefire came into force in Yemen this April and was later extended, a glimpse of peace seemed visible on the horizon. We all hoped it would last longer than six months, as the right hon. Member for Walsall South referred to. A glimpse of peace was visible for a short period. However, regrettably, such ceasefires do not translate into an improvement for Yemeni Christians in particular. An Open Doors analyst for Yemen observed that:
“Christians with a Muslim background seeking emergency supplies are vulnerable to discrimination and mistreatment, if their faith is known…Their names can be removed from distribution lists, especially if help is being given out through local mosques where it can be checked whether someone is a good Muslim or not, based on mosque attendance.”
With all the terrible things people have said for the Yemeni people themselves, it is even worse for Christians. It poses a serious risk to the majority of Christians in Yemen, as 95% of them are converts from Islam.
The situation also raises grave concerns about the fair distribution of humanitarian aid reaching Yemenis. We all want to see more of that, but it has to be fair and equal for everyone. A lack of freedom of religion or belief for converts should not be dismissed in the name of humanitarian disaster. It has to be equal in its distribution. At this moment in time, it is not. Of course, the crisis facing Yemen is manifold and complex, but one human rights issue should not be neglected for the sake of others, particularly as research shows that where freedom of religion or belief is protected, other human rights conditions tend to improve as well. I have always believed strongly that religious belief—whatever that belief is—of ethnic groups and human rights march hand in hand together. They cannot be separated as different things —they are one.
Suspended fighting in Yemen can, in short, mean little tangible improvement for Christians as the humanitarian crisis looms, but the staggering scale of humanitarian disaster should not lead to policy makers and authorities ignoring the plight of Yemen's religious minorities. Indeed, a report last year by the UN High Commissioner for Human Rights documented some of the awful disregard for religious minorities in Yemen, revealing that the conflict, which seems to many to be a Sunni-Shi’a divide, leaves no room whatever for people of other faiths. Experts found that Houthi leader Abdul-Malik al-Houthi incited violence and discrimination against religious minorities for his own political and personal ends, including Baha’i and Jewish communities. In March, he said that the Christians, Jews and Baha’is
“don’t want to coexist…They want to take away the sovereignty of Islam.”
No, they do not; they just want the same rights, the same parity and the same equality as everyone else. They should never be treated differently just because they have a different view. I would say that if it were Muslims, because they should all have the same equality of treatment.
The report further documented practices designed by parties to the conflict to silence their perceived opponents or punish them for their religious beliefs and legitimise their power through the spread of fear. Like others, I speak on behalf of the Christians, Baha’is and Jews— on behalf of all the ethnic minorities that are being discriminated against by al-Houthi in Yemen.
Any peace process in Yemen must remember the country’s Christians and other religious minorities and ensure that solutions to the crisis, however temporary they may be, respect and protect the rights to freedom of expression and freedom of religion or belief. As chair of the APPG for international freedom of religion or belief, I speak up for those of a Christian faith, those of other faiths and those with those with no faith because I believe that everyone should have the same equality. We do not see that in Yemen today.
Parties to the conflict must cease the arbitrary arrests and acts of harassment aimed at preventing the free exercise of those rights, including those directed at religious minorities and human rights defenders. We hear much about human rights defenders across the whole of the middle east. They play a very significant role, and they have been targeted too. We cannot wait until the humanitarian crisis is under control to protect those rights; they need to be safeguarded now.
Today, I just want to highlight the plight of the persecuted Christians and ethnic groups to all hon. Members and especially the Minister, for whom I have the greatest respect. I know that what I am saying is very close to his heart. I hope we can address this matter and see the plight of others in Yemen who are perhaps hidden. We want them to be treated equally and with parity, the same esteem, the same religious freedom and the same humanitarian aid. At this moment in time, they are not.
Alyn Smith (Stirling) (SNP)
It is a pleasure to see you in your place, Mr Davies. It is a genuine pleasure to wind up for the SNP in this debate. We have heard some very thoughtful contributions. I warmly commend the hon. Member for Meon Valley (Mrs Drummond) and the right hon. Member for Walsall South (Valerie Vaz)—the best part of Walsall, as I understand—for their very thoughtful contributions, and their empathy and good sense. I am struck by the sensitivity and humanity that we have heard from all points of the political compass.
I am glad that nobody fell into the trap of easy answers. As Members may be aware, the middle east is close to my heart. I grew up in Riyadh in Saudi Arabia, and my parents have just retired back from Kuwait. My mother-in-law lived in Aden until 1967. My family has sand in our blood. In the middle east, everything is connected to everything else, and in Yemen more than elsewhere. We should beware easy answers; there is very little black and white in any of the middle east, and particularly in Yemen. I am glad that we have not had too many easy answers this afternoon.
I also agree with a thoughtful point by the hon. Member for Meon Valley, who said that this is primarily a civil war. I agree: to categorise it as a proxy war is slightly insulting to the Yemeni people. There are a number of real disputes going on in the Yemeni territory as it exists at the moment, but the tragedy is that we cannot deny the external aspects of prolonging the conflict. The UK has a case to answer in that. It is not an impartial bystander; it has chosen a side via its foreign policy.
A number of excellent points have been made. I will try to distil them down to a few questions and points from our perspective to the Minister—I welcome him to his place, and I look forward to working with him on this and other issues. The SNP will always be constructive where we can be. Our worldview is different from that of many of the other parties here, but on international affairs there is less opportunity for domestic point-scoring, and less need for it, given that every 10 minutes a child dies in Yemen. We need a common effort and to assist each other to find a resolution to the issue, so I will focus on peace, aid and arms in my remarks
The UK is the penholder on Yemen at the United Nations. Because of that and by dint of our history and connection to the region, we are in a position to assist with the problem. As the right hon. Member for Walsall South said, the Stockholm agreement is in the doldrums. In the view of the UK Government, does that remain the best mechanism to reboot the peace process? The UK is supporting the special representative, but what can be done to give added impetus to that process? Perhaps there is now an opportunity, given the good news from the African Union today about the situation in Ethiopia. Progress is possible, so there could be progress in Yemen if there were a new impetus.
On the accountability mechanisms, there have been war crimes on all sides. None of us should indulge in the idea that it is some sort of competition: there have been war crimes on all sides and there needs to be a proper accountability mechanism for war crimes committed by anybody. I would be glad to hear about support for the UK’s continuing efforts to properly investigate those crimes and bring the perpetrators before the International Criminal Court.
On aid, there is a clear distinction between the position of my party and that of the UK Government. We deplore the cut from 0.7% to much lower and we think that was badly timed. All the world was dealing with covid and the idea of covid being used as a pretext to cut aid is entirely wrong, but we lost that argument. I welcome the fact that in March 2022 the UK pledged £88 million in aid for Yemen, but that compares to the figure of £214 million in 2020-21. Surely the situation has not improved since then. We should consider providing far higher amounts of aid, particularly post-covid and given the impact of the war in Ukraine on grain supplies to the wider middle east and Yemen specifically. We would like to see much more aid because the humanitarian crisis is not getting better, and will get worse.
If we want to hear big numbers, the UK’s position on arms exports cannot be taken out of consideration. Since March 2015, the UK has sold £8.6 billion worth of arms, which is a significant sum. To be clear, I am not against the arms trade or arms companies, but I would like to see far higher standards to safeguard the use of those arms, particularly in such a complicated conflict as the one in Yemen. Will the Minister commit to suspending arms sales to Saudi Arabia while there is a fuller investigation than we have seen to date? There is a case to answer. Will a wider and more comprehensive package of aid be brought back?
I am glad to wind up for the SNP in the debate. There are a number of points of agreement across the House. If the Minister takes steps towards a meaningful, durable peace in Yemen, he will have my full support.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies, I believe for the first time. I welcome the Minister to his place, and I look forward to working with him on this and many other issues. I thank the hon. Member for Meon Valley (Mrs Drummond) and my right hon. Friend the Member for Walsall South (Valerie Vaz) for securing this timely and important debate on the peace process in Yemen.
I believe the debate is important to raise awareness about the fragile political situation in Yemen and the ongoing humanitarian crisis. I welcome the opportunity to hear from the Government about what actions they are taking to help the people of Yemen. All of us, regardless of political party, are united in wanting to see a permanent ceasefire in Yemen and a political reconciliation between the warring factions. I and the Labour party believe that there is no military solution to the conflict and that inclusive political dialogue is the only route to a sustainable resolution.
The UK is the penholder on Yemen at the UN Security Council, which means the UK has the power to draft and table Security Council products on Yemen, including press statements, resolutions, presidential statements and more. Within the UN, the UK has the power to lead the way in efforts to forge a political, not military, solution to the conflict. It is important to consider that in our discussions about Yemen and about the actions the UK Government can take to help bring about a lasting peace. We need to focus on those efforts.
The relative calm brought about by the six-month truce has allowed some Yemenis to dream of a better future. It is therefore deeply disappointing that the truce came to an end last month, on 2 October, and that efforts to renew it have been unsuccessful so far. I will return to the truce and the prospects of its renewal in more depth, but first I want to outline the devastating impact of the war.
As hon. Member know, the conflict began in 2014 when the Iranian-aligned Houthis seized the capital, Sanaa, and much of northern Yemen, and later forced the Government into exile. In March 2015 a Saudi-led coalition, including the United Arab Emirates, began a military campaign, backing the internationally recognised Government. The toll of eight years of war on Yemen’s population has been extreme and the war has devastated the country. There have been thousands of civilian deaths, and the famine caused by the war has endangered millions of lives. Across Yemen, 16.2 million people—60% of the Yemeni population—continue to experience acute food insecurity. The UN has described the war in Yemen as the world’s worst humanitarian crisis, and it is estimated that 377,000 people have been killed or have died as a result of the war and the associated crises in basic food and other necessities.
Against this dire backdrop, the recently ended truce offered a beacon of hope and brought some welcome developments. Despite claims of violations by both sides, the truce brought about a sharp drop in fighting. Save the Children has calculated that the truce led to a 34% drop in child casualties and a 60% drop in the displacement of people. According to al-Jazeera, residents in Sanaa reported that their daily lives dramatically improved during the truce, and that prices came down as more essential goods entered the city. Evani Debone, a communications co-ordinator at the Adventist Development and Relief Agency Yemen, told al-Jazeera that the truce had given Yemenis hope for peace. She said:
“Children who go to school are not afraid of airplanes any more. Having the next generation of Yemen not being afraid and not running from the war, as well as having the right to live their lives again is the most important thing when we think about the truce.”
The truce established a partial opening of the Houthi-controlled Sanaa International airport and the key Houthi-held Red sea port of Hodeidah. During the truce, flights restarted at Sanaa International airport for the first time since 2016 and, according to the UN, fuel imports into the port of Hodeidah are calculated to have quadrupled during the truce, allowing people to regain some level of normality in their lives. The truce also called for the lifting of the Houthi blockade on Taiz, the country’s third largest city, but little progress was made there after talks aimed at reopening local roads stalled. Another sticking point was the funding of public employees, many of whom have not received salaries for years.
For now, it appears that some of the main gains of the truce, such as the increase in fuel shipments to Hodeidah and the resumption of flights to Sanaa International airport, have thankfully held. The ability to move freely from Sanaa International airport is particularly important because it means that tens of thousands of Yemenis have been able to visit loved ones and receive vital medical treatment during the truce. It is estimated that the opening of the airport allowed almost 27,000 Yemenis to get medical treatment overseas, and to pursue educational or business opportunities abroad.
I am sure everyone here agrees that the protection of measures that so improve the lives of ordinary Yemenis must be a priority. Although it appears that there has been no immediate major uptick in violence since the truce expired, the fear is that it will begin again. Two weeks ago UN special envoy Hans Grundberg told the Security Council that a “new uncertainty” and a “heightened risk of war” now prevailed across Yemen. Meanwhile, all sides in the conflict are blaming each other for the failure of the truce, but it is the ordinary people of Yemen who will suffer most if the violence begins again. However, UN special envoy Hans Grundberg has signalled that there is still cause for hope, telling the UN Security Council:
“It is important to remember that the truce was never intended as an end in itself, but as a building block to enhance trust between the parties”.
A truce is necessary in order to establish the kind of environment in which a political solution to the conflict can be reached. I have therefore been heartened that the special envoy has stated that he believes there is still a possibility for the parties to come to an agreement. It is vital that the UK Government and the whole international community do everything in their power to try to facilitate that. Re-establishing the truce would be a first step towards a durable peace. There is no doubt that it will take compromises and leadership from all sides.
To conclude, what specific steps are the Government taking to make the most of the UK’s penholder role in the UN in relation to re-establishing the truce in Yemen? Will the Minister tell us what the UK Government are doing to support the ongoing UN-led process to establish peace, and to encourage the negotiation of an enduring political settlement? It is vital that the Government do all they can to help end this brutal conflict and stop the suffering of the Yemeni people. For the people of Yemen, the stakes could not be higher.
Geraint Davies (in the Chair)
Now over to the Minister. Please leave two minutes at the end for Flick Drummond to sum up.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
It is a pleasure to serve with you in the Chair, Mr Davies, and I congratulate my hon. Friend the Member for Meon Valley (Mrs Drummond) on securing the debate. She was an amazing Parliamentary Private Secretary when I served in the Department for Work and Pensions, and we worked well together. It is great to see her passion on this subject, just as it is to see the passion of my right hon. Friend the Member for Walsall South (Valerie Vaz)—I call her my right hon. Friend because she is a friend, not an enemy—and my right hon. and gallant Friend the Member for Beckenham (Bob Stewart).
This is a really important debate, and it is good to hear about people’s family links. Indeed, it is wonderful to have received a bit of a history lesson from my right hon. and gallant Friend the Member for Beckenham, who spoke about his experience. He was very quick to talk about other people’s nappies, but he did not talk about his own, which I thought I would just mention gently. He talked about the complexities of the situation, and the hon. Member for Stirling (Alyn Smith) clearly set out that there are real challenges to deal with.
I pay tribute to my hon. Friend the Member for Meon Valley and the right hon. Member for Walsall South for securing the debate, for their incredible work in this area and for their keen interest in this subject. I also recognise the important comments made by my good friend, the hon. Member for Strangford (Jim Shannon). He and I share a real passion for freedom of religion or belief with many other people in this room. He is a beacon on the subject and we treasure him greatly. For peace to be achieved Yemen, it needs all members of minority religions to be involved in the peace process, and the UN special envoy has been taking steps to ensure that the process is inclusive. No doubt the hon. Gentleman and I will speak more on that subject, as we always do.
Yesterday marked seven months since the UN successfully brokered a truce between the warring parties in Yemen. The truce has allowed Yemenis to live more safely and travel more freely than at any time since the war began, and has delivered many tangible benefits for the Yemeni people. As Members have mentioned, the reopening of Sanaa airport has enabled 60 commercial flights, allowing Yemenis to reunite with loved ones and seek urgent medical treatment abroad. The reopening of Hodeidah port has enabled oil to flow into the country, allowing public services to restart and bringing down the towering oil prices that made it entirely unaffordable for most people. Cross-border attacks, such as those on the United Arab Emirates and Saudi Arabia in January, have ceased.
It is therefore deeply disappointing that the Houthis refused to agree to an extension to the truce on 2 October. By introducing new demands at the last minute and maintaining a maximalist negotiating stance, the Houthis jeopardised the progress enjoyed by the Yemeni people under the truce. They have also threatened to dismantle what has been built over the past seven months. The Houthi attack on the Nissos Kea tanker in the southern port of Ash Shihr a fortnight ago posed a serious threat to stability, and the UK Government condemned the attack and the way it threatened the peace process. It will push up the price of essentials for Yemenis. However, we are encouraged that, at least for now, the door for extending the truce remains open, and the parties have not returned to full conflict.
Valerie Vaz
I was remiss in not welcoming the Minister to his place. He has been a great colleague; I worked with him when I was shadow Leader of the House and he was a Whip, and he is amazing. I will speak about freedom of religion. My first communion and confirmation were all held in a church in Maala, and we had all of our confirmations at Steamer Point. My mother used to sing in the church choir, so my whole life was filled with music and going to church early in the morning. The Minister mentioned the peace process and said that there is room for hope. As the penholder, is he prepared to host a peace conference, as we did previously, to try to get aid to Yemen? Is he prepared to host that peace conference here, to bring all the parties together?
David Rutley
I thank the right hon. Member for her comments and her sincerity. This is not my brief, but Lord Ahmad’s, so he will respond to that point in due course. Without going as far as committing to what she suggested, I will come to what we are doing to facilitate and move forward with a political settlement.
The UK Government remain one of the principal supporters of UN-led efforts to end the conflict, and continue to play a leading role in moving the peace process forward. The Foreign Secretary, in his previous role as Middle East Minister, met UN special envoy Hans Grundberg in January. He offered the UK’s continued support for the work to bring the parties to the negotiating table, and to extend and expand the truce to convert it to a longer-term ceasefire agreement, which the right hon. Member for Walsall South included in her asks. We are working on those issues. Our excellent diplomats and experts continue to deliver on that pledge, working with countries in the region and the wider international community to bring about peace and alleviate humanitarian suffering. In January and July we convened Quint meetings relating to Yemen with the US and regional partners, to back the UN plan.
The hon. Member for Stirling mentioned the importance of the Stockholm agreement and its three main components, and we agree with him. It sets a solid foundation, covering key areas. The UN is taking forward a comprehensive political settlement that addresses the full suite of issues that are important to the parties and to the Yemeni people. We continue to use our role as penholder on Yemen in the UN Security Council to push for a lasting political resolution to the conflict. Resolution 2216 should be replaced when there is real consensus on a political settlement, and the UK stands ready to support the negotiation of a new resolution on ending Yemen’s war when the time is right. We have provided expert advice to underpin the technical aspects of the truce, and to support the longer-term economic, security and political vision for the country.
The UK has long upheld the position that any peace process and subsequent settlement should be Yemeni led, which was an important point made by my hon. Friend the Member for Meon Valley. We recognise the need for that process to be inclusive and involve marginalised groups, which we talked about under the auspices of freedom of religion and belief. We commend the UN special envoy’s approach to his consultations with the parties in March 2022, which involved a wide range of Yemenis.
To support the UN’s efforts to deliver a durable and sustainable peace deal, we have backed a range of grassroots initiatives that engage civil society and local groups through our conflict, stability and security fund. In April, we welcomed the establishment of the Presidential Leadership Council in Yemen. Along with my hon. Friend the Member for Meon Valley, I reiterate the UK’s strong support for the council and its eight members: President Rashad al-Alimi, Sultan Ali al-Arada, Faraj Salmin al-Buhsani, Abdullah al-Alimi Bawazeer, Othman Hussein Megali, Tariq Saleh, Abed al-Rahman Abu Zara’a, and Aidarous al-Zubaidi. We praise the strong and magnanimous leadership of the PLC. That leadership sustained the truce for six months and, since its expiry, has kept the door open for an extension. United, they will play a vital role in a Yemeni-led path to a political settlement—the outcome that all Members present actively strive for.
A number of points have been raised during the debate; I will answer those that I can. Concerns were raised by the right hon. Member for Warley (John Spellar) and the hon. Member for Birmingham, Perry Barr (Mr Mahmood) about the Iranian involvement in Yemen. The UK is deeply concerned by Iran’s destabilising interference in Yemen and the region. We know that Iran’s sustained material support for the Houthis has stoked further conflict and undermined the UN-led peace efforts. It is vital that Yemen is not used as a theatre in which to escalate the conflict in the region. The right hon. Member for Warley and the hon. Member for Birmingham, Perry Barr also talked about the issue of southern Yemen. The governance arrangements for southern Yemen are ultimately a question for the people of Yemen themselves; the UK position, and that of the UN Security Council, is to support the unity, sovereignty and independence of Yemen. That is why the UK supports an inclusive peace process.
My hon. Friend the Member for Meon Valley talked about external influences from China and Russia in Yemen. I note, though, that the five permanent members of the Security Council have remained relatively united on Yemen—more so than in other conflict areas. We know well that Chinese and Russian support for the peace process is highly valued by the UN special envoy. Ultimately, we share the goal of sustainable peace in Yemen and will continue to work together to that end.
The right hon. Member for Walsall South characteristically made some demands and asks—she is a demanding person, but in a nice way and for good reason. We regret that the mandate of the group of eminent experts on Yemen has not been renewed. The UK voted in favour of that resolution, and spoke in support of it during the voting. We are concerned about reports of serious and wide-ranging human rights violations and abuses by parties to the conflict. That group had a crucial role to play in providing ongoing reporting on the actions of parties, and we continue to urge the parties involved to investigate those allegations, and take action to promote and protect human rights. We advocate for the establishment of an equivalent mechanism—Lord Ahmad will give further detail in writing to the right hon. Member.
Questions were raised about arms sales. I reassure Members that the UK takes its export responsibilities extremely seriously, and assesses all export licences in accordance with strict licensing criteria. We will not issue any export licence if to do so would be inconsistent with our export licensing criteria, including respect for human rights and international humanitarian law. In response to concerns raised by the hon. Member for Leicester East (Claudia Webbe), I highlight that the UK regularly raises with Saudi Arabia, including at senior levels, the importance of international humanitarian law, and conducting thorough and conclusive investigations into alleged violations.
Political progress is essential for the permanent alleviation of the immense humanitarian suffering of the Yemeni people. We continue to be a major donor to the UN-led response, and have contributed over £1 billion since the conflict began. Yemen is a clear humanitarian priority for the UK. We have supported millions of vulnerable Yemenis with food, clean water and healthcare, and will continue to do so. Our support to UNICEF has already provided 182,000 children and caregivers with mental health and psychosocial support, and we intend to reach another 30,000 by March 2023.
It is worth mentioning that the British Council continues to have a positive impact on thousands of Yemenis. Since 2015, close to 1,000 teachers and over 300 school leaders have taken part in British Council core transferable skills training, which has enhanced the learning experience of over 160,000 students in Yemen.
My hon. Friend the Member for Meon Valley raised the issue of the Safer tanker. This year, UK financial and technical support also went towards addressing the threat posed by the tanker, which she clearly highlighted. The decaying vessel is at imminent risk of a major leak, which would be four times larger than the Exxon Valdez spill, and would devastate Red sea marine life, destroy livelihoods dependent on fisheries, and worsen an already critical humanitarian situation in Yemen. UK expertise brought the issue to international attention, and British firms are working with the UN on mitigation. Our £6 million contribution helped the UN to reach the threshold to begin the operation. That demonstrates how the UK is supporting Yemen in achieving the economic and environmental security that is critical for its future prosperity.
In conclusion, it is good to see that the situation in Yemen is more positive than in February. There has been considerable progress, which has delivered a truce and has the potential to lead to a permanent resolution to the conflict. However, we must also recognise that this opportunity is fragile and must be grasped by all involved. An inclusive and comprehensive political settlement under the auspices of the UN is the only way to secure enduring peace for Yemeni people and the region. The UK Government will continue to do all we can to bring about peace and a brighter future for all the people in Yemen. The Yemeni people deserve nothing less.
Mrs Drummond
Thank you very much for chairing the debate, Mr Davies. I thank the Minister for his encouraging remarks, and all hon. Members for their contributions.
The war started as an internal civil war. It has gone on far too long and has brought in other state actors. We need every party to get together, in a bottom-up, not top-down, way that encourages every community and tribe to get involved. We need a new peace process, and we need it fast. I thank everybody, but I especially thank my friend, the right hon. Member for Walsall South (Valerie Vaz), for securing the debate with me; shukran.
Question put and agreed to.
Resolved,
That this House has considered the peace process in Yemen.
Written Statements
(1 year, 6 months ago)
Written StatementsRead Full debate Read Hansard Text
Chagos Archipelago
(1 year, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Foreign, Commonwealth and Development Affairs (James Cleverly)
Following the meeting between the then Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), and Prime Minister Jugnauth at the UN General Assembly, the UK and Mauritius have decided to begin negotiations on the exercise of sovereignty over the British Indian Ocean Territory (BIOT)/Chagos archipelago.
Through negotiations, taking into account relevant legal proceedings, it is our intention to secure an agreement on the basis of international law to resolve all outstanding issues, including those relating to the former inhabitants of the Chagos archipelago. This will allow the UK and Mauritius, as close Commonwealth partners, to work even more closely together to tackle the regional and global security challenges that face us all. We will seek to strengthen significantly our co-operation on Indian ocean security, maritime security and marine protection, conservation of the environment, climate change and respect for human rights, and on tackling illegal migration, illegal fishing, drugs and arms trafficking, as well as bilateral co-operation on a range of other issues. We will work to do this in co-operation with key allies and partners in the region.
The UK and Mauritius have reiterated that any agreement between our two countries will ensure the continued effective operation of the joint UK/US military base on Diego Garcia, which plays a vital role in regional and global security. We recognise the US’s and India’s interests and will keep them informed of progress.
The UK and Mauritius have agreed to engage in constructive negotiations, with a view to arriving at an agreement by early next year.
[HCWS354]
Manchester Arena Inquiry Report
(1 year, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Suella Braverman)
Today the Manchester Arena inquiry has published volume 2 of its report, which has been laid before the House. The report can be found at www.manchesterarenainquiry.org.uk and on gov.uk. The third and final volume of the inquiry’s report will be published at a later date.
This report relates to the emergency response into the Manchester Arena attack. I am grateful for the strength and courage of the victims’ families and the survivors, and the engagement of all those who have shared their experiences to ensure the inquiry can deliver its vital work. I am grateful too for the bravery of the emergency services who responded to the attack.
Steps have already been taken to implement learning from the attack to improve joint working between the emergency services when responding to terrorist attacks. The Government will review this report and consider where further improvements can be made and will respond to its content in due course.
I would also like to thank Sir John Saunders for his continued and considerable efforts in ensuring that the inquiry is a success and that lessons are learned for the future from this tragic attack.
[HCWS356]
Cabinet Committees
(1 year, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Rishi Sunak)
Today I am publishing an updated Cabinet Committee list. I have placed a copy of the new list in the Libraries of both Houses.
[HCWS355]
Office for Nuclear Regulation Annual Report and Accounts 2021-22
(1 year, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
My hon. Friend, the Under-Secretary of State, Department for Work and Pensions (the Baroness Stedman-Scott), has made the following written statement.
Later today I will lay before this House the Office for Nuclear Regulation annual report and accounts 2021-22. These documents will also be published on the ONR website.
I can confirm, in accordance with schedule 7, section 25(3) of the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.
[HCWS353]
Grand Committee
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Football Spectators (Relevant Offences) Regulations 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Grand Committee do consider the Football Spectators (Relevant Offences) Regulations 2022.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, this is a simple but important measure, which will ensure that those convicted of football-related offences involving class A drugs can be subjected to football banning orders. We had been on a long-term downward trend when it came to football disorder. However, we have just had a football season which saw more football-related arrests than in any of the previous seven seasons. Sadly, it is clear that, after pandemic restrictions were lifted, some football fans have concertedly pushed at the unlawful boundaries of safety and security, and this includes taking cocaine while attending football.
The police have been clear that they have seen an increase in drug-fuelled disorder at regulated football matches. This backs up the conclusions of the noble Baroness, Lady Casey, who was commissioned by the Football Association to undertake an independent review surrounding the completely unacceptable disorder by England football fans seen at the Euro 2020 final. The noble Baroness found that cocaine use was rife during Euro Sunday, and witnesses on the day were terrified by the reckless and aggressive behaviour of some fans. Unfortunately, this trend has continued since the Euro 2020 final. A recent study found cocaine traces on nearly all tested toilet cisterns at a major football ground, and the police have found it necessary to carry out matchday operations to seize drugs at football matches and arrest individuals. Cocaine use is highly harmful to both the user and those around them. There is a clear nexus between those who are under the influence of class A drugs and those who have propensity to cause trouble.
A football banning order is an effective tool to help to combat this rise in football-related disorder. We want to be clear that anybody causing trouble at football matches is liable to a ban from all regulated football matches for between three and 10 years. Football banning orders have historically proved successful in preventing known troublemakers continuing to offend and deterring others from offending. This is an important point: we want to prevent offenders attending matches and deter others from future offending. Watching football is not a crime, obviously, but commit crime at football, spoil the match experience for everyone else, and you are not welcome and will be prevented from attending.
The instrument contains a measure to address this; it will ensure that those who turn up to football matches in possession of class A drugs or intending to supply class A drugs to others will be subject to football banning order proceedings following conviction. This will give the police an effective tool to combat the rise in drug use seen at football matches. Police data shows that there were over 140 reported arrests for drug offences during the 2021-22 football season. We cannot allow decent football fans to be frightened of attending matches, or football stadia to become unsafe.
I reassure your Lordships that this order has the backing of the Football Association, the Premier League, the English Football League and the National Police Chiefs’ Council lead for football policing. I know your Lordships will recognise the detrimental effects that class A drug supply, possession and use can have at a football match, and I hope that your Lordships support this measure to combat these offences that have contributed to a rise in football-related disorder. I commend this order to the Committee and beg to move.
Lord Faulkner of Worcester (Lab)
My Lords, I welcome the statutory instrument and thank the Minister for introducing it so clearly. I regret that it is necessary. It is depressing that, according to the official statistics published by the Home Office on 22 September, the incidence of football-related disorder is at its highest level for some years—a fact that the Minister referred to. There were 2,198 football-related arrests under Schedule 1 to the Football Spectators Act 1989 in the 2021-22 football season—around 59% higher than those in the 2018-19 pre-Covid season and comparable to the levels seen in the 2011-12 and 2013-14 seasons. A new factor is the incidence of drug-taking at football matches, hence the reason for this order.
Those of us who were involved with the efforts of the football bodies and the Government to tackle what was described as hooliganism associated with the game in the 1980s and 1990s knew that alcohol played a huge part in many of the events that shamed English football at that time. Your Lordships may have seen that there is currently a three-part series of programmes on Channel 4 on Monday evenings which centre on the Italia 90 World Cup. They remind us how dire the reputation of English fans at home and abroad then was.
We had hoped that this was all behind us, but quite obviously that is not so. That impression is reinforced if one studies the excellent independent report produced for the FA by the noble Baroness, Lady Casey of Blackstock, on the events surrounding the Euro final at Wembley on 11 July 2021, to which the Minister referred. This was the subject of a Private Notice Question I asked on 6 December—almost a year ago now—in which I said:
“She makes it clear in her report that we shall never know for sure how close we came to a huge disaster involving major loss of life, caused by 6,000 ticketless fans outside the stadium who were ready to storm inside had England won the penalty shootout.”—[Official Report, 6/12/21; col. 1641.]
Contained in the noble Baroness’s report were a number of comments about drug-taking. For example, page 26 says:
“Eyewitness accounts given to the media in the immediate aftermath of Euro Sunday state that there was use of drugs, in particular cocaine, among the crowd. These are supported by the Review’s survey, which suggests illegal-drug taking must have been widespread and taken place in plain sight. More than 3,500 respondents (47 per cent) said they saw illegal drug taking when they arrived at Wembley.”
As the noble Baroness pointed out, and the Minister has confirmed today,
“Football Banning Orders (FBOs) can be given to supporters in relation to alcohol misuse. Offences include ‘possession of alcohol or being drunk while entering/trying to enter a ground’. But there is no equivalent provision for drugs”—
so far. As the Casey report says on page 117,
“drug use in football stadiums is a growing concern for football and policing officials.”
She cites the finding of cocaine traces on almost all the toilet cisterns of a major football ground.
Unsurprisingly, the noble Baroness said in recommendation 5 that
“the Home Office should consider … ensuring that the FBO regime to ensure drugs-related disorderly behaviour is treated in the same way as alcohol-related disorder”.
This SI implements that recommendation, and therefore I welcome it. I hope that the Minister will be able to confirm that the Government are taking equally seriously the other recommendations contained in the noble Baroness’s outstanding report.
Lord Paddick (LD)
My Lords, I thank the Minister for introducing these regulations. It will be well known that Liberal Democrats feel that drug misuse should be treated as a health issue rather than a criminal issue, but we draw the line where drug misuse leads to disorder or anti-social behaviour. Clearly, in this situation, drug taking at football matches is fuelling the disorder.
Do not get me wrong: cocaine is an extremely dangerous drug, and in my own professional experience I have seen people—healthy young men—die very quickly of heart attack from having excess cocaine in their systems. But here, we are talking about reckless and aggressive behaviour, as the Minister said. I do not attend football matches and I do not take cocaine, so I have to take other people’s word for the impact that taking cocaine in those sorts of environments has in terms of causing reckless and aggressive behaviour. I am very grateful to the noble Lord, Lord Faulkner of Worcester, who has a wealth of experience of soccer issues, for his very helpful and informative speech about the record on this issue, particularly the report of the noble Baroness, Lady Casey.
I am not sure about traces of cocaine on toilet cisterns. I think there were similar findings in the House of Commons, so we have to be very careful in drawing conclusions as to whether that is an indication of the prevalence of drug-taking. However, it seems absolutely ridiculous that football supporters can be banned for alcohol-related disorder and not for disorder related to the taking or supplying of cocaine at football matches. We therefore wholeheartedly support the regulations.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I too thank the Minister for introducing this statutory instrument, which we support. I declare an interest as a sitting magistrate who has fairly regularly put in place football banning orders for various reasons. As the noble Lord said, this is about adding the possession or supply of class A drugs at football matches as a reason for giving a football banning order.
We welcome the work that the police have done with the football authorities to reduce violence and drug-fuelled behaviour at games, although I note the figures that the Minister and my noble friend Lord Faulkner gave about the deteriorating situation in recent years. As my noble friend said, it used to be so much worse back in the 1990s.
When was this matter first raised? Was it really as a result of the European final that it came starkly to the attention of Ministers, or were there concerns before that? Also, is there any evidence of similar concerns or problems with other major sports, such as cricket or rugby? Obviously we are talking about football banning orders, but how wide does this problem go?
Has there been any wider work done on why these problems seem to be worsening? Is it because of drug use, or are there other problems behind it? Is this being investigated by the Home Office? Is it that drugs are more generally available? There has been an increase in drug-related deaths in England and Wales in recent years, and we know that communities and children’s lives are being blighted by county lines gangs. What is being done to tackle the supply of drugs reaching fans and to ensure that police forces have the resources to support specialist drug enforcement teams and take action on recognising child criminal exploitation?
A football match should be a safe, accessible, enjoyable experience for fans of all ages, so what wider work is being done by the Home Office to encourage safe and positive environments for sports fans? We of course support the statutory instrument, but my questions go a bit wider, to other sports and to how this impacts on drug policy as a whole. I look forward to the Minister’s response.
Lord Sharpe of Epsom (Con)
My Lords, I am grateful to all noble Lords who have spoken and particularly note the widespread support for this measure, which is as it should be. I am sure we all agree that there is no place for class A drugs or the disorder they give rise to at football matches. This simple, practical measure to tighten the law will ensure that the football banning order regime properly encompasses those who commit drug offences related to football. I take particular note of the comments from the noble Lord, Lord Paddick, on the dangers of cocaine misuse.
I will try to address some of the specific points that your Lordships raised. The noble Lord, Lord Faulkner, quoted the statistics; I will go into a little more detail on those. Official statistics for the 2021-22 season show that there were 2,198 football-related arrests, which is a substantial increase—59%—on the last complete pre-Covid season. It is important to note that football-related arrests had previously been on a long-term down trend, reducing by some 50% since the 2010-11 season to record lows. Last season’s arrests total was comparable with the 2013-14 season. There were also 170 dedicated football officer-related incidents of supporter drug use during the 2021-22 season.
The noble Lord, Lord Faulkner, also referred to the Channel 4 documentary on Italia 90. I have not seen it—I am still mentally scarred by our loss to Germany, of course—but I will definitely watch it.
Lord Paddick (LD)
Before the Minister concludes, does he not agree that drug offences are fairly unique in that a drug crime is recorded only when police make an arrest? Therefore, the more effort the police put into the enforcement of offences involving possession or supply of drugs, the worse the problem appears in terms of the statistics. The emphasis should be on reducing the disorder that results from drug-taking rather than placing any reliance on the number of people arrested or convicted of drug offences at football grounds, because that could be the product of enhanced police enforcement rather than an increase in use.
Lord Sharpe of Epsom (Con)
The noble Lord is almost certainly right, although I cannot prove or disprove that either way. But as I said, a considerable and comprehensive report was written after the disturbances at Euro 2020 which highlighted these issues, so it would be logical to conclude that police upped their activity and I would imagine that that led to an increase. However, I cannot prove that, and if I am wrong, I will of course notify the noble Lord. In the short term, I commend the regulations to the Grand Committee.
Alcohol Licensing (Coronavirus) (Regulatory Easements) (Amendment) Regulations 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Grand Committee do consider the Alcohol Licensing (Coronavirus) (Regulatory Easements) (Amendment) Regulations 2022.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, this instrument, which was laid before Parliament on 22 September, contains measures to provide ongoing support to the hospitality sector, which endured an immensely difficult period during the pandemic and is now grappling with cost of living concerns. As your Lordships are aware, the Government recently announced the energy bill relief scheme, which will provide a discount on gas and electricity bills for business customers, including those in the hospitality sector. This follows a number of measures to support the hospitality industry and other businesses during the pandemic and since Covid restrictions eased.
During the pandemic, we provided a package of financial support to businesses, including the Coronavirus Job Retention Scheme, the Eat Out to Help Out scheme, and a business rates holiday for retail, hospitality and leisure businesses. We also introduced a number of regulatory easements through the Business and Planning Act 2020. Among those were temporary measures to make obtaining a pavement licence quicker and easier for those who wished to set up chairs and tables outdoors. Parliament has already agreed to extend those measures, and they will run until September next year.
A complementary measure on alcohol licensing gave a temporary off-sales permission to 38,000 licensed premises in England and Wales that did not have one. There were also measures which increased the number of temporary events notices that licence holders were allowed to give in a calendar year. Those provisions remain in place until December next year.
The instrument I propose today is relatively modest. It is an extension of provisions in the Business and Planning Act to allow sales of alcohol for consumption off the premises to licensed premises that did not have that permission for a further year, until 30 September 2023. In the intervening time there will be a consultation on long-term arrangements.
I assure the Committee that officials consulted the National Police Chiefs’ Council about the effects that the temporary off-sales permission has had. The view of the police then was that it had not caused any increase in crime and disorder.
I know that your Lordships will appreciate the impact that the pandemic and the cost of living have had on the hospitality industry, and I hope that you will support these measures to aid its recovery. I commend this instrument to the Committee. I beg to move.
Lord Paddick (LD)
I am very grateful to the Minister for introducing these regulations. I understand that many people were very concerned about going to on-licensed premises—going to the pub—because of their concerns about catching coronavirus. My personal experience of socialising in central London—very limited, because I am always here doing work—is that most restaurants and pubs seem to be very busy. I am not sure whether the Minister can tell the Committee whether that is universal or a phenomenon just in central London, but that is my experience.
My understanding of the previous regulations is that they were to try to compensate pubs that had only an on-licence for that lack of trade so that people who were anxious about catching Covid could instead get their alcohol to take away—they could take it home or even, when the weather was more clement than it has been for the last few days, drink it outside. The only thing I would ask is this. Why do the Government think that that particular Covid support, which is what these regulations are about, should continue? What evidence is there that people are still nervous about socialising in an enclosed space and that it is therefore necessary for on-licensed premises to be able to sell to people to take away?
If this provision is simply for other reasons—the noble Lord mentioned increased energy prices having an impact on on-licensed premises in particular, but there is also the cost of living crisis, with people feeling that they cannot socialise as much as they did in the past because of the pressure on household budgets—why not have an alternative measure? The noble Lord talked about consultation on more permanent measures, but, bearing in mind that the police say that there has been no adverse impact on giving on-licensed premises the ability to sell alcohol to take away, why has a permanent change not been brought forward, rather than what appears to be the rather spurious extension of coronavirus-specific regulations that we have before us?
I appreciate that civil servants, particularly in the Home Office, have been very busy with other things in recent months, and it may be that the easy route was simply to extend the coronavirus regulations, but we need to move on from the impact of the pandemic and the virus and be more honest. If we think that this is a good thing in the long term, we should have a permanent change in the law. I know the Minister said a consultation is being conducted on it. That would be more honest than extending coronavirus regulations that, by this time, should have come to an end.
Lord Ponsonby of Shulbrede (Lab)
One of my principal questions was going to be whether this is the easy route, as the noble Lord, Lord Paddick, put it, and whether there is a long-term review of the law. It may be appropriate to keep the changes in some cases and not in others, so I would be grateful if the Minister will respond to the points raised by the noble Lord, Lord Paddick.
We support this change. We have been told that, as far as the NPCC is concerned, there has been no increase in anti-social behaviour as a result of these measures. Did the consultation go beyond the NPCC? Were local police forces consulted? Are there variations in different parts of the country?
I too have experience of occasionally going to social events in central London, and it is true that the bars and restaurants seem to be extremely busy. However, in other parts of the country or other parts of London, many restaurants and pubs are shut because of the impact of the pandemic, as well as changing habits. How much variation across the country have the Government seen? Is this blanket approach appropriate and how should it be looked at over the longer term? Does the Minister have any updated information on the impact of Covid on the hospitality sector and its recovery? One reads extensively of the hospitality sector still struggling because, in spite of our experiences in central London, the numbers are not back to where they were, and this is proving a problem.
Have any local authorities raised any concerns about extending these changes? Are there any extra costs or burdens on local authorities? Finally, were any local communities consulted? Did they have views on the extension of these licences?
The central question is that asked by the noble Lord, Lord Paddick, about how this temporary change, which we approve of, fits into a wider review of provisions that were brought in during the pandemic, some of which may continue while others do not.
Lord Sharpe of Epsom (Con)
My Lords, I am grateful to the noble Lords who contributed. I am thankful for their general support for this measure and their recognition that we should be looking to support our hospitality industry, which has suffered a tumultuous few years and continues to feel the after-effects of the pandemic; I will come on to that in a second.
The noble Lord, Lord Paddick, questioned the fact that this a temporary measure and asked why it is not being made permanent, since it extends the off-sales provision only until next September. Let me go into some detail regarding what has happened since the pandemic.
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bellamy
That the Grand Committee do consider the Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2022.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
My Lords, I beg to move that the Committee do consider this statutory instrument to amend the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975. The effect would be to enable any current or potential sponsor on the Homes for Ukraine scheme in England and Wales to be eligible for the highest level of criminal record check undertaken by the Disclosure and Barring Service. This is known as an “enhanced criminal record certificate with barred list” check and would be carried out by local authorities responsible for approving sponsors. As your Lordships know, such a high-level check reveals any criminal convictions that would otherwise be spent under the 1974 Act and any barring order preventing the person concerned working with children or vulnerable persons.
Your Lordships will be aware that Homes for Ukraine is a sponsorship scheme in which individuals in the UK offer up their homes to Ukrainians fleeing the war. Since its launch in March, more than 100,000 Ukrainians have arrived in the UK as part of the scheme. I pay tribute to the families and individuals who have offered up their homes to those fleeing the war. However, it is right that we make sure that adequate safeguards are in place to ensure the safety of those arriving from Ukraine. Without this amendment, certain enhanced DBS checks would not be possible.
In practical terms, two scenarios are particularly relevant to the proposed amendment. The first is a process called domestic rematching, where the original match arranged by the sponsor and beneficiary breaks down, is deemed unsuitable or expires. When this happens, the local authority may rematch the beneficiary with a new sponsor. In these circumstances, the guests can find an alternative host who would be willing to take them in that further rematch, arranging it either themselves or through the council or a third party.
When arranging the original match when the refugee first arrived, the original sponsor would have gone through the equivalent of an enhanced DBS check as part of the visa process. But if there is a change of sponsor after the visa has been granted, when the refugee is already here, under the existing law all the local authority can do is carry out a basic DBS check on the new sponsor. That basic check would not reveal any spent convictions or any barring order. Given the vulnerability of many of these refugees, the Government consider that a power to carry out an enhanced DBS check is appropriate for all sponsors, particularly to deal with the rematch situation.
The second situation the Government have identified where higher-level DBS checks are necessary is for unaccompanied children who are not travelling with, or to join, a legal parent or guardian in the UK. In July the Government expanded the Homes for Ukraine scheme to enable children to come to the UK without a parent or legal guardian to stay with a sponsor who, except in exceptional circumstances, should be personally known to the parent or legal guardian. Under current regulations, the higher-level DBS checks can be carried out on most Homes for Ukraine sponsors for these children. However, at present only the basic DBS check can be carried out on the sponsor or members of the sponsor’s household if they have a family relationship with the child.
However, the concept of a family relationship is somewhat vague and sometimes these family ties can be quite loose. For example, a parent in Ukraine may be entrusting a child to an extended family member with whom they do not have any close or recent relationship. An aunt may have a partner in the house who is completely unknown to the parent or guardian in Ukraine. In the Government’s view, the vulnerability of these children, unaccompanied by their parents or a guardian, means that enhanced checks on all adults in the sponsor household, whether related to the child or not, are a sensible precaution.
I emphasise that this is a power to carry out the checks. A spent conviction revealed through an enhanced check will not necessarily prevent an individual becoming a sponsor, but it will give the local authority access to a fuller range of information, strengthen safeguarding arrangements and be a proportional response to the unique circumstances of the scheme.
On a more technical level, changes are necessary to two legislative regimes to bring about these enhancements. The first is the one we are considering today, this amendment to the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975. The other is an amendment to the Police Act 1997 (Criminal Records) Regulations 2002 and 2009 to enable access to the records held by the police. The relevant changes to the Police Act requirements have already been made by a statutory instrument laid by negative resolution by the Home Office, which came into force on 13 October last. The order before your Lordships today requires an affirmative resolution of both Houses and was approved by the other place last Wednesday, 26 October. Similar changes were made in Northern Ireland on 3 October, and the Scottish Government have also amended their legislation. Your Lordships’ approval is, as it were, the last piece of the jigsaw.
Lord Dholakia (LD)
My Lords, I thank the Minister for explaining why this provision is necessary. This SI amends the Rehabilitation of Offenders Act 1974 to enable current or potential sponsors under the Homes for Ukraine scheme to undergo a full criminal background check undertaken by the DBS. In essence, the changes are designed to give local authorities more flexibility to undertake the highest level of DBS checks on sponsors who are related to children under 18 or to relations who require additional support due to age, disability or illness.
As someone who was responsible for promoting a Private Member’s Bill on the Rehabilitation of Offenders Act 1974, I see no reason why this legislation should not be supported. Any legislation to ensure that an applicant who is prepared to can host a refugee is welcome. Currently, the host can undergo an enhanced DBS check when they have an unrelated person under the age of 18 or in rare circumstances when the sponsor is providing additional support to a non-family guest who may have additional needs. If the host houses a related person under 18 or a related person with additional needs, they can currently undergo only a regular DBS check.
Enhanced DBS checks are higher than basic checks and should incur an increased cost for local authorities. At present they bear a heavy cost for looking after refugees and asylum seekers. What provision is available to assist local authorities if the present method of payment is not sufficient? The SI should theoretically grant flexibility for local authorities to process applications for sponsors who live in complicated circumstances where it is not immediately clear which DBS test they should be eligible for. Are there systems to ensure that DBS checks are available for refugees and asylum seekers when accommodation to house them is provided by local authorities? Of course, we have serious concerns about children who cannot be traced and who end up being exploited by those who use them for trafficking.
This SI provision applies in England and Wales only. The Minister mentioned discussions with the Scottish authorities on this provision. Have the Government consulted the Scottish authorities about how they deal with such issues? Finally, can we be assured that such checks are carried out on refugees in hotels and detention centres at present?
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the Minister for introducing this statutory instrument, and of course we support it. The noble Lord, Lord Dholakia, very effectively set out the background to this. I will just set the scene and then ask a few questions of the Minister. First, I personally know a number of friends and colleagues who have welcomed Ukrainians into their homes. I am sure others in the Room have the same experience and, from what I have been told, it has been a positive experience for all concerned. However, there have been problems and we need to be realistic about them.
Lord Bellamy (Con)
My Lords, I thank noble Lords for their support for this amendment. In response to the noble Lord, Lord Dholakia, on his question about the cost of a DBS check, my information is that a basic check costs £18 and an enhanced check costs £38. The Government’s view is that that can be absorbed within the resources already made available to local authorities.
The points the noble Lord made on the comprehensiveness of the systems available to make sure that children are safe, do not disappear and can be traced are primarily for the Home Office. I venture to say that the Government have them well in mind and will do our very best to ensure that the points rightfully made by the noble Lord are fully taken into account in the administration of the Homes for Ukraine scheme. I thank the noble Lord for his comments.
The noble Lord, Lord Ponsonby, asked various questions. On his first point about spent convictions, there is of course always a tension as to where you draw the line between the rehabilitation of the offender and the protection of the vulnerable. When I said that this was a power, I meant to convey that, having carried out these checks, the local authority does not have to refuse the sponsor. It could say, “This was 15 years ago, it wasn’t very serious and he’s been a perfectly good citizen ever since, so we’re not going to take that into account”. This simply gives them the opportunity to have the information; that is the essential point.
On the various loopholes and questions, again, they are primarily for the Home Office, so I will make my response subject to further guidance from the Home Office and correct it if I get it wrong. My understanding is that hosts are expected to inform the local council when the refugees arrive and leave so that there is full information constantly available. Whether that always happens may be another question but, as far I know, the obligation is there; I will correct my statement if it turns out to be incomplete or wrong.
As far as the multi-occupancy of a house is concerned—this was another perfectly legitimate question—I am not in a position to answer on that, but I take it that the local authority should carry out these checks on an appropriately wide basis. If it is the case that the refugee or child in question is in the relevant household, everyone in that household must be checked. What the household is and who is in it is no doubt a question of fact to be addressed, but the Government certainly support the suggestion from the noble Lord that a check should be carried out on as wide a basis as is necessary to ensure the safeguarding of the refugees in question.
I hope that I have addressed at least the main questions that have been raised. I thank your Lordships for their support.
Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 3) Order 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 3) Order 2022.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I beg to move that the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (No.3) Order 2022, which was laid before the House on 7 September 2022, be approved.
The UK Emissions Trading Scheme—the ETS—was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme to encourage cost-effective emissions reductions, contributing to the UK’s emissions reduction targets and our net-zero goal. This scheme replaced the UK’s participation in the EU Emissions Trading Scheme—the EU ETS—and the 2020 order applied existing rules on the monitoring, reporting and verification of emissions with modifications to ensure that they work for the UK ETS.
The 2020 order was subsequently amended by several statutory instruments in 2020, 2021, and 2022 to set up the scheme. These included provisions for the free allocation of allowances and the UK ETS registry, as well as a series of technical and operational amendments to improve the running of the scheme. Regulations under the Finance Act 2020 established rules for auctioning allowances and mechanisms to support market stability.
The purpose of this order is to amend the 2020 order to enable the inclusion of flights from Great Britain to Switzerland within the scope of the UK ETS. The existing UK ETS currently covers domestic flights, flights from the UK to the European Economic Area, and flights between the UK and Gibraltar. Since our departure from the European Union, flights between the UK and Switzerland are not covered in either the UK ETS or the Swiss Emissions Trading System, creating a gap in ETS coverage.
The Government consulted on the policy in this draft instrument between May and July 2019 as part of a consultation on the future of UK carbon pricing. In the 2020 government response to that consultation, we committed to include UK to Switzerland flights within the scope of the UK ETS if an agreement could be reached with Switzerland. I am happy to say that we have now agreed with Switzerland to cover these flights, and Switzerland has amended its relevant domestic legislation to ensure that flights from Switzerland to the UK are included in the Swiss ETS from 2023.
This instrument amends the 2020 order to include flights from Great Britain to Switzerland in the definition of “aviation activity” and to bring them within the scope of the UK ETS for the start of the 2023 scheme year. In 2019, UK to Switzerland flights amounted to approximately a quarter of a megatonne of CO2, which is less than 0.2% of the UK ETS cap for the 2023 scheme year.
Noble Lords should note that the policy intent is to include flights from across the UK to Switzerland within the scope of the UK ETS. However, as the Northern Ireland Assembly was not able to consider affirmative legislation at the time when the instrument began the legislative process, this legislation brings only GB to Switzerland flights into the scope of the UK ETS. Once the Northern Ireland Assembly is functioning, equivalent legislation will be proposed to the Assembly as soon as possible to ensure that all flights between the UK and Switzerland are then covered. This order will enable the inclusion of flights from Great Britain to Switzerland within the scope of the UK ETS.
In conclusion, this SI will close a gap in coverage in the UK ETS, fulfilling the commitment set out in the government response to the future of UK carbon pricing consultation and upholding our agreement with Switzerland. On that basis, I therefore commend this order to the Committee.
Lord Teverson (LD)
My Lords, I very much thank the noble Lord for that explanation. It is good to see the usual BEIS team opposite.
I went to Switzerland on holiday this summer. I was very lucky to do so. We went by train.
Lord Teverson (LD)
Yes.
We avoided airfares and carbon emissions from aeroplane travel. I bring this up because one of the issues is that the cost of travelling by train all the way through from Cornwall where I live and back again was significantly more expensive—I would say up to three times more—than travelling by air. This is a real issue in terms of climate change emissions and the whole way we manage this area.
At the heart of that to some degree is the tradition that comes from the EU ETS, which is a free issue of permits. I am sure that the Minister will be able to tell me what it is, but I think that the price per tonne of carbon in the UK ETS is around £60—I am not sure, but it is a significant amount of money anyway. I am interested to understand how much money or valuable assets we are offering as a public authority to the airline industry in terms of the number of permits times their value. I would be very interested to understand that. The airlines are able to sell on these permits, and quite rightly, because it is a marketplace. That is how we incentivise the industry, and other industries, to make their carbon emissions much more efficient.
Baroness Blake of Leeds (Lab)
My Lords, I, too, thank the Minister for his full explanation of the SI before us today. I have a feeling that we will have many opportunities in future to discuss the success and progress of emissions trading schemes in general, and I am fairly certain that there will be a focus on this at COP 27 next week. I look forward with interest to seeing progress generally.
Obviously, the situation with Switzerland had to be resolved. I am pleased that this instrument has come before us today. I thank the Minister for his explanation about Northern Ireland and the impact of the impasse in the Assembly, including what effect that is having in this area. I have a couple of questions. What assessment has been made of the impact of flights to Switzerland not being included in the UK ETS during the period between leaving the EU and the start of next year, when this instrument comes into force? Is there any way that this could have been avoided? Hindsight is a wonderful thing, of course.
The impact on the public sector will be mainly in the form of additional revenues from the auctioning of land for these flights. Have the Government made an estimate of the value of that? Generally, are there any other, similar gaps that the Government are looking to close? Are they looking to develop the ETS by extending elsewhere in a similar manner? Obviously, this is a complex area for operators working in this space. Do the Government think that aircraft providers will need any additional guidance to make changes as a result of this instrument? If so, what steps are the Government taking to provide this?
In spite of those questions, I am pleased to see this measure in front of us today; I look forward to seeing it move forwards.
Lord Callanan (Con)
I thank noble Lords for their contributions. I am particularly grateful to the noble Lord, Lord Teverson, for sharing his holiday experiences with us all. I expect he will bring his photograph album next time. I was going to say that it would show him lying on the beach but, of course, there are no beaches in Switzerland; perhaps he will be lying on the lakeside in Switzerland. I am grateful to both noble Lords for their support for these proposals and their questions.
This Order in Council, as it will be, will enable the inclusion of flights from Great Britain to Switzerland within the definition of aviation activity and bring them within the scope of the UK ETS for the start of the 2022-23 scheme year. As I said, we will seek to include flights from Northern Ireland as soon as the Northern Ireland Assembly is functioning.
In response to the noble Baroness, Lady Blake, although UK-Switzerland flights amount to approximately a quarter of a megaton of CO2, which is less than 0.2% of the UK ETS cap for the 2023 scheme year, this legislation will enable us to uphold our agreements with Switzerland and the UK Government’s commitment to the 2020 government response. Clearly the proposals will ] not have a significant impact on the costs of participating in the UK ETS for the vast majority of participants, although aircraft operators running flights between Switzerland and Great Britain will of course see a slight increase in their obligations as a result of the expanded scope.
As the noble Lord, Lord Teverson, correctly stated, to reduce the risk of carbon leakage, a proportion of UK ETS allowances are allocated to aircraft operators for free, which they can use towards their scheme obligations, and flights from Great Britain to Switzerland will be able to apply for a free allocation entitlement. In the Government’s response to the Future of UK Carbon Pricing consultation, we committed to reviewing the UK’s approach to free allocations to ensure that carbon leakage is appropriately mitigated. It supports the UK’s high climate objectives and preserves the incentive to decarbonise, which is what we want. The commissioned economic research on aviation carbon pricing found minimal risks of carbon leakage for the aviation sector under the current scope of the UK ETS, and the consultation proposed three potential phase-out trajectories of aviation-free allocation. The consultation also explored potential updates to the UK ETS free allocation methodology, including benchmarking and updating activity data and how we account for new operators.
Furthermore, as set out in the energy White Paper, the UK net-zero review and, most recently, the Developing the UK’s Emissions Trading Scheme consultation, which was published in March this year, the Government remain open to the possibility of linking the UK ETS internationally. Under the terms of the TCA, the UK and the EU agreed to co-operate on carbon pricing, including through giving consideration to linking our respective carbon-pricing schemes.
The noble Baroness, Lady Blake, asked what assessment has been made on flights to Switzerland not being included since leaving the EU and the instrument coming into force, and whether or not that could have been avoided. When establishing the UK ETS, our priority was to ensure, as far as possible, continuity of coverage. That included an agreement with the EU to cover flights between the UK and the EEA in the UK ETS and the EU ETS. The EU-UK Trade and Cooperation Agreement provided for coverage of the EU ETS for flights from the EEA into the UK and set a precedent for including departing flights without, at the time, a full linking agreement. We will follow this precedent for flights between the UK and Switzerland. Flights from the UK to Switzerland will indeed represent a very small proportion of the total flights and emissions within the UK ETS.
In addition, the noble Baroness, Lady Blake, asked whether the Government think that the aircraft provider will need additional guidance and what steps we are taking. In total, UK ETS auction revenue in 2021 added up to £4.3 billion. We estimate that the UK ETS will raise over £6 billion in 2022 if prices remain at or around the current level, which is an average of £80 a tonne for the first six months of 2022. Once the legislation is laid, the Environment Agency will get in touch with aircraft operators to clarify exactly what their new obligations are.
I think I have dealt with the questions noble Lords asked. I therefore commend this draft order to the Committee.
Inter-American Investment Corporation (Immunities and Privileges) Order 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Goldsmith of Richmond Park
That the Grand Committee do consider the Inter-American Investment Corporation (Immunities and Privileges) Order 2022.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con)
This instrument, which is subject to the affirmative procedure, was laid before Parliament in draft on 11 October 2022. It will be made once it is approved by both Houses. It confers immunities and privileges on the private sector lending arm of the Inter-American Development Bank Group, the Inter-American Investment Corporation. This arm of the bank is known commercially as “IDB Invest” and I shall refer to it in that way hereon.
The Inter-American Development Bank Group works to promote greater security and stability within Latin America and the Caribbean. The bank is a key partner as we work towards our objectives in the region, which include promoting democracy and economic growth, preventing organised crime and taking action on climate change. We are also working to deepen trade and investment relationships, and to prevent and prepare for the next pandemic.
The Inter-American Development Bank Group is an international financial institution, headquartered in Washington DC. It is the largest source of development finance for Latin America and the Caribbean. It provided $22.9 billion in 2021. It shares similar policy objectives with other international financial institutions, such as the World Bank Group, to accelerate economic and social development. The UK has been a member of the bank since it was established in 1959 and we have used our shareholding to help shape it. This includes securing a commitment from the bank, ahead of COP 26, to align its portfolio with the Paris Agreement by 2023 and to increase the volume of finance that it provides for climate change.
The bank plays a critical role in providing loan finance to Governments across the region to support development projects, including in infrastructure, health and education. However, private sector investment across the Latin America and Caribbean region is also critical to driving growth, creating jobs and tackling climate change. To strengthen the group’s focus on investing in the private sector, it agreed with its shareholders in 2015 to merge out its private sector operations to form IDB Invest. This is now a separate legal entity within the group, with its own board and shareholding structures.
Today, IDB Invest provides around $6 billion of finance per year to businesses, with a focus on small and medium-sized enterprises. The UK voted in favour of the merge-out and agreed to transfer $7 million of UK capital from the bank to IDB Invest. In 2018, the IDB Invest treaty was presented to the UK Parliament. The final stage of the process to join IDB Invest is to ratify this treaty.
As we join an international organisation, we are required under international law to grant it the necessary immunities and privileges. The International Organisations Act 1968 allows His Majesty to do this by Order in Council. It is long-standing UK policy to grant immunities and privileges only where they are needed, and I can assure Members that the immunities and privileges afforded to persons connected with IDB Invest are strictly limited to those required for them to conduct their official activities. They are not for their personal benefit. They are also in line with those offered to officials of other international financial institutions of which the UK is a member. They include immunity from suit and legal process for staff in respect of their official acts, and tax exemption. Members should note that the income tax exemption does not apply to British citizens.
Lord Bruce of Bennachie (LD)
I thank the Minister for that introduction. We appreciate that the consolidation of the bank’s arrangements has led to this situation; that is perfectly understandable.
I will raise just one or two questions. The Minister said the bank aligns with UK aid, but on previous multilateral assessments the bank has not performed as well as other international institutions and international banks in a number of areas, particularly on inequality and gender issues. It has improved on climate change, which the Minister will be particularly pleased about, but can he indicate the extent to which the bank aligns and the extent to which the UK can influence it? We have a UK director—I assume we still have—and it would be interesting to know what his or her brief is and what they are looking for, given that we are a very small shareholder in the bank. The UK and the bank worked together on the green bond initiative. I wonder how that has developed and whether it could develop further.
With the bank operating here, is there a particular objective to being in the UK? Its interests clearly are not here. Is it about raising money? Is it about partnerships? It would be helpful to have some idea of the bank’s interests in being in the UK.
This is a small point, but I see that the Scottish law is different. Just for clarification, given that the Scottish Government have been consulted and have agreed, is there any significance to this? Will the passing of instrument and the relevant legislation in the Scottish Parliament ensure, from the bank’s point of view, that the UK operates as a homogeneous whole and that there are no differences? An international bank such as that might have some trouble if there were internal differences.
We have just had an election in Brazil, which has been welcomed by many people, particularly on climate issues. Again, I am sure the Minister will be very supportive of that. I suppose the question is: is there an opportunity for the bank to refocus and reprioritise? To the extent to which there is, does the UK have some capacity to shape that so that it matches UK aid objectives?
As an aside, UK aid objectives are somewhat confused and reduced at the moment, but I very much welcome the reappointment of Andrew Mitchell as the Development Minister attending Cabinet, because I know from his past record that he will certainly want to ensure that UK development aid gets back to where it has been, not just in financial terms but in quality and impact.
The Inter-American Development Bank is not the most important vehicle for UK aid and development but, given that we are part of it, it is important that it aligns and that we use whatever influence we have to help shape it. I will be grateful if the Minister is able to give us any flavour of that.
Lord Collins of Highbury (Lab)
My Lords, I thank the noble Lord for those questions. I shall not repeat them, although I was going to cover some of the issues myself. One thing that struck me, which the Minister mentioned, was that, when we presented the treaty in 2018 to join the bank, the associated impact assessment stated that secondary legislation would be required to grant immunities and privileges. I am not at all surprised that we have this SI, but I am slightly interested to know why it is happening four years later. Just to pick up the point, it would be good to better understand what prompted it to come now.
The Minister mentioned that there was no physical presence of the bank in London, but is there going to be? If there is going to be, what are the reasons for that? Is it something that we can positively influence and shape? We heard from the noble Lord about how we might be able to have influence, even as a minor shareholder. He is absolutely right to draw attention to the election in Brazil and the fact that there will be a greater opportunity to push the green agenda. Given that the Amazon is the lungs of the world, it is even more important that we focus on that.
I have just a couple of technical points. When SIs of this nature have come up before, particularly as part of privileges, I have asked the specific question about road traffic offences and immunities and whether they are part of those privileges. I hope that the Minister can reassure us on that. On the question of physical presence, if he is expecting there to be one, is there any anticipation about the number of officials who are non-UK citizens who might be here?
In conclusion, I agree with the comments that have been made. This is positive news; we welcome this, and we certainly welcomed the treaty and our engagement with the bank in 2018. In its original presence, it has been around since 1984, and the more we can influence it, the better. Such investment has an important role to play in development and reaching the UN’s 2030 agenda on sustainable development goals. We certainly welcome these regulations, which should allow the corporation to contribute to that.
Lord Goldsmith of Richmond Park (Con)
I am grateful to noble Lords for their contributions and questions, and I shall do my best to answer them. I welcome the support for our membership of IDB Invest.
I turn to the questions from the noble Lords, Lord Bruce and Lord Collins, who both mentioned the scope for further alignment of international objectives between the UK and IDB Invest. We are very much moving in the same direction already; the IDB played a very important role in the run-up to and at COP 26. Noble Lords will remember that, as part of our forest package, we secured commitments from what are now 145 countries, representing 91% of the world’s forests, to end deforestation and reverse it by the end of this decade. We secured $20 billion in finance from Governments and philanthropists to help them to do that, and, as part of it, we got the multilateral development banks, including the World Bank, to commit to aligning their portfolios not just with Paris but with those broader deforestation goals as well. We would not have been able to do that had it not been for the intervention of key figures in the IDB. I am personally very grateful to them for the support that they provided during COP and in the run-up to it.
Obviously, climate change continues to be a top international priority for us and is a key priority for the IDB. In the context of that region, the obvious contribution that can be made to the challenge of tackling climate change is protecting the lungs of the earth, as the noble Lord, Lord Collins, said. There is no solution to climate change that does not involve nature and protecting and restoring degraded forests. From the perspective of the IDB, the Amazon is absolutely central. This remains a priority for us. At COP, we committed £200 million of UK ODA to support efforts to protect the Amazon, and we are working in many other ways to amplify that support; it is not just financial.
Both noble Lords mentioned the election in Brazil. From the point of view of the environment, climate change and the protection of the Amazon, the result was wildly good news. The previous Government had a hostile attitude to environmental protection and, in particular, the indigenous people who live in the forest. President-elect Lula takes a completely different approach. He has been bullish and ambitious in the statements he has made about his plans to protect the Amazon. We will of course do absolutely everything we can to support him in those endeavours.
I should also say that he has a record: under his previous two terms, deforestation in the Brazilian Amazon came down very markedly, and it went up very sharply under the last Government. So we know that it can be done, and we stand ready to support our friends in Brazil in whatever way we possibly can, alongside other donor countries, with which I have had many conversations in the past few days about how we might work together to support the new Government in that objective. I thank noble Lords for raising this issue.
The noble Lord, Lord Bruce, talked about other areas of the IDB’s performance. IDB Invest certainly has space to improve but it is found to be good for transparency, and it is rated as one of the highest-performing organisations in that regard. As one of its priorities, the UK will use its membership of the IDB to invest in and push for higher levels of transparency still, greater learning across the bank and the sharing of best practice. This very much remains on the agenda for us but we are happy with our relationship with the multilaterals. There are numerous big multilaterals, and not all of them are as easy to deal with as the IDB on the issues I have just talked about.
Both noble Lords asked about the likely presence of the IDB in the UK. It does not have a staffed office at the moment; the only people who are expected to be granted immunities and privileges, therefore, are staff members who travel to the UK on official business—for example, to meet UK Ministers or businesses. We anticipate that fewer than 10 IDB Invest staff will travel to the UK per year on official duties.
With respect to the important point made by the noble Lord, Lord Collins, about road traffic accidents, it is hard to discuss this issue without making reference to the tragic case of Harry Dunn. Before moving on, I should say—I know that everyone in the Room will echo this—that my deepest sympathies very much remain with his family; I pay tribute to their resolve. We are pleased that criminal proceedings are now taking place in that case. It is a long-standing government policy to seek a carve-out of immunities relating to road traffic accidents when granting privileges and immunities. However, the possibility of such a carve-out was not included in the establishment charter for the IDB in 1959, so it was not passed through to the IDB Invest treaty. Instead, the FCDO has negotiated a bilateral memorandum of understanding with IDB Invest to mitigate this risk. The MoU states that IDB Invest staff members are not permitted to drive a vehicle on official business in the UK.
The noble Lord, Lord Collins, asked why it has taken so long to ratify the UK’s membership. The delay in laying the required legislation was the result of two factors: first, the higher priority given to legislation to facilitate our exit from the EU; and, secondly, the time taken to negotiate an MoU with the bank to clarify that IDB Invest staff members are not permitted to drive a vehicle on official business in the UK.
It is good news that we are now here. In taking up our membership of IDB Invest, we will undoubtedly be better placed to influence the investment that it makes to support private sector development. This will allow us to support the UK’s goals of promoting development and reducing poverty in a region of enormous strategic importance. Once again, I thank noble Lords for their contributions and commend the instrument to the Committee.
Adult Social Care Information (Enforcement) Regulations 2022
(1 year, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Davies of Gower
That the Grand Committee do consider the Adult Social Care Information (Enforcement) Regulations 2022.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee
Lord Davies of Gower (Con)
My Lords, the draft regulations laid before the House on 5 September allow the Secretary of State to impose a financial penalty on private adult social care providers that fail to submit information required under Section 277A of the Health and Social Care Act 2012 or provide false or misleading information.
This statutory instrument will make sure that the Government receive a regular, standardised and accurate set of data from providers of social care to give us an up-to-date understanding of how the care system is functioning, what problems are emerging and where those problems are. This in turn means that the Government can support providers and the social care system as a whole to serve the care needs of the population, offering people choice, control and support to live independently.
At the start of the pandemic, it became clear that, here at the centre, we were lacking up-to-date information about the functioning of the social care system, as we had no comprehensive national source of data from providers. For instance, we did not know how many people were receiving care, where they were receiving it or where capacity was in the system, and we lacked provider-specific information about the workforce.
The Government relied on data mainly captured through aggregate annual returns from local authorities and periodic returns from the Association of Directors of Adult Social Services, supplemented by state of care briefings from the Care Quality Commission and from Skills for Care on the workforce. By the time we received this sort of information it was of little use to respond to on-the-ground situations.
As an interim response during the pandemic, the Department of Health and Social Care expanded the use of the capacity tracker tool, which at the time was used by providers primarily to share information about their bed vacancy, so that we could collect the information we desperately needed to give us a picture of the front line of social care. This gave us near real-time data to manage risks and issues that were presented on the front line, but, until the Health and Care Act 2022, it was difficult to require providers to do so.
Since the pandemic, most providers have continued to complete the capacity tracker, and it has continued to be a valuable source of data. However, with the ending of the infection control funds, we have seen completion rates decline. Therefore, we have taken steps to put provider data collection on a sustainable, long-term footing through new powers inserted into the Health and Social Care Act 2012 by the Health and Care Act 2022.
The Secretary of State for Health and Social Care now requires registered adult social care providers to submit data via the capacity tracker tool. This includes data on bed vacancies, service users, workforce resourcing, vaccination status and visiting data. We recognise that data collection can be onerous for care providers and, in making this data collection mandatory, we reduced the frequency of data collections from weekly to monthly. We have also removed data fields where the information was no longer critical.
Our intention is to share appropriately collected data with organisations across the adult social care sector that need it to guide delivery, policy development and research. The information submitted will be subject to the UK general data protection regulation.
Through the 2022 Act, we can now require the information from providers. This is already in place. It is important to note that what we are debating today is the legislation to enforce that requirement. Enforcement is through financial penalties, which have been developed to make sure that the mandation of the data is effective but also done in a way that is proportionate. The draft regulations therefore cover the amount of the penalty, the service of notices, the right to make representations and the right to appeal to the tribunal. The regulations set out that the level of the penalty will be the same as a provider’s Care Quality Commission registration fee, which is scaled to provider type and size.
It is our intention that these enforcement powers are used as a last resort. A notice of intent will be given before imposing a penalty, and the provider will have the right to make representations as to why it should not be imposed. Thereafter, a final decision will be taken and, if it is decided to impose a penalty, a final notice will be given. The provider will then be able to appeal to the First-tier Tribunal—the UK courts—if it disagrees with that decision. There is also provision in the regulations for notices to be withdrawn, for the recovery of financial penalties in the county court and for a duty to review the regulations every five years.
We need these draft regulations because we need to be able to enforce the information duties created by the Health and Care Act 2022. In particular, the Act inserted new Section 277A into the Health and Social Care Act 2012 to enable the Secretary of State to require information from regulated providers of adult social care services about themselves, their activities and the persons to whom they have provided care. New Section 277E provides for regulations to be made to enforce that duty to provide information through the imposition of financial penalties. We hope, and very much expect, compliance to be the norm so that financial penalties are not required. However, a deterrent is important, and these regulations provide powers to impose financial penalties if needed.
The Government’s priority is to support providers to share their data wherever possible. The data required will be proportionate, and providers will normally be given three months’ notice of any changes to the data requested unless there are any particular extenuating circumstances. Financial penalties will normally be a last resort, for example where a provider continues to be, or is persistently, in breach of its data obligations despite multiple offers of support from our delivery partners.
So what have the Government done so far? In our data strategy, we set out our vision for how data will be used to improve the health and care of the population in a safe, trusted and transparent way. Ultimately, we want a health and care system that is underpinned by high-quality, readily available data that is collected once and shared appropriately with those in the sector who need it. This is critical to the running of our health and care services and will help to improve adult social care commissioning practice, improve outcomes for people receiving care and provide greater oversight of the sector.
I beg to move.
Baroness Tyler of Enfield (LD)
My Lords, I thank the Minister for setting out the policy intention behind these regulations; for reminding us of the very real problems that were experienced during the pandemic due to the lack of data in the field of social care; and for explaining how these regulations would operate in practice. I simply want to make a couple of general points then ask a couple of quick questions.
I am certainly in favour of better data collection in this area. In broad terms, I certainly support these regulations. It seems to me that, if we are to tackle the current crisis in social care, we need a far better picture and understanding of the sector at all levels—that is, what is happening locally, regionally and nationally. Unless we have that information in a more standardised form that people can use, it is very difficult indeed for those in the sector who need to plan and provide the higher-quality care that we all want to see. The availability of this data is absolutely crucial to both those who commission and deliver social care and those who are responsible for ensuring good outcomes for those individuals who use it.
For too long now, there has been too little information. It has been difficult to share it across the sector and it has not been standardised, which has not helped. These regulations are an opportunity to address these problems and move the dial forward, as well as improving transparency and accountability in a sector that has often felt quite opaque to many people. With this opportunity, I hope that a greater joined-upness—if I may use that term—in data collection and availability will be at the forefront of the minds of the people putting these regulations into practice. As the Minister acknowledged, the more we can have an “ask once” dataset, the better to achieve the objectives I have just set out.
I have two questions. It has always been important to us on these Benches that data collection is in keeping with the Data Protection Act 2018 and the UK GDPR. The regulations say that it will be, so that is good and proper and as it should be. But can the Minister give a specific confirmation that this will always remain the case and will not be something that a future Secretary of State might try to come back and change? If that were the case, we would not be able to continue our support of these regulations.
Finally, I was pleased to see that the fining of providers would be a last resort and proportionate, particularly to their size. Again, I query whether it would be possible for a future Secretary of State to change that without coming back to Parliament. I would worry if that were the case because, frankly, small social care providers do not have the reporting structures and the administrative support of the NHS. There needs to be some real understanding of their situation in the way that these regulations are taken forward.
Baroness Wheeler (Lab)
My Lords, I thank the Minister for introducing the SI, which sets out the process of fines, including notice periods and the right of appeal, for adult social care providers that fail to provide any or accurate information to the Health Secretary without reasonable excuse. It is important for adult social care providers to be required to supply the Department of Health and Social Care with key data and information. The use and further development of the capacity tracker, which was the only tool available to get the vital data needed during the pandemic, is a welcome step forward.
It is indeed truly striking, as the noble Baroness, Lady Tyler, said, that prior to the pandemic there was no comprehensive national data from providers on workforce status, bed availability or the number of people in receipt of care. Regularised, standardised and accurate data is vital in order to get an up-to-date understanding of how the care system is functioning. The noble Baroness, Lady Tyler, made that point very forcefully. It is very worrying that since the infection control fund ended, data completion and submission rates from care homes have declined. How are care homes to be supported in the work involved, in light of their current desperate shortage of staffing and funds?
We recognise the need to put information submission from care homes on a statutory footing and acknowledge that the SI is largely uncontroversial. It flows from amendments to the Health and Social Care Act 2012 made by the Health and Care Act 2022, as has been stated, on more extensive and accurate data provision and transparency in the sector, which we all argued for and supported at the time. Has the Minister made any assessment of how much money will be paid in fines each year? Will smaller providers definitely be able to digest government guidelines and keep up with monthly data collection? Can the Minister be sure that no care homes will be forced to shut or scale back their services due to these regulations? The reassurances that providers that do not submit data will be helped and supported and that fines will be the last resort are also welcome, as the noble Baroness, Lady Tyler, said.
Lord Davies of Gower (Con)
I am grateful to the noble Baronesses for their contributions this afternoon.
The noble Baroness, Lady Tyler, and I were on the Public Services Committee during Covid, and one thing we were very conscious about was data collection. That was highlighted on that committee, so I am very aware of the points that were raised in that respect.
On the purpose of data collection and support, as I am sure the noble Baroness appreciates, the availability of good quality and timely data from ICS providers is essential to improve the service for all users, support efficient commissioning and systems assurance and manage national, regional and local risks. The data is needed to continue to support Covid recovery, monitor vaccination levels, understand capacity and risk in the care system more generally, understand the impact of winter pressures, determine when and how to target support to providers and, ultimately, help facilitate the care of individuals across the care system long term.
The noble Baroness, Lady Tyler, asked about transparency. Our programme of work to improve data in adult social care includes updating the adult social care outcomes framework to ensure that it better captures the outcomes that matter most to people and reflects the Care Act 2014 and reform. It is used locally and nationally to set priorities for care and support, measure progress and strengthen transparency and accountability. We are developing an ISC data framework, which will start to set out what data gaps we have, our approach to addressing them, the purpose of those collections and the standards to which they are collected.
The noble Baroness, Lady Tyler, asked about guarantees for future Secretaries of State. I cannot stand here and speak for what a future Secretary of State will do but, for now, I can assure her that the data will be subject to the UK GDPR.
The noble Baroness, Lady Wheeler, asked about the burden on small businesses. We hope to see full compliance so that financial penalties are not required. Our priority is to support providers to share their data wherever possible. The data required will be proportionate and we do not anticipate it being onerous. Financial penalties will normally be a last resort, where a provider continues to be or is persistently in breach of its data obligations despite multiple offers of support from our delivery partners.
The noble Baroness also wanted some assurance on data collection. As I said, our aim is to work closely with stakeholders to identify and agree key data needs, as well as look at opportunities to streamline current data collections from ASC providers, so that data can be captured once and shared safely with all those who need it.
Another point raised by the noble Baroness, Lady Wheeler, was on fines. As I said, we hope to see full compliance so that financial penalties are not required. Our priority is to support providers to share their data wherever possible. The data required will be proportionate and we do not anticipate it being too onerous, as I said earlier.
I think that covers most of the points that were raised.
Baroness Wheeler (Lab)
I also asked about the cost of the appeal process and the five-year review.
Lord Davies of Gower (Con)
As I mentioned in my opening remarks, the appeal process is through the courts. If it would be helpful, I can guide the noble Baroness through the level of fines. They will be the same as a provider’s CQC registration fee, which is calculated based on the type and size of the provider. These are examples of fines: where the care home provider has fewer than four beds, the penalty will be £313; where the care home provider has 16 to 20 beds, the penalty will be £2,388; and where the care home provider has more than 90 beds, the penalty will be from £15,710. Here are further examples: where the domiciliary care provider has fewer than 20 users, the penalty will be up to £1,597; where the domiciliary care provider has 26 to 50 users, the penalty will be from £1,651 to £2,954; and, lastly, where the domiciliary care provider has 76 to 100 users, the penalty will be from £4,366 to £5,670.
As I mentioned in my opening remarks, details about the process of appeal are standard and set out in the relevant rules for the First-tier Tribunal, rather than in these regulations. The standard deadline for making an appeal to the First-tier Tribunal is 28 days after the decision—in this case, 28 days after the final notice.
In conclusion, we want to build a better picture of adult social care services across England so that, at the local, regional and national levels, people in the sector have the information they need to provide high-quality care and support to people who need it. These draft regulations will ensure that we continue to get vital information from all registered adult social care providers and that, where providers do not make a good-faith effort to provide the data or do not otherwise have a reasonable excuse for not doing so, they are held to account. I commend these draft regulations to the Committee.
House of Lords
Oaths and Affirmations
Climate Change: Behaviour Change
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Browne of Ladyton
To ask His Majesty’s Government, further to the advice that they have received from the Climate Change Committee that 62 per cent of emissions reductions involve some form of human behaviour change, what plans they have to introduce a comprehensive behaviour change strategy.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Government recognise that our net-zero target will require people to make changes in how we do things, such as the way that we travel or heat our homes. We want to empower people to make greener choices while maintaining freedom of choice and fairness. As one example of government action, I point out that this summer we launched the “Find Ways to Save Energy in Your Home” page on GOV.UK, which provides homeowners with tailored advice.
Lord Browne of Ladyton (Lab)
I thank the Minister for that Answer. He will remember that on 20 October, in the debate on net zero and behaviour change, he said more than once that the heat and buildings strategy is an example of how the Government are providing advice and support to the public to help them to make green choices. The Climate Change Committee’s assessment of the strategy noted that significant challenges remain, particularly about the skills needed to deliver it. Its June 2022 progress report said that the promised action plan for net-zero skills has not yet been published, even though the EAC said a year ago that
“the workforce of the future is being undermined by a lack of evidence-based Government policies on how jobs will be filled in green sectors”,
while the Scottish Government published their skills plan in December 2020. When will the net-zero skills plan be published?
Lord Callanan (Con)
The noble Lord makes a good point: providing the skills necessary for all the future green jobs is extremely important, and we are taking action on that. We have launched a number of different training competitions and, through BEIS alone, provided about £20 million for two sets of training competitions that have provided tens of thousands of new training places. The DfE has a large skills programme as well, and we work closely with it to ensure that we provide the workforce with the skills that they require.
Lord Deben (Con)
I declare an interest as chairman of the Climate Change Committee. Why do the Government find it so difficult to help people to eat not 20% less meat but better meat, particularly when that meat is British and produced on pasture with the lowest carbon footprint in the world? Why can they not provide better information for ordinary people to decide how they can insulate their houses? Frankly, it is difficult enough if you are chairman of the Climate Change Committee to find out how to put a heat pump in your house, which I have done. That took me a long time because it is complicated, and there is no indication from the Government as to how best to make those decisions.
Lord Callanan (Con)
I think my noble friend is wrong. If he looked at the pages on GOV.UK, he would find tailored advice for his property linked to its EPC, if one exists. Perhaps he needs to spruce up his computer usage.
Lord Anderson of Swansea (Lab)
My Lords, one of the effects of climate change will be a moderation in the pace of the population increase of the world, which leads to desertification, deforestation and increased migration. How can we encourage that?
Lord Callanan (Con)
The effects of climate change are of course different in different parts of the world. We need to work with developing countries, which we are doing through our extensive programme of international climate change work, to help them to both mitigate and adapt to the effects of climate change.
Baroness Parminter (LD)
My Lords, the Government’s own net-zero strategy is underpinned by six principles, one of which is to motivate and build public acceptance for major change. While the Minister cites the energy-saving website, I challenge him to produce any other examples from this Government of trying to give consumers the advice that they need about heating their homes, as the noble Lord, Lord Deben, said, and about the food they eat and buy and how they travel. During the pandemic, which was a successful example of behaviour change, we saw the importance of sustained, clear communication with the public. Will the Government introduce a public engagement strategy, as the noble Lord has so rightly articulated?
Lord Callanan (Con)
If the noble Baroness wants another example, the Help for Households campaign provides tailored advice on the three cheapest and quickest ways to save energy in your home, No. 1 being to turn the boiler flow temperature down. We are very clear that we are not going to get into telling people what to eat and how to live their lives. We want to provide them with the options to make greener choices.
Lord Lilley (Con)
My Lords, may I reassure my noble friend the Minister that the Climate Change Committee does not say that 62% of emissions savings needed for net zero must come from changing behaviour? That would require Stone Age lifestyles. The 62% figure includes savings from carbon capture and storage, and other technologies. In fact, my noble friend Lord Deben’s excellent committee sensibly says that 90% of carbon savings will come from new technologies and just 10% from modest lifestyle changes. Shamefully, the Environment and Climate Change Committee voted to omit that 10% figure from its report, because it would not get a good headline or satisfy the puritans and others who want to make us all adopt frugal lifestyles. Does the Minister agree that being economical with the truth undermines support for sound environmental policies and discredits the committees of your Lordships’ House?
Lord Callanan (Con)
My noble friend makes some interesting points and I will certainly have a look at the claims that he makes. I am sure he would not want to mislead the House about the statistics produced, but he makes an important point about the role that technology will play. We have some fantastic and innovative developing businesses in this country providing many of the solutions that we need to overcome these difficult challenges.
Baroness Taylor of Bolton (Lab)
Will the Minister answer the question that my noble friend put originally? When will the net-zero skills plan actually be published?
Lord Callanan (Con)
I cannot give the noble Baroness a precise date but we do a lot of work on skills. I outlined some of the skills strategies that we have adopted to the noble Lord but it is also, of course, not just about what the Government are doing. There is some great work being done in the private sector as well. I have attended a number of workshops and training academies run by, for instance, various heat-pump manufacturers to upskill plumbers and others in the new technologies of installing low-carbon heat sources.
Lord Cormack (Con)
My Lords, while I understand that my noble friend does not want to tell people what to eat, could the Government not encourage people, particularly at this time of year, to eat more game, which is nutritious, low in cholesterol and delicious?
Lord Callanan (Con)
The noble Lord has made the point and I am sure the watching millions will be fascinated to know of his support for the game industry.
Baroness Blake of Leeds (Lab)
The importance of behaviour change to deliver reductions in climate emissions is significant and acknowledged. To achieve the necessary change in behaviour, we know that alternatives need to be in place: for example, to achieve a modal shift in travel by increasing the use of public transport. Against the backdrop of chaos and a major loss of confidence caused by frequent cancellations and delays to rail services, especially across the north, can the Minister update us on progress towards setting up the new Great British Railways body intended to improve performance and thereby contribute to reduced emissions from the transport sector?
Lord Callanan (Con)
I will certainly ask my DfT colleagues to update the noble Baroness on where we are with the new Great British Railways body, but much of the chaos and cancellations we have seen in train services have been caused by the trade unions, which she is close to.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register. The Minister spoke about energy efficiency in homes and buildings but does he accept that saving energy in them saves money for consumers and the taxpayer, and that it saves emissions for the planet? Bearing that in mind, is it not time that we had a comprehensive energy-efficiency strategy, including skills training and long-term investment, so that the market can be developed and, in the light of that, does he agree that it would be wrong for the Government to reverse the amendment passed by this House on this issue to the Social Housing (Regulation) Bill?
Lord Callanan (Con)
I certainly agree with the first part of the noble Baroness’s question. Energy efficiency plays a vital role, which is why we have a comprehensive energy-efficiency strategy. She will be getting bored with me repeating the statistics, but we are spending something like £12 billion over this Parliament on a whole range of retrofitting strategies, with energy-efficiency policies across all the different domestic and non-domestic sectors.
Lord Kirkhope of Harrogate (Con)
My Lords, does my noble friend agree that considerable amounts of hot air seem to emanate from these premises, particularly along at the other place? Is it not interesting that the press coverage of these premises has been quite strident in saying that we are wasting energy and that an enormous amount of heat appears to be seeping out of these buildings? Does he have any view as to what we should be doing to improve things here?
Lord Callanan (Con)
I am not sure, from attending some of these sessions, that the other place has a total monopoly on hot air production. My noble friend will forgive me for not wanting to get into an area which is not my expertise. I know that the restoration and renewal programme is proceeding; I have not looked at it in detail but, clearly, the way that this building operates through antiquated heating systems is extremely inefficient. One quite interesting point is that a new heat network is being developed in the Nine Elms development, which has considerable opportunities for expansion. There are already tunnels underneath the Thames which can take district heating pipework, and it would be a great example for Whitehall and Parliament to connect to a new and efficient heat network.
Employers: Fire and Rehire
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Woodley
To ask His Majesty’s Government what assessment they have made of the frequency of the use of ‘fire and rehire’ practices by employers as (1) a negotiating tactic, (2) a cost-cutting measure to increase profits, and (3) a cost-cutting measure to prevent insolvency.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Government have been clear that threats of dismissal and re-engagement should not be used as a negotiation tactic. We have asked the Advisory, Conciliation and Arbitration Service to conduct an evidence-gathering exercise to learn more about the use of dismissal and re- engagement practices, and its report is available on its website. The Government are now going further; we will bring forward a statutory code of practice and publish a draft for consultation in due course.
Lord Woodley (Lab)
I thank the noble Lord for his update. Members across this House share my belief that fire and rehire is immoral, but this obnoxious behaviour is still happening today. We know that and the Minister knows that. It is disappointing that, in spite of the kind words and efforts that have just been spoken about, the Government are not doing enough to eradicate this practice even though opinion polls show that 70% of Tory voters believe that this should be banned. Can the Minister therefore confirm that the new Government will be supporting my Private Member’s Bill? I emphasise that it protects companies which are at risk of going under and at the same time protects workers from the exploitation of opportunistic employers?
Lord Callanan (Con)
I am sure the noble Lord will not be surprised to know that we will not be supporting his Private Member’s Bill. Let me say that dismissal and re-engagement should only be considered as an absolute last resort if changes to employment contracts are critical and voluntary agreement is not possible. We do not want to encourage the practice but do not think that banning it would be right because, in some limited circumstances, it is the only way to save businesses and protect the jobs within them.
Lord Addington (LD)
My Lords, will the Minister give us an assurance that any firm using this practice inappropriately will lose any government contracts? That would be a very clear indicator that the Government disapprove.
Lord Callanan (Con)
We do disapprove of these practices, which is why, as I said to the noble Lord, Lord Woodley, we are producing a statutory code and will consult on it shortly.
Lord Young of Cookham (Con)
My Lords, is it not the case that the Government themselves have been guilty of firing and rehiring Ministers?
Lord Callanan (Con)
In his excellent way, the noble Lord makes a good point. I am sure it will give all of us, including the Prime Minister, cause for reflection.
Lord Anderson of Swansea (Lab)
In the proposed code of practice, what sanctions do the Government propose?
Lord Callanan (Con)
The noble Lord will have to await the details in the code of practice. One option will be to allow employment tribunals to take into account if the statutory code has not been followed and award uplifts in compensation as a result.
Lord Fox (LD)
My Lords, many across this House joined together to condemn P&O Ferries for its appalling behaviour towards its employees. Does the Minister agree that, in the long run, it seems to have got away with it and that this indicates the weakness of employment law?
Lord Callanan (Con)
As the noble Lord will be aware, the Government are bringing forward legislation to stop those kinds of practices and extend minimum wage provisions to seafarers. The DfT is progressing that.
Lord Hendy (Lab)
My Lords, when will the long-promised employment Bill be presented to the House? On previous occasions the Minister has said “when parliamentary time allows”. We notice that parliamentary time has allowed legislation to further restrict the right to strike and proposals to create a bonfire of workers’ rights derived from EU directives. Could the Minister not find a little bit of time for the employment Bill promised in 2019?
Lord Callanan (Con)
The noble Lord has answered his own question. The position remains that we will bring forward an employment rights Bill when parliamentary time allows. I point out that the Government are supporting numerous Private Member’s Bills which have been introduced, particularly in the other place, such as the Neonatal Care (Leave and Pay) Bill, Employment (Allocation of Tips) Bill, Protection from Redundancy (Pregnancy and Family Leave) Bill and the Carer’s Leave Bill. Many of these provisions are being taken forward.
Lord McNicol of West Kilbride (Lab)
My Lords, everyone deserves to be treated with dignity and respect at work, even government Ministers. Being rehired on worse terms and conditions is just plain wrong. It has been over seven months since the Government announced the new statutory code on fire and rehire, which I think the TUC called baby steps that would not deal with rogue employers. Can I push the Minster a little more? He said, “in due course”, but can he give any more detail on the timescale for the start of the consultation? Regarding the last question from the noble Lord, Lord Fox, I do not think P&O carried out fire and rehire, but just fired staff.
Lord Callanan (Con)
I answered the question from the noble Lord, Lord Fox. I cannot be absolutely precise on a timescale with the noble Lord; he will understand that. But we want to bring it forward in the near future.
The Lord Bishop of London
My Lords, having access to secure work is key to health, not just of individuals but the community. It means sufficient wages and reliable hours. London has the highest share of care workers paid below the real living wage of any English region. What are the Government doing to encourage care providers to be living wage employers to ensure that the workers who look after us have access to secure work?
Lord Callanan (Con)
The right reverend Prelate is correct. The best workers’ right is the right to a secure, well-paid job, which is why I am delighted that we have delivered record low levels of unemployment in this country and that the labour market is performing well. We also have one of the highest minimum wages in the developed world which this Government have increased significantly.
Baroness Donaghy (Lab)
My Lords, I am looking forward to hearing from both the noble Baroness, Lady Penn, and the noble Lord, Lord Parkinson of Whitley Bay, later in Question Time. I had nicknamed them the “Fire and rehire two”, but it is very good to see them back on the Front Bench. My question is about the use of employment tribunals and the reference the noble Lord made earlier. He will know the unsatisfactory situation and the length of time it takes for people to take cases to tribunals. Many cannot afford to because they are still scratching around for a new job. Is the Minister satisfied that our employment tribunal system is adequate for today’s needs?
Lord Callanan (Con)
The noble Baroness has queued up my noble friend Lord Parkinson for his return; we are all looking forward to his contribution. There are difficulties in the employment tribunal system—many of which are a result of the pandemic—as there are across the whole of the judicial system. Colleagues in the Ministry of Justice and others are working hard to resolve those problems.
Lord Alton of Liverpool (CB)
My Lords, can the Minister give further thought to and reflect on the suggestion made to him about the importance of looking at products produced by companies that fire and rehire? Would it be possible to amend the Procurement Bill—the noble Baroness, Lady Neville-Rolfe, is sitting alongside him and now has responsibility for overseeing that legislation—to prevent companies using these practices from selling their products into the Government’s supply chains?
Lord Callanan (Con)
I am sure my noble friend Lady Neville-Rolfe has heard what the noble Lord said. I am not going to give any commitments on her behalf. It is important to point out that only a very tiny minority of employers resort to these practices. The vast majority of employers look after their employees well and responsibly. As I said, we do not encourage these practices.
Baroness Chakrabarti (Lab)
My Lords, I am grateful to the Minister for his answers so far, but can I probe him just a little further on his suggestion that there are certain circumstances in which fire and rehire would be appropriate or necessary? It is well-established in employment law that a company facing challenges can make lawful redundancies, so why on earth should they be able to get into practices of firing and rehiring? Is he really seeking to establish high levels of insecure and zero-hours employment?
Lord Callanan (Con)
No, of course I am not. That is why we have one of the best employment law frameworks in the world. We have one of the lowest levels of unemployment. We have one of the highest minimum wages in the developed world and an excellent record on employment law. The point I am making is that in some very limited circumstances—which is not to be encouraged—if the alternative is the company closing and everybody losing their jobs, then it might be appropriate for a company to engage in this kind of restructuring because 90% of a wage is better than no wage.
UK Green Taxonomy
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Parminter
To ask His Majesty’s Government, further to their commitment in Greening finance: A roadmap to sustainable investing, published on 1 October 2021, to consult on the “UK Green Taxonomy” in the first quarter of 2022, what plans they have to publish the draft taxonomy.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
The UK green taxonomy is an important part of the Government’s ambitious programme of work on sustainable finance. However, it is critical that we learn from approaches being developed in other jurisdictions and take the time to get this right. The Government will continue to engage with scientific experts and market participants this year on how best to take forward work in this area.
Baroness Parminter (LD)
I thank the Minister for her reply. As she will know, many firms really support the transition to net zero, but this will not be achieved without clear direction from government. The Government’s independent green taxonomy advisory group told them last month that they had to send a “rapid market signal”, or we risked falling further behind Europe, which launched its taxonomy in 2020. So when will the Government publish their consultation on the green taxonomy? Will we get it by Christmas, or will the market just have to accept that we will fall further behind in the world and never become the financial leader on green issues that we should be?
Baroness Penn (Con)
My Lords, I agree with the noble Baroness on the importance of progressing this work at pace but it is also important that we get it right. For the green taxonomy to have real value for the market, we need to make sure that it is user-friendly and operable, and that is what we are focused on. We continue to progress our work in this area and remain committed to producing the green taxonomy.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome my noble friend back to her place on the Front Bench. Could she outline the work in this area to reduce greenwashing, and could she highlight the work on carbon offsetting? Does she share my concern that, although it is right and helpful, in environmental terms, to plant trees, they must be planted in appropriate areas, so as not to cause more flooding rather than reducing it?
Baroness Penn (Con)
The Government are taking a number of steps. The FCA, for example, has consulted on a sustainable investment-labelling scheme so that, when consumers and investors are told that they are investing sustainably, they have better information to show that that is based on an objective assessment of those investments.
Baroness Hayman (CB)
My Lords, a year ago, the Prime Minister, then the Chancellor, made the commitment at COP 26 that the UK will be
“the world’s first net zero aligned financial centre”.
Does the Minister—whom I welcome back to the Front Bench—agree that, to achieve that, we need a robust and respected taxonomy for green investment? Does she also agree that this is an increasingly competitive area, with other countries having exactly the same objective? Does she accept the need for urgency in this area?
Baroness Penn (Con)
I agree that the green taxonomy is an essential part of being a leader in green finance. The UK has led the way: we were the first country to lay regulations to make reporting mandatory under the TCFD framework and firms listed on the London Stock Exchange have the highest sustainability disclosure rate of any global financial centre. But, if we want to continue that leadership, we need to continue to make progress. We have laid out a number of future steps under our road map. I accept that some have been delayed, and it is for us to continue to work to make better progress, to ensure that we continue to lead in this area.
Baroness Kramer (LD)
Last night in this House, the Lord Mayor of London underscored that retaining our leadership position on green finance is essential to retaining a leading role in financial services far more broadly. Understanding the pressures generated by that, could the Minister please tell us when we will get the green finance strategy? Given all the government changes, could she publicly recommit to the earlier commitments to become the first net zero-aligned financial centre, as described by the noble Baroness, Lady Hayman?
Baroness Penn (Con)
My Lords, that commitment has not changed. On the importance of retaining our leadership position on green finance for London as a financial centre, I completely agree with the noble Baroness: that is why we have been so ambitious in this area. We have taken a number of steps to ensure that we lead the way, and we work with our international partners to bring them along with us. When we chaired the G7 last year, we got commitments on sustainability disclosure requirements, for example, from all the G7 Finance Ministers. So we are not just leading the way; we are also trying to bring other countries with us.
Lord Tunnicliffe (Lab)
My Lords, for the avoidance of doubt, I have already welcomed the noble Baroness back to the Front Bench. The concept of a green taxonomy is of value to investors assessing how green a company is—that is almost self-evident. It is also of value to companies because it protects them from litigation accusing them of greenwashing. A number of actions are occurring around the world in which companies are being sued for overpromising on greenwashing. To be really valuable, however, the taxonomy needs to be international. What progress is being made on gaining international consensus?
Baroness Penn (Con)
The noble Lord is absolutely right that, to be most useful, having international agreement on a taxonomy is essential. The Government have supported the development of international standards in this area: for example, we have worked with the International Sustainability Standards Board to ensure that there is international alignment on the work in these areas.
Baroness Altmann (Con)
My Lords, I also welcome my noble friend back to the Front Bench. I echo the calls for us to urgently release the information on the green taxonomy. Could my noble friend please confirm that the Government remain committed to a green taxonomy that is science-led? Could she also confirm the position regarding natural gas as a transition fuel, given concerns about the security of the energy supply in the short term?
Baroness Penn (Con)
I assure my noble friend that we will be led by science in this area. Earlier in this Question, noble Lords referred to the work of the Green Technical Advisory Group, which was set up to advise the Government on the UK green taxonomy and is informing our work in this area. There is a question about the inclusion of both gas and nuclear in the green taxonomy. The Government have not made any decisions on their inclusion, but they will engage with experts and the market before making any final decision in this area.
Lord Kamall (Con)
I also welcome my noble friend back to the Front Bench, even though the Prime Minister has fired me but not rehired me—
Lord Kamall (Con)
I apologise; I was not after the violins. When I dealt with developing the green taxonomy in the European Parliament, we did not look only at companies that can certify themselves as green and ensure investors; we also looked at how to incentivise companies that are not yet green to become greener. How will the Government tackle that in developing their green taxonomy?
Baroness Penn (Con)
I take this opportunity to pay tribute to my noble friend’s work. I saw at first hand the energy and commitment that he brought to his roles. He is absolutely right that information is the first step on this path, and it then needs to be used to ensure that firms working in all sectors make plans for transition and action to ensure that their activities are aligned with net zero by 2050. Our green finance road map sets out the path that the Government think firms can take towards that aim.
Football Governance
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Bassam of Brighton
To ask His Majesty’s Government when they expect to bring forward legislation to implement the recommendations of the Fan-Led Review of Football Governance, published on 24 November 2021; and in particular, the proposal for an independent regulator.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, the Government published their response to the recommendations made by the independent fan-led review of football governance in April 2022. The Government recognise the need for football to be reformed to ensure the game’s long-term sustainability. We continue to consider the policy and consult interested parties, but the Government remain committed to publishing a White Paper setting out our detailed response to the fan-led review.
Lord Bassam of Brighton (Lab)
My Lords, I warmly welcome the noble Lord back to his place on the Front Bench and commiserate with the noble Lord, Lord Kamall, his predecessor, but this is part of the problem. The Conservative Party made a strong manifesto commitment, as did our party, to hold a fan-led review of football’s governance. I appreciate that we have had a year of on-off, merry-go-round government, but a year has passed since the review was published and nearly six months since the Queen’s Speech announced a White Paper. When can we expect some legislative protection for our football clubs? When can we start to see the interests of the fans who give their support week in, week out to football clubs properly represented? This has been going on for far too long, and I think we are all beginning to run out of patience.
Lord Parkinson of Whitley Bay (Con)
I join the noble Lord in paying tribute to my noble friend Lord Kamall, with whom I swapped places on the substitutes’ bench; I hope that his stay there will be as brief as mine. However, for all the changes in ministerial positions, the work to continue examining the recommendations made by Tracey Crouch, in commitment to and fulfilment of our manifesto pledge, as the noble Lord said, has continued at official level. The Secretary of State and my right honourable friend the Sports Minister, who have stayed in place, have been engaging with organisations. The Sports Minister made sure that his first meeting was with the Football Supporters’ Association. They are taking the time to continue that engagement and to look at the policy, and they will bring forward a White Paper with the answers to these complex issues soon.
Lord Addington (LD)
My Lords, will the Minister assure us that the Government are still in absolute agreement that there needs to be change and that it will happen soon? If that is so, can they assure us that we will not be talking about this in another year’s time, because there needs to be action now? Those assurances are required, and other sports have similar problems. I put my hand up as a rugby union player.
Lord Parkinson of Whitley Bay (Con)
Yes, we still agree that football needs to be reformed to secure its long-term sustainability. Some of the action can be taken now; it does not require legislation or government action. The clubs can do it—for instance, on the financial flows throughout the football pyramid. We continue to encourage clubs to do that, and we are discussing the challenges facing rugby football clubs as well.
Lord Faulkner of Worcester (Lab)
My Lords, on 25 April, the noble Lord, Lord Parkinson, answered a Question from the noble Lord, Lord Ravensdale, about the fan-led review. His first words were:
“My Lords, the Government have endorsed the principle that football requires a strong independent regulator to secure the future of our national game.”—[Official Report, 25/4/22; col. 4.]
He has not referred to a regulator in his answers so far today. Can he confirm that it remains the Government’s policy? In an interview with the Sun newspaper on 19 July, his right honourable friend the Prime Minister was reported as having made the following promise:
“In a bid to pitch himself as a footie-mad man of the people, Tory frontrunner Mr Sunak promised to hand fans power over dodgy owners in a radical shake-up. The diehard Southampton fan said he would implement all ten of the recommendations from former sports minister Tracey Crouch’s fan-led football review in time for the World Cup.”
I do not think he can do it in time for the World Cup, but can the Minister say whether it will be before the end of the Parliament?
Lord Parkinson of Whitley Bay (Con)
My Lords, much has changed even since the Prime Minister made those commitments. My right honourable friends the Secretary of State and the Sports Minister are taking the time to consider the recommendations of Tracey Crouch’s review. We remain grateful to her and the thousands of fans who took part in it and informed it. The noble Lord should not read any more into that than that they are taking the time to look at this complex area of policy and to discuss it with the FA, the EFL and supporters’ organisations among others. We will bring forward our response in the White Paper.
Lord Woodley (Lab)
My Lords, I declare an interest in so far as I am the president of a football club with 47 children’s teams, and as a struggling Evertonian. I spoke in April about the need for fans to have real input and real say in the day-to-day running of their clubs in their communities. Nothing has changed since then apart from the fact that, particularly in the Premier League, more owners than ever are foreign investors, particularly from the USA, or even people from the Middle East who murder innocent journalists. Can the Minister explain why these takeovers are being allowed to happen in our national game, without the fans being given any real say or influence?
Lord Parkinson of Whitley Bay (Con)
We want to give fans a strong voice in the governance of the national game. That is why we had the fan-led review, and we are grateful to everyone who took part in it. The response in April stated that
“new owners’ and directors’ tests will help to ensure the future sustainability of our … clubs”,
which play such an important role in their communities, and that ensuring that football has suitable owners and directors is crucial to securing the long-term future of the game.
Baroness Taylor of Bolton (Lab)
The Minister has given some rather vague assurances today, which cause some concern as to whether the Government will row back on what has previously been said about the regulator in particular. Can he be firmer about the commitment the Government will make? These problems have been around for a long time. He has said that we “will” get a White Paper and that they “will” consider the problems. When will we get a White Paper?
Lord Parkinson of Whitley Bay (Con)
The White Paper will set out the detail that I am unable to give at the Dispatch Box today. My right honourable friends the Secretary of State and the Sports Minister have engaged directly with football organisations and football supporters to discuss the complex issues and to take forward the recommendations made by Tracey Crouch and the fan-led review. The White Paper will be coming soon, but I am afraid that I cannot give the noble Baroness a date today.
Lord Kamall (Con)
I thank my noble friend for the kind message regarding my being put on the subs’ bench. I want to ask about the thinking in the department. Can we still set the same objectives in a fan-led review, but without a regulator, and are there alternatives that may be considered just as effective?
Lord Parkinson of Whitley Bay (Con)
Officials and Ministers in the department are discussing the recommendations of the fan-led review with all the interested parties, taking into account all those views, and the White Paper will provide the answers which my noble friend and others seek.
Lord Fox (LD)
My Lords, words such as “discussing” and “reviewing” indicate that the department seems to be kicking this ball into touch. Does the Minister recognise that, with every month and every year that passes, clubs that have been part of communities are being lost, and that more delay will mean that more clubs are lost?
Lord Parkinson of Whitley Bay (Con)
As I said to the noble Lord’s noble friend earlier, football itself can take forward some of the recommendations in the fan-led review which we endorsed in April, such as financial redistribution throughout the leagues. We urge them strongly to do that, and my right honourable friends have done so directly.
Lord Polak (Con)
My Lords, we need to be a little careful that we do not throw the baby out with the bath water. The Premier League is the envy of the world; it attracts the world’s best players. As a Liverpool fan, I could not let this debate go by, being led just by an Evertonian. I urge us to be very careful to ensure that the Premier League stays the premier league.
Lord Parkinson of Whitley Bay (Con)
My noble friend raises some of the complex issues with which my right honourable friends are grappling in their discussions with everybody interested in this matter, including supporters’ groups and the fans themselves, and they will bring forward our answers in the White Paper.
Lord Grocott (Lab)
My Lords, we have had two attempts on this side, first from my noble friend Lord Faulkner and then from my noble friend Lady Taylor, to get an answer to a specific question, which is whether the Government stand by their commitment earlier this year and endorse the principle that football requires a strong, independent regulator. If I ask the Minister a third time, might it be third time lucky?
Lord Parkinson of Whitley Bay (Con)
I may disappoint the noble Lord by repeating that we are looking at that and all the recommendations that Tracey Crouch and the fan-led review made. He should not read anything more into it than that we are taking the time to give those complex recommendations the thought and attention they deserve, and the White Paper will provide the answers to his question.
Financial Markets: Stability
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Sharkey
That this House takes note of the importance of stability in the financial markets and its impact on pensions, mortgages and the rental markets.
Lord Sharkey (LD)
My Lords, I start, as is now traditional, by welcoming the return of the Minister, and by thanking the Library for the outstanding note it has produced for this debate.
The Motion before us seems simple: financial stability sounds like a common-sense kind of thing and obviously desirable. However, the reality is significantly more complex. There are at least two readings of the phrase “financial stability”. The first reading, in this context, is defined by the Bank of England, which has a statutory objective to protect and enhance the stability of the financial system in the United Kingdom. The definition is that
“financial stability is the consistent supply of the vital services that the real economy demands from the financial system (which comprises financial institutions, markets and market infrastructure).”
The FPC has qualified that definition by saying:
“Financial stability is not the same as market stability or the avoidance of any disruption to … financial services.”
This qualification was quite properly abandoned in dealing with the events of September and October.
The second reading of the words is the usual and common-sense one: things should not change violently, radically or without warning—and that definitely includes inflation. The mini-Budget of 23 September was probably the most incompetent, damaging and destabilising ever produced. It is still hard to believe that a Chancellor would put forward such a list of spending measures without any indication of how they were to be funded. It is astonishing that the Chancellor explicitly refused the offer of an input from the OBR. It defies belief that the Chancellor and Prime Minister took no account of the likely bond market reaction.
It is not as though the bond market reaction was unknown or of no importance: Bill Clinton famously encountered it when preparing the programme for his second term. His advisers told him that some of his policies would not be possible. Clinton said:
“You mean to tell me that the success of the program … hinges on the Federal Reserve and a bunch of”—
expletive deleted—“bond traders?” One of his advisers, James Carville, said at the time:
“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
The bond markets certainly terrified our Government and probably most of the rest of us as well. Long-term gilt yields rose by 30 basis points on the day of the mini-Budget, and by another 50 in the next three days. On 26 September, the pound fell to $1.03, its lowest ever level. On 27 September, there was an initial fall in gilt yields and then a rise of 67 basis points. On 28 September, the Bank intervened with a short-term commitment to QE of up to £65 billion. In all, the Bank bought £19 billion of bonds to stabilise a market that the Government had directly caused to crash. That was added to the Bank’s existing QE stock of £875 billion. Given the asset-inflating effect of QE and the deflationary pressure imposed by the inevitable higher interest rates, some commentators noted that the Bank appeared to be driving with one foot on the accelerator and the other foot on the brake.
Katie Martin noted in the Financial Times on 7 October:
“The intricacies of bond yields rarely trouble the general population, but homeowners quickly figured out what this meant for mortgage repayments, making it a searing political issue. Plus, it all jacks up the price tag for the government’s plans”.
The Financial Times returned to the issue over two weeks later, with Patrick Jenkins writing:
“To describe the ‘mini’ Budget of outgoing prime minister Liz Truss and outgone chancellor Kwasi Kwarteng as ill thought-out is almost a compliment. If they underestimated how spooked the markets would be by £45bn of unfunded tax cuts, they clearly had no notion at all about the collateral damage it would cause—to mortgages, to government and corporate borrowing costs and most alarmingly to the £1.4tn defined benefit pension system, via the now infamous ‘LDI’ hedging structures buried within many schemes.”
So here we have rising mortgage costs, rising energy costs, rampant inflation, no increase in real wages over two decades and now a threat to the pension system. I think that it is entirely probable that neither Liz Truss nor Kwasi Kwarteng had heard of, or understood anything about, LDIs. I do wonder whether the Treasury had understood and had given sufficient warnings to the Prime Minister and the Chancellor. The Bank, the Pensions Regulator and the FCA certainly did know about LDIs: each of them has a partial regulatory role over some parts of the LDI sector, and each of these institutions has now written not very convincing letters of exculpation to parliamentary committees. We seem to have uncovered a remnant of the pre-crash regulatory regimes, where a plurality of regulators failed to deliver necessary oversight or control. It is surely time that the regulation of these LDI funds was made simpler, clearer and more rigorous, so that we can avoid further unpleasant surprises and outbreaks of finger-pointing. When the Minister replies, I would be grateful for her thoughts on the matter.
This all, emphatically, does matter. All this rather obscure and technical stuff has clear effects on the real economy: mortgage rates have been rising as the bank rate has risen—probably to 3% in a moment or two. In December, the average rate offered for a two-year fixed deal was 2.34%; by 3 October, it was 6.07%; by 18 October, it was 6.53%. Of course, this means a steep rise in mortgage repayments. The Resolution Foundation predicts that over 5 million families are set to see their annual mortgage payments rise by an average of £5,100 between now and the end of 2024. The chief economist of the Royal Institution of Chartered Surveyors took the view that mortgage arrears and repossessions would inevitably move upwards over the next year; of course, this influences the rental market.
In late October, Moody’s, having downgraded its assessment of the UK’s economic outlook from “stable” to “negative” because of instability and high inflation, also estimated that more than half of landlords looking for a new fixed-rate deal in 2023 or 2024 would be unable to remortgage without raising rents if mortgages were 4 percentage points higher. Given the fall in real wages, this might push rents up beyond what tenants could afford.
Rents were already rising anyway, driven by what Knight Frank described as
“an ever-deepening mismatch between supply and demand”.
Shelter has said:
“Private renters are disproportionately exposed to the cost of living crisis”
and
“the most likely tenure to already be in fuel poverty.”
When the Minister replies, I would be grateful if she could tell the House whether the Government are actively considering increasing the local housing benefit allowance rates—frozen since March 2020—to ensure that housing benefit keeps pace with inflation, as Shelter recommends.
The current economic situation and the ongoing cost of living crisis bear very heavily on households, exacerbated by uncertainty about the future. Is the triple lock on or off today? Will inflation really rise to 12%, as the Bank seems to think? Will benefits be uprated in real terms? What will happen to my energy costs? Is my pension safe? Will there be reasonable pay rises? What will happen to the NHS and our schools? The need for some assurance and stability in these uncertain times is absolutely clear.
The most comprehensive survey of household and individual finances is the FCA’s excellent Financial Lives Survey. The next survey is due to be published early next year, but the FCA has just released some of the findings from its 19,000 respondents—they make for very distressing reading. One in four adults in the UK was either in financial difficulty or would fall into trouble if they had a financial shock. Nearly 8 million people were finding it a heavy burden to keep up with their bills—an increase of 2.5 million people in the last two years—as wage growth fails to keep pace with inflation, which is now at a 40-year high.
Over 4 million people missed a bill or loan repayment in the six months to February and, unsurprisingly, these problems were worse in the most deprived areas of the United Kingdom. About 12% of people in the north-east and 10% in the north-west are struggling financially, compared with 6% in the south-east and the south-west. Already, by the end of June, over 2 million households were behind with their electricity bills and just under 2 million behind with their gas bills. Citizens Advice reports a sharp rise in people being forced on to prepayment meters, which are more expensive. Can the Minister confirm that to address at least some of this, benefits will be uprated by inflation? Can she stop our energy companies moving customers to prepayment meters?
Of course, the real question is what should be done about the mess we are in. How can a measure of stability be restored to our financial lives, our real incomes and the institutions on which we depend? We may know more on 17 November; I do not expect the Minister will be able to say anything of any substance about what the Autumn Statement might contain, but some things are already clear. Last week, the Institute for Government, of which I was a governor for five years or so, and the Chartered Institute of Public Finance and Accountancy published their annual government performance tracker, and it is worth quoting at some length from the introduction. It states:
“Public services are in a fragile state. Some are in crisis. Patients are waiting half a day in A&E, weeks for GP appointments and a year or more for elective treatments. Few crimes result in charges, criminal courts are gummed up, and many prisoners are still stuck in their cells under more restrictive regimes without adequate access to training or education. Pupils have lost months of learning, with little prospect of catching up, social care providers are going out of business or handing back contracts, and neighbourhood amenities have been hollowed out.”
The report goes on to say:
“These problems have been exacerbated by the Covid crisis but are not new. After a decade of spending restraint, public services entered the pandemic with longer waiting times, reduced access, rising public dissatisfaction, missed targets and other signs of diminishing standards … Governments since 2010 may have been seeking efficiency over resilience but achieved neither.”
All this is simply a preamble to the report’s conclusions that most services do not have sufficient funding to return to pre-pandemic levels of service and performance:
“There is no meaningful ‘fat’ to trim from public service budgets. If the government wishes to make cuts in the medium-term fiscal plan, it must accept that these are almost certain to have a further negative impact on public services performance.”
Perhaps the Minister when she replies can tell the House whether she agrees with the IfG and CIPFA in their conclusions and, if not, why not.
The economy needs stability of purpose, policy and direction. People and business need a stable and reasonably predictable environment in order to plan, save and invest. People need stability because many families have very low resilience to financial shocks or steep movements. The Government could make a start on all this. They could honour the triple lock. They could raise benefits in line with inflation. They could devote scarce resource to where it is most needed and most productive. They could be open and honest about the state of the economy and what that really means for us and for our children. I look forward to hearing the contributions from other noble Lords and to the Minister’s reply and I beg to move.
Lord Young of Cookham (Con)
My Lords, I very much welcome this timely debate, introduced by the noble Lord, Lord Sharkey. While the economy has been centre stage for the last two months, we have not debated it since the summer—apart from the 40-minute Statement on 19 October. I join others in welcoming my noble friend Lady Penn back to the Front Bench, this time as a fully-fledged member of the Treasury team.
I want to focus on the final element identified in the noble Lord’s Motion—the rental market and, in particular, the private rented sector. I suspect the noble Lord, Lord Best, will also do this. There is a vicious circle operating here. Rising interest rates with earnings lagging inflation are making home ownership less affordable. This adds to demand for private renting, pushing rents up. This is reinforced by cost pressures on landlords, as buy-to-let mortgage rates increase, with less advantageous tax arrangements and higher environmental standards. This in turn leads to landlords leaving the market, leading to a further imbalance between supply and demand and yet higher rents. Too many renters already pay more than 50% of their income in rent, making home ownership less attainable. The ONS notes:
“Given the excess of demand over supply, rental prices are expected to rise further.”
In September this year, Rightmove reported annual growth in rents of 12.3%.
One in five households now lives in private rented accommodation—a doubling in two decades—and nearly all are on six-month assured tenancies. The theme of the noble Lord’s debate is stability. I believe we need a fundamental review of the private rental market to put it on a more stable and sustainable basis. In a nutshell, we need to move from a market dominated by the small private landlord, buffeted by tax changes and interest rate movements, where tenants have limited security of tenure and where it is not their tenure of choice, to a market more like that of France, Germany or Switzerland. There, a higher proportion of the population see private renting as the “normal” tenure choice and financial institutions invest in the sector for the long term, ensuring that properties are professionally managed and in good condition and, crucially, have long leases to provide stability for the tenant.
This is not to say there is no role for the private landlord, but the sector as a whole needs to be put on a more stable long-term basis. There are signs that this transition is taking place here. Institutions such as Legal & General have started building thousands of flats for rent, targeted at students, professionals living in cities, and those who need mobility for their career. But we need to accelerate the transition and broaden its base. Build to rent is only 5% of the rented market. This would be a good investment for pension funds. Historically, they have invested in equities, gilts, commercial property and fixed interest loans, but they have had little direct exposure to the residential property market. This is perverse, as it has consistently outperformed equities.
To make the transition happen smoothly, we need to understand the motives of private landlords. They invested in buy to let for two main reasons: capital appreciation and a buoyant income. In many cases, they preferred this over a pension. But the disadvantage is that their capital is illiquid and owning property brings with it management problems and the prospect of a tougher regulatory regime.
To facilitate this transition, what is needed is a quoted housing investment trust to whom landlords could sell their property not for cash but for shares in the trust. So the investor would retain his investment in residential bricks and mortar—the trust’s only asset—with an income stream linked to rental values and capital values rising over the long term, but without the hassle of management and with easy access to capital. The property could be sold to the trust without giving notice to the tenant as it would be held as an investment.
The process could start with blocks and properties in a specified area, with management undertaken by registered social landlords such as housing associations, giving further reassurance to tenants. There would be a role for the Treasury to play in helping the transition to get off the ground. Normally, when a private landlord sells, capital gains tax is payable, and this could be a deterrent. However, under the scenario I have outlined, if capital gains tax was deferred until the shares were sold, that would act as an incentive.
I put this proposition forward to provide stability to a sector that is the least stable form of tenure in the housing market. I do not ask for immediate adoption today, but it would be good if the Minister could give it a nudge by encouraging the Department for Levelling Up, with its new Secretary of State, to explore further the potential of the idea I have just floated.
Lord Kestenbaum (Lab)
My Lords, I thank the noble Lord, Lord Sharkey, for securing this vital debate, the urgency of which is of course prompted by an experiment in fiscal policy as calamitous as it was unprecedented.
Recent weeks offer a cautionary tale of how such mayhem—stemming in part from political incompetence—spirals, demanding costly intervention and creating misery for so many. As we survey the wreckage, we are left with two salutary observations. First, the nervous breakdown in the system, such as we saw in recent months, matters to every single household in the UK. Let us remember, these rising markets of recent years have been fuelled in some measure by a striking injection of personal finance from the retail investor. Market analysis suggests that small individual shareholders’ share of equity trading volumes in the largest stocks has climbed to 24%. Gone are the days when stock markets were the sole preserve of large institutional investors. So every time we hear phrases such as the markets are “correcting” or “repricing”, they are just euphemisms for the utter misery felt by large numbers of households in the country.
Market instability, as in the title of this debate, is not an economic technicality affecting the privileged few. It profoundly touches many millions of citizens. It is not uncommon for as much as 35% of a stock to be owned by everyday, small investors, often representing a meaningful percentage of their liquid assets. The Government would do well to be less zealous—certainly less frivolous—in toying with a system in which so many will be harmed if things go wrong.
These spillover effects are felt even more acutely in the housing market. Noble Lords will know the disastrous effect on mortgage rates—as the noble Lord, Lord Sharkey, suggested—following the mini-Budget and subsequent market meltdown. The numbers of those affected speak for themselves: 25 million homeowners in the UK have gained a home with the help of the mortgage sector, and let us remember that the UK has the highest total outstanding value of all residential mortgages in Europe. This is a country where homeowners are critically reliant on the stability of mortgage rates.
In those chaotic 12 days, we heard how the numbers spiralled. The catalyst for what played out in front of distraught mortgage holders is all too well known and worth repeating: the announcement of vast unfunded tax cuts, leading to ratings agencies taking fright, risk premia reacting accordingly and a spiralling yield on gilts that placed mortgages out of reach or, worse, unable to be serviced.
If my first observation is that the trauma in financial markets had a political catalyst, my second is that what lies beneath may be equally damaging. The entrenched view has been that, for the last 15 years, we have lived with a monetary experiment as a reaction to the disasters of 2008. Such an experiment comprised the dual anaesthetic of the unlimited printing of money together with near-enough zero interest rates—all designed, reasonably perhaps, to prop up markets.
However, the spillover effect on us all was, we must admit, that more risk was taken than was advisable: too much risk in our mortgages and too much illiquidity exposure in domestic expenditure, let alone what felt like unlimited government borrowing. A judicious appetite for risk was exceeded because the implicit message was twofold: we can always print more money and we can always keep interest rates low—so keep borrowing. In doing so, all involved forgot the golden rule that one day the music will stop and, when that day comes—and with it unaffordable mortgages and debt that cannot be serviced—the entire system is at risk.
Against this backdrop, we have had the calamity of recent weeks, which saw dramatic intervention by the Bank of England and the undignified spectacle of pension trade bodies rushing out statements to say that they believed UK pensions should be safe. It seems to me that the mere fact that such statements were required should be a cause for alarm. But this cannot be seen as a “Thank goodness that’s over” moment, which leads me to my conclusion.
The case I make today is that the trauma of recent market instability is both episodic and systemic. My concluding comment, however, is about something equally significant, namely a reckoning. The last time we experienced market shock of such magnitude was in the crisis of 2008. Perhaps the most important question posed in that tumultuous time was asked by our late Queen, who, not the first time, spoke for the entire nation when asking a group of economists, “If this crisis is so large and so far-reaching, how come you didn’t see it coming?”. We may well ask that again—and we do.
Some calm has been restored but the debris is everywhere, with unaffordable mortgages, new entrants to the housing market priced out and pensioners with hard-earned savings in funds that have lost meaningful, material value. Amid much talk of good judgment being restored, one cannot help feeling that the lasting consequence of this instability is that, ultimately, the British electorate will exercise their judgment and, when it comes, a reckoning will be made.
Baroness Bowles of Berkhamsted (LD)
My Lords, the mini-Budget caused sharp falls in the value of sterling, gilts and confidence in the UK’s rating. Despite policy reversals, there is substantial residual damage in people’s pockets and pension funds.
But this was not just an economic event. It triggered a systemic financial stability event, leaving question marks over regulators. The devil was liability-driven investment funds—LDI—and, as if we learned nothing from the great financial crisis, financial engineering that hides behind three-letter acronyms eventually leads to four-letter expletives when it blows up. So what was lurking, and why? The Pensions Regulator—TPR—has overly favoured investment in gilts, which steered funds away from higher-yielding productive investments. The accounting practice also developed of requiring net present value of liabilities, based on gilt interest rates, to be used in both pension scheme valuations and sponsor company accounts. That transferred artificial volatility to both scheme and company balance sheets.
Ways to smooth that volatility were therefore sought. LDI emerged and, with it, borrowing and leverage using repo and derivatives. Gilts were subject to repo—that is, sold but with retention of interest, a buy-back agreement and margining—and the cash used to buy further investments. Along with interest rate swaps, this quashes the accounting volatility and the pension fund gets to hold equities that regulatory edicts had inhibited. This sounds a bit like regulation-dodging, but the practice was actively encouraged by TPR. Alas, it also exposed pension schemes to cash margin calls. They were borrowing short against long liabilities—maturity transformation, just like Northern Rock, with shades of the great financial crisis again.
Then excess set in and, instead of buying equities with the borrowed money, more gilts were bought and underwent repo and so on. They were often leveraged four times, or seven times, as admitted in a TPR survey, or, anecdotally, 13 times. In 2018, the Bank of England Financial Stability Report noted that leverage and exposure to derivatives in pension funds was far greater than in hedge funds. It advised liquidity buffers and stress-tested market moves to 100 basis points based on historical review. My thoughts were that it did not think widely enough, not even to taper tantrums. The Bank pointed to international concern about systemic risk in non-banks but, despite the known UK-specific circumstances of DB schemes and a systemic feedback loop on gilts should there be a falling market, direct action was not—maybe could not—be taken. So the systemic trigger event happened. There was a spiral of margin calls and, although the Bank intervened to purchase gilts, the fire sale of assets within pension schemes cost many of them around 25% of asset value.
Now we come to the funny money accounting illusion where the TPR, FCA and BoE all say that, due to the recent rise in gilt yields, the net present value of liabilities has dropped, deficits have narrowed and pension schemes are in a better position for buyout. Rejoice they may, but assets—out of which pensions will actually be paid, both now and in the future—have dropped by 25%. That hole will be felt.
Was LDI, at least in its simplest embodiment, a smart move? Possibly, but there is the issue that pension scheme borrowing is not legal. TPR hides behind the sophistry that repo is a sale and repurchase, though the BoE and FCA more honestly call it borrowing. Thus, in pursuit of buyout or accounting niceties, employers, trustees and regulators have embraced the contrivance of dubious legality to evade primary principles in legislation, with the Pensions Regulator, the FCA and the BoE seemingly oblivious to those primary principles. It is an accident waiting to happen again.
Lord Liddle (Lab)
My Lords, I welcome the noble Baroness, Lady Penn, back to her rightful place on the Front Bench. The speeches so far, led by the noble Lord, Lord Sharkey, have been of the highest quality. I must confess that I have already learned a lot from listening to experts such as my noble friend Lord Kestenbaum. I will make some brief observations on how we handle the situation we are now in.
First, we have to recognise that our national sovereignty, where we live in the world, is limited. Kwasi Kwarteng and Liz Truss thought that Brexit had somehow liberated them from constraints on national sovereignty. It has not, and that fact must be recognised.
Secondly, financial stability is essential. I believe we will face a very tough Budget but, when we make these tough decisions, it would be a great mistake to cut the programmes which are most likely in the long term to improve our rate of growth and therefore our ability to finance public services and a generous welfare state. If a Government present well-worked-out plans for investment, which should be audited by independent bodies, and if we invest wisely, we can borrow wisely to improve our position in future. I hope that will still be the case, because we need to invest in not only capital programmes but training. If we are to solve the problems of the health service, we need to invest in the workforce, particularly the social care workforce, because that is a crucial condition of getting the escalating costs of running the NHS under some kind of control. We need to invest in order to save; that is essential.
Thirdly, in tough times we should not neglect problems of poverty and inequality, or the essential role played by public services. We are getting to the familiar point that we want a Nordic welfare state with US levels of tax. That cannot be sustained with our demographic pressures, particularly on the health system. How do we get out of this? I do not believe we can solve the problem simply by imposing fantastically high taxes on the top 2% or 3%. We can do a bit more of that, but we cannot solve the fundamental problem of the welfare state by doing it. We need tax reform.
The noble Lord, Lord Young, illustrated in his excellent speech how prudent tax reforms could improve the housing situation and bring in more money to the Exchequer. The same is true of pensions. Why should better-off people get 40% tax relief when they invest in a pension, as I did, when people on average earnings get only 20%? We should have a standard incentive for investment in pensions. That would bring in a lot of revenue to the Exchequer, and it would be fair.
There are ways forward. Rachel Reeves has begun to address tax reform in business rates, but we must go further in other areas. I hope we can find a way out of this crisis that allows us to invest in growth and also maintain a sense of social justice.
Lord Best (CB)
My Lords, I thank the noble Lord, Lord Sharkey, for initiating this debate and for his excellent opening speech. My contribution will seek to identify actions which the Government could take to avert an ever-worsening housing situation and even extract something positive from the instability in financial markets which has led to higher borrowing costs.
First, to prevent a spate of repossessions—with the misery and huge cost of families being made homeless—there needs to be a robust safety net to meet the inevitable rise in home buyers running into serious mortgage arrears. In response to the 2008 global financial crisis, the Government introduced an improved income support for mortgage interest scheme. However, help was much diminished in 2018. On 9 June this year, the Prime Minister’s office announced a new plan to support homeowners which would strengthen protection at this time of other cost of living increases, but no further detail about these proposals has been given since. Can the Minister say when it is expected that the Government will take this forward to avert a serious outbreak of mortgage repossessions and homelessness?
Secondly, turning to new housebuilding, Secretary of State Michael Gove this week re-established the Government’s target for the construction of 300,000 homes per annum. This has sent out a signal that the Government believe it is essential to ease shortages and improve affordability by stepping up housebuilding. But, sadly, it will be harder to achieve this target with the rise in borrowing costs. Housebuilders are likely to sit on their hands rather than build more homes when costs are higher but prices may be falling; when there will be far fewer first-time buyers able to afford the new mortgage costs; when Help to Buy subsidies are finishing; and when deep uncertainty about the future will hold back potential purchasers.
The benefit which society can salvage from this predicament could come from a boost in the supply of new social housing, with support for the acquisition by social housing providers of sites or not-yet-finished developments. Not for the first time, this would keep the construction industry going through hard times and prevent a construction-led recession while achieving a real increase in desperately needed affordable social housing.
Thirdly, turning to the private rented sector—I welcome the helpful contribution of the noble Lord, Lord Young of Cookham—the hike in borrowing costs will now affect thousands of landlords. The number exiting the market has already been growing following less favourable tax treatment and necessary new and forthcoming regulatory changes. Two-thirds of the country’s 2 million landlords who have buy-to-let mortgages will face the higher costs of borrowing alongside higher costs of management, maintenance and new energy performance requirements. Very few will be able or willing to pass on all these extra costs to their tenants, not least since some tenants are already paying half their income in rent. So a greater exodus from the private rented sector can be predicted, with dire consequences for those already struggling to find rented accommodation.
This is not necessarily a disastrous phenomenon if struggling landlords are enabled to sell to social landlords—local housing associations and community-led housing organisations—which can modernise and re-let the properties as secure, affordable homes with low energy costs. The 2021 Affordable Housing Commission, which I had the honour of chairing, proposed a national housing conversion fund of £3.5 billion which could, with the usual private financing, achieve this switch for many thousands of properties. Will the new levelling-up funds open up this powerful route to addressing poor conditions and fuel poverty in the private rented sector, regenerating neglected areas, reducing the escalating housing benefit bill, saving NHS and social care costs and helping with net-zero targets?
I encourage the Minister to pass on to her colleagues Churchill’s wise advice: “Never let a good crisis go to waste”.
The Lord Bishop of St Albans
My Lords, we are living in challenging times, with inflation rates at a 40-year high. Turbulence in the financial markets, with higher interest rates and larger mortgage payments, is adversely affecting people in all walks of society. With the wholesale price of energy and gas increasing due to Putin’s appalling and illegal invasion of Ukraine, it is vital that His Majesty’s Government do all they can to protect renters, those with mortgages and, of course, pensioners.
To put a human face to this debate, I thought it might be worth while just quoting one of a number of emails I have received from communities in my diocese this very week. One person emailed me on Friday: “In my role as chair of a food bank, we are having to make decisions around both frightening increases in demand and a growing decline in donations. This summer, we increased our warehouse capacity to handle food for somewhere around 500 food parcels a day. The problem is in-work poverty which is growing substantially. In the past few weeks, we have been approached by a hospital, a large business, schools and a local council about whether they can refer low-paid staff to us.” He went on: “Apparently, employers are not prepared to talk about the problem of in-work poverty, feeling ashamed. They would like to raise wages and want the best staff welfare but can’t because that would move them into a deficit budget.” The human reality of what we are facing is stark. Unfortunately, the mini-Budget of 23 September made a challenging financial climate much worse.
I want to say a few words about the challenges facing pensioners. Statistics show that more than 2 million pensioners are living in poverty, with this figure increasing by around 200,000 in the last year. Age UK has suggested that one-quarter of elderly people are being forced to choose between heating and eating. These pressures are being felt particularly by those who are reliant on the state pension alone. I know many of us are hoping that in the forthcoming Budget we will be given some assurances about the commitment to maintain the level of state pensions.
I turn to private pensions for a moment and particularly raise concerns about the use of LDIs, which other noble Lords have mentioned. According to the Pensions Regulator, 60% of defined benefit pension funds incorporate LDIs. Without the Bank of England’s promise this September to purchase £65 billion in government debt, it is near certain that some of these funds would have been imperilled—that is perhaps a very mild description. The Bank of England has described this scenario as capable of
“driving a potentially self-reinforcing spiral and threatening severe disruption of core funding markets and consequent widespread financial instability”.
I understand why LDIs are being used. Nevertheless, as in many things, the issue is how and to what extent they are being used. I have heard reports that some of the funds were using too much leverage with too little protection and in so doing potentially causing a great deal of danger not only for themselves but to more responsibly managed pension funds and markets. We have to ask, and I hope the Minister will give some reassurance on this: are these LDIs being properly regulated? Are the risks really understood so that we are protecting pension funds? Are they subject to adequate stress tests? Indeed, I am tempted to throw in the question: if we are worried about LDIs, are there other financial investment mechanisms that might threaten the long-term stability of pension funds?
The Government must ensure that pensioners, some of the most vulnerable in our society, are protected from the riskiest of investment policies adopted by some pension funds. Will His Majesty’s Government investigate the use of LDIs by pension funds and ensure that pensions are properly protected?
Lord Sikka (Lab)
My Lords, I thank the noble Lord, Lord Sharkey, for facilitating this very timely debate. I want to talk about the elephant in the room, which is the finance industry and how it has destabilised the whole society. We have about 41 regulators for the finance industry, but they have very little idea of what the finance industry actually does. Indeed, it came as a shock to them after the banking crash that they were using derivatives to such a large extent. After the fiasco of the mini-Budget, some £1.3 trillion has been wiped off the UK bond market, and that includes £882 billion from gilts and the index-linked gilts market. The Pensions Regulator tells us now that some 7,500 pension schemes may well be technically insolvent. Did the Bank of England, the Treasury, the regulators or the FCA know how the pension funds are funded? We frequently get impact assessments accompanying financial Bills, but none of them looks at the destabilising effects of what the Government actually do. I hope we will get something different.
Financial markets are inherently unstable and, in the absence of effective regulation, continue to destabilise society. Short-termism is prevalent, compounded by fraud and anti-social practices, which are rife in the City of London. Numerous financial products have been mis-sold for more than half a century. Has any big company ever been liquidated as a result? No. Governments bail out the industry—that means there is no threat of bankruptcy at all for the key players and they then have a public licence to continue to misbehave. Financial sanctions are puny and they continue to engage in tax avoidance, rigging interest rates and exchange rates, forging customers’ signatures, money laundering and anything else we can think of.
The finance industry is the only industry that has the capacity to decimate economies. Research by my colleagues at the University of Sheffield has shown that between 1995 and 2015, the bloated, scandal-ridden finance industry made a negative contribution to UK GDP of £4,500 billion, yet the Government do not take that on board in anything they do in relation to this industry. There is no public inquiry of any kind as to how the industry operates. Can the Minister tell us when we will get a public inquiry into this scandal-ridden industry?
Effective regulation is the key. That was recognised after the 1929 Wall Street crash, when the US created the Securities Exchange Act. Of course, it has not fully succeeded. The UK has a rather laissez-faire approach. Until the mid-1970s banking crash, there was no regulator for the banking industry at all. The Banking Act 1987 handed the keys to the Bank of England and it failed miserably, as was shown by the frauds at BCCI and Barings and the collapse of Johnson Matthey. Then we had, through the revolving doors, the Financial Services Authority, after which the 2007-08 crash showed that the chaps regulating the chaps does not work at all; it has never worked. Then we brought in the FCA and the PRA and the scandals have not gone away, whether it is London Capital & Finance, Blackmore Bond, Woodford Equity or any other. The HBOS and RBS frauds are still unresolved. My colleagues have sent regulatory bodies 10,000 pages of evidence to show that banks are forging customers’ signatures to repossess their homes and businesses, yet we have seen no action of any kind.
The shadow banking industry is not regulated at all, yet it is bigger than the regulated banking industry. That is another elephant in the room and we saw part of the effects of that through its effects on pension schemes. Can the Minister tell us why the shadow banking industry is not regulated on the same terms as the banking industry?
I shall wind up by reminding noble Lords that we need effective independent regulation in which the stakeholders, not the City elites, are in control of what happens in our society. Until that happens, there is little prospect of stability in the finance industry and that will affect the rest of the economy, because everything is now financialised. Indeed, private equity owns supermarkets: if they collapse, supermarkets will collapse too.
Lord Bilimoria (CB)
My Lords, between 8 and 19 September, after Her Majesty the Queen sadly passed away, the whole world looked to this country with the utmost respect thanks to that wonderful lady. On 23 September, it all came crashing down. I had been travelling around the world, in Asia and in Europe, and people said to me, “What is your great country doing to itself?” On 24 October, on Diwali day, our first south Asian-Indian Prime Minister, Rishi Sunak, was appointed. What happened on 23 September? Liz Truss and Kwasi Kwarteng’s plan was a good plan with its intentions for growth and to cut taxes. When I was president of the CBI, I constantly said to Rishi Sunak, when he was Chancellor, “Please don’t put up taxes”. The Indian Budget in 2021 deliberately did not put up taxes. The Indian Government said, “We do not want to stifle the recovery and hamper growth, because that is what will happen if we put up taxes, and businesses have suffered enough”. Instead, we have the highest tax burden in 70 years.
In life, more often than not, it is not only what you do but how you do it. I remind noble Lords of the irrational exuberance of Liz Truss and Kwasi Kwarteng on 23 September, pulling rabbits out of a hat, including removing the cap on bankers’ bonuses. This is the right thing to do to make the City of London more competitive, but not when people are going through the most acute cost of living crisis in memory. Reducing the top rate of tax from 45% to 40% is absolutely the right thing to do. It was 40% under Margaret Thatcher, John Major, Tony Blair, and Gordon Brown, who put it up to 50%. Then it was taken down from 50% to 45% by George Osborne, and not to 40% because of the coalition with the Liberal Democrats. He would have taken it down to 40%; it should be at 40%, but not now—timing is everything.
The markets were spooked of course, because there was no OBR report to back up and support the so-called mini-Budget. There was no plan and no budgeting. Removing the national insurance rise of 1.25% is again the right thing to do. The Labour Party itself said that it would not have increased national insurance. Now everyone is focused on this black hole of £50 billion. No one talked about the black hole of £400 billion that was spent during the pandemic. Our debt to GDP is, at the moment, about 100%. It is the second lowest in the G7. Japan is at 250%, America is at 150%, Italy and France are both over 110%. Our debt is not that high. It is all about perception, and about the Government and the Treasury having a plan, and the Government and an independent Bank of England working together.
Before the financial crisis in 2008, we had an average growth rate of 2.5% and interest rates of about 5%. After the financial crisis we had austerity. Austerity did not work; it led to no growth and declined productivity. We had almost 0% interest rates for over a decade. We must not go down the austerity route. We need efficiencies in public services. We are all grateful for the National Health Service; its expenditure has gone up from £110 billion to £150 billion, and will continue to increase. It needs root and branch reform. We need to be able to continue to offer health, social and dental care free at the point of delivery, and that will need efficiencies.
Putting up corporation tax from 19% to 25% is going to hamper our competitiveness and will harm businesses in every way. To counter that, the Government should encourage investment. The super-deduction of 130% has been taken away. I ask the Government if they will introduce a 100% tax deduction for capital investment, innovation and R&D to encourage investment? We need to invest in skills and to reform the apprenticeship levy. Can the Minister tell us if the Government will reform it?
We are crying out for the reform of business rates. The rates we have are some of the most expensive and unfair in the world. They are killing our high street, hospitality and retail sector. Will the Government reform business rates? Will the Government agree that business needs help right now to survive this winter, in the face of a recession? We need to temporarily reduce VAT to 10% for the hospitality sector, as we did in the pandemic. We need to give business rates relief, as we did before. We need to activate the shortage occupation list. Do the Government agree that we need a revamped Migration Advisory Committee, much like the Low Pay Commission that sets the minimum wage, and the independent Monetary Policy Committee that sets interest rates? We should have an independent MAC that activates shortage occupation lists, sector by sector, granting one or two-year visas, to give industry the workforce it needs.
We need access to cash flow and government-guaranteed loans. That way businesses will survive. If not, we will have 10% of hospitality going bust. We need the help now. I would rather do that to prevent unemployment and businesses going bust. We need a credible plan and a credible budget, not irrational exuberance, and to continue to invest in education, infrastructure and defence—and I am sorry to say I think that 3% defence expenditure is going to be required.
We now have a Prime Minister and a Chancellor with business backgrounds. We have interest rates that have gone up to 3%; they will go up to 5%. We must focus on investment, growth and this country’s strengths, with its strongest combination of hard and soft power in the world, and a reputation for integrity, which is why we have been trusted historically by the world.
Lord Desai (Non-Afl)
My Lords, I thank the noble Lord, Lord Sharkey, for initiating this debate and the powers-that-be for holding it in the main Chamber and not shoving us off into the Moses Room. I have never enjoyed an economics debate in the Moses Room. It is much better in here.
We have already had three overlapping crises. First, we had come out of a pandemic, which had caused us to spend a lot of money and build up a deficit, but that was necessary. Secondly, as I said last time that we had a general economic debate in July, we are in a stagflation crisis as serious as the one we had in the 1970s. That crisis lasted 15 years and we have to take this crisis very seriously. It is partly the result of the Russia-Ukraine war, partly other things, but the shock of energy price rises is going to stay here and not go away any time soon. Thirdly, we had the desire on the part of the then Prime Minister, Liz Truss, to ignore all this and go for growth. I have lived here for nearly 60 years and as a professional economist I have never known any time when the British economy has not been going for growth—not actually getting it, but going for growth. Going for growth is the great thing. “How can we grow faster? How can we be like Germany or America?” That has cost us a lot. This is a very fragile economy. I remember the days of stop-go when the weakness of sterling was causing us a lot of problems and we could never get growth. Then we had the long battle about Europe and we finally Brexited. I think Brexit has done some damage, which the Government still do not admit, but the Office of Budget Responsibility was very clear how much Brexit has harmed us.
Given that these conditions were facing us, during the debate about the Conservative leadership it was quite clear that there were two views. One was of fiscal responsibility and the other was a dash for growth. I think the dash for growth won the support of the Conservative Party members.
The surprising thing about what happened then was the indecent haste with which the dash for growth was implemented. The new Prime Minister had plenty of time: unfortunately, because Her Majesty the Queen had died, Parliament was not sitting. She had a month or two to think about her policy. But no—she was in such a hurry I can only call it Maoist. Mao Zedong, when he became the leader of China, suddenly thought, “Within five years we are going to catch up with the UK in steel production”, and he totally ruined the economy. This economy can be ruined much faster than China’s, and that is what happened.
To propose tax cuts which are not properly funded was such an elementary mistake that it made the financial markets respectable and much loved in this country; for the first time, ordinary people thought, “Well, thank God for the financial markets, because this madness would have cost us a lot”. So in a sense it is quite right that the financial markets offer good advice to politicians: “Don’t do foolish things; try to do better”.
I do not have much time, but let me put it to the Government this way: do not start on the growth run. Please preserve our stability. There is plenty of time—this country is not going to go away. Right now, we are still suffering from the loss of skilled labour due to Brexit, and we need to take care of social care, the health service and so on. Conserve, preserve, and save the economy. We will have enough time to grow later.
Lord Campbell-Savours (Lab) [V]
My Lords, following the excellent speeches from the noble Lords, Lord Young of Cookham and Lord Best, I will concentrate my remarks on the narrow issue of housing and the instability in the housing and rental markets arising from the crisis brought on by the war in Ukraine. That war, with its consequences worldwide, is undermining housing markets across Europe, with escalating interest rates and a drop in construction activity. In London there is a particular crisis: Foxtons and Chestertons are reporting between 20 and 30 applicants for each rental property, with supply at an eight-year low.
Escalating rents are driving desperate prospective tenants into offering 12-month upfront rental payments. With thousands of new builds on hold, a Budget forcing up interest rates on mortgages—topping 6%—and escalating building costs, we have a real crisis in the making. This is all against the background of the Bank of England’s statutory objective to
“protect and enhance the stability of the financial system”.
We all know what that means for those who lack resources and buying power. Those with resources will see savings increase in cash terms, while those without will really suffer as they service their borrowings. Of course, all lose in conditions where inflation bites into savings.
Faced with rising mortgage costs, landlords are responding, often erratically, in defence of their business models. On the one hand, they have rising mortgage costs, and on the other hand the problem of affordability by tenants. Faced with escalating mortgages, some landlords are pulling out of the rental market. There are reports that the number of properties available for rent in quarter 1 of 2022 was down a third from the pre-pandemic five-year average—all at a time when demand from new tenants is rising and existing tenants are struggling against demands by landlords for increased rents. In June, the BBC reported on tenants’ bidding wars, with renters under 30 spending 30% of their income on rents, and Shelter’s August survey found that 32% of private renters spend at least half their monthly income on rent—and this was all before the consequences of the disastrous Kwarteng-Truss Budget measures, with their ruinous effects on interest rates.
One of the consequences of the most recent escalation in interest rates is deeply worrying. My contacts in the housing market talk of huge increases in rents being sought from tenants who, on pleading an inability to pay increased rents, are being evicted or pushed to leave, some under the provisions in Section 21 of the Housing Act 1988. This brutal section enables private landlords to repossess properties from assured shorthold tenants without having to establish fault on the part of the tenant.
In April 2019, the Government announced the repeal of Section 21, and the Conservative manifesto equally promised repeal and a better deal for renters. In this year’s Queen’s Speech, the Government announced the “renters’ reform Bill”, and its accompanying White Paper proposed abolishing Section 21 evictions—all good news. However, we now hear some ambiguity in recent statements from Commons Ministers about the timetable of the legislation. Whereas originally it was to be introduced
“in the 2022-23 parliamentary session”,
it is now
“in the course of this Parliament.”—[Official Report, Commons, 17/10/22; col. 355.]
Meanwhile, insecurity of tenure and potential evictions can proceed. Renters in this volatile market need urgent action. They need protection now, not delay. The crisis requires early action, and the Government need to respond. I appeal to the Government to introduce legislation as a matter of priority. Landlords cannot always be relied on to act sensitively.
I want to repeat a question I asked earlier this year, and again ask the Minister to consider my suggestion that
“with vulnerable, low-income elderly groups in this highly inflationary period facing unaffordable, escalating service charges and possible loss or even forfeiture of their homes, why not promote or sponsor a national scheme for elderly leaseholders that rolls up service charges in the form of a debenture against property title—effectively a rising legal charge? The debenture holder would pay the service charge on behalf of the resident, and then claw back payments—interest-serviced or otherwise—on death or even before.”—[Official Report, 20/6/22; col. 12.]
I have not been informed that there is work going on in the department. I hope that the Minister can take my suggestion away and consider it, because there is a real problem developing in this area of housing policy.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Lord, Lord Sharkey. It is very tempting to use the opportunity he provided to reflect on the immediate impact of the reckless unleashing in September of failed 1980s policies built on a fundamental misunderstanding about the nature of markets—which are not some abstract, immutable, timeless force but a human creation shaped by human-made rules and, as ours are now constructed, subject to wild irrationality and mindless seeking of short-term profit without any concern for long-term costs, structured so that a few benefit and the rest of us pay.
But I am not going to do that. Instead, I am going to focus on stability, which the noble Lord asks us to contemplate with reference to the obvious recent impacts of instability on pensions, mortgages and the rental market—to put it another way, on the provisions of the essential needs of life, or the needs for survival.
Stability demands resilience and resistance to shocks. It is not just our financial markets that need resilience but our entire society in this age of shocks: pandemics; geopolitical earthquakes; the climate emergency and nature crisis; and demographic shifts such as our ageing population. In the past we tried to deal with such issues with stress tests. To quote the Deputy Governor of the Bank of England, Jon Cunliffe, in a recent letter to the UK Treasury Select Committee,
“the scale and speed of repricing leading up to Wednesday 28 September far exceeded historical moves, and therefore exceeded price moves that are likely to have been part of risk management practices or regulatory stress tests.”
A stress test can only ever be as effective as the stress that it can imagine, and we are now in an age of shocks like we have never seen before.
The right reverend Prelate the Bishop of St. Albans asked whether we should not have better stress tests but, practically, this is not enough. No one truly understands the current system and, as the noble Lord, Lord Sikka, so powerfully outlined, we have an innately risky and unstable system that is absolutely stock-full of fraud and corruption, as well as a lack of transparency.
It might be said that maybe this is the price we have to pay to live in a modern society. As the noble Lord, Lord Sharkey, said, I think it is worth looking back to the excellent House of Lords Library briefing here, which—I think rather pointedly—started by quoting the Bank of England’s definition of financial stability. It says that it is
“the consistent supply of the vital services that the real economy”
needs. Those are the human needs that the noble Lord’s questions refer to: the need for a roof over your head and for an income when you are old so that you can feed yourself. We can look again to the Bank of England’s website to ask: what are financial markets for? The Bank of England says that
“financial markets … exist to bring people together so money flows to where it is needed most.”
Let us think about where money has been flowing. If we go back to 2007-08, where did money flow? It flowed massively into the banks, to rescue them. At that moment, that had to happen or the cash machines would have stopped working and no one would have had any money to buy their food, et cetera. But what happened after that? The money stopped flowing to our essential public services; it stopped flowing to the basic benefits that keep people alive.
I invite noble Lords to imagine an alien landing on Earth today, in the UK. Where does money need to flow? Obviously, it needs to flow into households that are struggling to heat their homes and feed their children; into schools contemplating a four-day week because they have not got enough income; and into hospitals with queues out the door. But where is it flowing? It is flowing to tax havens and rich men’s yachts; it is swilling around and around in the City of London.
To give some figures, according to the Bank of England, lending from banks to the non-financial sectors accounts for only 20% of their balance sheets. The rest is interbank claims: money swilling around and around in the financial sector. Now, that figure excludes trading derivatives, which are often several times larger than banks’ balance sheets. The fact is that on banks’ balance sheets, their loans make up a tiny proportion of their total banking interests. Two-thirds of the non-financial lending goes into mortgages, pumping up prices, and the rest into business assets, again pumping up prices.
The Treasury directed the Financial Conduct Authority in the last financial crisis to make financial markets work well. If they work well, they have to serve the real economy, which they patently and clearly are not doing now. They are risking the secure future of us all.
Lord Davies of Brixton (Lab)
My Lords, I first offer my thanks to the noble Lord, Lord Sharkey, for initiating this debate, and to the previous speakers. I have to declare an interest as a fellow of the Institute and Faculty of Actuaries. I have to say, based on over 40 years in the world of pensions, I find it quite difficult to cram what I want to say into five minutes—less than five minutes now.
I will, however, make three points. First, thanks to the noble Baroness, Lady Bowles of Berkhamsted, we have heard a clear exposition of the technical difficulties that arose in the episode in September. We need to understand, however, that this is a systemic problem with our pension system and the way that it is funded. It is not just a question of overleverage or pooled funds being difficult to manage. It is about the whole approach to how we fund defined-benefit pensions. There is a mistaken belief that if you look to reduce short-term volatility, that in some sense helps in the long term. The contrary is true: the real risk to pension funds is that they do not deliver their benefits, or the obverse, which is that the cost of providing those benefits is set too high, dissuading us from making adequate provision. It is a complicated subject, but this is encapsulated by this short-termism and focus on mark-to-market valuation at the behest of company accounts. That is the fundamental problem and it needs to be broken.
To address that issue, we must have a proper review of this incident and what it means for funding in general. Currently, we have an alphabet soup of regulators involved: there is the Joint Forum on Actuarial Regulation; within that we have the Institute and Faculty of Actuaries, the Financial Conduct Authority and the Pensions Regulator—it goes on. They are undertaking a review next month of what happened but we need an important and clear independent element in that review. I pressed the issue in Questions earlier in the week: I hope that the Treasury will take a more long-term view of what is happening here. We are told that three Select Committees are looking at this issue. Perhaps we will have to wait until their conclusions, but the Treasury has to take hold of this issue and look at what needs to be done, rather than relying on this alphabet soup of regulators.
Thirdly, what impact does this have on pension benefits? A lot of commentators in the industry have said that funding ratios have gone up, so it is all right. As has been explained, ratios have gone up not because there is more money—there is less money—but because of the adjustment in the value attributed to future liabilities. That is fine, but the problem is that the better funding ratio is not looking at what that means for benefits. The funding ratio might have improved, but the higher rate of inflation that comes with that reduction in interest rates will have a devastating effect on members’ future benefits. It is no good having a higher funding ratio if the benefits have, effectively, been reduced because of the impact of inflation.
Baroness Kramer (LD)
My Lords, I join in welcoming the Minister to her role and thank all noble Lords who have spoken. It has been a quite exceptional debate, both for its quality and new ideas and the wide range of contributions. But while we have been standing here, the Bank of England has raised interest rates by 0.75 of a point to 3%. That is the biggest hike since 1989 and it is forecast that the UK is facing a “very challenging” two-year recession, which would be the longest on record.
I say to the Minster, since she is here, that this calls for the Chancellor to come to Parliament and to speak more generally to the nation. So many people will now be desperately worried about what will happen to them. Several speakers today—I am thinking of the noble Lords, Lord Young, Lord Best and Lord Campbell-Savours—focused on housing, both on mortgage costs and the immediate impact on the rental market. That will feed through to people long before we get to the Autumn Statement on 17 November. Will the Minister ask the Chancellor to reassure the nation before then, rather than leave people twisting, quite frankly, with overwhelming concerns? All three of those speakers talked about longer-term reforms. Those things matter, both for housebuilding and for the rental sector, but we have an immediate crisis, and that is what I ask the Minister to focus on and deal with immediately.
After the events of the past weeks, I hope we no longer have to deal with discussions that question the need for financial stability. It is a prerequisite for a functional economy, and fiscal responsibility clearly underpins that stability. I have been listening for years to people who have claimed that we can print money, borrow, cut taxes and spend, with almost no limit. I pick up the phrase of the noble Lord, Lord Kestenbaum, who said that one day the music will stop. We have to take proper responsibility.
We also need to recognise that we are not the US economy with the almighty dollar and a domestic market of 350 million people. We are not in the EU with a domestic market of 450 million and 27 countries at our back. We are a medium-sized European economy, adrift since Brexit from any significant trading bloc and with a currency that is no longer a globally used trading vehicle. We have made our economy significantly more vulnerable. I pick up the point made by the noble Lord, Lord Desai—that the UK is an inherently fragile economy and we have to recognise that in the decisions and actions we take.
I also hope—I really disagree with the noble Lord, Lord Bilimoria, here—that we have heard the last from those who claimed that very low corporate taxes, reducing taxes on the richest, slashing regulation and cutting public services are the answer that will hand us growth.
Baroness Kramer (LD)
I misunderstood; I thought the noble Lord was advocating cuts in public services to balance the books.
Baroness Kramer (LD)
I would like to deal with that issue of efficiencies and cuts. After so many years of cutting out the fat and getting to the bone and flesh, the word efficiency is used extremely casually. Very often, it is expensive to make the change that underpins efficiency, so I will be looking to see if the noble Lord, Lord Bilimoria, speaks out against cuts in the real financing of public services.
We have been through this low-tax strategy and, frankly, it is an ideology that has been proven to be wrong. It may have suited or looked sensible when first implemented, but we have seen consistently over a long period that it does not deliver growth in the UK economy. I shall be fascinated to hear speeches from the Conservative Benches after the Autumn Statement. I am sure there will be lots of support for whatever the new orthodoxy is, and I look forward to seeing how Members opposite align that with the enthusiastic speeches in favour of the mini-Budget.
Businesses are now trying very hard to get the Government to hold back from their other false growth claim, which is slashing regulation. I noted that even the noble Lord, Lord Wolfson, said in this House that business is not looking to cut or change existing regulation. Last week I was at Mansion House to hear the Lord Mayor of London trying to impress on the Government and regulators that the City and financial services depend on the accreditation and confidence that regulation provides. If ever we needed to understand that regulation, having standards and getting it right are important, it is in light of the crisis triggered by LDI.
Numerous speakers picked up that point, including my noble friends Lady Bowles and Lord Sharkey, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Sikka, as well as the noble Lord, Lord Davies, who looked specifically at the need to reform the way we think about and structure pensions. These are not deregulatory actions; they will often incur different, but firm, regulation. Regulation is a mechanism for enforcing standards, and the casual notice that a deregulation agenda somehow leads to growth is something most of industry is pleading with the Government not to adopt.
In the end, it is ordinary people and small businesses that pay the price of decisions that fly in the face of the real world and the experience we have been through. The noble Lord, Lord Kestenbaum, made the point that market instability hits many ordinary people. I will not repeat the many conversations that have taken place today on the impact of the rising cost of living, mortgages and rents; that has been very well laid out. The noble Lord, Lord Liddle, made the point that we cannot ignore poverty, the right reverend Prelate the Bishop of St Albans talked about the problems of in-work poverty, and all the conversations about rental reform very much feed into these concerns. I have simply no idea how most families manage when the cost of the very basics for living are up by 17%.
The Government are going to have to confront the impact of declining real wages. You cannot clap nurses one week and push them to food banks the next. I disagree again with the noble Lord, Lord Bilimoria, that uncapping bonuses is just a timing issue. You cannot say that one group of people cannot work effectively unless they have uncapped bonuses, then look at nurses and say that they can work effectively even with declining real wages. That bonus system, together with light-touch regulation, played a huge role in driving the 2007-08 crash that still scars us today. There is an old saying: fool me once, shame on you; fool me twice, shame on me. We have to be very careful about how we handle the financial services industry, for which I have great respect but where the wash of money tempts people to find a workaround in so many different ways. Indeed, LDI is a very good example of the industry trying to find a workaround.
We wait to see the Autumn Statement on 17 November. I think everyone here is very well aware that Shell announced last week not just quarterly global profits of $9.5 billion, over twice those for the same period last year, but that it also paid no windfall taxes. BP had almost the same earnings and paid a tiny bit of windfall tax. The House might be interested to know that the oil and gas sector has in just this quarter paid out $29 billion to shareholders. This, if anything, demonstrates that this tax has been very badly structured. I understand the Chancellor wanted to put in many thoughtful loopholes, but they desperately need to be removed and this must become a meaningful tax. To pick up on points made largely by the noble Lord, Lord Liddle, one of the things we need to think through is a shift from taxing earned income so heavily to looking at unearned income.
I agree with the noble Lord, Lord Bilimoria, that small businesses are under terrible pressure, and that needs to lead to reform of business rates and various schemes that will let them manage the debt they are carrying, many for the first time. Of course, I also join with others in calling for the uprating of benefits in line with inflation and protection for the triple lock.
There are many things that I do not forgive this Government for, because for years they have ignored the fundamentals of growth in the economy. That may be a point for a different debate—I would love the opportunity to develop it. The Chancellor faces hard choices. The Conservative Party has over the last decade brought those choices on itself, but the unfortunate part is that it has also brought them on the country.
Lord Tunnicliffe (Lab)
My Lords, I congratulate the noble Lord, Lord Sharkey, on securing this important debate. I congratulate all noble Lords who have participated; I enjoyed their critique of various factions. I found particularly helpful the discussion on LDI. Studying it over the last few days, it finally failed a test that I have always found useful: if it looks too good to be true, it probably is, and is in many ways a charade.
I have already welcomed the noble Baroness, Lady Penn, back to her place on the Front Bench. She had no role in the recent economic turmoil, yet she shares responsibility for clearing up the mess. I wish her well—it will be a tough task—and hope her first priority will be to stress to the Chancellor the importance of fairness as he prepares his Autumn Statement. It must place the burden on those with the broadest shoulders, recognising the very serious financial struggles being faced by so many across the country.
It says a lot about the mini-Budget that it was announced less than six weeks ago yet managed to: crash the economy; lose Mr Kwarteng his job; be torn to pieces in record time, in such a public manner; and evict Liz Truss from Downing Street. As we heard during this debate, the damage done by the mini-Budget will not be undone for some time. This was an economic crisis made in Downing Street. Through instability to pension funds and significant hikes in mortgage rates and rents, ordinary people are paying the price for the Conservative Party’s reckless gamble.
On pensions, I admit to leaving the Chamber on Tuesday afternoon with more questions than answers. Responding to questions on the use of liability-driven investment strategies, the Government seemed to have four fallback positions: non-banking activity is subject to different regulation; pension funds had been stress-tested in 2018; the Financial Policy Committee does not believe funds can ensure against all extreme events; and this is an issue of international concern, meaning there is no domestic fix. Let us take each in turn.
First, we will shortly consider a hefty Financial Services and Markets Bill. What provisions, if any, are there in that Bill which may help address concerns around the risks posed by LDIs and indeed any other instruments in the future that create those dilemmas? Is the Treasury actively considering adding any provisions in response to recent events? If so, when will those new measures be introduced?
Secondly, can the Minister confirm whether any additional stress test has been carried out since the exercise in 2018? Do these occur at regular intervals, or was it a one-off exercise?
Thirdly, while it is true that funds may not be able to guard against all possible market events, that does not absolve them of the responsibility to guard against the risks they are taking on behalf of pensions beneficiaries. The FPC will, in due course, come to its own view on where the bar should be set, but does the Treasury have its own position?
Finally, on mortgages, it is true that there is an international element. That is why I used my question on Tuesday to cite the news that other countries’ regulators are expanding their surveillance of activities with links to UK pension funds. The Minister told the House that the Government are advocating for international agreements in this area. Could she outline the forum in which these talks are taking place? Do the discussions pre-date the mini-Budget, or have such talks commenced only since the events in September? Does the Minister believe that the UK has suffered material harm to its international reputation for financial stability?
While the detail and regulation of LDIs is very important, the biggest impact in the UK’s recent financial instability for many people has been the sudden increase in their housing costs. For many, the legacy of Liz Truss’s short spell in Downing Street will be higher mortgage bills or rent costs, not just for the few weeks she was in office but for years to come. The Resolution Foundation warned two weeks ago that more than 5 million households could see their annual mortgage payments rise by £5,100 by the end of 2024. Labour analysis of mortgage market data suggests that the costs may be even higher: those who borrow £200,000 will now spend almost £6,700 more a year than they would have last September.
Of course, these costs may rise further still. The Bank of England will continue to hike interest rates in the coming months as it seeks to bring inflation down. Given that economic picture, there can be little surprise that mortgage approvals for purchases were down 10% over the past month. Many first-time buyers have had their dreams dashed, with banks withdrawing mortgages for those with low deposits and drastically increasing the rates on the products that are left.
Renters are also feeling the pain, with many anecdotal reports of landlords increasing charges to offset higher costs. As the Library briefing outlines, various property firms have produced evidence that rents are spiralling. For many, this was the case even before the mini-Budget—a reflection of the Government’s poor record on housebuilding, regulation, and so on.
People’s lived experience of the last six weeks means that they simply do not believe the Conservative Party’s assertion that the recent economic crisis was driven by international events. Yes, interest rates are rising across the world, but the mortgage and rent hikes seen in the UK are simply not being replicated elsewhere. Other countries’ pension funds did not require a bailout from the national bank. These events were the result of a catastrophic failure of judgment from the former Prime Minister and Chancellor. The new Prime Minister may have acknowledged that mistakes were made, but we are yet to see any evidence that the Government know how to put this right.
The Conservative Party is out of ideas. Only Labour can deliver the stability and growth Britain needs, through strong fiscal rules, an office for value for money, our green prosperity plan, a modern industrial strategy, and our plan to scrap and replace business rates.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, I join all noble Lords in thanking the noble Lord, Lord Sharkey, for the opportunity to debate this important topic.
The central responsibility of any Government is to protect national security, and an essential pillar of that security is economic stability. That economic security and stability has real and profound impacts on people’s lives, as we have heard in today’s debate, from pensions and savings to mortgage costs and the broader cost of living.
The Motion that we are debating today speaks of the importance of stability in financial markets, and I agree with all noble Lords on the desirability of this. However, it is also important to recognise that many of those factors influencing stability can be beyond our control. There are global forces that can create volatility in the financial markets, as we saw in the past with the global financial crisis and more recently with the shocks of the global pandemic and the energy shock in the aftermath of Russia’s invasion of Ukraine. The role of government and the regulators is to ensure that we have a system that is resilient to those shocks. Since the financial crisis in 2008, that is what we have sought to build.
We created a new Financial Policy Committee to look at risks across our financial system, backed by the powers to tackle them. On the question the noble Lord, Lord Tunnicliffe, asked about whether the Treasury will take a view on financial stability risks in addition to the Financial Policy Committee, the Government remain committed to the Bank of England’s independence, so it is right that the FPC can independently assess the level of resilience required to promote UK financial stability.
We have also developed the UK resolution regime, which provides the financial authorities with powers to manage the failure of financial institutions in a way that protects depositors and maintains financial stability, while limiting the risks to public funds. We have implemented regulations to strengthen the resilience of the banking system, with the major UK banks now reporting core capital ratios three times higher than before the global financial crisis. There has also been a concerted international effort to strengthen the financial system and ensure that the authorities have the necessary tools in place to protect financial stability.
Recognising in particular the significance of the non-bank sector, over the last decade the Government and UK regulators have worked closely with our international partners through the Financial Stability Board to identify vulnerabilities and enhance the sector’s resilience. It is important to pursue this work through international fora due to the global nature of the financial system, and the Government, the Bank of England and UK regulators play an active role in this work. As a result, the system is much more resilient today than it was in 2008.
However, alongside the UK’s independent financial regulators, we continue to closely monitor any developments that could be relevant to UK financial stability. The Treasury, the Bank of England and the Financial Conduct Authority have well-established and mature systems for monitoring the health of our financial services firms and responding when incidents occur. We are also committed to maintaining and enhancing the UK’s position as a global financial services hub.
The noble Baroness, Lady Bennett, questioned what the financial sector delivers for the United Kingdom. She will probably be familiar with the statistics that financial and related professional services employ more than 2.3 million people across the UK, creating £1 in every £10 of the UK’s economic output and contributing nearly £100 billion in taxes to help fund vital public services. We plan to continue to strengthen that sector through the Financial Services and Markets Bill, which is currently in Committee in the House of Commons. We are all—
Lord Liddle (Lab)
The Minister has stressed, rightly, the importance to the prosperity of the City of London of financial regulation, and of a stable financial regulatory regime, which I certainly support. However, the Government are talking about taking powers to overrule regulators. Can the Minister confirm whether or not these powers will be included in the Bill when it gets to this House? Can she tell us how she thinks that will contribute to the independence and stability of the regime, which is so fundamental, as she admits?
Baroness Penn (Con)
I cannot confirm that, but I am sure that when that Bill comes to this House, we will spend sufficient time scrutinising its provisions and ensuring that they deliver the outcome that we all want—a stronger financial services sector—which is important not just for the City of London but for people’s everyday lives in the country.
Baroness Bennett of Manor Castle (GP)
The Minister referred to the amount of employment from the financial sector, which, by my figures, is about 7% of total paid employment, meaning that 93% of people are not working in the financial sector. If the Government are focusing their efforts on increasing the financial sector while failing to meet the needs of the sectors of the economy that provide 93% of jobs, are we not all losing out?
Baroness Penn (Con)
I do not believe that that characterisation is right. Ensuring that we have a strong financial services sector also benefits many other parts of our economy in terms of access to capital, and many other things. It does not need to be at the expense of the rest of our economy. It strengthens the rest of our economy.
Lord Sikka (Lab)
The Minister referred to £100 billion of tax from the finance industry. That is misleading, because it includes things such as the VAT collected by the finance industry, which is borne by customers; PAYE, which is borne by employees; and national insurance, part of which is also borne by employees. Surely that £100 billion number needs to be corrected.
Baroness Penn (Con)
No, it is correct. The noble Lord seems to know how it is composed, so we are transparent in how that number is reached. I would like to make a little progress.
Baroness Bowles of Berkhamsted (LD)
I am sorry, I know that the Minister keeps being interrupted, but maybe it should all come at once. She mentioned that the Bank of England had powers to intervene. I would be very interested to know what preventive powers she thinks the Bank of England could have used to intervene on LDI and leverage. It put it in its Financial Stability Report, but genuinely, I do not know what powers it has to intervene over something that is not covered by FiSMA. It is DWP and there is another regulator, yet it is causing a systemic glitch that could happen again.
Baroness Penn (Con)
The noble Baroness is right that there is more than one regulator at play in this space. That point was also made by the noble Lord, Lord Davies of Brixton. If the noble Baroness will forgive me, I will come on to some actions taken after the 2018 stress test shortly.
The noble Lord, Lord Tunnicliffe, asked what the forthcoming Bill will do to promote financial stability. Allowing us to tailor our financial services regulation to the UK’s situation and needs will mean that we can create the best regulation for our circumstances. In a world where financial services are evolving all the time, with new developments and technologies requiring regular changes, the measures in the Bill will mean that UK regulations can remain up to date and effective.
It is also the role of the Government to ensure that their own decisions lead to trust and confidence in our national finances. Our responsible approach to managing the economy meant that we went into Covid and the current economic crisis with strong public finances, allowing us to intervene to support people’s lives and livelihoods. In that context it is important to acknowledge that, while well intended, the recent growth plan had unintended consequences for economic volatility.
Mistakes were made, and we have taken steps to fix them. Most of the tax measures in the growth plan have been reversed and the associated volatility dissipated. However, we are still faced with a profound economic crisis, with global inflationary pressures driven by increased demand post Covid, elevated energy prices after Putin’s invasion, widespread labour shortages and, in response, central banks across many major economies raising interest rates.
My right honourable friend the Chancellor of the Exchequer has been clear that we will take the measures needed to restore confidence and trust in the UK’s public finances and to deal effectively with the economic shocks that are being felt across the globe. In doing so there will be difficult decisions to take, but I hope that I can reassure the noble Lord, Lord Tunnicliffe, and others, that in taking them, this Government will protect the needs of the most vulnerable.
Specifically on recent events, the FPC noted in its July Financial Stability Report that the worsening global economic outlook had caused markets to be volatile in recent months. Since July, global inflationary pressures have intensified further. Specifically on the intervention by the Bank of England, all noble Lords will be aware that in late September there was elevated uncertainty in the UK bond market that resulted in gilt yields rising rapidly and significantly. LDI funds, many of which held leveraged positions in the gilt market, faced significant margin calls as a result. In some cases, these calls exceeded the cash buffers that they held, forcing them to raise cash by selling gilts into a falling market. Large sales of gilts into an already illiquid market led to yields increasing even further, in turn triggering further margin calls and forcing further gilt sales to try to maintain solvency.
This would have led to a spiral of falling prices but increasing pressure to sell gilts, so, within its remit, on Wednesday 28 September, the Bank of England started temporary purchases of long-dated UK government bonds, with the aim of restoring orderly market conditions. In line with the Bank’s statutory financial stability objective, the purpose of these operations was to act as a backstop to restore orderly market conditions and reduce any risks from contagion to credit conditions for UK households and businesses while the appropriate adjustment takes place. This operation was fully indemnified by the Treasury.
It is worth remembering that the Bank’s intervention served to keep the gilt market stable so that funds had time to adjust their positions in line with the changed market conditions. The speed and scale of repricing far exceeded historical moves, and therefore fell outside the expectations of risk management plans or regulatory stress tests. Throughout the intervention, the Bank worked with LDI funds and pension schemes as they built their financial resilience ahead of it coming to an end. Market conditions have since improved. The Bank’s usage of the scheme, at under £20 billion, was significantly below the maximum size permitted under its maximum daily auction size and below the increase in the indemnity provided by the Treasury. This stress in the LDI sector highlights the necessity of ensuring that the appropriate risk oversight and mitigation systems are in place for market-based finance.
I shall try to address the question asked by the noble Baroness, Lady Bowles, and the noble Lord, Lord Tunnicliffe, about what has happened since the 2018 exercise that looked at this. Since then, the Bank of England has worked with other domestic regulators, including the Pensions Regulator and the FCA, on enhancing monitoring of the risks. That included working with the Pensions Regulator on a survey of DB pension schemes in 2019 and prompting work to improve pension liquidity risk management. As the FCA noted in its letter to the noble Lord, Lord Hollick, and my noble friend Lord Bridges in March this year, the FCA contacted the largest LDI fund managers to ask them what plans they had in place to deal with increased volatility. It also probed large managers on the speed with which they could call money from underlying pension funds in the event of stress.
In response to many noble Lords, including the noble Lords, Lord Sharkey, Lord Sikka and Lord Davies of Brixton, and the right reverend Prelate, the Government recognise that there will be lessons that need to be learned from the market volatility seen in recent weeks. The regulators are working with the industry to improve their resilience to market shocks, and it remains a focus of the Government and regulators to ensure that we have a robust regulatory system.
In addition to the ongoing monitoring of systemic risks by the FPC, His Majesty’s Treasury and UK financial regulators have been working internationally as part of the Financial Stability Board, as I previously noted, to develop global approaches to identify and address vulnerabilities in market-based finance. The noble Lord, Lord Sikka, asked why we take a different approach to the regulation of banks versus non-banks in the financial system. Part of that is the international nature of the non-banking part of our financial system.
The Bank of England has also committed to working with the Pensions Regulator and the Financial Conduct Authority to ensure that appropriate levels of resilience are in place to mitigate risks to UK financial stability. As the Pensions Regulator chief executive emphasised earlier this month, DB pension schemes were not and are not at risk of collapse due to rapid movements in the price of gilts, and savers should not make any hasty decisions about their pension pots.
I turn to pensions. As I have just stressed, defined-benefit pensions remain strong, and members of those schemes that were invested in LDI funds are not at risk of losing out as a result of either the aforementioned volatility or interventions made by the Bank. Indeed, the independent Pensions Regulator issued a statement on 12 October for trustees of defined-benefit and defined-contribution schemes and their advisers, which communicated its expectations on matters for trustees to consider in relation to managing schemes and supporting savers.
The noble Lords, Lord Sharkey, Lord Best and Lord Campbell-Savours, and my noble friend Lord Young of Cookham, rightly mentioned the housing market, and I want to respond directly. The fact is that interest and mortgage rates have been rising since last autumn in response to global trends. This is not a UK phenomenon, with the US Federal Reserve having raised its base rate since March 2022 and the ECB taking similar steps. In the UK, around 75% of residential mortgages are on a fixed rate and therefore, in the short term, shielded from rate rises. However, I know that, for those on variable rights and those who are seeing their own fixed-rate deals coming to an end in forthcoming months, there will be significant concern. Where mortgage holders fall into financial difficulty, FCA guidance requires firms to offer tailored forbearance options. While it is important to note that the pricing of mortgages is a commercial decision for lenders in which the Government do not intervene, the Government do offer support through Support for Mortgage Interest loans for those in receipt of income-related benefits and protection in court through the pre-action protocol.
Similarly, the setting of rates is a commercial decision for private landlords in which the Government do not intervene. However, we understand that many people will be worried about the impact of rising prices. My noble friend Lord Young of Cookham spoke more broadly about the reform needed in the private rented sector in order to provide more security to tenants in that sector. I agreed with much of what he had to say. Indeed, the Government’s programme of work to reform the private rented sector continues through, for example, our commitment to ban Section 21 no-fault evictions. We heard ideas from my noble friend Lord Young and the noble Lords, Lord Best and Lord Campbell-Savours, for other changes that we could potentially make in housing. I will take those back to the department and ensure that they are looked at carefully.
The noble Lord, Lord Sharkey, asked whether the local housing allowance would be uprated. He will know that, as part of our response to Covid, the rates of local housing allowance were increased significantly to the 30th percentile of the market, with 1.5 million households gaining just over £600 a year. We have maintained those rates at an elevated level last year and this year in order to ensure that claimants can continue to benefit from this. This is reviewed annually, and I will not comment further on the uprating of benefits.
More specifically, many noble Lords spoke about the difficulties that vulnerable people are facing this year with the rising cost of living. The Government absolutely recognise that and are focusing our support most heavily on those households. People are facing a difficult time. We have put in place an energy price guarantee and further support for those on income-related benefits, pensioners and those with disabilities. There is also discretionary support for local authorities to provide help in their local areas.
I am conscious of the time so I will begin to wrap up. Many noble Lords used this debate as an opportunity to look ahead to the Chancellor’s Autumn Statement. I welcomed the constructive efforts by the noble Lord, Lord Liddle, to make suggestions not just about areas of spending that should be prioritised but about ideas for tax reform to help to fund them, which always needs to come alongside. I will only say to him, on his suggestion for equalised pension tax reform, that we have heard in this Chamber in recent weeks about the challenges of keeping GPs and others in their roles because of the tax treatment of their public sector pensions, and the idea might perhaps be a bit more complicated than it may look at first sight.
Baroness Penn (Con)
I am afraid I am really short on time, so I will make some progress and finish.
As the Chancellor has said, and as I think the noble Lord, Lord Desai, and the noble Baroness, Lady Kramer, agree, stability is a pre-requisite for growth. It is vital for families across the country—from the jobs they depend on to mortgages they have to pay, and to savings for pensioners and businesses investing in the future—and vital for the Government’s ability to borrow and invest in our economy.
The Chancellor will deliver his Autumn Statement on 17 November. Many noble Lords have asked me to speculate on its contents. They will know that I cannot, but I can say at this stage that the Prime Minister and the Chancellor are clear that the priority will be to ensure economic stability by setting out a concrete plan to get debt falling in the medium term. However, they are also clear about their priorities when taking the difficult decisions that this will necessarily entail: to support the most vulnerable and to drive growth to ensure that we have a strong economy by building jobs for the future—and our resilience to future shocks, too.
Lord Sharkey (LD)
My Lords, I thank the Minister for her response, much of which we will no doubt return to frequently. I also thank all other noble Lords for their contributions.
On 23 September, the day of the mini-Budget and the beginning of the period of extreme financial and political instability, Mark Carney was being interviewed by the FT in New York. In that interview, he pointed out that in 2016 the UK economy was 90% of the size of Germany’s but in 2022, even before the crisis, it was less than 70%. We need to put this right but we must not do that by increasing the burden on the poor, the sick and the old.
Avian Influenza
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Hayman of Ullock (Lab)
My Lords, the UK is experiencing its most severe outbreak of avian influenza. Its persistence over the last year, coupled with soaring energy and feed costs, has put the British poultry sector under huge emotional and financial pressure. We welcome the Government’s announcement that a full bird housing order will come into effect from next Monday, but that decision should have been made weeks ago. There has been a serious situation for months and the impact on producers is devastating, with over 3 million birds already culled, so why was this decision not taken earlier?
We recognise that the Government are offering farmers support, but concerns have been raised about whether the compensation scheme is fit for purpose. The Animal and Plant Health Agency’s position is that compensation is paid for live birds not showing signs of disease at the time of culling. But delays to culling, through no fault of farmers, mean that there can be very few birds left alive by the time culling begins, with farmers then not receiving the compensation to which they should be entitled. Will the Government reconsider how compensation is being assessed so that it treats farmers fairly and provides vital financial protection?
I am sure the Minister recognises the significant impact on free-range poultry farmers. The loss of free-range status and subsequent change in labelling requirements causes significant cost and disruption to egg producers and the supply chain, while the prospect of repeatedly losing free-range status threatens the long-term resilience of the industry. The NFU has asked the Government whether they will review the legislation which provides a 16-week protection period for the marketing of free-range eggs when the government housing measures are imposed. The protection period has to be fit for purpose, so the NFU is asking that it should instead last for the duration of these housing measures. Will the Government consider this?
We also understand that the outbreak has spread much faster this year and that we are six weeks ahead of where we were at this time last year. Turkey and geese farmers have warned that if the situation is not resolved, we could face severe shortages over Christmas. Is the Minister able to reassure your Lordships’ House on this matter?
Importantly, we must also consider the long-term approach and strategy to dealing with avian flu, because once this outbreak is over and we have moved on, it will inevitably return. On this note, I should like to ask the Minister about vaccines. Mark Spencer, the Minister in the other place, said in response to a question on Tuesday:
“The advice I have been given is that the current vaccines are not as effective against the current strain of European bird flu as we would have hoped”
and that
“because of trade deals, there is a challenge with vaccinated birds entering the food chain”.—[Official Report, Commons, 1/11/22; col. 806.]
If the current vaccines are not effective enough, what government research is taking place or being planned to take place into vaccination? Currently, avian influenza vaccination is not permitted in the UK for commercial poultry, so we need to understand any trade implications of a prospective vaccination programme if we can find a suitable way forward.
As part of the strategy to tackle this disease, will the Government urgently increase investment into research and development to build knowledge and understanding about the potential use of vaccination and, importantly, prioritise international collaboration, as, clearly, this is not just a UK problem? We recognise the seriousness of this situation. I hope the Minister can provide a clear response on the way forward. I reassure him and the Government that any short and long-term measures needed to tackle this terrible disease will have our support.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, avian influenza is having a devastating effect on the poultry industry and wild bird populations. The epidemic first manifested itself in autumn 2021 when migratory birds started to arrive on our shores. Since then, it has spread and there are now some 91 infected premises in the UK. The vast majority are in East Anglia, the first stopping point for migratory birds, especially waterfowl. I am sure the Minister is as concerned as I am, not only about the effect on seasonal poultry producers but also on biodiversity in the wild bird population.
In the run-up to Christmas, those poultry breeders, especially free-range turkey farmers, will be particularly affected and worried about how they will manage. This is a key season for them, and they cannot easily recover the loss of income from this epidemic at another time of the year. Poultry farmers are grateful for the Government’s change on compensation claiming, with it coming at the start of culling rather than the end. However, changes to the rate of payments starting from 1 October will not help those affected during August and September. Can the Minister say whether the Government are considering any help for these producers?
I, like others, welcome the measures for mandatory housing for poultry and captive birds starting next Monday. This should help to reduce the spread of disease but will nevertheless be a blow for free-range producers. The measures apply whether it is for one hen being kept in a garden or a large poultry business. The measures for mandatory housing are stringent and will incur extra costs for producers. Is there a grant scheme for producers to help with the cost of providing mandatory housing?
As with all animal epidemics, stringent biosecurity measures are essential whether for a small breeder or very large-scale poultry producer. As with the devastating foot and mouth epidemic in 2001, farm-gate foot baths, bedding and animal feed need scrupulous attention to ensure that they are not the cause of spreading infection. Only Defra avian influenza-approved disinfectants should be used.
Noble Lords will know that, if a breeder suspects that they have avian influenza in their flock, it is an offence not to report it to the Defra rural services helpline. Can the Minister say what the penalty for the non-reporting of a suspected outbreak is likely to be? Does the Defra helpline have sufficient staff to answer all the calls they will be receiving?
I turn now to the Government’s proposal to allow poultry farmers to slaughter their birds now before they become infected and freeze them. In particular I am thinking about turkeys in the run-up to Christmas. The proposal is that these birds, after slaughter and freezing, would be thawed and sold as free range rather than frozen birds. These thawed birds would be sold to consumers between 28 November and 31 December.
Since Brexit, there has been concern about sufficient numbers of vets and slaughtermen, who had previously come to the UK in the run-up to the Christmas season to help with the killing and preparation of turkeys. Can the Minister give reassurance that there will be sufficient staff at abattoirs to deal with this early slaughter of birds? I sympathise with the poultry industry and support measures to help it cope through this very difficult period. Equally, it is important to have a ready supply of qualified and competent staff to deal with the early influx of birds at abattoirs.
I am also extremely concerned that frozen birds are to be thawed and sold as free range—which, of course, they were before they were frozen. That is not the issue. The issue is that for years the advice has been that frozen poultry meat, once thawed, should not be refrozen unless it has first been cooked. Given the timeframe during which the thawed birds are to be sold, it is a fair assumption that consumers, seeing the birds for sale and knowing there may be a shortage, will buy what they need for Christmas early and take it home to put into their freezers, ready to take out a couple of day before they are due to be cooked.
In what way will these pre-frozen and thawed birds be labelled? Will the labelling make it clear that, although free-range, the birds have been frozen and thawed and should not be refrozen before being cooked and eaten? A “fresh” bird that has been purchased at the end of November or beginning of December is unlikely to keep in a domestic refrigerator until Christmas Day and still be fit for human consumption. Although the Government’s solution appears to help solve the poultry farmers’ problems, I am concerned about the health aspects of this for the population as a whole and am looking for the noble Lord’s reassurance.
I turn briefly to how the epidemic is affecting wild birds. My colleague, my noble friend Lord Teverson, reports that the shores of Cornwall are littered with the carcasses of dead gannets, and no one is picking them up. This will not be a problem isolated to Cornwall: wherever wild and sea birds congregate in large numbers, there are likely to be large outbreaks of HPAI, resulting in the deaths of birds. What should happen to these carcasses?
Lastly, there are currently no restrictions on organised game-shooting activities. Can the Minister comment on this, please? Is he satisfied that sufficient biosecurity measures are being used on game shoots? I look forward to his comments on the effects of this epidemic.
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
I am grateful for this opportunity to inform noble Lords about the very serious situation relating to avian influenza and all that we in Defra are doing, working with our colleagues in the devolved Governments.
The noble Baroness, Lady Hayman, asked why we did not impose the housing order sooner. We operate in line with the best advice we get. We Ministers are not experts; we operate on the advice of the chief vet and the Animal and Plant Health Agency, working with many other partners on this issue. We decided to impose the housing order for England. We talked to Scotland in the core group this morning; it decided not to impose a housing order because it believes that the protection zones can contain the outbreaks there. But we are proceeding with an England housing order on Monday, as the noble Baroness correctly pointed out.
The question of housing is important: it can improve the situation by a factor of about two. But good biosecurity can improve it by a factor of 44, which is why we are concentrating on biosecurity and working closely with the sectors to make sure that all keepers of poultry are adopting the best biosecurity they can, whether they are large industrial-scale poultry units or have small ornamental flocks. This also involves people accessing those units for whatever reason.
There is great concern about compensation. It was rightly pointed out that we are in consultation with the industry. Mark Spencer, the Farming Minister, and I had a meeting on Monday with all the representatives of the sector. That is in addition to the core group, which meets several times a week. We took forward their concerns, and one of the demands for the housing order came out of that meeting.
There is significant concern from the industry about the impact that rapid mortality caused by the current H5N1 strain—and the risk of escalating cases and numbers leading to substantial delays to culling—can have on the amount of compensation paid. In response to this, changes to the compensation scheme for avian influenza have been introduced, effective from 1 October. As the noble Baroness, Lady Bakewell, pointed out, compensation will be linked to decisions taken at the start, not the end, of planned culling. This will allow us to give earlier certainty about entitlement to compensation and better reflect the impact of outbreaks on premises, leading to swifter payments to help stem any cash-flow pressures.
The free-range issue is absolutely valid. Our current period for that is 16 weeks, and all matters are kept under regular review. I am happy to discuss this in more detail. Last winter, we developed a scheme which allowed eggs to be sold as “barn reared”. That was a simple process of putting a sticker over the “free range” sign, and it was accepted by the industry and by the consumer.
On turkeys for Christmas, around 10 million turkeys are eaten every year at Christmas. They are particularly susceptible to this disease, which is one reason why we brought in the frozen allowance, meaning that birds can be culled early, frozen and then defrosted. We are seeing an increasing number of turkeys falling prey to the disease. At the moment, we think that the situation for Christmas turkeys is there or thereabouts okay, but I would not like to predict that there would not be some impact if it carried on at the current rate. Around 1 million birds have been culled or have died. That cannot not have an effect on the supply chain. It is a resilient supply chain, and alternatives can come from elsewhere, but we want to make sure that people are eating healthy, British-reared turkeys.
The situation on vaccination is important. Currently, two commercial avian influenza vaccines are authorised by the Veterinary Medicines Directorate for use in the UK. These vaccines are unlikely to provide full protection from the strains of highly pathogenic influenza such as HPAI currently circulating in wild birds in Europe and the UK. Only zoos or collections in England holding a current zoo licence can apply for an authorisation to vaccinate. Currently available vaccines have disadvantages in that, although they may be able to reduce mortality, it is possible that some vaccinated birds would still be capable of transmitting the disease if they became infected while not displaying the symptoms. This would increase the time taken to detect and eradicate the virus.
On future-proofing, I refer noble Lords to the precision breeding Bill. This will not cause a rapid change to our ability to have stocks of poultry and waterfowl that are resistant, but it may over a number of years be the sort of thing we should do to make us more resilient to such outbreaks.
The noble Baroness, Lady Bakewell, was absolutely right to talk about the impact on biodiversity. The most apparent impact has been on shore birds and waterfowl. I was looking the other day at Bass Rock, south of Edinburgh, which for centuries has been white because it is a nesting area for gannets and other seabirds. It is not white this year; you can see the rock colour. That is a stark reminder of the horrendous impact that this disease has had on wild birds. We are measuring biodiversity. We have a wild bird avian influenza strategy, through which we work with the British Trust for Ornithology, the RSPB and a great many other organisations to try to assess the impact it is having on populations. We have an established way of counting wild birds in this country, and we are working with those organisations to make sure we know what the impacts are and where we can find particularly resilient strains, which might lead to future work.
The noble Baroness asked what the penalty was for not reporting. I shall have to write to her on that, but she is absolutely right that it is an offence not to report. There is an incentive. That is why the compensation regulations regarding all farm animals and disease are created in a way that incentivises people to report as early as possible. She was right also to point out the impact on vets; I am sure that we will be questioned on that shortly. We are using the vets we have available at the HPA. We are surging those numbers as best we can and recruiting as many people as we can, but perhaps we will come on to that later.
On the question of game shoots, we are again working on the best evidence. At the moment, it is not considered to be a reason for the spread of the disease—it does not add to the risk—but we are monitoring this, and we are absolutely confident that the prevalence of game in an area does not add to the risk of avian influenza in commercial flocks. That is one of the factors we are taking into the account; these matters are all under review.
Baroness McIntosh of Pickering (Con)
My Lords, I will pursue with my noble friend the Minister the question of what is happening in Scotland. There is deep unease that Scotland is not following the same measures as England. Will he keep this under review and use his best offices in that regard? The noble Baroness, Lady Bakewell of Hardington Mandeville, referred to the impact of migratory birds. How can we prevent the spread of wildfowl entering the system in future years?
Lord Benyon (Con)
We have a devolved system of government, and the Scottish Government have this decision in their hands. They will be talking to the Scottish NFU, Scottish research establishments and other interests in Scotland while making their decision. As I said, we are consulting them on a regular basis. On my noble friend’s second point, migratory birds are the reason this disease came to this country. It is a tragedy that is very hard to control because migratory birds are coming from all over Europe and beyond, and we now have the problem that the disease is within our own wild bird population. Whereas in the past it started to flare up at this time of year and more or less ended towards the end of February, it is now established in the kinds of species that I described earlier. All we can do is monitor this and see whether we can find areas of change. This is a flu—an influenza like many others—and, after a while, these viruses diminish in their effect, and great abilities to withstand their impacts start to occur. We must hope that this happens quickly. We are all united in this House in wanting this country to fulfil its desire to see no net loss of biodiversity by 2030, although factors like this make it more difficult. Nevertheless, these species can be extremely resilient: if we can get over this, their numbers can start to recover. I assure noble Lords that we are monitoring this carefully.
Lord Trees (CB)
My Lords, first of all, I empathise with our farmers who are losing their flocks. It is most distressing for them, on top of the economic challenges they are facing with rising feed and energy costs. Following on from the remarks of the noble Baroness, Lady Hayman of Ullock, I ask the Minister: what support are the Government giving to the development of improved avian flu vaccines, which have deficiencies as he outlined, and to the development of tests that will differentiate vaccinated birds from naturally infected birds? With regard to trade, what discussions are we having internationally to encourage the adoption and acceptance of vacations? I will ask another question, so as not to disappoint the Minister: what steps are the Government taking to strengthen our veterinary workforce, particularly to facilitate the return of many EU vets to the UK to bolster our very hard-pressed veterinary workforce?
Lord Benyon (Con)
On the emergency measures, we are concentrating absolutely on biosecurity. We are trying to ensure that we get to farms as quickly as possible: they are visited within 24 hours in all but a very few cases, which allows an assessment to be made on which birds are dead and which of those can result in the farmer being compensated. The number of vets is constantly under review. We have a shortage of vets in the Animal and Plant Health Agency, but we have surged those numbers by using vets from the wider population to try to assist us. Vets are on the Home Office’s shortage occupation list, and therefore visas are available for them. However, the noble Lord will know that some EU vets are deterred from taking this route by the level 7 English language requirement to register as a vet in the UK. These matters are constantly under review with the Home Office. The noble Lord asked me specifically about vaccination. I made the point that we are concentrating on the emergency measures, but, looking forward, we will certainly want to see progress made on vaccination so that we can differentiate between vaccinated and non-vaccinated birds. That will alleviate the trade issue, which is the reason why we are not permitting vaccination at this stage.
The Lord Bishop of Exeter
My Lords, earlier this year, His Majesty’s Government announced the establishment of a new flu map research project, which aims to help us better understand the transmission and spread of avian flu. Along with many others, I welcome the £1.5 million in funding by the Government, but in the light of the severity of this current outbreak, have the Government undertaken an assessment of the need for additional and further funding for this project, mindful of the fact that prevention is better than cure?
Lord Benyon (Con)
The right reverend Prelate is absolutely right. Further to that, the previous but one Prime Minister made a commitment at UNGA—the United Nations General Assembly—that Britain will be part of an international effort to tackle zoonotic disease. This is a zoonotic disease although the risk to human health is described by experts as very low. Ultimately, it is the sort of thing for our new zoonotic research capabilities, working with other countries. We must be mindful that we are far from alone in this business. It is a very serious situation right across Europe, the United States and elsewhere. It is in the interest of all countries that we develop a response which deals with this in the long term. I am talking mainly today about the short-term issues that we are tackling but he is absolutely right to raise the matter of the funding that we have put in and the other measures that we are doing, working with countries around the world to make sure we are tackling this and other zoonotic diseases.
Earl Cathcart (Con)
My Lords, I have 16,000 birds at my farm and the problem is the compensation. It is being paid only for birds that remain alive at the time of culling. We have heard of delays in culling because of vets et cetera so there could be very few birds still alive when the vet arrives. A producer had 10,000 birds and had lost all but 200 by the time the vets arrived so there was no compensation for him. Will the Minister consider compensation being paid at the date the producer notifies the vets and not at the time when the vets arrive? This applies to the rules for foot and mouth, so why not make it the same time?
Lord Benyon (Con)
I totally take my noble friend’s point. We are talking about taxpayers’ money here and are deeply sympathetic to farmers who have been hit by this but also have responsibility to make sure that compensation is fair. I am sure that my noble friend’s flock is very well protected and that the systems of management there ensure that the chances of infection are very low. But that is not the case everywhere. The taxpayer will be forking out millions of pounds where there have been biosecurity breaches. I have seen some photographs and have had evidence of lamentable biosecurity measures in place in some really quite large poultry establishments, and of course that has had an effect on the outbreak. We have narrowed the time from notification to someone arriving and have changed the way that the compensation is applied. It is never going to be perfect. The problem we have here is that this is so highly pathogenic. The time from the first visual example of a bird having the disease to large numbers dying is very short. We are getting out there within 24 hours in nearly every case. We continue to try to speed that up, but my noble friend’s experience in this matter is invaluable to the House.
Viscount Stansgate (Lab)
My Lords, I ask a question about the longer term. The Statement said that
“any future decisions on disease control measures, including the use of vaccination, will be based on the latest scientific, ornithological and veterinary advice.”
Is the Minister able to tell the House, especially in relation to the answer he gave to the noble Lord, Lord Trees, from which scientific organisations the department is intending to get the advice that it is seeking, and does it include the Royal Society itself?
Lord Benyon (Con)
I do not know specifically, but I would be very surprised if it does not. Our chief scientific adviser, Professor Gideon Henderson, is a very renowned scientist; he ensures that we use the best and most rigorous scientific advice and that we use it properly. I am very happy to give the noble Viscount more details about how we are approaching the medium to longer-term solution in the areas that he raised. I can assure him that—while scientific advice does vary and, at certain points, it comes down to Ministers making a judgment call—the advice that I have seen on this has been pretty clear. We need to progress that, and I will certainly keep him informed and give more details about the areas of scientific advice that we are tapping into.
Lord Naseby (Con)
My Lords, one of the most important things in life is communication. My noble friend on the Front Bench has gone into great detail, and I think the House also owes a tribute to the noble Baroness on the Opposition Front Bench. But, in today’s world, we are not good at communication. I used to be in charge alongside the COI, and I say to my noble friend that the consumer needs to know what is happening. The consumer is at two ends. First, there is the general public, who will be anxious; we can see now in some of the letters appearing in the national and regional press that people are confused. Will my noble friend pay particular attention to that area? Secondly, there are the retailers, wholesalers, direct sellers and so on. Finally, we have wonderful veterinary schools in this country. They have excellent students. This is a wonderful case history, in a sense, in which all those students can get involved between now and Christmas.
Lord Benyon (Con)
My noble friend is absolutely right to raise the importance of keeping people informed. In fact, it works both ways: members of the public are keeping us informed—often through NGOs, but also directly—in particular about the impact on wild birds. Defra and the Government keep consumers and customers informed directly through social media and other media announcements. We also work through retailers; they give us information and we give them information. I should say that there is a well-established method in England and Wales of reporting sick birds that are discovered. They can be reported to the RSPCA—and similarly in Scotland to the SSPCA—which will give advice and will euthanise wild birds that are sick. Single dead birds, birds of prey or three or more of any species can be rung through to the Defra helpline, which is on our website.
In terms of consumers and what they are going to eat, we will be keeping them informed, but there is absolutely no need for people to rush out and panic buy. This is a very resilient supply chain and we are talking to retailers and others regularly and keeping them informed as well.
On vet schools, thanks to the noble Lord, Lord Trees, and others, we have developed new vet schools. We have more veterinary surgeons coming into the system and we want to make sure that they are coming into government work as well as the private sector and private practice. We particularly want to encourage them into the large animal sector and this area as well. It is a constant problem, but we are trying to resolve it.
Baroness Bennett of Manor Castle (GP)
My Lords, I am sure the Minister is aware that, in the past 50 years, the global population of domestic poultry has multiplied by six, from 5.7 billion to 36 billion, representing 70% of the avian biomass on this planet. That is a large reservoir, connected by trade, for disease to flourish, which inevitably spills over into wild populations, as we are seeing here. We know that this avian flu originated in a domestic population. The noble Lord may be aware of the editorial last month in the journal Science, which said this avian flu outbreak should be regarded as
“a warning, with devastating consequences if not heeded”.
There is also African swine flu spreading over into wild populations and mycoplasma gallisepticum in finches and other wild birds in North America. The authors argue that we need to see reduced livestock numbers, reduced density on farms, limited movement of livestock and, in middle and higher-income countries, movement to plant-based protein sources. Does the Minister agree that there is a systematic issue with factory farming, which represents an unacceptable risk to human and environmental health?
Lord Benyon (Con)
We have very high animal welfare standards here, as seen in the removal of battery cages, and have worked faster than other countries in Europe and elsewhere to improve those factors. The point lying behind the question of the noble Baroness is that, when my grandparents were alive, chicken was a luxury item that one had relatively rarely. In many cases, it was reared on the premises. It has now become the staple diet of large populations right around the world. In a way, the market has responded to that. I am not saying that complications have not arisen, but the recent drive by retailers for free-range eggs has seen an enormous increase in egg producers in areas such as the Wye Valley, which is starting to have an impact on the natural environment.
The Government have to try to foresee all these things and then bring in measures, whether in planning, the right incentives, regulation or laws. The noble Baroness asks a perhaps more philosophical, societal question; we need to tackle it as best as Governments can, but people want to and like eating chicken and eggs. There are a lot more people around than there were when my grandparents were alive. We have to feed a hungry world, but we have to do so sustainably and mindful of the impacts of disease and on the natural environment.
Lord Randall of Uxbridge (Con)
My Lords, this is a terrible disease; my sympathy goes out to the producers and so forth. I declare my interest as a council member of the Royal Society for the Protection of Birds and other conservation interests. I was very heartened to hear of the involvement of the British Trust for Ornithology and the RSPB. It is not just gannets; the world population of great skuas is severely at risk. My noble friend may recall that there was some talk of setting up a task force specifically to look at the conservation impacts of this disease.
On game bird releases, while I agree with my noble friend that current shoots will not spread it, I wonder whether we should have done something a bit earlier. If this horrible disease is still so present this time next year, will game bird releases be stopped as they would be now under the housing orders?
Lord Benyon (Con)
I assure my noble friend that there is a sort of task force already in place. Defra and the devolved Administrations, working with the Animal and Plant Health Agency, Natural England, NatureScot, the Joint Nature Conservation Committee and non-governmental organisations such as the RSPB and the British Trust for Ornithology, are monitoring and responding to the effects of avian influenza on wild birds. We produced our Mitigation Strategy for Avian Influenza in Wild Birds in England and Wales, which sets out practical guidance to support land managers, the public, ornithologists and NGOs in England and Wales in their response to the growing threat of avian influenza to wild birds—how they can report it and what measures they can take.
On the other matter, I repeat what I have said. We will keep these factors under observation, but we must remember that, if we bring in measures against one sector, we have to make them consistent. Are we going to ban everyone from walking on a footpath, because carrying the faecal matter of an infected bird on your boots to another part of the countryside could spread it just as badly? We need to be really clear about the impact this could have on the rural economy and the important work many people do for nature conservation, such as gamekeepers, who keep numbers of wild birds vibrant in those areas. We want to make sure we do not cause unseen problems but take proportionate measures on the basis of scientific evidence.
Ambulances
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Lord Bishop of London
To ask His Majesty’s Government what progress they are making on ensuring swift ambulance handovers, as set out in Our Plan for Patients, published on 22 September, given the decision of ambulance workers across 11 trusts to ballot for strike action.
The Lord Bishop of London
My Lords, I start by saying how grateful I am to your Lordships’ House for setting time aside for what I think is an important and timely debate. I am also grateful for the briefing from the House of Lords Library.
Last week, the GMB union announced that it was balloting ambulance workers over strike action across 11 trusts in what would be the biggest ambulance workers’ strike for 30 years. I think it would be wise to ask ourselves what has happened across the whole system to bring us to this point. Ambulance handover delays are an increasing issue across the trusts in England. The NHS contract for this year sets out that 90% of handovers should take place within 30 minutes and 65% within 15. However, the Association of Ambulance Chief Executives notes 40,000 cases of patients waiting longer than an hour for handover—this was recorded this year and is the third-highest volume on record.
Long handover delays increase the risk of harm to patients while they are in ambulances. The NHS Confederation says that eight out of 10 patients who were delayed beyond 60 minutes were assessed as having had an experience that had potentially harmed them, and nearly one in 10 experienced severe harm as a result. The number of ambulances waiting to transfer their patients also impacts on the availability of ambulances, and the response times therefore increase. This in turn risks increasing further harm to those who are waiting for an ambulance in the community. Florence Nightingale famously once said that hospitals should do no harm. It is a sentiment that I believe is appropriate to the wider healthcare system. The healthcare system should do no harm.
Delays in handover also cause extreme anxiety for patients and families at a time when they are often very distressed. To be honest, waiting in an ambulance in this way is not how we should be treating people who have an inherent dignity. Long handovers are also putting pressure on staff and services right across the board. The Care Quality Commission’s annual report State of Care highlights the impact of waiting for handover on ambulance workers themselves. They cannot respond to incidents in the community. There may be a higher pressure on all staff involved, including call handlers who are trying to manage people who are repeatedly re-calling to check the status of their ambulance.
In addition to this, some ambulance workers are missing breaks and finishing their shifts late because they are required to stay with their patients as they wait to hand them over. These services function because people are working hard, even if they are not getting the resources that are required and the support they should be getting. The truth is that we cannot expect them to keep doing this.
The plan for patients set out by the former Secretary of State for Health and Social Care promised a “laser-like focus” on ambulance handover times. However, the plan that was set out lacked detail and made no headway in addressing the issue of workforce sustainability or retention. Will the Minister tell us when we can expect a workforce strategy to be published? A workforce strategy is key to any attempt to address this issue, which of course is one of the major issues facing the NHS and social care at this time.
The issue of ambulance handovers is one that gets to the heart of so many difficult issues which are within the health and social care sector. The NHS Confederation analysis of ambulance handovers states:
“Ambulance handover delays are not an ambulance issue, they are a whole-system issue and require a whole-system response.”
Some of the other issues that sit within the whole system are those we have discussed very recently in this House. They include, for example, the difficulty that people face in making a GP appointment. If you are unable to make a GP appointment, it may delay the time that you present, and therefore you become sicker. If you fail to be able to make a GP appointment, it may exacerbate the numbers of people who come to A&E.
There is also the significant issue of discharge into social care. The £500 million adult social care funding, announced by the then Secretary of State for Health and Social Care, was intended to assist with this. However, Matthew Taylor of the NHS Confederation has written to the Secretary of State, Steve Barclay, to say:
“Leaders across the NHS and local authorities are yet to see a single penny of this investment and any official detail on how it will be allocated”.
Change does not come quickly. Therefore, having the detail of this money and how it is to be allocated is important if we are going to avert a crisis this winter.
Furthermore, we have yet to understand whether this is not just an absorption of the health and social care levy repeal. As we discovered during the short passage of the Health and Social Care Levy (Repeal) Bill, the general budget is absorbing the loss of the tax increase so that the overall funding level for the health and social care sector does not change. Is it possible that this new £500 million for adult social care discharge fund is not new money, but is contributing to the absorption of the cut in the levy? I wonder whether the Minister could write to confirm the position.
I am sure noble Lords are aware that I have a particular concern for health inequalities. These inequalities are showing themselves in this area as well. The Care and Quality Commission annual report states that those living in the most deprived areas are likely to be more severely impacted by ambulance delays. It goes on to discuss the role of the ambulance service in meeting the needs of people caused by other failings across the sector:
“Anecdotal evidence … suggests that, traditionally, the ambulance service has fulfilled an informal role in helping people from deprived communities to navigate the health system”.
I have been fortunate recently to chair the Health Inequalities Action Group, which published its report last month. The report notes some of the barriers that both faith groups and healthcare workers face in engaging with each other, and the impact that would be possible with more constructive engagement, and the effect on reducing health inequalities. There is much work to be done to ensure that the more hidden groups, such as those known and represented by faith groups, can access the full benefit of healthcare available. If undertaken, this type of work will reduce pressure on the NHS, which, as a former Chief Nursing Officer for the Government, I feel is in crisis. This type of work, reducing health inequalities between healthcare and faith care workers, could also be part of a whole-system approach.
Ambulance handovers must be improved. However, without a workforce that is valued, supported and listened to, it is difficult to see how this is possible. In some ways, it is unsurprising that this balloting on action is being undertaken. According to the GMB acting national secretary, a third of ambulance workers think that a delay they have been involved with has led to a death. Can you imagine the impact that has on the well-being of healthcare and ambulance workers? Healthcare workers are also experiencing the cost of living crisis.
To draw to a close, what assessment have the Government made of the impact of ambulance waiting times on the loss of staff, and the loss of staff on ambulance waiting times? This will be the biggest ambulance workers’ strike for 30 years if it goes ahead, and this workforce is not in isolation. Last week, there was a further announcement of strikes across the NHS from UNISON. Yesterday, the Royal College of Nursing closed its UK-wide ballot for the first time for strike action in 106 years. The Royal College of Midwives and the Chartered Society of Physiotherapy are also balloting on strike action. It cannot be overstated how serious this is, not just for patients or our health but for the economic recovery of this country. This is a whole-systems problem which requires a whole-systems solution. I look forward to the contributions of other noble Lords and to the Minister’s response.
Baroness Brinton (LD)
My Lords, I declare my interest as a vice-president of the Local Government Association. I congratulate the right reverend Prelate the Bishop of London on securing this important debate and thank her for her thoughtful and knowledgeable introduction. I also echo her thanks to the House of Lords Library for its briefing and the Royal College of Nursing. It is important that we start by paying tribute to our ambulance and paramedic staff and, obviously, ambulance call handlers—as well as 111 staff, who may not automatically come into that category but are also fulfilling a very important role. All are doing the absolute best they can, despite the current circumstances. We owe them an enormous debt of gratitude.
We have had regular debates, Questions and Statements on the problems in our ambulance services for over a year now; everyone recognises that they are at breaking point. Record long ambulance waits are leaving vulnerable patients stuck outside hospitals waiting for the treatment they need. This debate rightly focuses on the part of the crisis that is very visible to everyone—ambulances queueing outside hospitals and delays in response times and handovers because A&E is full—and refers to the Government’s plan for patients.
I refer to the plan for patients because we have debated it within the last few weeks in your Lordships’ House, and most people recognise, as the plan does, that delays in the ambulance service are part of a larger problem—a “whole-systems problem” was the phrase I think the right reverend Prelate used. I will return to the detail of the plan later, but I start with some of the problems facing the ambulance service and its staff.
National standards set in 2017 said that calls are triaged into four categories depending on urgency and that all ambulance trusts must respond to 90% of category 3 calls within two hours and category 4 calls within three hours. I raise that because the targets for those categories have changed—they have lengthened.
Nationally, average ambulance wait times have more than doubled in the last two years. The British Heart Foundation, in a report published today, said that in September, average response times for category 2 calls—that is, suspected heart attacks and strokes—was 48 minutes, against the new target, set in spring this year, of 18 minutes. It used to be eight minutes before that.
I want to make a further point on category 1 and category 2 response times, because they also affect handover times and what is happening in A&E. For most levels of injury and illness, both category 1 and 2, there is what is known as the “golden hour” in which treatment must be started, particularly for strokes and suspected heart attacks. Strokes were moved into category 2 after paramedics started to be allowed to administer anti-clotting medication en route to hospital but, even with that extra time, you have to add on the queueing for hospitals. So, despite our talking about the waiting times for responses and the delays to handovers, that golden hour is constantly being eroded.
The Library briefing, to which the right reverend Prelate referred, made it plain that the situation continues to worsen. Ambulance handover delays are almost entirely caused by crowding in A&E, and that is why the plan for patients that the Government produced was discussed so heavily in your Lordships’ House. Part of the problem is that a lot of that is work that will happen in the future, not now. I want to ask the Minister what plans there are to upgrade the plan for patients, given the current crisis, because it is clear that this is unsustainable.
Today, a report in the Times on the British Heart Foundation report said that
“there had been 30,000 ‘excess’ deaths involving heart disease in England since the beginning of the pandemic.”
There is an absolute understanding that some of those are definitely due to ambulance delays. In fact, our papers are absolutely full of those reports and have been for the past six months.
The logjam could be described best in A&E as “beds and backlog”—and then there is care as well. The NHS Confederation helpfully identifies the problems of discharge and lack of capacity in the social care sector and has repeatedly, over the last year, asked the Government to help social care. Social care vacancies increased to 165,000 in July. That is a shocking increase of over 50% on the previous year, and the figure continues to rise.
It is increasingly difficult for disabled people who rely on personal assistants to recruit them. In your Lordships’ House, the noble Baronesses, Lady Campbell of Surbiton and Lady Thomas of Winchester, have repeatedly raised this. The same is true for people who need domiciliary care—that is, care in people’s homes—to keep them at home. It is increasingly difficult to recruit people to do that job. A key plank of the plan for patients is getting people home and keeping them there but that will not work without carers.
The consequences of Brexit are writ large in this sector. We know that the Government are trying to recruit from overseas, but we lost a stable workforce who returned home to Europe from the UK and have not, despite the problems of the pandemic, returned, even though they have been asked. The issue of delayed discharges therefore remains. I ask the Minister: what else on top of what was set out in the plan for patients will the Government introduce as a matter of urgency?
The broader problems in the NHS are also causing problems. From these Benches, we have highlighted for years the shortage of hospital beds compared to other OECD countries, which shows the UK at 2.3 beds per 1,000 of the population, compared to France at 5.7 and Germany at 12.6. It was a mistake to cut so many beds, especially without planning for and investing in primary care—not just GPs but all primary care healthcare professional staff and their support staff.
In August, when we were all on holiday, the Secretary of State announced that the Government would create the equivalent of 7,000 more beds through a mixture of new hospital beds, “virtual ward” spaces and initiatives to improve patient flow over the coming months. I have repeatedly asked Ministers for breakdowns of how many beds are in each of the various categories, but I still have not had an answer. There is a big difference between a bed, a virtual bed in somebody’s home, even with remote monitoring, and initiatives to improve patient flow—I am not quite sure how the latter equates to beds. It has been three months since this announcement, and we are already facing a rise in flu and other winter problems. Can the Minister please tell your Lordships’ House what that breakdown is and how many beds are in place? Specifically—I have asked him this before—can he say how many are virtual beds, because extra support is required in primary care to make those work? Will the Government undertake to fund more extra beds to stop handover delays at A&E and the backlog that goes right the way through the system?
I was very pleased to hear the right reverend Prelate refer to the importance of a workforce plan. We absolutely echo that from these Benches and have asked for one repeatedly, including during the passage of the Health and Care Bill earlier this year. This is not just about doctors and nurses, which the plan for patients relies on; it is also about other vital health care professionals such as physios, occupational therapists and speech and language therapists.
The plan for patients talks about more independent qualified prescribers in community pharmacies. This is essential to help reduce the burden on GPs. Exactly when will there be the promised increase in the number of independent qualified prescribers within community pharmacies? Will any long-term plans for providing finance and support for training and recruitment be brought forward? The plan for patients covers next year, but it is this winter that we have the problem. Above all, we need that workforce strategy.
My honourable friend Daisy Cooper MP said that Ministers should not lay the blame for these scandalous handover delays at the door of the NHS. To stop such delays, the Government need to fund the extra beds in A&E and properly fund social care. Hospitals are now running food banks for staff and staff cannot get to work because they cannot afford petrol for their cars. This is one of the reasons why staff are so concerned. This is not just about NHS staff possibly going on strike; this is an NHS cost of living strike. I hope the Minister can answer my questions.
Baroness Merron (Lab)
My Lords, I am glad to follow the noble Baroness, Lady Brinton, and I thank the right reverend Prelate for bringing not just this debate but great clarity to the issues it deals with.
In my view, the NHS faces what can only be described as a perfect storm in the making—except perfect it is not. The situation is absolutely dire and has been for many years; this is not a new problem. We have heard many times in your Lordships’ House about the well-documented challenges of getting an ambulance in an emergency. These challenges have served only to undermine the profound trust that the public ought to have in the National Health Service. In August alone, the Association of Ambulance Chief Executives estimated that around 35,000 patients were potentially at risk of harm as a result of long handover delays, with just under 4,000 of these experiencing potentially severe harm. There is no doubt that delay is the enemy of good care and safety.
As we have heard, delayed handovers are not just damaging in themselves. They result in poorer ambulance response times, as ambulances sit queueing outside A&E departments and cannot therefore get to patients waiting in the community. This increases pressure on not only clinical staff but ambulance call handlers, as the right reverend Prelate said, as distressed patients and their families call to get updates on their wait time, leading to thousands of duplicate calls and placing ever more pressure on ambulance services.
This situation now has all the potential to get even worse, with ambulance workers in 11 trusts balloting for strike action. If it does go ahead, it will be the biggest strike in that sector for some 30 years, which is surely nothing short of a disgrace. Union leaders have said that this is as much about patient safety as pay—and of course, when we talk about pay, we are doing so in the midst of a cost of living crisis. The right reverend Prelate asked the question: what has brought us to this point? I hope the Minister will reflect on that and perhaps give a view on it today to your Lordships’ House.
The general secretary of Unison, Christina McAnea, has said:
“Striking is the last thing dedicated health workers want to do. But with services in such a dire state, and staff struggling to deliver for patients with fewer colleagues than ever, many feel like the end of the road has been reached.”
Recently, the Minister advised nurses considering strike action to regard their work as a vocation. Can he give his view today on ambulance workers who are considering whether to go on strike? Indeed, can he give his views on the widespread balloting for strikes across the National Health Service, the factors he considers have led to this unrest, and whether they could have been avoided?
The Royal College of Emergency Medicine is clear that crowded hospitals is the operational issue stopping A&E doctors treating patients effectively and efficiently. As we know, high volumes of A&E attendances lead to overcrowding, rising pressure on services and a poorer experience for patients. Between April 2021 and March 2022, there were 24.4 million attendances at A&E across England, compared with 21.5 million in 2011-12. What assessment has been made of the reason for that increase, and could it have been avoided by taking action in other parts of the NHS, including on GP access?
It is fair to say that people desperately want to see an increase in the number of social care staff and beds, but perhaps it will be helpful if I emphasise that we are talking not just about beds but staffed beds, an increase in which would relieve the pressure. I add my voice to those of the right reverend Prelate and the noble Baroness, Lady Brinton, in asking a question that has been asked on so many occasions in your Lordships’ House: where is the workforce plan to deliver this increase in staff in the short, medium and long term? All of this is desperately needed.
Perhaps I may offer a helpful suggestion to the Minister: that the Government publish monthly the data, which is already being collected, showing the number of patients waiting two hours or more from the moment they step into the hospital, rather than simply when the doctor decides to admit them. It would be hugely helpful and give a much more accurate picture of patients’ actual experience in the accident and emergency department. Can the Minister take this up with his officials?
From Secretary of State Stephen Barclay saying that ambulance delays were a priority to Thérèse Coffey’s short-lived “ABCD” plan for patients, and now back to Stephen Barclay, it is fair to say that the sector is crying out for stability. Will the Minister indicate whether the plan for patients is still valid? Perhaps he might feel able to tell your Lordships’ House whether the new ministerial team have reviewed it and, if so, whether the Minister and his colleagues feel that the plan is sufficiently ambitious. It would be helpful for your Lordships’ House to have an update on this plan.
In my recent meeting with the Minister, for which I am grateful, he indicated that there are some 15 problem trusts that are especially struggling with ambulance delays. It would be helpful to receive an update on where the department’s work is on this and how lessons might be learned across the system, and for your Lordships’ House to know what action will be taken.
As we approach winter, what forecasting has been done on how the delays in these 15 trusts are likely to develop or change, and what will be done to avert the potential pressure of Covid and flu on these delays? I again emphasise the points about the £500 million adult social care discharge fund. Reports are that it is yet to be released to the health and social care system. Can the Minister say whether this is the case? If it is, why, and what is to be done?
Finally, what assessment have the UK Government made of the impact of current nursing vacancy rates on patient safety and emergency care? If an assessment has been made, can we have a publication of the modelling that has been done? Has there been a cost-benefit analysis of current spend on agency and international staff versus investing in recruitment and retention within our domestic workforce? As the right reverend Prelate said, this is not just about ambulances. This is a whole-system problem. I hope that the debate today will encourage the Minister to see it as such.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
My Lords, I am pleased to respond to this short debate. I reassure the right reverend Prelate the Bishop of London that ambulances are an utmost priority for this Government. We are absolutely committed to supporting the ambulance service to ensure that people receive the treatment that they need when they need it. However, as many noble Lords have noted, our ambulance services have faced unprecedented pressure since the pandemic, so I totally agree with the point that this is a whole-system issue, as the right reverend Prelate and the noble Baroness, Lady Merron, mentioned, and a “beds and backlog” issue, as the noble Baroness, Lady Brinton, mentioned. We all have similar variants on that. The plan for patients is still valid and is being reviewed by the current team. It is always being worked on and updated.
To directly address the point of the whole-system issue, or flow, some work that I have done has shown that the biggest predictor of ambulance wait times and handover times is bed occupancy. We all know that bed occupancy, which can be as high as 95%, with about 10% of our beds being taken up by Covid, is very much the issue. That is the first priority. Obviously, the Covid and flu vaccination programmes are important parts of that, but the £500 million adult social care fund to remove the 13% of bed blocking is vital to this.
I assure all the speakers who have mentioned it that the question of how the spend is allocated has been the subject of much debate, because we want to make sure that it really is targeted in the right place. Again, as a data hound, I wanted to make sure that we really were spending it in the best place. How it is spent now has been agreed, and that should be seen very quickly in the system.
The other issue regarding bed occupancy is, as the noble Baroness, Lady Brinton, mentioned, the 7,000 new beds. I am a big believer in the use of virtual wards, but I will get that breakdown so that we understand exactly what that situation is. I have been very much at the forefront of making sure that those 7,000 beds are targeted at the areas of most need, which is vital in all of this.
I think we all agree that dealing with the flow to create the space for A&E patients is the central issue. Primary care is a part of it too. That is why the 50 million increase in appointments is a vital part, as mentioned by the right reverend Prelate the Bishop of London and the noble Baronesses, Lady Merron and Lady Brinton. I will get the specific information on pharmacies as well.
On the workforce plan, work is being done on that right now. We are working from the 2020 NHS People Plan, and I will update the House as we get more information.
Central to the whole issue of ambulance handovers is, as I like to call it, the flow—the whole-system issue. It is only when we resolve bed occupancy and the flow into adult social care that we will have the free flow through the whole system and the reduction in handover times.
Response times were brought up by all the speakers. A lot of that is about managing the calls to achieve the right outcome. Yes, it means more call handlers, as was pointed out, so we are increasing the number of 999 call handlers to 2,500 and 111 call handlers to 4,800. I take the point made by the noble Baroness, Lady Brinton, about paying tribute to the work they are doing and the impact they make.
It is also about making sure that the call is navigated correctly. I was made aware of the fact—maybe this was known already—that 50% of 999 calls do not result in a conveyance to hospital. That says to me that there is a lot more we should be doing to help people in their home, such as picking up people from a fall and making sure that we go out quickly to their care homes. The thought is: in those instances, is an ambulance staffed with three people the best sort of response vehicle when someone needs help being put back on their feet? Maybe that is a much better place for us to use quick-response paramedic motorcycle-type people. This is very much at the top of our agenda. It is something that I was speaking to the NHS chair about just this week and something that I am going to do personally in terms of visits.
On the use of 111, unfortunately I had experience of that this week when my four year-old son was up all night throwing up and I was a distressed parent. My wife, like any mother would, was saying, “Should we be taking him to hospital? Should we be ringing 999?” We called 111 between midnight and 1 am. It took me a while to get through, so I am not saying it was a perfect experience, but when I spoke to them and they were able to put me in touch with a local doctor who could support me and get us through, that was key to helping us and stopped us going into A&E or clogging up 999.
Having the right people to deal with the problem in the right way is the best approach. It ensures that when there is an absolute emergency and you are into your golden hour, so to speak, the focus is really on having the right people. I shall not pretend that we have got it all right now but, believe me, it is very much at the top of the agenda. The investment in the ambulance fleet—we are talking about £20 million per year—is about making sure that we have the right type of vehicles to sort out the right situation, while ensuring that this is all overseen by a national ambulance co-ordination centre so that we really are responding in the correct way to each type of call and triaging, as mentioned.
I have mentioned the 15 trusts and 45% delays before; these were also mentioned by the noble Baroness, Lady Merron. I am very much into what the action plan is to address each of those. It is at the top of my agenda when I meet my NHS colleagues and I will give an update on where we are with that plan and our actions. To me, that is all part of an exercise to identify best practice and then roll it out across the system. As part of that, we have just kicked off a winter improvement collaboration programme that is about trying to identify those best practices and roll them out. That is the £450 million fund we are using; we have already used it to fund 120 trusts to create capacity in the system, such as in Leicester, north Bristol and Grimsby, so that we have those wait areas and can increase the capacity in the system. I am personally visiting some of the new system control centres in Maidstone next week, so that we can see what good really looks like and ensure that we are managing it as well as possible.
In addition, within the ambulance services themselves, we have put £150 million of increased funding into the system for these measures. It includes a lot of support, because a lot of these calls are from people who have mental health issues, so making sure that we have mental health-trained paramedics is a key part of this as well. These are all parts of the plan for patients, which is very much alive in all of this. However, as mentioned in the Question of the right reverend Prelate the Bishop of London and by the noble Baroness, Lady Merron, industrial action will clearly have an impact on everything we are trying to do here.
I note at this point that we have made the pay increases recommended by the pay review body at all points but I accept that if people are balloting to strike, there are clearly things we need to understand about why they feel the need to do that. It is premature to predict the outcome of the ballot at this time. We know that there is a range of options on the ballot, be it strike, work to rule or no strike, across three unions nationally and regionally. We are working on a number of contingency plans but, until we know the exact shape it will take, we cannot put those in place. Public and patient safety will come first and foremost; I know that is a view the ambulance staff share, which again is a point made by the noble Baroness, Lady Merron. When the ballot results are known, the NHS will sit down with the unions and staff to agree an approach with this in mind. They will agree the safe level of cover, which is foremost in all our minds, and then deploy our contingency plans around this safe level.
I hope I have managed to cover most of the points raised before I run out of time and sum up. Again, I will go over my notes to make sure that I follow up on any points I may have missed. I accept that this is an issue of key focus. I hope that the plans I have gone through this afternoon give a sense of what we are doing in this vital area. First and foremost, it is the whole-system issue, as mentioned by all the speakers today.
We recognise the pressures that the ambulance service and the wider NHS are facing. We continue to work closely with NHS England to ensure that patients receive the help they need when they need it. With that, I once again pay tribute to the right reverend Prelate the Bishop of London for securing this important debate. I know that we have a meeting soon, where I look forward to discussing this further.
Public Service Broadcasting: BBC Centenary
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Foster of Bath
That this House takes note of the future of public service broadcasting, in the year of the British Broadcasting Corporation’s centenary.
Lord Foster of Bath (LD)
My Lords, I begin by congratulating the Minister on his re-emergence, which is just in time to celebrate the 100th anniversary of daily broadcasting on the BBC. If, using the TARDIS from “Doctor Who”, Lord Reith could travel to a modern home, he would be amazed by flatscreen TVs, computers and smart speakers, which are all capable of delivering some or all of the BBC’s output. This now includes nine TV channels, 10 national radio stations and a network of local radio stations, a huge web presence and a large archive of programmes—all readily available for just 44p per day.
He would be equally amazed to learn that what he knew as the Empire Service now delivers reliable and trusted international news and other programming in more than 40 languages, projecting soft power around the world. He would be amazed to hear that BBC services reach 492 million people a week, making it the world’s largest broadcaster by reach. He would be impressed by the BBC’s contribution to our world-beating creative industries through investment, skills, training and, not least, BBC-led innovations such as iPlayer, which trailblazed for the global streamers and the creation of a new market for video on demand.
Reith would also see, with Bitesize, CBeebies, “Panorama”, “Frozen Planet”, “Strictly Come Dancing” and the “BBC Proms”, that the principles of “inform, educate and entertain” remain, as does the power to show us what it is to be part of the United Kingdom and to bring people together, as it did during the Queen’s funeral. He would be proud to learn that many believe that the BBC is the best and most trusted broadcaster in the world. It is probably our best gift to the world. Even rivals are complimentary. Netflix, for example, has said:
“The impact that the BBC has had over the last few decades in building the profile of the UK creatively, in nurturing talent, its investment in production and so forth”.
Reith would also learn that we now have other public service broadcasters. We have ITV, STV, UTV, S4C, Channel 5 and Channel 4, which had its 40th anniversary just yesterday. I note that as part of Channel 4’s celebrations it has guest presenters for its longest-running show, “Countdown”, and my noble friend Lady Benjamin in the hot seat this week.
However, with much to marvel at, Reith would also learn, in true “Doctor Who” style, that there are enemies incoming and PSB problems are multiplying. For example, take the Government’s attitude to the BBC. On these Benches, as critical friends, we support a strong, well-funded and independent BBC and oppose attempts to undermine it by seeking to reduce its funding or remit. Yet, we have seen sadly moves by the Conservative Government that have meant the BBC having to do more with less licence fee income. There has been a 30% cut over the past 12 years following the freeze on the licence fee from 2010. There are also rising production costs and new obligations such as funding free licences for the over-75s—a social policy that should be funded by government. Even now, controversial changes to news and local radio stations are being made which other noble Lords will mention. The BBC is rightly adapting to the digital world, but there can be little doubt that changes would have been done differently had its budget not been so severely cut.
Conservative antipathy to the BBC is perhaps not surprising. After all, it was Boris Johnson’s adviser Dominic Cummings who called for the
“end of the BBC in its current form”.
He advised right-wingers to work towards undermining the credibility of the BBC because it is the “mortal enemy” of the Conservative Party. No wonder we have seen repeated attempts to do so from right-wing politicians, think tanks and media organisations—many of whom have a vested interest.
Wider challenges face all PSBs. In return for spectrum allocation and guaranteed prominence on electronic programme guides for linear TV, PSBs are required to meet numerous obligations. These include being free at the point of delivery, providing impartial news and current affairs and distinctly British content, commissioning a minimum number of programmes from independent producers outside the M25 and being available on all platforms.
However, with change occurring at an unprecedented pace, they now face stiff competition from hundreds of other channels and online services. Subscription video on demand—SVoD—services, such as Amazon Prime and Netflix, operate globally, with strategic advantages in financing, data and economies of scale. They have enjoyed rapid success and are unencumbered by such obligations. The effects of this, such as the hyper-inflation of production costs, mean that some PSBs are questioning whether they should remain PSBs. We should be clear about what we would lose: there would probably be less original journalism from ITV and Channel 5, for example, and certainly less British content.
Currently, the PSBs combined produce far more original UK home-grown content than the streamers, producing 35,000 hours in the last 12 months to April, compared with only 831 hours produced by Netflix and Amazon Prime combined. If some channels ceased to be PSBs, it would inevitably lead to a reduction in home-grown content and increased reliance on US-made programmes. As the Select Committee said three years ago:
“Our evidence overwhelmingly indicated that public service broadcasting is as important as ever to our democracy and culture, as well as to the UK’s image on the world stage.”
So we must urgently address the challenges.
The April White Paper, Up Next: The Government’s Vision for the Broadcasting Sector, also recognises the challenges and proposes a range of solutions. I agree with some and disagree with others, such as the plans for Channel 4. But, given the urgent need for action, it is disturbing that there is no sign of the media Bill. On Tuesday, DCMS Minister Julia Lopez said that her department was keen to bring it forward, so can the Minister explain who is blocking it? We urgently need the opportunity to agree measures to ensure that we continue to reap the democratic, cultural and economic benefits of PSBs.
I turn to some of the measures that I believe are needed. The first is really easy and requires no money or legislation: simply stop putting the BBC down. It makes an enormous contribution to our culture and democracy, it is held in great affection at home and it is admired the world over. We should be immensely proud of that achievement. Of course, we cannot be complacent and must exercise vigilance over the spending of the public’s money. But let us not confuse accountability with the kind of full-throated attacks frequently heard in the right-wing press and occasionally, dare I say, from the Benches opposite. We should be more willing to celebrate than condemn.
Secondly, we should think creatively about alternative methods of funding the BBC, while ensuring that it continues to be universally available, free at the point of use and the benchmark for quality, range, innovation and training. I serve on the Communications and Digital Committee, the current and past chairs of which I am pleased to see in their places. The committee’s recent report on BBC funding outlined the options that we felt were plausible substitutes for the licence fee and those that we felt should be dismissed. I will not rehearse those arguments here—others may well do so—but we need careful cross-party consideration of those options to ensure that the BBC continues to be an integral part of British life well into the 21st century.
Incidentally, while the Government may wish to explore a contestable fund for additional high-quality UK-produced material, such as the trial carried out on the young audiences content fund, this should be totally separate from financing the BBC. That financing process should be independent and transparent, whether for the licence fee or for whatever succeeds it. In 2019, the Select Committee said that
“the integrity of the licence fee has been undermined by a succession of settlements which were carried out in secret and which have tended to disadvantage the BBC.”
It is time to end those clandestine negotiations, which are bad for the BBC and the country.
Thirdly, our public service broadcasters play a vital role in bringing international stories to UK audiences, informing them about urgent global issues and connecting them with people, places, events and concerns far beyond our national borders. Such a role is especially crucial given the danger of a post-Brexit Britain becoming ever more inward-looking and insular and so must continue to be enshrined in the remits of all PSBs.
Fourthly, we need to end the nonsense of Channel 4 privatisation. This was a particular obsession of Boris Johnson and Nadine Dorries, with virtually no support from the industry or from audiences. Your Lordships’ committee was clear that launching consultation on privatisation and stating that privatisation was the Government’s preferred option was “not the right approach”. It went on:
“The Government should have set out its vision for the future of public service broadcasting as a whole before examining what place Channel 4 should have in that ecosystem, and which business model it needs to realise that role.”
Yet the current Secretary of State is apparently reviewing the business case for privatisation as we speak, without any of the key decisions about the future of PSB having been made. I hope the Minister can explain why that is.
On these Benches, we are clear that a privately owned Channel 4 would mean a corporate owner maximising its return to shareholders rather than investing in programmes; it would mean less innovation, an inevitable reduction in serious peak-time news, fewer commissions to small, independent producers, and less investment in the nations and regions. Pulling the rug from under Channel 4 will not just impact one broadcaster; it will harm the whole sector. Privatisation was always a solution in search of a problem; it should go the same way as its initial sponsors.
Fifthly, as both BBC and ITV have warned, there is a risk that, soon, “crown jewel” sporting events will be available only on subscription services. I share their view that urgent changes are required to the listed events regime to avoid this happening.
Sixthly, there needs to be a proper inquiry, perhaps led by Ofcom, into which platforms PSBs should be obliged to provide their content to and whether they are getting fair value for it.
Finally, and perhaps most importantly, we urgently need to update the prominence regime so that content from PSBs is easily discoverable in the digital age. There is little point in placing content obligations on broadcasters if audiences are unable to find that content. It is three years since Ofcom called for new legislation to keep PSB content prominent on both linear and on-demand television. Three years on, at last we have the promised new prominence framework in the long-awaited media Bill—yet another reason why it should be introduced as a matter of urgency.
Our PSBs, not least the BBC, are the envy of the world, but they are operating in a rapidly changing landscape. If their reputation is to be maintained, urgent changes must be made to the way we support and regulate them. The proposed media Bill is long awaited. Let us hope the wait will be soon over so we can debate it and then agree measures to ensure a PSB sector fit for the new broadcasting age. I beg to move.
Baroness Stowell of Beeston (Con)
My Lords, I too congratulate my noble friend Lord Parkinson on his return to the Front Bench, and I also congratulate the noble Lord, Lord Foster of Bath, on an excellent opening and scene-setting speech to this debate.
I was at an event last night—I believe that the noble Lord, Lord Foster of Bath, also attended—at which the Secretary of State, Michelle Donelan, committed to bringing forward the media Bill very soon. As my noble friend the Minister knows, and I hope agrees, I believe that there is a strong case for a pro-growth media Bill that combines the prominence measures, which the noble Lord, Lord Foster, has just described, with the digital competition measures, which are also critical not just to the PSBs but to newspapers, publishers and UK tech businesses. These measures form part of another long-promised but still-to-be-seen Bill, so I hope that my noble friend the Minister can say something meaningful about all these things when he comes to wind up.
However, as important and urgent as prominence is for public service broadcasters and radio networks on digital platforms and smart TVs, it is also important to be clear that it is nothing more than a short-term solution. Prominence alone is not the answer to the real challenges facing the future of public service broadcasting. As much as we may feel sentimental towards our broadcasting institutions or specific channels, we cannot escape that the PSBs’ share of UK video viewing has fallen from 97% in 2010 to 63% this year, and it is currently predicted to fall to 50% by 2027. The broadcasters are all responding to this challenge: digital first is the main strategic shift that each is having to adopt, which is why prominence is so important. While I would not for one moment suggest that this is easy and without its challenges, this is a commercial imperative or a survival strategy.
When it comes to the bigger challenge of safeguarding the value of public service broadcasting to society, institutional preservation for the sake of it is not the place to start. There needs to be some big thinking about what public service broadcasting means in the next quarter of the 21st century, and the best way to deliver it, taking account of not just the changing viewing habits of audiences, and the young in particular, but the dissatisfaction of some sections of society who feel that their lives and perspectives are patronised and not seriously represented.
I believe that the broadcasters themselves should take the lead in being radical in the solutions they propose. As politicians, we should be demanding that they be clearer than ever before what the point of them is in this highly competitive media world, and calling on them to set out how the structure of public service broadcasting should change for it to continue delivering value for society. That includes asking whether we still need four public service broadcasters—each independently owned—to deliver distinctively British quality programming that binds us together as a nation. It requires the BBC—as the Communications and Digital Committee has called for—to come forward with its own vision for the future, driven by a clear strategic purpose and costed options for how best to deliver benefit to the nation, as well as how to fund it. The noble Lord, Lord Foster, referred to the report on Channel 4 by the Select Committee I chair—although it was chaired at that time by my noble friend Lord Gilbert—and we were clear that we did not object in principle to its privatisation, although we did question its urgency. If Channel 4 is not to be privatised, it requires its board, if it is to respond to these challenges, to propose new ways for it to be financially sustainable and deliver value that is distinctive from commercial broadcasters. For public service broadcasting to face all these challenges, competition regulators are required to think differently and not repeat the mistakes of the past.
Finally, it requires us, as politicians, not to blindly defend the status quo or engage in a political battle about the licence fee or Channel 4 privatisation, which only encourages the BBC or Channel 4 to keep their heads down and hope that, if we keep fighting, big decisions about funding or ownership models will remain unmade. Clearly, financial pressures are forcing the BBC and others to make changes now, ahead of any long-term strategic decisions, but these seemingly piecemeal decisions serve to illustrate the danger of the BBC waiting to define its strategic purpose to inform decisions about how it needs to change. We might worry about changes to, say, local radio, because we cannot see how they relate to a bigger picture.
It is because I believe in the importance of public service broadcasting to a cohesive society and our prosperity as a nation that I am demanding radical thinking about its future. I do not want solutions to be left to us politicians; I want the broadcasters themselves to be emboldened by us to lead the way and to depoliticise the debate. We all need to recognise that this is urgent and that raising these questions is not some kind of attack; it is the only way of safeguarding something that is important to all of us. I hope that my noble friend the Minister—back in his rightful place—can give me some assurance that the Government understand this and are acting accordingly.
Baroness Bakewell (Lab)
My Lords, 1922 was a very special year. It was the year The Waste Land was published and saw the birth of Philip Larkin and the creation of the BBC—cultural events that echo still to this day. My contribution is going to be about the BBC and my personal experience of it. I first worked for the BBC in the 1950s when I made the sound effects for the horses’ hooves in radio drama. I have gone on to have a varied career in all segments of the BBC, largely working with the creative community, of whom I have a continuing and varied experience. I have been close to them and not to the administrators—of whom the noble Baroness, Lady Stowell, is a distinguished one—so I speak from that community.
What do I see of the BBC now? I see the BBC living in fear. It lives in fear of government and government interference and change for the worst. It lives in fear of the right-wing press and its effect on public opinion, always vocal in damning the BBC for the slightest errors and undermining public trust in a national institution. It lives in fear of the public reputation and in fear of the other platforms and the changing landscape of the world of broadcasting; quite rightly, so it needs handling.
What is the consequence that I perceive in the behaviour of the BBC today? I see it as overmanaged, overloaded with managers trying to answer these fears that it harbours. I see too many people designated to sign off programmes—person after person—to sign off a creative enterprise whose managers are perfectly able to deliver in the first instance. I see a timidity from the BBC, overcautiousness about what you can say and how much daring you can display. The great triumph of the BBC throughout the 1950s and 1960s was its openness to adventure and daring and that is where it culled its huge reputation. Now, it drives away people such as Andrew Marr and Emily Maitlis who are fearful of expressing an opinion for fear of overstepping the new rules that apply.
I wish—and this is not the arena to say this—that the BBC had more courage to face down these fears. I call on the Government to endorse the values that existed at the founding of the BBC. I interviewed Lord Reith in this building at the end of his life when he expressed to me how much he regretted that jazz had ever been allowed on the radio. He felt that it was the beginning of the corruption. You can be wrong.
I would like the Government to acknowledge positively the role of the BBC today. The BBC has a global brand, an enviable one in the world of brand making; there is nothing to match it. It has global reach: it reaches into Ukraine; it reaches into China; it reaches everywhere, and it has a say. It is a soft power of incalculable value. Ask any of the diplomats. Ask our foreign embassies. They will tell you how much the BBC is valued as part of our diplomatic contribution to the world.
What is more, the BBC has the trust of the public. The public snipe at the BBC; that is what you do with those you love. Overall, the approval rating for the BBC is extremely high, and it is very precious. Unless we endorse it in a positive way, unless the Government say how they agree with the values of the BBC, then it will slide down the reputational ladder in our society. We cannot afford for it to lose heart and to give way to these fears that it harbours. I call on the Government to endorse the BBC and its values and encourage it to hold fast.
Lord McNally (LD)
My Lords, first, I congratulate my noble friend Lord Foster on his masterful opening and my noble friend Lady Bonham-Carter on her success in gaining this slot for our debate. I will not say anything about the return of the Minister, because the last time we shared a debate I congratulated him on his independence of mind and clear thinking, and then he was gone—I will keep quiet this time. What I will say is what a pleasure it is to follow the noble Baroness, Lady Bakewell. She is a proud daughter of Stockport, of which I was an MP, and Stockport is proud of her. I have to be careful about exactly how I describe what she means to my generation, so I will play it safe by saying simply that today’s feisty, self-confident female presenters stand on her shoulders and benefit from the path that she helped to pioneer for women in broadcasting.
This afternoon, as has been said, we celebrate the establishment of the British Broadcasting Company in 1922 and the British Broadcasting Corporation in 1927. Having listened to the noble Baroness, Lady Stowell, I remind us all again that it was a Conservative Government who established the BBC as a public corporation, protected by royal charter, with John Reith’s brilliant mantra—“inform, educate and entertain”—as its mission statement. It is important to remember that it was the conscious will of Parliament to distort the market in this way, as it has done ever since. Indeed, it was under Conservative Governments that the remit of public service broadcasting was extended, by the introduction first of ITV and then of Channel 4, Channel 5 and S4C. It is a reminder to Conservative Members of Parliament, in both Houses, that they do not have be hostile to the BBC.
Because public service broadcasting—and the BBC in particular—has been so successful in its mission it has, as has been said, been under sustained attack on two fronts. Those on the right wing of the Conservative Party hate it because it is publicly owned and well regulated. They are aided and abetted by a clutch of right-wing newspapers, all owned by tax exiles, who lust after the public service audiences—the eyeballs and ears they can turn into hard cash if public service broadcasting can be marginalised, as it has been in some other countries.
Meanwhile, we have to face the fact that, for the last decade and more, the BBC, under successive Governments, including the one of which I was a member, has had to manage successive squeezes on its funding. As has been said, the BBC has had to manage a 30% cut in its funding over the last decade. At the same time, the BBC has had to take on, as my noble friend Lord Foster said, tasks such as funding licences for the elderly, and the BBC World Service, neither of which should be charged to the licence fee. Unfortunately, the BBC insists on presenting all aspects of its cost-cutting as part of some shiny new vision in this new digital age. The corporation should be more up front about its various reforms and contractions and the very real funding constraints that it faces.
This morning, I sat in on a briefing by the BBC on the changes being planned for local radio. The proposals received a rough ride from a cross-section of Labour and Conservative MPs, all jealous to protect their local services—and rightly so. But there was an elephant in the room: if not local radio, where should the axe fall? The truth is that there is only a limited number of services that cutting Gary Lineker’s salary can cover.
The problem with understanding what the BBC is doing across the board is that it means we are acquiescing in a steady marginalisation of the BBC—the very agenda that Rupert Murdoch and other financial interests, along with the right wing of the Conservative Party, want to see.
I am particularly concerned by the proposal for it to close the BBC News channel and BBC World News and replace them with a single, global-focused channel next year. To lose a 24/7 UK news channel when major commercial competitors are tooling up to provide opinionated news channels is a major retreat by the BBC. I hope that Ofcom will examine these proposals with all due rigour and use the public interest powers that the Puttnam committee, of which I was a member, put into its arsenal at its formation 20 years ago. Meanwhile, parliamentarians in both Houses and the parties they represent have to be clear about the future funding of the BBC and the protections offered to it and other public service broadcasters.
Most of all, we need a clear commitment that public service broadcasters, and the BBC in particular, will have the support they need to continue to provide the iron pole of quality around which the ecology of our creative industries can flourish.
Baroness D'Souza (CB)
My Lords, public service broadcasting works in the UK within a wide framework of duties and responsibilities. These include strict rules on content, range, outreach, implementation and funding. The BBC is also bound by the royal charter, which sets out its objectives, mission and purposes. While we have a free broadcast media, it is monitored and regulated by Ofcom.
The House of Commons Digital, Culture, Media and Sport Committee’s 2021 report The Future of Public Service Broadcasting identified three core principles within public service broadcasting: universality of access, accuracy and impartiality, and freedom from government interference or political pressure. In a subsequent report in 2021, the same committee considered that the Communications Act 2003 had been overtaken by huge changes in online digital broadcasting and should no longer be considered fit for purpose. There is a dilemma: how best to amend legislation which pre-dates the rise of streaming platforms and is therefore outdated, and how new funding models might enable relevant and accessible public service broadcasting to compete effectively with the giant online platforms that remain as yet largely unregulated.
The overall consensus is that new primary legislation is now required to replace the 2003 Act, if only to keep pace with broader industry and economic trends and hundreds of other competing channels and online services. However, all the existing safeguards must be retained and perhaps even strengthened. A media Bill, announced in the Queen’s Speech in May 2022 and foreshadowed in the Government’s White Paper, is likely to encompass the core principles of public service broadcasting—to be renamed public service media—through new regulatory powers to enforce codes for on-demand videos and stricter rules on potentially harmful material. When the Bill arrives, I am sure it will be much debated.
Meanwhile, the BBC is the only major provider that relies entirely on the annual licence fee, which makes it uniquely vulnerable to political pressure. As we have heard, the BBC licence fee is currently frozen and remains under review, but it is 30% lower in real terms than it was a decade ago. The BBC has found savings approaching £1 billion over the past five years, but it will need to reduce its budget further, by approximately £300 million, before the end of this decade. However, reorganising and recreating models that satisfactorily relay public service broadcasting on both linear and online services will be very expensive.
While acknowledging the fall in listener and viewer numbers in the past five years, the BBC remains a key public service broadcasting provider around the world and the BBC director-general has announced plans to deal with competition and reduced budgets, staff and broadcasting hours while maintaining its crucial public service broadcasting role. These plans, which anticipate the closure of the BBC News channel and BBC World News, the latter funded by subscription and advertising, in favour of a rolling news service, will be fiercely resisted—not least because the new service will be a commercial venture and potentially therefore precluded from licence fee funding.
Colleagues in this Chamber have spoken, and no doubt will speak, with warmth and affection about the BBC World Service and its immense soft power. This is not, I would say, sentimentality; it is a hard, factual appreciation of the gem we have. I remember being extremely moved many years ago in Khartoum when that city simply went silent in order to listen to the 1 pm news, and not much has changed; I think that still happens the world over. In more recent times, the figures for listeners have shot up during world crises such as the Russian invasion of Ukraine. The reasons for this are obvious but worth restating: in an environment of disinformation, misinformation, half-truths and fantasy, the BBC is trusted.
The world’s most respected broadcaster and one of the UK’s key democratic institutions faces a bleak future in the absence of realistic funding. If public service broadcasting is to be given the importance to our democracy and to our culture that it deserves, together with the cost of maintaining linear broadcasting and expanding online on-demand services, it is vital that the Government provide sufficient funds. It is astonishing to me that the Government would even think of limiting or undermining such a powerful channel of UK influence. Instead, they should be ensuring its long-term security, to enable the BBC, including the World Service, to streamline its public service broadcasting for future decades.
The Lord Bishop of Leeds
My Lords, I too am grateful to the noble Lord, Lord Foster, for securing this very important debate. Before saying anything further on the theme, I want to express thanks to and admiration for those who prepared the Library briefing. I have been knocking around these issues for a couple of decades, and this briefing is a model of narrative accuracy and concision.
Public service broadcasting in the UK is unique on the planet and one area in which this country is genuinely a world leader, which is why it is so important that, in the centenary year of the BBC and the day after the 40th birthday of Channel 4, we assess the value of what we have and steel ourselves against the ideologically driven impulse to diminish it. Yesterday, I asked a friend who works in public service broadcasting what she would focus on in a debate such as this. Her response was immediate: imagine a world without it. That is, imagine a world in which broadcasting serves only narrow cultural or political interests and is subject purely to commercial or transactional persuasion. I might put it like this: look at broadcasting in the United States. Price is not the same as value.
The broadcasting landscape has changed, as has been noted by a number of speakers, and is changing by the day. Technology drives both the pace and nature of such change, but there remain principles which, if neglected or sold down the river to the highest bidder, will sell our culture short—and not just the UK’s but that of the global audience who rely on the BBC for accuracy and integrity. Does it get it wrong sometimes? Yes, obviously; but it is also open to scrutiny, challenge and critique. To understand the global importance of the BBC and what the loss of soft power might look like, just ask Arabic speakers what they think of the recent decision to close our Arabic service, at a time when it is most needed.
The main point about PSB is surely that, as the report by the House of Commons DCMS Committee makes clear, it is characterised by universality of access, accuracy and impartiality, and independence. It is surely not coincidental that we read on the walls of New Broadcasting House the words of George Orwell:
“If liberty means anything at all, it means the right to tell people what they do not want to hear.”
For this freedom to be guaranteed, there needs to be a well-resourced facility for universality of access, accuracy and impartiality—which is not the same as neutrality—and independence.
Yes, technology has changed everything, and it is timely that there should be some serious scrutiny of legislation for a rapidly moving digital and legal world. But, as I wrote in a newspaper article some years ago,
“If the BBC needs to hear what it doesn’t want to hear, then the politicians who want to reform PSB cannot exempt themselves from scrutiny of their motive. Diminishing those who challenge the integrity or motivation of governments or their policies is what happens in countries that are not admired for their democratic credentials.”
As we have heard, PSB is not the sole preserve of the BBC. The landscape has changed; there are different media with differing offerings, which are funded by different models. This provides a balance that is precarious and must be respected. Please can the Minister update us on the future of the media Bill, particularly the threat to privatise Channel 4, which is a clear success story of the last 40 years and for which there is no popular mandate to privatise?
Following the appointment of the new Prime Minister, the Government said the Secretary of State was
“carefully considering the business case for a sale of Channel 4”.
Might I suggest that business is not the only case to be considered here?
The Minister might like to help us with further questions. For example, how will the current drastic squeeze on BBC local broadcasting impact local democracy, community cohesion and accuracy of reporting? How will the drastic squeeze on the BBC World Service, and its consequent reduction in service, impact UK soft power in parts of the world where our reputation as a leading democratic and free nation is fragile, and matters?
Young people are accessing the BBC less than ever, but does this not emphasise the need to reach them more effectively with PSB, rather than simply diminishing its resources according to some numbers equation that takes little account of power that cannot be cashed out in a profit and loss spreadsheet? If PSB is reduced as a source of public funding—my assumption here is not incidental—what does this say about the encouragement and nurturing of a new and younger generation of journalists and programme makers who need to embody cultural values, not just technical skills? Do the Government value the fact-checking credibility of the BBC in a world being flooded with disinformation, with a serious impact on truth, democracy and culture?
A reform of legislation may be needed in the wake of radical technological change, to say nothing of the wild west of digital streaming and social media, but please will His Majesty’s Government commit to ensuring the cultural and democratic future of PSB in the UK, in order that we do not lose what has taken a century to build, but could be lost in weeks?
Lord Dubs (Lab)
I join noble Lords in congratulating the noble Lord, Lord Foster, on initiating this debate. We live in an increasingly dangerous world, and the soft power provided by the BBC and the British Council is invaluable. That this Government seem to be increasingly cutting back both the British Council and the BBC is unrealistic and increases the dangers to this country.
During the Labour Party conference, the BBC World Service held a breakfast during which they explained and demonstrated what the World Service was doing in its coverage of news from Ukraine. I am sure they did it at the Tory party conference as well, but it was interesting how the brave reporters of the BBC were reporting on what was happening in dangerous areas of Ukraine.
Many years ago, I paid a brief visit to Myanmar and I talked to some people from a hill tribe. They told me they get one hour of local language news a week, and that is what they live for. That is what they get from the outside world. I was also in China some years ago, and I did what many of us do when we are abroad: I switched on my iPad to get the “Today” programme, allowing for the time difference. All I got was some local Chinese radio stations. Clearly, they did not like the idea of making BBC radio programmes available.
The thing that shocks me most is that there is now a threat to the Persian language service. At a time when the brave people of Iran are demonstrating against their foul regime, risking their lives to speak up for freedom and wanting our help and support, what are we thinking of doing? Cutting back our service to them. That is absolutely unacceptable. Whether it is the Government cutting back on the BBC or the BBC deciding, that is surely the wrong decision. We know that the voice of the BBC, and those of our other public service broadcasters, are the voices of democracy and democratic values—and, indeed, they encourage positive attitudes towards this country.
As I understand it, the BBC is the biggest global news provider: 36% of people listen to the BBC; 67% of global business decision-makers use it; and its reach is nearly 500 million people. As has already been said, the BBC is now facing cuts of 30% compared with a decade ago, and I understand that the threat to close the news channel and BBC World News and create a new rolling news service will mean 70 fewer journalists. The BBC cuts threaten 450 posts altogether.
Are we not damaging one of the most powerful institutions in this country in seeking to weaken the BBC? We have already lumbered it with the licence fee for over-75s, and there is a freeze on its future income. There is a debate, encouraged by the Tory party, on whether the licence fee should survive at all, and local radio is also threatened. This is not the way forward. The potential cuts apparently represent a loss of about £5 billion, with possibly 50,000 jobs to be lost.
What about the independent production sector? We have one of the most vibrant such sectors in the world, and it relies heavily on the BBC for investment, training creative talent, apprenticeships and so on. That will be weakened. We have creative industries all over the country, in Salford, Bristol, Birmingham, the north-east and elsewhere, and they are also being threatened.
The BBC is such a valuable institution. As has been mentioned already, anybody who goes to the States and watches and listens to what is on will find Fox News. Heaven preserve us from Fox News; it is like an old Soviet propaganda-style broadcaster. Let us be grateful that we have higher standards here so far.
Channel 4 also supports the independent production sector. I do not understand the ideology that drives forward the wish to privatise Channel 4. It does not cost the public sector anything, and it provides a decent service. If the Government proceed to privatise Channel 4, what assurance can we have that it will not be bought by one of these American companies, or other companies? What is the benefit to us as individuals or as a country if Channel 4, a successful broadcaster, is bought by some overseas company? What is the point of that? What is the benefit? None at all. Of course, the public service broadcasting sector also covers ITV, which is doing pretty well.
So we seem to be moving backwards. Please let us think again before we throw away some of the most valuable features of life in this country.
Lord Clement-Jones (LD)
My Lords, I also congratulate my noble friend Lord Foster on initiating this debate and, in particular, on provoking some fine contributions so far. The much-respected Sir Peter Bazalgette, who has just stepped down as chairman of ITV, said in his Hay Lecture last month:
“Our viewing is so much richer than it used to be and the streamers have hugely enhanced this … Long may we have a system of broadcasting designed to deliver this.”
The streamers have returned the compliment:
“The impact that the BBC has had over the last few decades in building the profile of the UK creatively, in nurturing talent, its investment in production and so forth, is one of the key reasons why we have chosen to make our home here and … why we are such strong supporters of what it does and want to see it continue doing.”
That was Benjamin King, director of public policy for Netflix UK and Ireland, giving evidence to the Commons DCMS Committee back in 2020 in its inquiry into the future of public service broadcasting.
Anne Mensah, vice-president of original series at Netflix, who used to work at the BBC, went further, and I hope that the noble Baroness, Lady Stowell, notes this. She was asked if she thought the licence fee was a sustainable way forward for the BBC in the long term. She said:
“I absolutely believe in the long-term sustainability of the BBC. I love the BBC. I think that it makes some of the best shows, if you look at what it has done this year from ‘I May Destroy You’ to ‘A Suitable Boy’. I back the idea of having a UK creative economy that is built on a number of different models from subscription through to licence. I would hate to see the BBC diminished in its impact in the UK.”
Much the same could be said of the importance of commercial PSBs, such as Channel 4 and ITV. That is why the majority Conservative and Conservative-chaired committee concluded its report by saying:
“The strong, varied public service broadcasting ecology in the UK has played a significant role in the growth of the production sector in the UK. PSBs have been described as underpinning the wider creative economy and whilst SVoDs are beginning to invest more in production in the UK, the number of UK-originated content hours is hardly comparable.”
It is clear that we need a plurality of provision. Each has an important place in our broadcast ecosystem and they are interdependent. They rely on different funding mechanisms and that is a strength, not a weakness.
As Ofcom’s recent report into how the PSBs have delivered for UK audiences states, the amount and range of first-run original UK programmes on the PSBs
“far outweighs what is available on other commercial broadcast channels and the global streaming services.”
It also notes that the streaming services
“do not offer the same mix of original UK content as broadcast services, consisting of predominantly US produced drama and comedy programmes”.
The report, Public Service Broadcasting: As Vital as Ever, from the Select Committee on Communications and Digital—whose chair and former chair are present—concluded that
“TV which reflects UK culture is in demand at home and abroad. However, changes in the market may make the future of individual SVoDs and TV services uncertain. New entrants complement but cannot replace public service broadcasters, which guarantee continued investment in a wide range of original UK content no matter the state of the global market.”
Libby Purves, at the end of her insightful and far from uncritical article on the BBC last month in the Times—“Happy 100th, BBC, You Dear Old Monster”—wrote:
“Something must be done to keep the best of the BBC both safe and independent. Finding it is a serious job for serious politicians, if we ever get any again. And they should remember that every investigation and commission into the corporation has led, however reluctantly, to the conclusion it has unique value.”
I was here in 1999, when the noble Lord, Lord Bragg, concluded his splendid opening speech in a debate on the BBC. He said:
“For over 75 years the BBC has stood for something singular and been seen to be singular. If that goes the BBC will eventually go and a great chapter in our social and cultural history would have come to an end. It need not be like that. But the dangers are clear and the time to act is now.”—[Official Report, 3/3/1999; cols. 1668-69.]
Let us not keep repeating history, but recognise once and for all the huge value and quality in the variety of broadcasting we have, the core of which is our public service broadcasting.
In this light, I believe in particular that the media Bill and government policy should—to ensure that variety, diversity and quality in our broadcast services is included—definitely not contain the privatisation of Channel 4 which, as we have heard, is celebrating its 40th anniversary. As we noted earlier, it was created by a Conservative Government. The Bill should give Ofcom the powers promised in the White Paper to draw up and enforce a new video on demand code, to ensure that television-like content will be subject to similar standards regardless of how it is accessed, so that that age ratings used by all VoD services must meet the three criteria set out in the Government’s consultation response. It should reinstate the BFI young audiences content fund and—as recommended by the Commons Digital, Culture, Media and Sport Committee—reform rules around prominence, legislate to give a remit to the digital markets unit over PSB content and plurality in broadcast media, and extend the requirements for diversity reporting to streaming services. I hope the Minister will confirm that the Bill will contain that.
Viscount Colville of Culross (CB)
My Lords, I declare an interest as the series producer of a new series on the people of Ukraine to be made for international public service broadcasters.
In the words of the Communications and Digital Committee report, Public Service Broadcasting: As Vital as Ever:
“Public service broadcasting can bring the nation together in a way in which other media cannot and can ‘raise the level’ of quality, as well as ensuring continued investment in original UK content”.
In a broadcasting environment in which the PSBs are facing massive threats from the global streamers, they need economic and political support from the Government to remain relevant to British audiences.
Noble Lords have mentioned the uncertainty surrounding Channel 4, with the continued political indecision about whether to go ahead with its privatisation. I take heart from the Secretary of State’s answer in the other place that she is looking at the business case for its sale. As there is no business case, I would suggest to the Minister that it should not take long to resolve the issue. The channel had its most profitable year last year and if its borrowing limits need to be raised to compete with the streamers, then that should be facilitated.
As noble Lords have said, the other important policy for the Government to enact is the prominence regime on digital platforms. At the moment the channels are finding themselves thwarted by the massive power imbalance with the streamers. This matter is urgent. TV manufacturers are demanding huge fees to ensure the prominence of PSB tiles on their platforms. Channel 4 has just had to pull out of talks with the manufacturers of the LG TV sets because they demanded too much money to place its tile in the most prominent position on the home page, while the Amazon platform has just demoted the position of the All 4 tile to make way for the promotion of its own Freevee tiles. Channel 4 has asked Ofcom to investigate the move. The BBC is better placed because of its “must carry” obligations. The broadcasting White Paper had some very important promises to enshrine the principles of “appropriate prominence” on digital platforms, but every month the Government delay the new regime, the PSBs lose money.
PSB commercial channels need further support in their business relationships with the streamers. Noble Lords only have to look at ITV’s anguished negotiations with these global giants to see why it is important. The channel is confronting variants of closed platforms when dealing with Amazon, Google and other tech companies, which define the terms of inclusion of content. This is particularly important with the upcoming launch of ITVX with its wide-ranging digital offer. Amazon has told it that it must accept the standard terms of 30% share of advertising revenue, take it or leave it. It also will not share data with the content providers. Netflix is famous for failing to provide any audience data to content producers. However, that seems to be an own goal, as content commissioners will obviously commission material better tailored to audiences if they have the data on who is watching and how they are watching material.
The imbalance of power between the platforms and the PSBs strikes me as similar to that affecting news publishers, which I spoke about in last week’s debate on the Free for All? report. I suggested a variation of the mandatory code set up in Australia for news publishers. Surely something similar could be established for TV content providers on platforms in this country. This Government pledged to support the growth of British business and surely our indigenous PSBs should be given all possible help to break open the dominance of the platforms when creating terms for use of their content. I ask the Minister whether such measures could be included in the media or digital markets Bills.
I would also like to put in a plea for Ofcom-licensed radio stations. Last week the latest RAJAR audience figures showed that the percentage of online radio listening has increased from 18% last year to 24% this year. That is a huge increase which, if continued, will mean that the majority of listening will be online within five years. Smart speakers make up half of that and voice-controlled, in-car IP platforms are also a growing online market. It is important that Britain’s radio stations have protected positions on these devices. Without them, there is the temptation for platforms to drive listeners away from UK radio and towards their own playlists.
There also needs to be a regime which supports the ad revenue of UK commercial stations to ensure that they can place their own adverts around their content rather than being forced to accept the platforms’ ad offer, with the subsequent losses of revenue. I hope the media Bill will have specific clauses to support radio and protect listeners in these fields. I understand that the stations are having fruitful conversations with DCMS. I would be grateful if the Minister would give your Lordships’ House his thinking on this.
I welcome the Minister back to the Front Bench and I hope that his second term of office will be filled with the long-awaited DCMS Bills on media and digital spaces. They need to come before Parliament as soon as possible to protect our media industry from the onslaught of the streaming giants. The content production sector is a booming, but its mainstay and driver is the power of our public sector broadcasters in this new age. I ask the Government to embrace them in the tender arms of legislative support.
Lord Gilbert of Panteg (Con)
I too congratulate the noble Lord, Lord Foster, on securing this debate. He is a passionate and truly expert advocate of public service broadcasting.
It was a privilege to chair the Communications and Digital Committee, which produced a number of reports on the future of PSBs prior to the excellent report on BBC funding which my successor and noble friend Lady Stowell of Beeston has described.
The Government are right to look now at the future funding of the BBC and are right to ask whether the current model for Channel 4 is sustainable in the long term. However, it is hard to see how evidence-based answers to these questions can be reached without looking in detail at what we want from PSBs in this rapidly changing world. Will my noble friend the Minister, whose return to the Front Bench is most welcome, confirm that in looking at the future funding of the BBC, the starting point will be an across-the-board evaluation of the future role of PSBs?
On BBC funding, I welcome the Government’s commitment to greater transparency in future funding settlements and charter negotiations. We certainly cannot tolerate another behind-closed-doors stitch-up. In the interests of time I will skip the eulogies, but as a friend of the BBC I have to acknowledge that no Government of any colour are going to raise the licence fee significantly above the rate of inflation. With inflation in the sector likely to remain well ahead of consumer inflation measures for many years ahead, this is a recipe for a slow death for the BBC: annual cuts after annual cuts, no long-term investment and the inevitable but non-strategic withdrawal of services. That is why my noble friend Lady Stowell is right to urge the BBC itself to be radical and take a lead in the debate about its future funding.
On Channel 4, the Government are right to periodically review their ownership and they were right to worry about the sustainability of the current model. They should, however, have considered other ways of updating the model. Given that so much has changed since the launch of Channel 4, including the huge expansion of the independent production sector and the nature of underserved audiences, we should be asking whether the remit is up to date, the terms of trade and publisher broadcaster model need updating, and whether the way it accesses capital could be changed. However, if the Government should have asked these questions, so should Channel 4 have addressed them in its response to the Government’s proposals. An outright rejection of privatisation without any evidence that it had really weighed up the pros and cons and considered alternative approaches was not an adequate response.
However, let us work on the assumption that the Government are not going to privatise Channel 4 and that they are going to examine the future funding of the BBC. It seems that this is a time to be ambitious. The Government are right that levelling up and impartiality should be the focus of the BBC midterm review, but I argue that the role of PSBs should be looked at alongside the potential huge contribution of the TV and film production, broadcasting and content distribution sectors to levelling up. The creative industries generally and these sectors specifically should be right at the heart of industrial policy, and the Government should not be afraid of giving strategic direction.
The UK is attracting huge investment. Global players are here because of the facilities and talent that they can draw on and the incredibly rich ecosystem that has largely been nurtured by public service broadcasters. However, the sector remains too focussed on London and the south-east, and too metropolitan and liberal in outlook. This will not do. Diversity is about more than protected characteristics. It is about diversity of social background, geography and viewpoint, too. If these sectors are to provide well rewarded, fulfilling jobs in the post-automation world, they must be more geographically dispersed and more socially inclusive. That means a skills policy and tax incentives for the whole sector sitting alongside renewed PSB objectives and some clear targets.
It also needs to be specific. For example, incentives and policy should drive the growth of Salford as a TV production and facilities centre, building on the historic investment that ITV has made in the region, and encourage the clustering of businesses so that, across the whole range of on-screen and off-screen roles, young people can have a career in this sector without moving to London.
Cardiff has nurtured remarkable talent and is incredibly creative. Much of this stems from huge cultural and economic input from the BBC and now the right mix of training, tax incentives and political drive should be applied with the ambition of making it a world-class drama production centre. Glasgow, the home of BBC Scotland, STV and numerous small independent production companies championed by Channel 4, needs the Government to incentivise global businesses that are producing great content in the UK to bring returning series to Scotland.
When I have discussed levelling up and the role of PSBs with senior players in the global businesses that are investing so heavily in the UK, the message is clear. They value the mixed ecology and the role of the BBC and other PSBs, and they want to do more outside London. Yet vast investment in studios and stages is still concentrated in the south-east and, if you want a job in many of the roles in the sector, you need to move there. When I ask them what would persuade them to build studios and stages in other parts of the country, the answer is that they need to be able to access the full range of skills and facilities that support major productions. They also say that they need leadership and grip from the Government. I would add that the industry itself needs to work together to drive this change.
An ambitious Government who truly believe in levelling up will seize this opportunity and work with devolved Administrations to ensure that PSBs thrive at the heart of this sector, which has the potential to contribute as much to our economic success as to our cultural lives.
Viscount Stansgate (Lab)
My Lords, this is a good moment to discuss the future of public service broadcasting. I congratulate the noble Lord on securing and introducing this debate and join all noble Lords in welcoming the Minister back to the Front Bench. In the great carousel of recent government changes, I am glad that the wheel has stopped at exactly the right place for him to get off and resume his role as DCMS Minister. This gives me the chance, like everyone else in the debate, to congratulate the BBC on its centenary.
Of course, this is not the first time that Parliament has debated the future of the BBC or public service broadcasting. There was quite an interesting debate in July 1951 on the same subject. At that time, the distinguished historian Asa Briggs described Selwyn Lloyd’s report as “the real dynamite” which eventually led the BBC to lose its monopoly. Why is it useful to recall such a debate many decades later? It is because we are now facing threats to public service broadcasting again.
For example, the Government previously indicated that they wanted to sell off Channel 4, but it is not yet clear what the current Government will do. Indeed, it is not entirely clear what the current Government will do in a number of areas. However, we do know that the Government continue to put pressure on the BBC via the licence fee. There are people who want to see the BBC further constrained and reduced, both financially and by cutting its coverage, despite the BBC being the jewel in the crown of the United Kingdom’s soft power.
Sadly, only this week we heard of potential cutbacks in services provided by local radio. I presume that all noble Lords have had the very useful briefing from the BBC and its key statistics, so I will not repeat them except to say that the BBC remains an incredibly trusted voice in Britain and around the world.
My main purpose in speaking in today’s debate is to highlight one issue in particular: the BBC’s superb record over the years, whether on radio, on TV or, now, online, of informing, educating and entertaining the nation about science. I shall give the House some examples. “The Sky at Night” began in 1957. It was a monthly programme, one of the longest-running by the time it ended, and it was one of the very earliest of the regular science programmes. I grew up on it. Who could possibly forget the sheer enthusiasm of the presenter Patrick Moore? Yes, I agree that the more we learned about his personal political opinions, the less I liked them; nevertheless, over the decades he shared with people the sense of sheer excitement at space and what humankind could achieve. That culminated in the moon landing of 1969, which the BBC covered in an exemplary way as a national broadcaster. Another long-running show was “Tomorrow’s World” with presenters such as Raymond Baxter, Judith Hann, Maggie Philbin and James Burke guiding us through the then latest developments in technology.
More recently, there are programmes such as “Click”, which, since the start of the millennium has been the BBC’s flagship technology show on BBC World News, where presenters such as Spencer Kelly, Kate Russell and Lara Lewington have educated, informed and entertained us on all the latest news in the world of tech.
There are other programmes such as “Stargazing Live” with Dara Ó’Briain on BBC1, but it is not just on TV that the BBC has fulfilled the vital function of bringing science and technology to the nation. On radio, the BBC has had such programmes as “The Life Scientific” with Jim Al-Khalili and “The Infinite Monkey Cage” with Professor Brian Cox and Robin Ince. There are now also podcasts such as “13 Minutes to the Moon”.
Some of the BBC’s science output over this period has been on a grander scale, with such blockbuster series as “Life on Earth”, which opened up the world of natural history and set the standard for documentaries in that genre. That has been followed by “Frozen Planet” and “Frozen Planet II”, presented by our foremost scientific national treasure, David Attenborough. I think the first episode of the new series attracted 9 million viewers.
Then there are the series “Wonders of the Universe”, “Wonders of the Solar System” and “Wonders of Life”, all presented by Brian Cox. Heaven knows there are quite enough wonders in the world and I dare say the BBC will keep on bringing them to our attention in the years ahead—for example, by broadcasting the fantastic photographs provided by the James Webb telescope.
More recently, there was the BBC’s coverage of Covid-19, when the country and the world were crying out for trusted factual information to help us navigate our way through a terrifying period in our recent history. The BBC once again pioneered things such as “Covid: Your Questions Answered” on the BBC News Channel and on “BBC Breakfast”, where people around the country could put their questions on all aspects of Covid.
And, of course, for much of the past half-century the BBC has brought us “Doctor Who”, mentioned in the opening speech, with its iconic music. That programme has helped inspire generations of children—and, I dare say, a few adults too—with an interest in and fascination with science and the future. It has been as integral a part of the BBC’s output on science as any other.
My point is very simple. No one else—no other independent channel anywhere—has provided remotely the same level of public service broadcasting in science and science-related programmes. Contrast its output with that of broadcasters around globe. It is a record to be proud of and it is true public service broadcasting. Moreover, these BBC programmes are so prestigious that they are sold around the world.
I am not denigrating other providers—some also make valuable contributions to our understanding of science—but, when we look ahead to the future that lies before us, which is unimaginably different from that faced by Parliament when it debated these matters in 1951, it is my view that the BBC remains the only entity in today’s multidimensional broadcasting world that we can rely on to provide science-related programmes.
That is why our current system of public service broadcasting remains an essential part of who we are as a country. There are times when public service broadcasting needs to be defended, and this is one of them.
Baroness Benjamin (LD)
My Lords, I thank my noble friend Lord Foster for securing this important debate and for his kind remarks. I declare my interests as set out in the register.
Public service broadcasting content is vital nourishment for children and their well-being. It is the perfect way for them to recognise and understand the world that they live in. I have vast experience, knowledge and wisdom of the importance of this because of my 46 years of broadcasting for children, through programmes such as the BBC’s “Play School”. Many say that that programme, where I took them through the arched, round and square windows, shaped their lives, helped them deal with dark moments and gave them unconditional love and confidence to face adversity.
Before we meddle with the future of public service broadcasting, let us think of our children and what we are going to replace it with. Our thinking about the future of public service media must recognise that young people are taking the lead in the adoption of new services and developing loyalty to new platforms. If we ignore that young audience, we risk losing them permanently to a diet of international content that fails to connect them to the UK’s culture, engage them in UK society or reflect them as members of that society. Remember: childhood lasts a lifetime, so if we fail to provide content that has public service purposes at its heart, then public service media will be meaningless to them as they become adults. This is why the media Bill is crucial to ensuring that PSB has prominence, is inclusive and has fair value for its content, and that those broadcasters are able to compete fairly with global streamers and secure fair value for their investment in original UK content, which in turn has clear value for the UK.
Several areas of public policy are impacting on young people right now. First, Ofcom had identified market failure in the provision of children’s television in the UK, mainly associated with the reluctance of the commercial public service broadcasters to commission new content for children and teenagers. So the young audience content fund, which I persuaded the then Digital Minister Margot James to give to children’s production, was a successful pilot which addressed market failure. It disbursed £44 million over three years and provided 50% of the funding needed to generate new content for children and young people on ITV, Channel 4 and Channel 5. It coincided with the new regulatory powers that Ofcom was granted through the amendment I proposed to what is now the Digital Economy Act 2017. I fought hard for that amendment in this House. At last, Ofcom could insist that public service broadcasters provide programmes for young people. Ofcom worked with broadcasters, allowing them flexibility to run content on their dedicated children’s channels or online. It was a perfect carrot and stick approach.
However, the fund was abruptly brought to a halt when the DCMS did a deal with the BBC in the current licence fee settlement to abandon contestable funding. This was the death-knell for the young audience fund—for broadcasters, producers and the audience, who benefited from the dozens of new projects that it generated. This was a successful new way of tackling market failure. It addressed the issue of “If you can’t see it, you can’t be it”. For a child to truly aspire—for a child to feel welcome in their own culture and the broader culture of the country in which they live—they need to be included in the media they consume. The fund achieved this. We urgently need to create a successor to the fund to support a plural system of public service provision, such as through levies or lottery funding, not by top-slicing the licence fee.
The second policy impact on the children’s audience is the BBC children’s department. It is currently focusing on animation, which is expensive and will impact on the amount of commissioning of live-action content for kids. But Ofcom must not roll back the requirement for the BBC to commission content for children in a variety of genres, and at a reasonable number of hours per year. We know that the BBC plans to place all CBBC content on the iPlayer in the long term. While positioning BBC content on platforms such as YouTube could be a way of recapturing the lost audience, this should not be done at the expense of independent producers, who currently hold the rights to exploit their content on digital platforms. Clearly, there is pressure on the finance for children’s content at the BBC, so we need to ensure that the BBC is funded securely and in a fair manner. Without secure and adequate funding, the BBC will short-change the children’s audience and continue to lose them to YouTube, TikTok and the streamers.
Another important aspect of public service broadcasting is that it provides something for everyone. Channel 4 is currently helping the UK fulfil that promise through its commitment to 13 to 16-year-olds. A fully commercial Channel 4 would be highly unlikely to serve this niche group. Once again, public policy decisions will impact heavily on this audience. A privatised Channel 4 would not serve the young children’s audience well. I am frightened to say that as a result of public policy decisions, market failure is back with a vengeance. Will the Government commit to finding new methods of funding competitive, trusted public service content for children and young people? They are the future; please, let us not fail them.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Lord, Lord Foster of Bath, for securing this debate and for his superb introduction. I agree with every word he said about the Government’s ideologically driven, utterly nonsensical proposed sale of Channel 4. I also echo the comments of the noble Baroness, Lady Benjamin, on the importance of that. I would join everyone in welcoming the Minister back, but, wary of setting off that ministerial carousel the noble Viscount, Lord Stansgate, referred to, I will not in case it might not do him any good.
On Tuesday I had an Oral Question about the teaching of philosophy in our education system. My supplementary question was about whether this could help to improve the quality of public debate and the state of the public sphere. It is interesting that I got the loudest intimations of support, from every corner of your Lordships’ House, that I have ever enjoyed when I asked that question. We know that the quality of our public discourse and political debate needs to be much better. However, it could be much worse, as the noble Lord, Lord Dubs, said, pointing to Fox News in the United States. The noble Lord, Lord Gilbert, said that the Government have to answer the question, “What is public service broadcasting for?” My answer to that question is: to ensure there is a clear, funded voice expressing ideas, encouraging creativity and allowing the public to speak for the public good—not voices driven entirely by private profit and interests. I will come back to who owns the private broadcasters.
To be fair, as we are talking about public service broadcasting, I acknowledge that I have sometimes been a critic, particularly of the BBC. If the noble Lord, Lord Gilbert, thinks that the BBC is too liberal, I invite him to consider the number of appearances of Green Party representatives on “Question Time” compared with UKIP, the Brexit party and their ilk. The maths is quite astonishing. We have seen a BBC that has been “small c” conservative; it kept giving a platform to climate change deniers long after most other international media outlets had given that up and were astonished that the BBC was still doing so. In a story in the New Statesman only this week, looking at the BBC’s economic coverage, economists express concern that the national budget/household budget analogy is utterly false and misleading for the public.
I speak as a former newspaper editor, so I know that editors have enormous pressures on them. A number of noble Lords have referred to the enormous pressures placed on the BBC in recent years. Those pressures have come from right-wing, profit-driven commercial forces. The media tycoons I referred to earlier have commercial and political interests in squashing the BBC. In recent years, sadly, their voices have been backed by the Government. They have often seemed to be joint voices, the two working together to attack the BBC and our other public service broadcasters. It is crucial that there is an alternative voice saying that we want a genuinely critical BBC which acknowledges that there are lots of different voices and approaches.
Particularly on that basis, a number of noble Lords have referred to the importance of local media outlets. Local BBC radio in particular is crucial—I appear on it quite often because I travel around the country a lot. It is so valued by local communities, particularly in times of crisis, of which we are seeing so many now. I would like there to be thinking about how we can fund more local public sector broadcasting and media.
The reality of broadcasting now is that everything is merged together: people often get what is called broadcasting, what used to be called newspapers, and social media through one device, and they do not necessarily make much of a distinction between them. Along those lines, I return to the issue of ownership and voices. The latest Media Reform Coalition report, from 2021, pointed out that 90% of national newspaper circulation is now owned by three companies. These voices are competing with the broadcasters. DMG Media, owned by the Daily Mail and General Trust, has 38% of weekly newspaper circulation, and News UK has 32%. We need balance.
Speaking as someone with a degree in communication studies, I say that we have to start thinking about all of this as an interactive process. We are talking about broadcasting and audiences sitting there receiving the content, but we need to think much more about content created by individuals to whom technology is now available, with broadcasters picking some of that up and sharing it around. Perhaps I should declare an interest: I am probably one of the few Members of your Lordships’ House with a TikTok account. I would be interested to know who else has one; I will follow them.
We have to think from the perspective of young people today and make sure that they have a voice in mainstream sources, such as public sector broadcasting. We have to make sure that they are not drowned out by a few loud—inevitably right-wing—media tycoon voices.
Baroness Harding of Winscombe (Con)
My Lords, I join other noble Lords in congratulating and welcoming my noble friend back to his rightful place on the Front Bench. I also thank the noble Lord, Lord Foster, for securing this debate.
I declare my interests in the register and, if noble Lords will forgive me, I will highlight a correction recently made to them. I have been undertaking work for Vitrifi Ltd, a telecoms business that is part of a fund managed by Octopus Ventures, which I had incorrectly declared as working for Octopus Ventures. My entry in the register now accurately reflects that I am working directly for Vitrifi, and I hope that noble Lords will forgive my inaccurate previous statement.
As many noble Lords have said, public service broadcasting and broadcasters enjoy broad public support. Inquiries by committees of both Houses have consistently found support not just for the principles of public service broadcasting but for the programmes themselves. But the world is very different from 100 years ago, when the BBC was born—both the media landscape and British society. We no longer sit in our living rooms, watching linear broadcast channels all together as a single family unit on the single family TV set: the landscape is now multimedia, multidevice and multiplatform. We have and need public service media, not just public service broadcasters.
Society is also very different from 100 years ago: it is more diverse and more open. Our digital native children and grandchildren access media completely differently from the way that we in this Chamber do and did. As we heard, viewing of BBC channels, for example, by 16 to 34 year-olds has halved over the last 10 years, according to our Communications and Digital Committee report. So, if we value public service broadcasters—I do not think that anyone has spoken today from a position other than valuing them—we should not be afraid of change. In fact, I would argue that updating and changing to reflect the modern world is essential to maintain the public glue and the very value that we all hold so dear in our public service broadcasters.
Noble Lords may call me naive, but I worry that in public debate we too quickly move to hero or villain. It is very hard for individuals and institutions to admit mistakes or that that they could do better without immediately being castigated as the villain. It is also very hard to take risks and to change if you are put on a pedestal as the hero. It is entirely possible both to be incredibly proud of an organisation, its role in society and its performance and to acknowledge that it can and should change and do better.
That is where I am about public service broadcasters in the round. Our PSBs are one of the things that hold our country together. Like many of my fellow citizens, I am incredibly proud of them. I watch and love their content, and I think they could do better. Indeed, we could help them do better. There is something for all of us in helping them to do that. As a number of noble Lords have said, legislation is clearly needed to recognise that existing rules that worked in a linear TV and radio world need to be updated to reflect the digital age of streaming and global tech platforms. Clearly, prominence rules need to be updated, but we also need things such as the Digital Markets Unit in Ofcom to be put on a firm legal footing. I ask my noble friend the Minister to confirm that that legislation will be coming soon.
There is clearly work for government to do as well. It needs to face into the difficult decision of funding the BBC. Our generation here today might just about be able to get our heads around a licence fee being linked to a television set, but that is impossible for my children, who consume almost all their media on other devices. I fear we risk the credibility of our system of funding the BBC by tethering it to an increasingly anachronistic model of media consumption—that of just the television set. I do not pretend that replacing the licence fee as it stands today is easy, but just ignoring the need for change is definitely not the answer.
As a number of noble Lords have said, the public service broadcasters themselves must work much harder to appeal to all groups, especially young people and those from more diverse backgrounds, both urban and rural. As with the funding decisions, this is really easy to say, but it is much harder to do well. That is what will mark out successful public service broadcasters and media organisations worldwide. It is those which develop platforms and programmes that make us all feel welcome and have something for all of us to treasure that will flourish in the future. We need our wonderful public service broadcasters to stand up to that challenge.
We as parliamentarians have a role to play as well. Our public service broadcasters are the envy of the free world, and it has been all too fashionable to bash many of the establishment organisations in this country. It is hugely important that we do not fall into that trap. Nor should we put them on a pedestal. Our role as parliamentarians should be to be hugely proud of our public service broadcasters but also to challenge them to do an even better job. One hundred years ago, it was the most fantastic moment that the BBC was born. We need to both respect and challenge our PSBs to deliver for another 100 years ahead.
Lord Addington (LD)
My Lords, this is one of those debates where there has been less direct confrontation and “You’re wrong and we’re right” than I was expecting, but, at the same time, there is the fundamental truth that to those of us who feel really embedded in it, public service broadcasting feels slightly under threat. I do not know why this is, other than that it has become fashionable, certainly on the right in politics, to feel that the BBC—let us face it, that is the lead organisation, the unit—is against the Conservative Party.
I feel that this is almost totally down to the fact that the Conservative Party has its behinds on the Treasury Bench. Any news organisation that does not primarily put fire under what the Government are doing is not worth having. Let us face it, if they are the people making the decisions—I point my finger towards the Treasury Bench—they will be the ones getting the criticism and being the most solidly examined. The noble Baroness, Lady Bennett, gave a little suggestion about what happens if you are not in power: you get ignored. When a party comes third or fourth in a general election, they are begging the BBC to pay them some attention. So if noble Lords want the BBC to be nicer to them, they should lose the next two general elections—it is that simple.
Having got that off my chest, I will now address some of the things that it is very unlikely that anything other than a public service broadcaster will do well. We have already heard a few examples: children’s television and science. Another is sport, particularly sport that is not immediately mainstream at a given point in time. It is a fact that public service broadcasting has proved to us that disability sport is still a contest worth watching. If Channel 4—whatever happens to it—has carved a little place in history, it is because of the huge step it took in making the Paralympics accessible. It was a massive change that went beyond sport itself: it managed to broadcast programmes in which disabled people were people who happened to have a disability, and viewers did not notice it half the time. By the way, Adam Hills playing disability rugby league for Australia and losing to Wales, while still having a smile on his face, gets my round of applause.
We can look to another sector, which is probably bigger still: the growth of women’s team sports as national institutions and events. Who is going to forget the Euros in a hurry? It is not the type of football with which I am most closely associated, but the degree of enjoyment, celebration and success that came out of that game—the team will probably have it coached out of them by next time—was something we could embrace as a nation. The fact that 51% of the population can play sport, enjoy it, be good at it and have a degree of sheer joy in it is wonderful.
At the moment, we have yet another England team—the rugby union team—which is the betting favourites to lift another world cup. We will see what happens with rugby league. There is a lot of enthusiasm here. These sports would not have been brought to the attention of the public if it were not for public service broadcasting. There was no ready market, so nobody was willing to invest money to get them there. It takes a leap of faith to bring them forward—and that must come from public service broadcasting, because who else is going to do it? You can make a huge investment and work for 100 years to build an audience—you might be able to do it—but who is going to make that first investment? The public service broadcasters took something that already existed and said, “Enjoy it. Make sure that people are embracing it more strongly”. No matter what happens in public service broadcasting, this, among other things, is something we must encourage for the future: that minority groups, by taking part in something, are given the credit they deserve, allowing them to become mainstream. I cannot see this being done anywhere else—or in any other way going forward. If anybody has any suggestions, I am all ears.
I will make one final point: when we look at public service broadcasting, we must also remember that it is a public service. Before we get rid of it, I would turn our minds back to the pandemic. Who else other than the BBC would have taken on providing huge support to education? Who else could do it? Who else would even consider doing it on a commercial basis? Whatever the Government do, I hope they will retain that capacity for public service somewhere within our broadcasting system. If we do not, we are potentially damaging ourselves in the long run.
Lord Bilimoria (CB)
My Lords, one of my earliest memories of my grandfather, Squadron Leader JD Italia, in Hyderabad, India, is him listening to the BBC World Service on his radio. Last month, I visited Bangladesh. Fifty years ago, my father fought in the liberation war of Bangladesh, commanding his battalion. He was General Bilimoria at that time, later Lieutenant Colonel Bilimoria. He commanded his battalion of the second 5th Gurkha Rifles, Frontier Force, that liberated Pirganj and Bogra, while another battalion of the same regiment of 5th Gurkhas liberated Sylhet, where the vast majority of the Indian curry restaurant owners come from. In fact, the liberation of Sylhet was helped by the BBC broadcasting that the brigade of Gurkhas was landing in Sylhet, which put the fear into the enemy.
I thank the noble Lord, Lord Foster, for initiating this excellent debate and give many congratulations to the BBC. It was born on 18 October 2022 and, of course, we know that is principally founded through the television licence fee. I also congratulate Channel 4 on its 40th anniversary, which is publicly owned but commercially funded. As the noble Baroness, Lady D’Souza, said, in public broadcasting there are three principles: universality of access, accuracy and impartiality, and independence.
Will the Minister acknowledge that as many as 60 British TV production companies could face going out of business if Channel 4 is privatised? We heard recently from the Government, on 27 October, after Rishi Sunak became Prime Minister, that they are carefully considering the business case for a sale of Channel 4 and will set out more details in due course. Can the Minister elaborate on that, please, and confirm that Channel 4 will not be privatised? Furthermore, as many other noble Lords have mentioned, on 24 October the Government said they would introduce a Bill when parliamentary time allows. When will we have that Bill before us?
The BBC World Service is predominantly funded by the licence free. It faces serious financial challenges: high inflation, soaring costs and a cash-flat licence fee settlement. It continues to receive grant-in-aid funding from the Foreign, Commonwealth and Development Office, and there is a strong case for more investment from government over the coming weeks in order to minimise more damaging cost savings next year. Can the Minister reassure us where the BBC World Service is concerned?
The BBC has been a cornerstone of Britain for the last century, with its mission to educate, inform and entertain. It has brought people together around the country. It has been at the forefront of Britain’s biggest moments over the years and, most importantly, this has all been possible thanks to its values. Some 90% of UK adults use a BBC service every week and audiences around the world bank on the BBC to get impartial news. That was proven by the Ukraine war, during which audiences for the BBC Ukrainian website have more than doubled.
Some 48% of people are more likely to turn to the BBC for news that they trust. Do you know the next highest station? Sky is on 8%, ITV News is on 6% and the Guardian, 5%. The BBC is way ahead. The BBC generates almost £5 billion of economic output. Every £1 of economic output generated by the BBC generates almost three times as much for the economy, and approximately half the BBC’s GVA was generated outside London. It works with 334 producers and supports more than 53,000 jobs—and all this is fantastic value at less than 50p a day. Some 44% of adults back the licence fee. That is higher than 15 or 30 years ago, when the figure was 28% and 31% respectively. In lockdown, we saw how beneficial the BBC was to our children, with almost 6 million of them using it at its peak.
As chancellor of the University of Birmingham, I have seen the fantastic broadcasting of the Commonwealth Games, which we were so proud of. The top market for BBC News around the world is India, with 70 million viewers, including my 86 year-old mother in Dehradun. Of course, the BBC also encourages people to do business with the UK. It inspires people to visit the UK. It inspires international students like me to come and study in the UK. As co-chair of the All-Party Parliamentary Group for International Students and president of UKCISA, I can vouch for that.
Most importantly, the BBC is associated around the world with the amazing respect Britain has as a country for fairness, integrity and impartiality. I have said many times that the UK has one of the strongest combinations of hard and soft power in the world. If you rank the top three elements of soft power, the Royal Family is first, thanks predominantly to Her Majesty Queen Elizabeth II and her 70-year reign, and, of course, now King Charles III. Secondly, there is Premier League football, watched by almost 1 billion people around the world, with the top teams having hundreds of millions of followers. The third is the BBC.
The BBC is trusted. A Harvard Business School professor of mine, Frances Frei, described trust as a triangle: to get trust, you must be authentic; you must have the logic, the ability and professional capability to deliver what you are promising; and you must have empathy. The BBC has all three of those in spades. John Simpson, the famous broadcaster, said: “It is the BBC that opens those doors, not me.” It is those magic initials. The BBC means honesty.
We are very fortunate to have the BBC. We are lucky; we should never, ever take it for granted. All I can say is “Thank you, thank you, thank you” to the British Broadcasting Corporation.
Lord Inglewood (Non-Afl)
My Lords, I start like many other speakers by saying how appropriate it is that the noble Lord, Lord Foster, has instituted this debate, first, marking as it does the Minister’s return and, secondly, celebrating the BBC’s 100th birthday. It is now older than each and every Member of the House of Lords—and I am confident that it will stay that way.
During that past century, the BBC has become a real UK-wide and global institution and brand and, taken as a whole, has been a real force for good during both peace and war. In terms of its current place in the UK, it and the National Health Service seem to be the two most significant institutions that have emerged.
At its start, the politicians and broadcasters were quite right in insisting that the Government were to get nowhere near the day-to-day running of the corporation and that political interference should be nowhere near our national—and, in those days, monopoly—broadcaster. It is from this that public service broadcasting, or what the noble Baroness, Lady Harding, called “public service media”, has evolved, combining the requirement of non-partisan political news and comment with the need to provide other things for society as a whole. This has obviously developed further with the establishment of ITV and then our other public service broadcasters in the ensuing years. Channel 4, in my view, is a little bit different in some respects, and I will try to explain that later.
One of the heresies of contemporary Britain is that there is an overweening tendency to believe that we are exceptional—generally, we are not. But, as far as I can see it, there is a fair case to be made for saying that the quality of broadcasting—using that word in a wide sense in an internet world—is not surpassed anywhere else. This is something of which we should be proud, for which we should be grateful, and which we should cherish.
I mentioned Channel 4 which, as has been said, also has a significant birthday this year. If we look at its history, how it has evolved and the way in which it has been established in law by Parliament, it seems clear that, even if at one time it was a mere broadcaster, it now has a distinct role and purpose in helping and supporting our independent broadcasters and young businesses to break into the national and then the international market, which is hugely important from a UK economic perspective. Its function now is, in some respects, much closer to something in the third sector than being purely commercial. It is for this reason that the suggestion that it be privatised calls to mind the phrase “breach of trust”. Apart from anything else, I really cannot see how privatising Channel 4—for what, in the context of the national finances, is a mess of pottage—tallies with what it should be doing.
Since we are celebrating anniversaries, I remember 25 years ago—I do not expect that many other noble Lords will—when I was Minister for Broadcasting. What is dramatically clear is that the media was very different then in all respects from what it is now. No longer is spectrum the key; in the age of the online world, that has changed. While it is important, television and broadcasting are only a part of something much larger.
The question, then, is whether public service broadcasting is still relevant. I think it is. Not merely must even-handedness be embedded in at least some news provision that is available free to all—after all, we have seen how fake and dishonest news is universal and its impact is invariably malicious and carcinogenic—but the availability of quality broadcast material over a range of genres is a complement to the educational and cultural remit of the contemporary UK state, at least for the time being. It is part of society’s information and societal infrastructure.
One of the big questions is how to pay for the BBC, not least when the use of television sets is far from universal, as has been said. I have always thought, although I may be heterodox, that the licence fee is essentially a charge, not a tax. I suggest that it should be treated as such. I would attach it to the council tax for onward hypothecation, rather than having the BBC bankroll the cost to certain deserving categories that should be dealt with as part of the mainstream element of the welfare system.
What about the non-licence fee-funded broadcasters? Clearly, spectrum and EPG prominence have some value, but is it enough to sustain this important part of the public service offering beyond the commercial revenues they can generate? I do not know the answer to that; it needs to be thought about carefully.
Nobody would have set out to create the system of public service broadcasting we now enjoy. It has evolved in a peculiarly British way into something that works, and we should be proud of it. We must not curtail the evolutionary processes of technology and the way the world works; if we do so, it will die, and everyone will be the loser.
Lord Razzall (LD)
My Lords, like many other noble Lords, I welcome the Minister back to his role. I think the unanimity of view shows the esteem in which he is held in all parts of the House. I do not normally intervene in these debates, not only because my daughter has worked for Channel 4 and is now the arts and culture editor of the BBC but because many colleagues across all parties are more expert on these topics than me. However, I cannot resist speaking in this debate in the light of recent attacks on both the BBC and Channel 4.
It all started with the Johnson Government in 2019. If noble Lords remember, such was his antipathy to the BBC—probably egged on by Dominic Cummings—that for a long time you were more likely to hear the captain of the England women’s cricket team on the “Today” programme than a Cabinet Minister. This was followed more recently by the proposal from Nadine Dorries—who is rumoured soon to be joining us—to privatise Channel 4. The proposal was clearly based on such intimate knowledge that she believed Channel 4 to be funded by the taxpayer. As the noble Lord, Lord Bilimoria, has said, it was clearly made without any thought for the impact on independent production companies, many of which rely on Channel 4 for their very existence. The proposal was also clearly opposed by Channel 4 management. Normally a privatisation is welcomed by the company’s management, but, notably, not in this case.
The final straw for me has been recent attacks on the BBC and its funding model, which are putting its very existence as we know it in danger. As noble Lords have said, “Inform, educate and entertain” was the rubric for the BBC when it was established by John Reith. Can there be any doubt that, over 100 years, without the BBC many critical world events would not have been captured so vividly? I name a few: the Cuban missile crisis in 1962, the 1966 World Cup victory—apologies to the Scots—and the recent war in Ukraine. In all those cases, the BBC has been at the forefront of stellar reporting. We have clearly been informed. As for education, the Open University could not have been established without the BBC’s participation and, as the noble Lord, Lord Addington, indicated, during the pandemic, education could not have survived without it.
Then there is entertainment. I always worry about politicians talking about the BBC, because I think they think it is all about politics, news and comment. It is not. For most people, it is all about entertainment. I am sure all noble Lords are aware of the pleasure given to millions by, for example, “EastEnders”, “The Archers” or “Strictly Come Dancing”—I am sure most noble Lords have heard of them—let alone the export revenue from BBC-produced shows.
Why do the Government seem so hostile to public service broadcasters, particularly the BBC and Channel 4? I believe it is ideological. I think the desire to sell off Channel 4 came from Johnson’s refusal to appear on a political programme and being replaced by a block of ice. I think the desire to clip the financial wings of the BBC comes from the belief on Tory Benches that it is full of nasty lefties biased against a Tory Government. Oh, yes? Nick Robinson, formerly its political editor and now a presenter on the “Today” programme, used to work for Tory central office; Tim Davie, the director-general, stood for Hammersmith council as a Tory in the White City ward, and chair Richard Sharp was at one stage, I believe, a Tory donor—hardly nasty lefties.
The fact is that every Government think the BBC is against them. It is because a key role of the BBC is to hold Governments of all persuasions to account. Noble Lords should have heard Alistair Campbell’s views about the BBC when he worked for Tony Blair. The Johnson Government started on a path in 2019 to curb many of the key pillars of our society. The judiciary: remember the so-called “traitors”? The Civil Service: let us sack Permanent Secretaries who disagree with us. The parliamentary system: remember Prorogation? After 100 years of the BBC and 40 years of Channel 4, now is the time for the Government to return to what I always thought was the raison d’être of the Conservative Party—to conserve what is best in our society. I say to the Government, “Keep your hands off our public service broadcasters”.
Baroness Bonham-Carter of Yarnbury (LD)
I thank my noble friend Lord Foster for his characteristically excellent opening speech to this debate and welcome the noble Lord, Lord Parkinson, back. Keeping up the “Doctor Who” theme, I see him as the David Tennant of the House of Lords Benches.
The origin of the word “broadcast” was “to sow seed widely”, and that is what our PSBs have done, beginning with the BBC and its mission to inform, educate and entertain. They have made culture, news and other people’s experiences and lives available to all. Before the BBC started universally beaming into homes via the radio, the vast majority of the population did not have access to plays, stories and music. I heard Harold Pinter recollecting, in a recent programme, how, as a working-class teenager, listening to the Third Programme opened up a new world and set him on his creative path. He was not alone: it led to the formation of a whole new generations of artists.
Factual programmes such as “Woman’s Hour”, established in 1964, linked women with each other in a ground-breaking way, allowing isolated individuals to understand that their experience was not unique. Then there are the programmes for children. Just go for a stroll with my noble friend Lady Benjamin anywhere and her “Play School” babies flock, united in shared memories.
It was the BBC that came up with the idea of television. There was radio and there were the movies. The BBC put the two together, movies and radio, and it has continued to lead as an innovator—not something that has been much mentioned in this debate—working in the public interest with the likes of iPlayer and BBC Sounds, not just establishing new technologies but setting standards for the whole media industry. It led on rolling out the digital switchover and created two new consumer platforms, YouView and Freeview Play, which made online TV available to all UK audiences.
Every £1 of BBC R&D spend contributes up to £9 in value to the UK creative industries and beyond. As the noble Lord, Lord Gilbert, and my noble friend Lord Foster said, the streamers love the UK partly because of this trail-blazing R&D, as well as the skills and infrastructure that the BBC and other PSBs provide. Companies such as Netflix, Amazon and Disney have flocked to these shores, making the UK their production base because, as my noble friend Lord Clement-Jones has already said, they get what our PSBs contribute and they understand the value of investing in them. Netflix alone is involved in more than 40 co-productions in the UK, worth tens of millions of pounds.
“A big benefit of a co-production model is we have partnerships with PSBs that have great creative instincts. We defer to them creatively.”
Those were the words of a Netflix executive.
However, the Government do not seem very grateful. They do not seem to understand what the streamers do. As my noble friend Lord Foster said of the BBC, they have consistently undermined an institution that is the backbone of these creative industries, doubling its money, as the noble Lord, Lord Bilimoria, said, so far as investment in the creative economy goes. It is a rare sector of the economy that still, despite all the efforts of Brexit, thrives.
The effect of initial BBC spending multiplies as it ripples through the economy, from region to region and sector to sector. It is pivotal in supporting our creative industries through the innovations I mentioned, but through skills and training as well. It feeds directly into levelling up. We have a Secretary of State for levelling up, so I presume it is still a government commitment. The BBC makes programmes across the country, boosting local economies and utilising local skills. It costs 44p a day and offers exceptional value, supplying British content via television, radio and the internet, universally available to everybody, in all parts of the UK.
As the noble Viscount, Lord Stansgate, said, it supplied a lifeline through the pandemic, providing news that the public trusted and essential support through Bitesize. The noble Lord, Lord Addington, mentioned how women’s football found its audience through pioneering coverage on the BBC, and now Harry Kane invokes the Lionesses as the World Cup team’s inspiration. It supplied superb coverage of Her Majesty Queen Elizabeth’s lying in state and funeral and, as my noble friend Lord Razzall mentioned, the BBC and our other PSBs supply top-quality journalism in covering the war in Ukraine—not something the streaming services will ever provide.
Yet, as the noble Baroness, Lady D’Souza, pointed out, this Government’s 100th birthday present to the BBC is to freeze the licence fee, effectively depriving it of £3 billion over the next five years. We think the Government are putting their determination to weaken the BBC before the national interest. Most recently, we have seen the consequences for the World Service, mentioned by so many across the House, such as the loss of 382 jobs and changes to delivery that mean nearly half of all 41 language services will become digital only. Of course we have to move with the times, but these cuts involve BBC Arabic radio and BBC Persian radio, both of which will cease. Digital is accessed via the internet, and the internet can be shut down by tyrannical Governments, as we are witnessing at the moment in Iran.
Does the Minister not agree with a former Foreign Secretary—a certain Boris Johnson—who described the BBC as the
“single greatest and most effective ambassador for our culture and our values”
and a crucial contributor to Britain’s role as a “soft-power superpower”? In which case, can the Minister answer the question from these Benches and from the noble Lord, Lord Bilimoria, about why there is not more funding?
As my noble friend Lord McNally brought to our notice, the cuts to local radio are equally alarming. In the words of NUJ officer Paul Siegert:
“This is the biggest threat facing local radio since it launched in 1967. The key to its success over the past 50 years has been its localness.”
Does the Minister not agree, and how can local radio be local when it comes off air at 2 pm? Just last month, local radio stations took turns to interview the then Prime Minister, Liz Truss. The quality and depth of BBC local journalism was on display, and it was a triumph for local accountability and the power of local media. Does the Minister not agree that these cuts in radio, both across the World Service and domestically, provide an incredibly convincing argument as to why we should protect and finance the BBC properly?
I am afraid that the Government’s gloomy attitude extends beyond the BBC to public service broadcasting in general, with the threat to Channel 4 through privatisation. As so many people have talked about this, I am going to cut my speech on this point. However, contrary to what the April White Paper claims, and due to the expansion of its digital channels, Channel 4’s viewing demographic is young and diverse, and advertising revenue has increased over the last two years. The fact is that Channel 4 is in rude financial health and does not need privatisation to prosper. The Secretary of State has said that she will re-examine the business case. I hope the Minister accepts that the figures in the government paper need re-examining, too—as the noble Viscount, Lord Colville, said—as many are plain wrong. The other pressing need is for a media Bill, as many noble Lords have said, both to ensure prominence and to reform listed events.
In the words of Sir Peter Bazalgette:
“One of the justifications for the intervention in the marketplace that is the BBC is the value of the creative industries democratically, culturally, socially and economically.”
That is the point. Our public service broadcasters are much more than what we see on their screens, and the BBC’s original mission has never been more important. The first episode of a recent programme “How the BBC Began” was titled “Accident and Opportunity”—how true. As the noble Lord, Lord Inglewood, said, the BBC is a unique and glorious aberration. Once gone, it is never coming back, and with it go our other public service broadcasters. The BBC is 100, ITV is 67, Channel 4 was 40 yesterday—long may they last.
Lord Bassam of Brighton (Lab)
My Lords, in common with other noble Lords today, I congratulate the noble Lord, Lord Foster, on securing this debate and giving us something of a tour de force of a speech. There have been many tours de force this afternoon—probably too many to list—and I have enjoyed them all. While we are on the business of congratulations, I join others and reaffirm my earlier congratulations to the noble Lord, Lord Parkinson, on his bouncebackability. It is a good cause for celebration. Whatever the reason for his departure under the Truss regime changes, we all feel reassured by his return.
This has been a wide-ranging debate, all about modernisation and modern media, and quite a lot about nostalgia. We should remind ourselves of some things about public service broadcasting. In recent years, particularly during the Covid pandemic, as I think the noble Lord, Lord Bilimoria, touched on, its value has been brought home because of its trusted nature and its ability not only to provide news and advice at the same time but to do much more than that—to entertain us when we need it most and to act as a key tool for children and young people in the absence of their usual school day.
TV these days is a formative part of a child’s experience, as the noble Baroness, Lady Benjamin, reminded us, in a way that is very different from my childhood. Indeed, when I was thinking about this debate today, I was reminded that I did not watch a television until the age of eight—something unthinkable today, when TV screens are everywhere and catch-up enables us to tune in to whatever, whenever.
Indeed, I recall my mother being deeply sceptical about the merits of children watching TV at all. She was oddly rather relieved when we moved to a house served only by gaslight rather than electricity. Later, when I was older, she said that at least she did not have to think about the issue.
My early broadcasting experience as a consumer was with radio, in the days of the Home Service, the Light Programme and the Third Programme—which I was told was only for posh people. Then, of course, there was the Empire Service, later rebadged as the World Service. Now it is a very widely respected output, one that—as many colleagues this afternoon have said—is trusted for its reliability but has, unfortunately, been threatened by the decreases in funding over the years.
I knew nothing of current affairs and politics until TV arrived in our household and the outcome of the 1964 general election became a topic of conversation. Nowadays we can have all this as a wall-to-wall subject, manipulating content to suit our personal preferences. Of course, today the modern Conservative Party has seemingly done its best to keep BBC News and Channel 4 busy with wall-to-wall coverage of its own soap and psychodrama, particularly over the last year—something that I must say I have greatly enjoyed. It is a form of entertainment.
More seriously, the broadcasters have played out the game of politics in front of us in a way that I think has been incredibly balanced, informing while trying to keep us up to date with the latest twists and turns. In a strange way, I think they have proven their value as impartial observers, casting questions in the right direction, by the way in which those stories have panned out.
We had excellent coverage following the sad passing of Her Majesty Queen Elizabeth II in September. The BBC reports that 32.5 million people tuned into the Queen’s state funeral. That was an enormous number of people paying close attention, far more than watched the Queen when she was crowned back in 1952. Huw Edwards was a calming, reassuring, measured presence during that tumultuous time and, as something of a national treasure, many will share his sentiments on the BBC. As he says, it offers
“very good value for money”
and represents
“100 years of incredible achievement and some of the best programming in the world.”
It is hard to dispute those words.
As well as celebrating the BBC’s centenary, as many noble Lords have said today, we should also congratulate Channel 4 on its 40th anniversary, which was marked yesterday. Contrary to assertions made by the Government in recent years, Channel 4 continues to reinvent itself. It has the biggest free streaming platform in the UK and is constantly evolving its offering, supporting independent production companies and emerging talent across the whole of the UK. As noble Lords have reminded us this afternoon, if we privatise Channel 4 and go down that route, many of those production houses and companies will simply disappear.
If left by Ministers to get on with its work, Channel 4 is well positioned to continue playing an important public service role for many years to come. Yes, the Government have raised questions about its future funding, but privatisation is not the only answer. Channel 4 has a well-advanced alternative business plan that addresses the issues the Government claim exist as a threat to its success. As others have said, we know that the Secretary of State for Digital, Culture, Media and Sport has been reassessing the business case for its privatisation. Can the Minister confirm where the Government have got to on this? Either they have gone very quiet or a review has found its way into the long grass.
Can the noble Lord please reassure us that we shall have the much-needed media Bill? The noble Lord, Lord Foster, made that point very persuasively and the noble Baroness, Lady D’Souza, and others followed. We need to know because there is so much uncertainty out there. Some of the issues that are very much alive, such as prominence and a sense of mission for our media, need to be dealt with in a modern and updated piece of legislation.
I also want the noble Lord to take the opportunity to correct the record concerning Channel 4’s chief executive officer’s remuneration package. On 21 July, he told the House that Channel 4’s boss receives
“more than the chief executive of ITV”,—[Official Report, 21/7/22; col. 2032.]
yet, according to both organisations’ annual reports, that is simply not the case, so perhaps the noble Lord can offer a correction. Channel 4 may be a specialist in commissioning alternative programming, but discussions about its future should not be based on alternative facts.
Of course, neither Channel 4 nor the BBC is without its faults. Just this week, we heard of the BBC’s plans to radically shake up its radio offering. Local BBC radio stations inform and entertain millions across the country. We also saw during Liz Truss’s short spell in office that the BBC local radio presenters are excellent journalists. They were asking the hard questions, putting the Prime Minister on the spot and holding her to account perhaps more effectively than we are used to. It was a service to the nation.
The BBC has not covered itself in glory in recent days with its announcement and we should not shy away from saying that, but one answer is for the Government to provide it with greater clarity about its long-term future. The plans it outlined do in part have a direct relationship to the Government’s decision to cap the licence fee at £159 and effectively take some £250 million of revenue out that would otherwise have been available to the BBC for its programming. That reduction made it inevitable that change to service levels would take place, but whether they are the right ones must be open to debate.
Just as Ministers have threatened Channel 4 with privatisation, the BBC has been threatened with the withdrawal of the licence fee, with no feasible alternative proposal in its place. We know that licence fee payers have been diminishing in number—a challenge that the noble Lord, Lord Gilbert, the noble Baroness, Lady Harding, and others raised in their plea for us to think big in the future. We need to understand why those licence fee numbers are shrinking and what that means and implies for the future funding of the BBC. It is for the Government to lead the debate there, in a constructive way that recognises the value of this great institution.
The BBC has served our country well for 100 years since its inception. We benefit from its history and legacy and, as others have said, we undermine it at our peril. Not only is it rightly admired worldwide, rather like our National Health Service, but its reputation, despite periodic political attacks, remains high. For a whole variety of reasons, many of which have been given clear and distinct voice during the debate, we should cherish and nurture our public service broadcasters, guaranteeing their future rather than throwing it into doubt. Broadcast media, like all others, live in an era of rapid change. As the noble Baroness, Lady Harding, said, our role is surely to create a framework in which we as parliamentarians provide opportunities for change and renewal and encourage it in a way that strengthens, rather than weakens, the broadcasting ecosystem.
We can only hope that the arrival of the third Prime Minister in as many months, who we are told is a grown-up, will see a ratcheting down of the threats to public service broadcasting outlets and a more mature discussion about the issues that currently face all broadcasters. There are decisions to be made about funding, listed events, new markets, prominence, missions, purpose and so on, but they must be taken in the national interest, not in a narrow party-political interest, with the widest possible public debate and engagement in a well-informed way. There is much in that menu for the Minister to respond to.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, this has been a very spirited and thought-provoking debate, and a very enjoyable one for my first time back at the Dispatch Box. I warmly congratulate the noble Lord, Lord Foster of Bath, on securing it. He encouraged me to sign up to speak from the Back Benches and I had done so, but it is a delight to be responding with a bit more time from this position.
The noble Lord’s Motion encourages us to look to both the future and the past, but perhaps I should start with an observation about the present. It seems to me that we in the UK today are very lucky to benefit from a vibrant and diverse broadcasting sector. We have access to hundreds of television and radio channels, each of them unique. These are in turn supplied by a wealth of creative talent and distributed in innumerable ways, some cutting-edge and others which would be familiar even to the late Lord Reith himself—although I wonder whether he might have mellowed in his opinions on jazz.
Moreover, it strikes me, taking the long view, as today’s Motion invites us to do, that that success is due in no small part to the work of the BBC, first as the pioneer of radio, and later television, broadcasting, and then, over time, providing a different role, an important foundation on which so much else of our broadcasting heritage is built.
As the noble Baroness, Lady Bakewell said, 1922 was a very special year. It marked the publication of TS Eliot’s “The Waste Land” and James Joyce’s Ulysses, one of which I have read repeatedly and the other of which I am still struggling through, but both of which I have learned a great deal about in this centenary year thanks to the BBC’s programming about them.
However, as we heard, a lot has changed since 1922. The BBC is no longer our only broadcaster; indeed, it is not our only public service broadcaster. Strictly speaking, it is one of six but, taking a more rounded measure of public service, we might also include our eight local television providers and hundreds of local and national radio stations in that list. That does not even include all the programmes created and shown by commercial broadcasters that are nevertheless public service in nature.
The need for public service broadcasting in this country is as strong as ever it was. Whether that is breaking news footage of Russia’s illegal invasion of Ukraine, or lessons for children stuck at home during the pandemic, it is vital that our broadcasters understand the positive impact that they can and do have on our life in the United Kingdom: on our culture and values, on our economy and on the very cornerstones of democracy. They play a key role in bringing the nation together at our moments of greatest celebration and our moments of deepest sadness.
In particular, I echo the tributes paid by other noble Lords to our public service broadcasters, especially the BBC, for their thoughtful and respectful coverage following the recent death of Her late Majesty Queen Elizabeth II. As the noble Lord, Lord Bassam, said, more than half the country, 32.5 million people, watched the BBC’s coverage of the state funeral, and millions more watched it on ITV: a powerful example of what public service broadcasting can and should be about.
I agree with my noble friend Lady Harding that, in Parliament, it is our job as parliamentarians to hold public service broadcasting to account but also to provide a legal and regulatory framework which encourages and supports the contribution that the BBC and others make. Part of that framework, of course, includes the media Bill, which noble Lords in great number have asked about, understandably, today. Let me highlight what my right honourable friend the Secretary of State said last night in your Lordships’ House—not in the Chamber but in a reception held here. She said she is fully committed to introducing legislation to make sure that we are regulating in a way that is fit for the modern era, and that we will be coming forward with the media Bill shortly. I am afraid I cannot be more precise than that, but I am happy to echo her words that we will do that soon.
I will start with the legal and regulatory framework for the BBC. In January, the Government announced that the licence fee will be frozen for the next two years and will rise in line with inflation for the following four years. That means that the cost of the licence fee will remain fixed at £159 until April 2024, before rising in line with inflation until April 2028.
Concerns about the cost of living have been echoed in your Lordships’ House today and were central to the Government’s decision. The settlement aims to support households at a time when they need that support most, while also giving the BBC what it needs to deliver on its important remit. Under the settlement, the BBC will continue to receive around £3.8 billion in annual public funding, allowing it to deliver its mission in public purposes and to continue doing what it does best.
We believe that this is a fair settlement which strikes the right balance between protecting households and allowing the BBC to deliver its vital public responsibilities, while encouraging it to make further savings, efficiencies and innovations. The Government’s longer-term road map for reform of the BBC sees two forthcoming milestones as we prepare for the next review of the BBC’s royal charter: the ongoing mid-term review and the planned BBC funding model review. I will address each of those in turn.
At this point, half way through the charter period, work has already begun on the mid-term review. That will function as a health check, conducted by the Government and examining how effectively the governance and regulatory arrangements introduced by the current charter, such as the move to the new unitary board, are performing, and whether further reforms are required. The Government are interested in the success of the BBC’s governance and regulatory arrangements in enabling progress against our ambitions for greater impartiality, an effective complaints system and a BBC that represents the breadth of the audience it was established to serve.
That is not just about how well the BBC is doing. We also want to look at the effectiveness of the framework by which Ofcom holds it to account. The Government are seeking to conclude the review swiftly and to report on its findings next year. At the same time, the BBC’s funding model faces major challenges, due to how people consume media, as we have heard in this debate. Technology has revolutionised how, when and where audiences can access and watch content. An increasing number of households are choosing not to hold a TV licence as fewer people choose to watch live television or other activities which require a TV licence. If this trend continues as expected, that presents clear and looming challenges to the sustainability of the licence fee.
It is not just the Government who have these concerns. They have been echoed in today’s debate. Licence to Change: BBC Future Funding, the report of your Lordships’ Communications and Digital Committee under the chairmanship of my noble friend Lady Stowell of Beeston, whom I had the pleasure of sitting alongside, albeit briefly, in the last few weeks, found that the drawbacks to the current licence fee model are becoming more salient. We must consider how best to fund the BBC over the long term so that it can continue to succeed. It is therefore right that we examine the future of the licence fee. The Government will set out further detail on their plans in due course.
The BBC forms just one part of the UK’s vibrant public service broadcasting system. Our six public service broadcasters provide a wealth of important content—news and current affairs programmes which help us understand the world around us, original, distinctively British programming which shapes our culture and reflects our values, and programmes made in all corners of our nation and broadcast around the world.
The noble Baroness, Lady D’Souza, the noble Lord, Lord Bilimoria, and others, were right to praise the important work of the BBC World Service. The Government strongly support the BBC’s mission to bring high-quality and impartial news to global audiences in some of the most remote places in the world, particularly those parts of our globe where free speech is limited. The BBC is operationally and editorially independent from the Government, so decisions over its spending and services are a matter for the BBC, but the Foreign, Commonwealth and Development Office is providing the BBC World Service with over £94 million annually for the next three years, supporting services in 12 languages and improving key services, and that is in addition to the nearly £470 million which the Government have already provided through the BBC World2020 programme since 2016.
The noble Lord, Lord Dubs, was right to highlight the bravery of BBC journalists who report for the World Service, particularly in Iran. We regularly raise the harassment of BBC Persian staff directly with the Iranian Government as well as in multilateral fora, but I wholeheartedly agree with his tribute to them. Moreover, our public service broadcasters complement their commercial competitors by raising standards across the industry by investing in skills, boosting growth and taking creative risks. They drive growth in our booming production sector by commissioning distinctive public service content and supporting the hundreds of independent production companies that are the lifeblood of that sector.
This contribution is not limited to television. As the noble Baroness, Lady Bonham-Carter, noted, in celebrating 100 years of the BBC, we are celebrating 100 years of BBC radio. Since listeners first tuned in to daily news bulletins on its 2LO service, BBC radio has been a pioneer of public service content, from great drama to ground-breaking comedy, the newest music and the greatest of old, not least through its orchestras and choirs. Radio is also changing, as more and more people consume audio content online. With its unique position in the radio market, I hope we can have confidence that the BBC will continue to evolve to deliver high-quality and engaging audio services to the country and the globe over the years to come.
The noble Baroness, Lady Bonham-Carter, and others raised the announcements this week about changes to BBC local radio stations. Again, the BBC is rightly operationally and editorially independent of government, but the Government are disappointed that it is reportedly planning to make such extensive cuts to its local radio output. In an Answer to an Urgent Question in another place earlier this week, my honourable friend Julia Lopez set out that she is meeting the BBC next week and will be conveying to it the views raised in that Urgent Question. We wait to hear more from the BBC on how it expects these changes to affect local communities, including the provision of local news and media plurality.
As noble Lords have noted, it is not just the BBC celebrating an important birthday this year. On Tuesday, Sianel Pedwar Cymru, or S4C, the UK’s Welsh language television broadcaster, celebrated its 40th birthday. S4C is a great example of how our public service broadcasting provides for every part of the UK, not only providing an opportunity for Welsh speakers to access content in a language familiar to them but supporting the Welsh economy, culture, and society.
Channel 4 also celebrated its 40th birthday yesterday. It is an integral part of our public service broadcasting system and a great UK success story. Over the past four decades, Channel 4 has done an excellent job in delivering on its founding purposes, providing greater choice for audiences and supporting the British production sector, including in the diocese of the right reverend Prelate following its move to Leeds. The Government want Channel 4 to continue to deliver for audiences for the next 40 years and long beyond. My right honourable friend the Secretary of State is carefully examining the business case for the sale of Channel 4 and will set out further detail on our plans for the future of the channel in due course. As the right reverend Prelate and others said, there is much to be considered. The principal conclusions of the Government’s review of public service broadcasting were set out in our White Paper earlier this year and my right honourable friend will be able to draw on those conclusions when considering her decision.
I am grateful to the noble Lord, Lord Bassam, for giving me the opportunity to correct the record. He is right to pick up on an answer that I gave when last in this post, stemming from a confusion between salaries and total remuneration packages. One of the last things that I did before leaving was to write a letter to the Library of your Lordships’ House setting that out for the record; if it was not sent, I will make sure that it is. I am grateful for the opportunity to do that from the Dispatch Box.
Continuing with birthdays, as the noble Lord, Lord Inglewood, will remember particularly well as a former Broadcasting Minister, in March this year Channel 5 turned 25. It continues to make a vital contribution to the UK PSB system through its provision of news and its unique focus on children’s television.
Our two other public service broadcasters, ITV and STV, continue to play an important role both on and off the screen. Last year, STV was the most watched peak-time television channel in Scotland for the fourth year in succession, and in 2019, the most recent year for which detailed data are available, ITV spent more than £250 million outside London, directly employing more than 2,000 staff and indirectly supporting many more. That is not to mention its 3,000 hours of national and regional news, with “STV News at Six” having held Scotland’s number one news programme slot since 2019.
However, despite these ongoing successes, there are also challenges ahead for our public service broadcasters. I have referred already to some of the specific challenges facing the BBC, but in many ways, they are symptomatic of broader changes in the sector, which create both opportunities and risks. One of those is advances in technology. Just as the advent of cable and satellite services revolutionised broadcasting in previous decades so internet-delivered services are revolutionising it now, creating new distribution methods and potential business models. It is notable, for instance, that 79% of households with a television set now choose to connect it to the internet.
Changing consumer habits are also a factor. Today’s viewers now have huge choice in what they watch and how they watch it, and are taking advantage of that choice. Two-thirds of households subscribe to video-on-demand services like Netflix and Disney+, and in September 2021 YouTube reached 92% of online adults in the United Kingdom. Viewers are shifting to different platforms, types of content and modes of viewing: telephones, laptops, short-form, long-form, on-the-go and around the house. To be a successful modern broadcaster, it is important that broadcasters make their content available in a multitude of formats across a wide range of devices and platforms.
Increased competition is also changing the sector. New global players, particularly US-based streamers, as noble Lords have noted, are using their greater financial resources to compete with both our public service broadcasters and our commercial ones. That is not just a question of competition for viewers but for the programmes they show. In 2019, the public service broadcasters in the UK were collectively able to spend just under £2.8 billion on new content. At the same time, Netflix alone spent an estimated £11.5 billion on production globally.
In April this year, the Government set out their proposals for supporting our public service broadcasters, using our new legislative freedoms to deliver a regulatory framework which works in the best interests of the UK. We were able to draw upon much previous work, including the report of the Communications and Digital Committee of your Lordships’ House, at that time chaired by my noble friend Lord Gilbert of Panteg. As a result, the White Paper contained a number of proposals to support British broadcasters to prosper in this new media environment.
The first of these relates to prominence. An important part of our public service broadcasting system is ensuring that public service content is readily available to as wide an audience as possible and easy to find. But as audiences increasingly watch content online, our broadcasters, including the BBC, are finding it increasingly difficult to secure and maintain their presence on global platforms. We announced in our White Paper plans to legislate for a new online prominence regime, so that PSB content is made available and given protected prominence across designated TV platforms. Building on Ofcom’s recommendations, we believe that legislating for prominence will not only support the future sustainability of public service broadcasters; it will also mean that viewers can continue to find the content they value. We understand, and share, the concerns of our public service broadcasters that action to address this issue is needed as soon as possible. I am glad to hear that echoed in today’s debate.
I also want to touch briefly on the listed events regime, which helps to ensure the free and universal availability of key moments from some of our most loved sports. In recognition of the key role that our public service broadcasters play in distributing content which is distinctively British and of interest to audiences in the UK, the Government have announced their intention to make qualification for the listed events regime a benefit specific to our public service broadcasters. This will ensure that they have the opportunity to show national sporting events such as the Paralympic Games and the Women’s EUROs, both rightly praised by the noble Lord, Lord Addington, for years to come. We are considering whether digital rights should be brought in scope of the regime to reflect the rapidly changing viewing habits of UK audiences and the growth in on-demand streaming services.
Video-on-demand services such as Netflix and Amazon Prime provide huge value to UK audiences and in many cases significant, and growing, contributions to the UK economy. But these on-demand services, apart from BBC’s iPlayer, are not subject to Ofcom’s Broadcasting Code, which sets out appropriate standards for content, including for harmful or offensive material, accuracy, fairness and privacy. This means that the television-like content which people watch is regulated differently depending on how they choose to watch it. Some services available in the UK are not regulated in the UK at all. That is why we intend to bring larger TV-like on-demand providers, which are not regulated in the UK but which target and profit from UK audiences, under Ofcom jurisdiction. We will also give Ofcom powers to draft and enforce a new video-on-demand code, similar to the existing Broadcasting Code. These changes will mean that UK audiences will be better protected from harmful material and better able to complain to Ofcom if they see something about which they are concerned.
My noble friend Lady Harding of Winscombe was right that the people who are moving to these new methods of watching television the quickest are the young, and the noble Baroness, Lady Benjamin, was right to raise our important responsibility to children. UK-wide television tax reliefs aimed specifically at children’s television programming have since 2015 directly supported more than 500 projects and over £600 million of investment in children’s content. We are grateful to have worked closely with the noble Baroness, Lady Benjamin, on introducing powers for Ofcom to monitor the commercial public service broadcasters and enable them to set criteria for the provision of children’s television programming; and of course, we chose children’s television, alongside radio, to pilot contestable funding, as she mentioned in her contribution. An evaluation of the three-year pilot of the young audiences’ content fund is taking place to determine its impact. The potential for further investment will be assessed against that evaluation and future public service broadcasting needs.
The noble Viscount, Lord Colville of Culross, mentioned smart speakers. Today the whole sector faces perhaps its greatest challenge yet with the emergence of online audio services and smart speakers. I share the noble Viscount’s concerns about the potential impact of these devices on the radio sector. Officials in DCMS are actively exploring potential options for bringing forward legislation to protect the position of radio on smart speakers in a way consistent with the proposals to develop a new pro-competition regime for digital markets.
The noble Lord, Lord McNally, said that it was a Conservative Government who established the BBC. As this is a Liberal Democrat debate, I should say that a Conservative and Liberal coalition presided over its birth. The BBC was founded on 18 October 1922. The following day, Tory Back-Benchers met at the Carlton Club and pulled the plug on that coalition, giving the BBC its first big story to cover. Those were the days when Tory Back-Benchers brought down Prime Ministers from other parties. It was thus a Liberal politician, the Postmaster-General FG Kellaway, who noted:
“If the best use is to be made of this new form of communication, it must touch life at many aspects”.—[Official Report, Commons, 4/8/1922; col. 1955.]
I think we would all agree that our public service broadcasters have delivered on that vision. Now is the time, as we have done today, to look ahead to the next century and provide the foundations for future success. I am very grateful to the noble Lords who have given us the opportunity to do so.
Baroness Stowell of Beeston (Con)
Before my noble friend sits down, may I seek a couple of points of clarification on legislation? My noble friend echoed the Secretary of State in saying that the media Bill will be with us shortly. Yet a decision on the privatisation of Channel 4 has yet to be taken. Could he confirm that, if the Government decide not to go ahead with the privatisation of Channel 4, the media Bill will still come forward shortly because it is the non-Channel 4 aspects that are deemed incredibly urgent?
The Minister also made some comment in response to the noble Viscount, Lord Colville, on digital competition. However, I am not entirely clear on what he is saying about the prospect of a digital competition Bill. He may remember that I was very keen, if possible, that we should combine the two things, particularly if Channel 4 is no longer on the agenda.
Lord Parkinson of Whitley Bay (Con)
I am grateful to my noble friend for the opportunity to say a bit more. There is not much that I can add, other than to repeat the Secretary of State’s words from last night. We will bring the media Bill forward shortly and that does not pre-empt the decision she is considering vis-à-vis Channel 4. The Queen’s Speech set out the Government’s commitment to publishing a draft digital markets competition and consumer Bill in this parliamentary Session. We will do so as soon as parliamentary time allows.
Lord Foster of Bath (LD)
My Lords, I thank the Minister for his reply. I am almost surprised that he did not lead us in a rendition of “Happy Birthday” for the BBC and Channel 4. I also have to ponder what his speech might have been like had he delivered it, as originally intended, from the Back Benches rather than the Front Bench. I am almost certain—the Minister will correct me if I am wrong—that the history lesson about the Liberal role in the BBC’s establishment would not have been included in a Back-Bench speech, but I am grateful to him for it.
The Minister will have heard that there is a great deal of support for public service broadcasting all around the Chamber. I am grateful to all noble Lords who have spoken, particularly those who emphasised important reasons for supporting it that I did not mention. There were references, for example, to science, children, sport and even the importance of trusted news in conflict areas.
I am also conscious that, in the back of our minds, many of us support the public service broadcasters, including the BBC, because of what the right reverend Prelate the Bishop of Leeds called the “nightmare alternative” of having a broadcasting landscape like that in the United States—or, as the noble Lord, Lord Dubs, put it, “Heaven preserve us from Fox News”.
So the Minister will take away that there is a great deal of support for the BBC. He in turn supported the comments of the noble Baroness, Lady Harding, about the need for the public service broadcasters, including the BBC, to address some of the issues that need addressing. Reference was made to former chairs of the Select Committee and the way in which some people in society feel that they are not represented by our public service broadcasters—they have to address that. It is equally true that, as my noble friend Lord McNally said, public service broadcasters need to be a bit more up front about their own proposals and, as the noble Baroness, Lady Bakewell, said, less timid.
I end by repeating my thanks to everybody. I hope that the Minister will take away the very clear message from the whole of your Lordships’ House that there are issues that need fixing and that can be fixed only through legislation, which we need as soon as possible—including legislation in relation to the important digital markets issue. I was present when the Secretary of State spoke, and she said “soon”, not “shortly”. I have had the chance to stand at the Dispatch Box and use all those phrases—“when parliamentary time allows”, “in due course”, “soon”, “shortly”, “in a few weeks’ time” and so on—and I have never understood the subtle distinctions between them. But, if the Minister knows the answer to this, could he intervene? It would help us to answer the question of how likely it is that we will get this soon. Does he know whether a media Bill has been approved by the Cabinet? If he does not, perhaps he could find out, because that would be helpful information for the House. If it has not been, could he do everything in his power to urge the Cabinet to address this issue very quickly?
Electronic Trade Documents Bill [HL]
(1 year, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Parkinson of Whitley Bay
That the Bill be referred to a Second Reading Committee.